Provincial funding strategy comes up short on major targets

FOR IMMEDIATE RELEASE

13 January, 2026

OTTAWA — New research casts doubt on the long-term sustainability of the federal daycare program in Ontario. According to Child Care Funding Update: Ontario—2022–23 and 2023–24, a new report by Cardus, Ontario carried over more than a billion dollars in unspent federal funding in each of the first three years of the program, while failing to meet its space-creation and $10-a-day affordability targets.

The province strategized to carry over large portions of unspent federal funding from the early years of the agreement, expecting massive cost increases in the final years of the five-year deal. Cardus estimates that with previously unspent funding and the 2024-25 annual federal allocation, Ontario had more than $4 billion in federal funding on hand in 2024-25. Even so, the province has fallen well short of space-creation goals and will not achieve $10-a-day daycare in 2026.

“The decision to sign a one-year extension, instead of a new five-year deal as most other provinces have, suggests Ontario and the federal government are very far apart on covering this program’s costs,” says Peter Jon Mitchell, report author and family program director at Cardus. “While the federal daycare program is prohibitively expensive, more funding won’t fix the complex challenges the province faces. Sadly, parents lose out as only a minority of Ontario families will access the program in the year ahead.”

Among the few bright spots for Ontario’s implementation of the federal daycare program was that the province met or exceeded most of its inclusion targets for 2022–23 and 2023–24. Ontario surpassed targets for the number of French-language and bilingual daycare spaces, as well as its budget allocation goal for special needs resources. Despite this, the supply of qualified staff for language and special needs programs continued to be a challenge. Progress toward developing a collaborative strategy with First Nations was also slow.

The Cardus report follows an earlier auditor general’s report, which found that lower-income families’ child care enrollment had dropped by 31 percent in Ontario compared to 2019. As demand spiked for heavily subsidized spaces, more prosperous families crowded out those who needed the most help—an outcome Cardus had predicted in 2021.

The auditor general also confirmed that Ontario is falling well short of its child care space-creation targets. The province would need to create 50,000 new child care spaces between January 2025 and December 31, 2026 just to reach its goal of 86,000 new child care spaces by the end of the year. Meanwhile, 80,500 Ontario spaces within the federal daycare program had no children enrolled or were not operational as of December 2023.

“Funding parents directly, prioritizing families that need the most help, would be far more effective than the expensive and ineffective program that exists today,” says Mitchell. “As we’ve seen in every province and territory Cardus has studied, the federal daycare program has failed to achieve its objectives.”

-30-

MEDIA INQUIRIES
Daniel Proussalidis
Cardus – Director of Media and Public Relations
media@cardus.ca
613-241-4500 x508

Cardus – Imagination toward a thriving society
Cardus is a non-partisan think tank dedicated to clarifying and strengthening, through research and dialogue, the ways in which society’s institutions can work together for the common good.