Canada’s federal budget for 2021 included a $27 billion commitment to establish a $10-a-day child care program within five years. Combined with additional funding, a total of $30 billion was committed in years one through five, with a projected annual cost of at least $9.2 billion in year five and later. The federal government then entered into negotiations with each province and territory (negotiating a unique, asymmetrical agreement with Quebec, which had a program already) to jointly determine the funding and goals. These negotiations resulted in a Canada-Wide Early Learning and Child Care Agreement with each province and territory (which we refer to as “the Agreement” in this brief). As of July 2025, eleven provinces and territories have renewed their Agreements through fiscal year 2030–31. The Northwest Territories renewed its Agreement for $80 million. This is an increase from $51 million when the territory signed the initial Agreement in 2021.

Cardus conducted its own costing estimate in 2021 prior to the release of the Agreements, concluding that the federal government had underestimated the cost and complexity of implementing a national child care program. 1 1 A. Mrozek, P.J. Mitchell, and B. Dijkema, “Look Before You Leap: The Real Costs and Complexities of National Daycare,” Cardus, 2021, https://cardus.ca/research/family/reports/look-before-you-leap. Cardus is now studying the funds spent and goals achieved in each province and territory as data become available.

The Agreement with the Northwest Territories was signed on December 14, 2021. 2 2 Government of Canada, Canada–Northwest Territories Canada-Wide Early Learning and Child Care Agreement— 2021 to 2026 (December 2021), https://www.canada.ca/en/early-learning-child-care-agreement/agreements-provinces-territories/northwest-territories-canada-wide-2021.html.

This brief presents the results for year two for the Northwest Territories (fiscal year 2022–23, which is April 1, 2022, to March 31, 2023). Year one results are included in the tables for context. 3 3 The year-one report can be found at https://www.cardus.ca/research/family/research-brief/child-care-funding-update-northwest-territories-year-one/.

The Northwest Territories encountered a number of challenges in implementing the objectives of the Agreement action plan in year two.

First, not all licensed child care programs in the territory charge a fee, as funding from the territory and Indigenous governments covers operational costs. By the end of year two, the number of communities offering no-fee care had declined from eighteen communities to fifteen.

Second, the territory used inconsistent methodologies to determine the average fee in year one and year two, preventing accurate year-to-year comparison. The difference in methodology concerns the apparent inclusion and exclusion of some fee structures and types of care. In year one, the territory reported reducing fees by an average of 56 percent compared to the baseline average in 2022 before the implementation of the fee reduction. In year two, the territory reported maintaining a 50 percent fee reduction compared to the same 2022 baseline average. The significance of the fee reductions from year to year is obscured by the differing methodologies mentioned above.

Third, after an increase in child care spaces in year one, the number of spaces for children under age six decreased in year two, leaving the territory with fewer child care spaces than when it signed the Agreement in 2021. This occurred despite federal and territorial space creation funding and additional territorial funding specifically allocated to preserving existing spaces.

Fourth, the territory struggled to spend Agreement funding across many targets, most notably in the area of inclusion. Year-two inclusion targets were dependent on the completion of a year-one evaluation of inclusion programs, which had been delayed.

Finally, the Agreement identified three targets to enhance quality in year two. Of these, only a Retention Incentive was completed in year two.

Term: April 1, 2021, to March 31, 2026.

Table 1 displays the projected federal share of financial provisions for each year of the Agreement.

• Reduce fees to 50 percent of the 2019 average fee by December 2022, and to an average of $10 a day by year five.
• Increase the number of regulated child care spaces to 59 percent coverage for children under age six by year five.
• Create 300 full-time-equivalent spaces by the end of year five.
• Increase the portion of early childhood educators who meet territorial certification requirements to at least 30 percent by year five.

• Territorial child care budget of approximately $10 million in 2021. 4 4 Canada–Northwest Territories Canada-Wide Early Learning and Child Care Agreement—2021 to 2026.
• Average fee of approximately $46 a day ($1,380 a month) in 2021. 5 5 Canada–Northwest Territories Canada-Wide Early Learning and Child Care Agreement—2021 to 2026.
• 1,071 infant and preschool regulated spaces in 2021. 6 6 Canada–Northwest Territories Canada-Wide Early Learning and Child Care Agreement—2021 to 2026.

The Canada-wide Agreements share a similar structure, focusing on four priorities: affordability for parents, increasing access through space creation, making child care more inclusive, and improving the quality of care.

The Northwest Territories created an action plan for the first two years of the Agreement (2021–22 and 2022–23). The tables shown here summarize the commitments made, the years in which targets are to be achieved, and the federal funding allocated to the targets. The tables also summarize the progress made toward the target and the funding spent on these efforts in years one and two. 7 7 Unless otherwise noted, the results shown are taken from the following sources acquired through Access to Information and Protection of Privacy requests: Government of Northwest Territories, Canada-Wide Early Learning and Child Care (ELCC) Agreement Annual Progress Report for Fiscal Year 2021–2022; Government of Northwest Territories, Canada-Wide Early Learning and Child Care (ELCC) Agreement and ELCC Extension Agreement Merged Action Plan Annual Progress Report for Fiscal Year 2022–2023.

As with some other regions in Canada, the territory has a separate bilateral Early Learning and Child Care Agreement (2021–26) with the federal government in addition to the Canada-Wide Early Learning and Child Care Agreement (“the Agreement”). The territory signed an extension to this separate bilateral agreement, which operates concurrently with the Agreement. Beginning in 2023, the territory merged the action plans of the two agreements. The merger of action plans overlapped year two of the Agreement. This report focuses on the Agreement action plan, but notes where bilateral extension agreement funding was applied to Agreement targets, and vice versa. Additionally, the territory was permitted to reallocate funds within the Agreement action plan. Finally, the territory reallocated unspent funds carried over from year one into year two. For these reasons, our tables include the allocation amounts originally indicated in the Agreement action plan, as well as revised allocation amounts as presented in the territorial annual reports.

The Agreement’s target was to reduce the average user fee by 50 percent of the 2019 level by December 2022, and to an average of $10 a day by 2026. Some communities offer no-fee care, made possible through funding from Indigenous governments and the territory. In year one of the Agreement, eighteen communities offered no-fee care, but this number dropped to fifteen communities in year two. The number of communities with no licensed care for children under age three increased from twelve communities in year one to thirteen communities by the end of year two.

The territory reported that it reduced fees by 56 percent prior to the December 2022 target deadline in year one. Agreement funding was used in year one to create the Child Care Fee Reduction subsidy (CCFR), which was extended into year two. As in year one, operators that received the CCFR committed to holding fee increases to a maximum of 2.3 percent. The federally funded CCFR was tied to territorial funding streams, meaning that operators either opted into the federal/territorial funding package or opted out of all government funding. The territory exceeded the target of supporting up to eighty-eight licensed day homes and centres, with ninety-two programs receiving the CCFR.

In year two, the territory allocated $5.86 million to the CCFR, with an additional $4.38 million carried over from year one for a total Agreement allocation of $10.24 million. The territory spent $3.61 million, distributed to seventy programs, down from ninety-two licensed day homes and centres that received the CCFR in year one.

The territory altered the method of calculating the average fee in year two. The Agreement states in section 2.1 that the baseline measure is the average fee in 2019, but the territory used the average fee for infant and pre-school care in 2022, before the implementation of the CCFR. In year one, the territory appears to have included the average out-of-school care fee and excluded no-fee operators in reporting the reduction of fees by an average of 56 percent of the 2022 average fee before the implementation of the CCFR. In year two, the territory appears to have excluded out-of-school care fees, but included no-fee providers in the calculation, claiming to have maintained a 50 percent fee reduction compared to the average 2022 fee prior to the implementation of the CCFR. The inconsistent use of methodologies prevents accurate year-to-year comparison.

Under the Agreement, the territory targeted the creation of at least three hundred new spaces by 2025–26. These spaces included seventy-five new full-time-equivalent spaces to be created in the first two years. 8 8 Note that “new spaces” and “net new spaces” are used interchangeably throughout the CWELCC Agreement. Of the seventy-five spaces, seventy were to be funded under the extension agreement.

The territory allocated Agreement and extension agreement funds to health and safety materials so that operators could maintain licensing standards. The action plan allocation was $274,000, but the territorial report shows an allocation of $70,000. No Agreement funds were spent on this target, but the territory did spend extension funding.

The Agreement allocated money to space creation and the conversion of toddler spaces into infant spaces where demand warranted. The action plan allocated $105,000, but the territorial report states that $50,000 was allocated. Additional extension agreement funding was used for this target. The territory spent $50,000 in Agreement funding, with eight programs receiving funds.

Although no Agreement funding was allocated to the enhanced Early Childhood Program operating subsidy in the action plan, the territory states that $302,000, including $113,000 carried over from year one, was allocated and spent on the subsidy. Extension agreement funding was also applied to the subsidy. The subsidy was distributed to sixty centre-based programs with preschool spaces, and seven centre-based programs with out-of-school spaces for students who require care outside of school hours.

How many net new spaces were created in the territory by the end of year two? The territorial report states, “As of 2022–2023 there have been 72 net new spaces created compared to the 2018–2019 baseline year, [and] 228 net new spaces remain to achieve a total of 300 net new spaces by 2025–2026.” 9 9 Canada-Wide Early Learning and Child Care (ELCC) Agreement and ELCC Extension Agreement Merged Action Plan Annual Progress Report for Fiscal Year 2022–2023, figure 2. Although the territory suggests that 2018–19 is the baseline year, neither the Agreement nor the extension agreement reference a baseline year for measuring space creation. The Agreement states the number and type of spaces in the territory as of November 2021, just prior to the signing of the Agreement in December 2021. The territorial summary reports for years one and two provide updated data on the number and type of spaces for each year. There was an increase in the number of spaces in year one, followed by a notable decline in spaces in year two. By the end of year two (March 2023) there were fewer spaces than in November 2021, just prior to the territory entering the Agreement.

The net loss of spaces is notable. In addition to the federal expenditures, the Northwest Territories spent $1.39 million in territorial funding on increasing access to care in year one and an additional $77,657 on preserving existing spaces in year two.

The territory intended to develop and implement a new inclusion plan based on an analysis that was scheduled to be completed in year one. The year-one analysis was delayed, resulting in the delay of the development of a new inclusion plan in year two and the implementation planned for year three. The territory reported that the analysis would not be completed until year three. The action plan allocated $100,000 in year two; however, the territorial report indicates that no Agreement funding was allocated. Agreement funding was likely reallocated to other targets, and no expenditure was recorded for inclusion initiatives in year two.

The action plan allocated $1.07 million to improving child care quality in year two. The allocation listed in the territorial report was $1.72 million in Agreement funding, with an additional $339,000 in carry-over funds from year one, for a total allocation of $2.06 million. The territory spent about $1.75 million in Agreement funding on child care quality initiatives in year two. As noted above, the Agreement permits the territory to move funds between categories, which may account for the different figures in the Agreement and territorial reports.

The Agreement action plan identified three specific targets for year two. The plan included the provision of a Retention Incentive, the establishment of a baseline average Early Childhood Educator (ECE) wage from which to develop a future wage grid, and the collection of baseline data on the number of workers who meet the educational requirements for ECEs.

The territory allocated $1.41 million, including $200,000 carried over from year one, to a Retention Incentive. Over three hundred ECEs received the payment, at a cost of about $1.44 million in Agreement funding.

No Agreement funding was spent in year two to determine the baseline wage for ECEs. The territory reported that work to improve data collection was ongoing.

The territory did not collect baseline data on the number of ECEs who meet the educational requirements specified in the Child Day Care Act and Standard Regulations. The territory reported that tracking the number of certified ECEs would begin after 2024–25, when a certification process was to be established. No Agreement funds were spent in year two.

As noted above, the territory spent Agreement funding on targets identified in the extension agreement, for which Agreement funding had not been allocated in the initial action plan.

The territory allocated $100,000 from the Agreement, and additional funds from the extension agreement, to professional development, with 109 ECEs receiving training. The territory allocated $510,000 in Agreement funding, including carry-over funding from year one, to support ongoing post-secondary training opportunities at Aurora College and to explore the development of a francophone ECE diploma at Collège Nordique. From this allocation, the territory spent $173,938, benefiting eighty-seven students. In addition to extension agreement funding, the territory allocated $40,000 in Agreement funding to a post-secondary scholarship program. The territory spent $27,000 in Agreement funding on scholarships for thirty-four ECE students.

The territory allocated $1.41 million in Agreement funding, along with additional extension agreement funding, to expanding the bureaucratic capacity of the Department of Education, Culture, and Employment. Some proposed staff positions remained unfilled at the end of year two. The territory spent $393,741 in Agreement funds on this target.

Additional administration targets include the development of IT resources for data collection and reporting, and a census of the child care sector. No Agreement funding was spent in year two on these targets.

The territory amended the Northwest Territories Child Day Care Act, effective May 1, 2023. Notable amendments included mandating the creation of an ECE certification process and the determination of a minimum pay standard for ECEs. The new regulations no longer require operators to commit to a Contribution Agreement to receive CCFR funding, but operators are required to file monthly reports to continue to receive funding. The amendments also mandated cost-control measures for operators and set a maximum parent fee. The Act requires operators to collect the demographic data of children, to improve service delivery. 10 10 Northwest Territories, Legislative Assembly, Standing Committee on Social Development, Report on Bill 68: An Act to Amend the Child Day Care Act (March 9, 2023) (Chair: Caitlin Cleveland), https://www.ntlegislativeassembly.ca/sites/default/files/legacy/cr_48-192_scosd_report_on_review_of_bill_68.pdf; Northwest Territories, Education, Culture and Employment, Overview of All Changes to the Child Day Care Regulations Effective May 1, 2023, https://www.ece.gov.nt.ca/en/elcc-act-regulations-changes-in-force.

Our previous report on the first year of the implementation Agreement in the territory noted communication challenges between the territorial government and operators. Evidence suggests that the strained relationship between operators and the territory continued during year two.

A report issued by the Standing Committee on Social Development in March 2022 noted that amendments to the Day Care Act would not “fix the damaged relationships between the sector and government.” 11 11 Executive Summary, Report on Bill 68, 1. The testimony and submissions made to the committee highlight the tension between operators and the government of the Northwest Territories.

The major concern from operators was the cost-control framework. The territory capped parent fees and introduced wage minimums for ECEs. Operators argued that they were no longer in control of their finances. The Northwest Territories Métis Nation reported to the Standing Committee, “The cost control measures restrict the ability of a not-for-profit board to manage its own finances and liability of child day care facilities. It will be a challenge for childcare operators to increase reporting measures and pay higher wages while fees charged for child care are capped.” 12 12 NWT Métis Nation as quoted in Report on Bill 68, 4.

Day home operator Nicole Loubert reported to the committee, “The Government is not equipped by design to respond in a timely and appropriate manner to address changing needs and circumstances of individual programs, which is why this is best left to programs.” 13 13 Nicole Loubert as quoted in Report on Bill 68, 4.

Many operators felt that the CCFR funding and fee caps were unsustainable, but the Northwest Territories required operators to join the federal program in order to continue to receive other territorial money. Ryan Fequet, then president of the Yellowknife Day Care Association, a non-profit provider, wrote to the Standing Committee, “The proposed changes (to the Day Care Act) I referenced will extinguish the ability of a not for profit child care centre to govern and ultimately effectively operate the provision of early child care and education, creating further challenges to an already struggling sector.” 14 14 Ryan Fequet speaking notes submitted to Cleveland, Report on Bill 68.