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CITY OF VANCOUVER ADMINISTRATIVE REPORT |
Date: |
July 4, 2003 | |
Author: |
Carol Ann Young | |
Phone No.: |
604-871-6042 | |
RTS No.: |
3448 | |
CC File No.: |
2402 | |
Meeting Date: |
July 24, 2003 |
TO: |
Standing Committee on City Services and Budgets |
FROM: |
Director of Social Planning |
SUBJECT: |
Protecting the Availability of Child Care Spaces and Programs |
RECOMMENDATION
A. THAT Council direct staff to submit a brief on behalf of Council to the Standing Committee on Finance for the 2003 pre-budget consultation in relation to child care funding.
B. THAT Council write to the provincial government to request that they reverse child care funding cuts; tie the new provincial operating grant to licensed capacity and affordability, and ensure that federal child care funds are allocated to the new operating grant program to increase affordability and program stability.
C. That Council write to the Federal Government outlining its concerns regarding the use of federal multilateral child care/child development funds in British Columbia.
CONSIDERATION
D. THAT Council approve additional funding to the Childcare grant program of $162,250 annually to be directed to grants for improving child care affordability and stabilization under the Inner City grant program, subject to evaluation and report back in early 2004; source of funds for 2003 to be from Contingency Reserve. Subject to the report back, funding for 2004 and subsequent years of $162,250 would be added to the Civic Grants Budget without offset.
GENERAL MANAGER'S COMMENTS
The General Manager of Community Services RECOMMENDS approval of A, B, and C and puts D forward for consideration.
CITY MANAGER'S COMMENTS
The City Childcare Grant Program was adopted by Council in 1990, based on the objectives outlined in the Council Policy Section below. The Council of the day recognized that the provision of childcare was the responsibility of senior levels of government and the city's involvement was not intended to assume that responsibility and the potentially significant financial burden it entails. In the intervening years, City staff and financial support to childcare have been directed, with success, to achieving those objectives.
In considering the current situation with childcare, Council is encouraged to provide reminders to the senior governments of their responsibilities. However, it is important for Council to consider the implications of providing additional financial support in an area where senior governments have the responsibility.
The City Manager therefore supports the General Manager of Community Services and RECOMMENDS approval of A, B and C and submits D for Council's CONSIDERATION.
COUNCIL POLICY
Council established the annual Civic Childcare Grants Program on October 23, 1990, as part of the Civic Childcare Strategy. The overall objectives of this grant program are:
· to support the viability, accessibility and quality of existing childcare services;
· to assist childcare initiatives in high need areas;
· to encourage and support efficient, coordinated administrative services required for a childcare system in Vancouver;
· to lever other sources of childcare funding whenever possible
Council approved "Moving forward" Childcare: A Cornerstone of Childhood Development in April, 2002, which set out a strategic plan for childcare and child development services for the City.
PURPOSE AND SUMMARY
The purpose of this report is to respond to Council's urgent request to protect the availability of child care spaces and programs in the City. As child care is a shared responsibility between all levels of government and families, recommendations to increase the level of awareness and request a broader commitment from senior levels of government are being proposed. In addition, consideration for additional funding to the Inner City grant program is being put forward. Childcare in Vancouver has experienced the impacts of a number of recent provincial policy changes, most significantly are the changes in subsidy eligibility, the reduction of provincial funding to out-of-school care and the tying of the new provincial operating grant to enrolment versus licensed spaces. These changes have impacted the affordability and accessibility of licensed child care for low and moderate income families.
A number of families in the Inner City, who used licensed child care, have withdrawn their children from programs, as the cost of care has become unaffordable. This has created financial instability in some programs, particularly in preschool and out-of-school care and a two tiered approach in others. As of May, 2003, Inner City grant applicants reported approximately 250 vacancies in 26 programs.
To mitigate these impacts, staff are putting forward, for Council's consideration, a two stage funding approach. A grant of $25 per vacant space per month would be made available to programs offsetting a portion of the costs of the 250 vacancies. In addition, 20% of the 1,700 licensed spaces from the Inner City grant applicants would receive $25 per space per month (over 11 months) to help offset the costs of care to low income families.
BACKGROUND
This report is in response to Council's urgent request to protect the availability of child care spaces and programs in the city. It is not intended to be a comprehensive review of all of the changes and impacts on the operation of child care but rather highlight those that are creating the greatest instability. It also does not address the many other ways Council supports child care through community resources and coordination, facilities and maintenance, policy development and public education. The report strictly deals with an urgent response to protecting the availability of child care spaces in Vancouver.
Staff have developed a funding strategy for consideration based on a modest increase to the Inner City grant, to reduce the impacts of a two tiered system by increasing affordability for low income families, increasing program stability and positioning programs to maximize provincial grant funding. In addition, staff have made recommendations to ensure that all levels of government take a proactive role in creating an affordable, accessible, quality licensed child care system.
On May 13, 2003, Council approved a motion that stated:
"WHEREAS, access to quality daycare is vital to children of working families to promote healthy development and school readiness in children, while supporting a strong economy and labour force participation;
"AND WHERAS, the City of Vancouver has long recognized and advocated for adequate and stable funding to ensure a high quality, affordable and accessible child care system;
"AND WHEREAS, the City of Vancouver has taken leadership in childcare at the municipal level, building what has been assessed as the highest quality childcare in Canada;
"AND WHEREAS, recent provincial government cuts to childcare subsidies are creating a two tiered system, with childcare for those who can afford it and unregulated child minding or less for those who cannot;
"THEREFORE BE IT RESOLVED that, the City of Vancouver call on the Provincial government to meet with the City to find solutions to the childcare crisis, and reposition British Columbia as a national leader in childcare;
"BE IT FINALLY RESOLVED that, City Council ask City staff to provide a report on measures the City can take on an urgent basis to protect the availability of childcare spaces and programs in the city."
The funding of child care is a shared responsibility between Federal, Provincial, local governments and families. A recent national poll of Canadians sponsored by the Canadian Child Care Federation and the Child Care Advocacy Association of Canada found that 90% of Canadians think we should have a nationally coordinated child care plan that gives all children access to quality child care.
Federal Funding
The Early Childhood Development Agreement was the first new program signed under the Social Union Framework, which included a commitment of $2.2B over 5 years for early childhood development which included child care. Of this, $291M was allocated to BC. Unfortunately, implementation has fallen short of the key principles, as there are no requirements to spend funds on supporting and improving regulated child care. Based on provincial reporting, funding to child care has been limited.
In the February, 2003, Federal budget, government committed $900 million specifically for child care over five years and got agreement from the provinces and territories to invest in regulated early learning and child care programs for children under six. While this is nowhere near enough for a comprehensive system, it is a start. The allocation for BC over five years is $121M. This year's allocation of $3.3M was allocated to supported child care (child care for children with special needs); however, in a recent announcement, it was stated that supported child care be refocused to child development and not childcare. Staff are trying to understand the full implications of this policy shift
Provincial Funding
Since 2000, the Provincial government has reduced child care funding by $50M. Many families have lost part or all of their subsidies, some child care staff will have wages rolled back to 1998 levels, preschool programs and out of school programs will have experienced significant cuts in revenue and enrolment, licensed child minding is no longer eligible for provincial grants and some child care facilities whose facility costs were covered by the Province will be expected to pick up the tab. Many children with special needs, whose families work, will no longer receive support or subsidy to attend child care. Child care resource and referral programs, critical to providing training and networking and helping parents find quality child care, will no longer receive provincial funding as of April, 2004.
DISCUSSION
Three key policy changes have significantly impacted licensed child care in Vancouver:
i) changes to child care subsidy;
ii) the new child care operating funding program ; and
iii) the roll back of wages.
Each policy change is briefly described below.
(i) Subsidy
In April, 2002, two major policy changes relating to child care subsidy were implemented:
The income exemption that determined parent's eligibility, was lowered by $285. This essentially meant that parents needed to earn $285 per month less to qualify for a full subsidy. In addition, the amount of income eligible for subsidy was reduced by 60%. Therefore, a family with an income of $1,582, whose child care fee was $520 was eligible for a subsidy of $368, requiring the family to pay $152 monthly towards the fee. Once this new policy was implemented the parent portion increased to $323.00. This made the cost of child care prohibitive for many families and, as a result, families withdrew their children from licensed child care.
In April, 2003, a second change to the income exemption was made, increasing the amount from $285 to $185. Families now could receive $257 in subsidy requiring they pay a difference of $263 versus $323 toward their fees. While this increased the affordability for some families, some families who had previously been ineligible did not return to licensed child care.
In addition to these changes, families who were eligible for a $50 or less child care subsidy per month, were told they would not receive any subsidy. This had a significant and detrimental impact on out-of-school care and preschool. So much so, that a study conducted by Social Planning Department of a sample of licensed programs, primarily on the east side, found that preschools overall experienced an 88% drop in subsidized children from April to December, 2002.
The other compounding variable in the subsidy policy changes was the elimination of subsidy for preschool socialization, short-term family crisis and special needs; thus preventing many children of the east side and children with special needs, the opportunity to access some form of licensed early childhood education opportunities.
(ii) Child Care Operating Funding Program
The second significant policy change was the elimination of the funding assistance program (FAP) for out-of-school care and the "consolidation" of provincial childcare grants. As of April 1, 2003, the province eliminated the $7 per day subsidy to families for out-of-school care and replaced it with an operating grant of $2.30 per child per day. In addition, grants to infant/toddler and preschool age children were rolled into one operating grant. While fully enrolled infant/toddler and three-to-five year old programs experienced little financial impacts, out-of-school care programs were significantly impacted. The key differences with the new operating program are that: (a) funds are now tied to enrolment, not licensed capacity and, (b) parent fees are not capped. This means that programs that do not have full enrolment, do not receive the full operating subsidy. Furthermore, no requirements to put a ceiling on parent fees, does little for affordability if fees continue to increase.
The result of this policy change, in conjunction with the previously implemented subsidy changes, has been significant to out-of-school care programs and preschool. For example, out-of-school care providers are reporting a loss of provincial revenue at rates between 50% to 66%. In addition, they are experiencing drops in enrolment, increases in parents unable to pay fees, monthly changes in enrolment and significant fee increases.
(iii) Munroe Roll Back
The third key policy decision that has impacted child care was the decision to eliminate the wage lift for child care programs that negotiated wage increase under the "Munroe Agreement". There are ten child care organizations in Vancouver affected by this change. The result of this cut has seen child care staff return to 1998 wage levels. Some staff have experienced a $2 to $6 per hour drop in their hourly wage and some programs have increased fees.
In summary, the overall result of these changes has created financial instability and, in some cases, fee increases. While many child care programs have been able to fill vacancies with full fee paying parents, it has created a two tiered system - quality licensed child care for those who can pay, and unregulated care for those who cannot. In some areas, however, the neighbourhood's socio-economic mix cannot support full fee paying families and vacancies remain. Furthermore, because child care is primarily funded by parent fees, reductions in government funding has a direct impact on the need for programs to increase fees, making service further unaffordable for many families.
RECOMMENDATIONS
The City of Vancouver continues to be a national leader in child care. However, the responsibility to fund and support a high quality, affordable and accessible licensed child care system primarily remains a federal and provincial one. As such, staff are recommending that Council take action immediately with its federal and provincial partners to restore funding to child care and create a plan that will move child care forward. In addition, recommendations are being made to augment the existing Inner City child care programs to ensure stability and preservation of spaces.
Federal/Provincial Action
The Standing Committee on Finance will be holding public hearings on the 2003 Pre-budget Consultations from September 15 to November 7, 2003. In order to participate in the consultation, notification of a brief submission must be made by August 15, 2003, with a brief to follow by September 8, 2003. Staff are recommending a brief be submitted, outlining the City's concerns for child care and federal allocations.
In addition, staff are recommending that a letter be sent to the Province requesting a reversal of cuts to child care funding, that the new provincial operating grant be tied to licensed capacity and affordability, and a meeting be scheduled to discuss with the provincial government the state of child care in Vancouver.
CONSIDERATIONS
The Inner City grant category was established in 1992 as Phase I of a Civic Childcare Direct Operating Grant program, and is targeted at non-profit organizations providing childcare services to low income, high need families in Inner City neighbourhoods. These are typically programs that charge fees to parents that are at or below the city-wide average. Civic funds are used for basic operating costs such as staffing and food and are essential to keeping fees affordable to low income families.
Staff have considered a number of options (see Appendix A) and provided a preferred funding strategy. Two focus groups were held with Inner-City child care operators to explore the pros and cons of proposed options and to design a strategy. Participants were clear in their message to the City on two fronts: first, that funding must be longer term than one year, or there is a further risk of destabilizing programs and families and, second, the priority is first to sustain preschool programs and out-of-school programs that are experiencing under enrolment, and return children to some form of licensed child care.
Should Council approve the proposed strategy, funds would mitigate some of the impacts of provincial funding changes, encourage the return of some of those children who have dropped out of the licensed child care sector due to cost; and provide some stability to the child care programs hardest hit in the city as a result of the multiple provincial policy changes. There are approximately 1,700 licensed child care spaces to which the Inner City grant funds were directed this year, including 250 spaces that were vacant at the time of the grant applications. These numbers have been the bases for calculating a funding strategy.
Staff are putting forward for consideration a top-up to the Inner City grant budget of $162,250, to be added to child care program's base operating budgets. This is a two step strategy which would i) eliminate current vacancies, and ii) provide a fee subsidy for 20% of the licensed spaces in Inner City programs. The impact of this funding would be evaluated and reported on in the 2004 Budget Report.
A grant of $25 per space per month would be allocated to those programs that are experiencing vacancies. In addition, a grant of $25 per space per month for 11 months, would be available for up to 20% of the 1,700 spaces for Inner City grant programs (note: 11 months gives consideration that some programs operate 10 months while others operate 12 months). Funds would be allocated based on criteria set out in grant applications. Programs with vacancies would be given top priority, followed by preschool and out-of-school care, with remaining funds to infant/toddler and 3-to-5 programs.
Estimated license spaces from Inner City applicants = 1,700
Example:
250 vacancies x $25.00 per space x 11 months (some programs offer 10 months others 12 months) = $68,750, PLUS
20% of 1,700 spaces = 340x 25.00 x 11 months = $93,500
Total Allocation = $162,250
Pros:
· Serves all age groupings in Inner City programs;
· Assists with increased enrolment to maximize provincial grant for programs with vacancies;
· Encourages programs to serve low income families and reduces two tier service
· Perceived as fair and equitable across programs;
· Moves towards base operating grant for grant administration;
· Provides opportunity to evaluate moving to operating grant model for Civic Child Care Grant program.
Cons:
· Some families still may not be able to pay the difference between subsidy and parent fee;
· Programs that did not apply for Inner City funding that may be experiencing difficulties, would not be eligible;
· Only targets 20% of Inner City spaces.
FINANCIAL IMPLICATIONS
Council approved a Civic Child Care Grant Budget in 2003 of $706,800. Of these funds, $255,820 was allocated to the Inner City child care grant program. Over the past ten years, programs in the City have increased by 45%, while the Civic Childcare Grants budget has seen a 13% increase. An additional grant allocation of $162.250 would increase the overall Inner City grant budget to $420,820. and the overall Civic Childcare Grants budget to $871,800.
CONCLUSION
The primary source of funding for child care is from parents. The primary sources of additional funding are from Provincial and Federal governments. The City's contribution is relatively small but can be critical to providing some spaces from low income families. By increasing the Inner City grant category by $162,250 on an annual basis, Council would support approximately 600 licensed child care spaces in the Inner City to increase the affordability of care for low income families. In addition, these funds would increase program's viability by supporting centres to reach full enrolment and thereby accessing the maximum Provincial Child Care Operating Funding Program dollars. Longer term and more comprehensive solutions require support from higher levels of government.
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