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Introduction

Background
Development and Consultation Process

1. Toronto's Child Care System

1.1 Our Clients
1.2 Overview of the Service Sector

1.3 Funding of Child Care Services
1.4 Current Service System Issues

2. Current Management Principles and Practices

2.1 Service Plan
2.2 Budget Guidelines and Accountability
2.3 Operating Criteria

3. Implementing Toronto's Vision for Its Child Care System

3.1 Meeting Diverse Needs
3.2 Integrating Service Delivery Systems

3.3 Promoting and Ensuring Accountability
3.4 Actual Costs of Child Care Programs
3.5 Improving Equity of Access to Child Care Services

3.6 Achieving Equity

3.7 Equity Scenarios

3. 8 Developing the Child Care Budget

3.9 Provincial Funding in 2001

3.10 Capital Funding

3.11 Guidelines for Community Action Plans

3.12 Conclusion

Appendices

Executive Summary

For the past decade the City has enjoyed the benefits of a service plan for licensed and subsidized child care. This new child care plan builds on the progress achieved to date and extends the service planning process to include the broader range of services for children and families for which the City as the Consolidated Municipal Service Manager (CMSM) is now responsible. The 2001 Child Care Service Plan also provides an important next step in the City's journey towards truly integrated planning and delivery of services for young children and families.

Toronto's Child Care Service Plan identifies the principles and objectives which have guided the service planning process, describes the development process followed including the community consultation and Council approval. It provides an historical overview of the local child care system and maps local services currently available. This service profile is considered in the context of assessed local needs and provides a backdrop against which service gaps, overlaps and priorities are identified.

The plan proposes a three-year action plan with specific reference to the future treatment of fee subsidies, wage subsidy, special needs resourcing and family resource centres. In addition, special attention is paid to the service needs of the francophone and Aboriginal communities within the city. Service management strategies to address the priority areas identified are also proposed. The approved city budget for Children's Services for 2001 forms the basis of the cost sharing request to the province implicit in this service plan presented.

And finally, the service plan identifies the future work planned or already underway to address some of the many challenges facing the child care service system in the city which are identified in this report.

The implementation principles negotiated with the community as part of the service planning process are based on Council direction emanating from the Children's Strategy (November 1999) and are summarized below:

Integration of Services

  • Children's Services, through the local service planning process and its operating policies and practices, will ensure that existing and new services reflect the principles of the Children's Strategy. To this end, Children's Services will ensure that service development and service contracts promote integrated, efficient and accountable services.
Accountability
  • The payment of adequate staff salaries and the provision of professional development opportunities for staff and boards of directors encourages positive service outcomes for children and families.
  • Caregiver rates should be structured to adequately reflect costs, training, hours of care and to provide an incentive for providers to stay in regulated home child care.
Actual Costs
  • Child care programs should be paid their actual costs, including recognition of administrative costs.
  • Operators should submit budgets that reflect their costs of doing business.
  • Budgets will be reviewed against a common set of guidelines.
Equitable Allocation of Child Care Subsidies
  • For planning and allocation purposes, resources are allocated on the basis of the number of children in a ward who live in families with incomes below the Statistics Canada Low Income Cut-Off (LICO) as a proportion of all children in the City of Toronto who live in families with incomes below the LICO.
Age Equity
  • Allocation of subsidies to each ward and subsidy grants to clients are subject to the individual age group ceilings: 15 per cent infant, 15 per cent toddler, 45 per cent pre-school and 25 per cent school-age.
  • Every attempt will be made to fill all vacant licensed infant and toddler space

Equity for Population Based Services
  • For planning and allocation purposes, the service plan proposes that resources be allocated to each ward on a per capita basis for special needs resourcing programs and family resource programs.
Supports for High Needs
  • Child care providers serving children in high-need areas will be afforded protection and support through the following measures:
    • Lower optimal capacity than the usual 98 per cent (to be negotiated on an individual basis)
    • Better teacher-child ratios where warranted
    • Support of re-adjustment of salary costs to accommodate all trained staff.
Aboriginal & francophone programs
  • Aboriginal and francophone programs are able to locate in any area of the City of Toronto without consideration to the service levels provided by other child care operators.
Investing in Equity
  • Future capital and operating investments should promote, rather than hinder the achievement of equity.
Surplus Wage Subsidies
  • Surplus wage subsidies will be used to promote the age and geographical equity targets of the service plan.
Special Needs
  • Children with special needs should have access to a range of service options in their community. In 2001, Children's Services staff will complete an analysis of the location and utilization of resources and develop a plan and timetable for achieving equity to be implemented in 2002.
  • New expansion funds will be used to promote increased accessibility to supports for children in high-need areas in equitable fashion
Expansion of Family Resource Programs
  • Available expansion funds will be used to develop family resource programs in under-served areas. Emphasis will be on integrating family resource and licensed child care programs wherever possible.
Community Action Plans
  • Community action plans will focus on implementing overall direction of the Service Plan, which is based on current knowledge, research and city-wide expectations. Local plans are about finding the best way of implementing this framework; and not about setting /amending the City's child care vision.
  • The City's Children's Strategy and the Child Care Service Plan focus on equitable outcomes for children and families, not on equal allocation of city resources. This means that for community planning process a thorough assessment of community assets is required; these include investment by other funders such as the United Way various foundations and the federal government.
  • The planning process must focus on cross-sectoral integration and inclusion of all children and families.
  • Ensuring maximum possible accountability and effectiveness of services must be an integral part of the planning process
  • Participation of related sectors including, but not limited to, Libraries, Parks and Recreation and, Public Health is essential to successful development of community action plans.

Introduction

This document is the Child Care Service Plan. Child care is defined as services to children and families which include licensed child care (centre based and supervised home child care), support for families with special needs and family resource programs. To the extent that it is funded by the City of Toronto, this definition also includes unlicensed child care such as summer day programs and unsupervised informal child care for eligible Ontario Works participants.

The service plan is divided into three main sections.The first section describes the current state of Toronto's child care system from the clients' and service providers' view. Current system management practices are addressed in the second section. The third, and the most important section of this service plan translates the city's vision for children into concrete implementation principles that form the basis of a three-year action plan.

Background

The Child Care Service Plan 2001 is a tool for guiding the funding and management of Toronto's children's services system over the next three to five years. This plan deals with how to implement existing policy. It acts as a framework for action for the city's role in managing the continuum of services that are provided to meet the early learning and care needs of Toronto children and families. Toronto Children's Services plays a key role in that continuum. The division is responsible for the system management and funding of the licensed child care system, supports for families with special needs, and family resource programs. The funding takes the form of child care subsidies, wage subsidies and operating grants. (See Section 1 for an overview of the children's services system).

The Child Care Service Plan 2001 has been prepared at the direction of City Council which in November 1999 adopted a report recognizing that a combination of circumstances has created "an excellent opportunity to begin to develop and implement a more comprehensive and cost-effective system of early childhood education and care." Among the circumstances that have shaped the current context are the transfer of system management responsibilities from the province to the city in 1999, the amalgamation of six area municipalities and the Metropolitan government into the new City of Toronto, and Council's adoption of a Children's Strategy. (See Appendix 1.A for the full text of Toronto's Children's Strategy).

This Service Plan builds on Children's Services' ten years of experience in service planning in Toronto. The foundation document for that decade of service planning is the 1993 Service Plan for Child Care Services which translated principles developed through previous Metro task forces into practical goals. It proposed ways in which service could be delivered in a rational, accountable and equitable manner that maximized the use of resources available to the system. The plan has formed the basis of an annual contract between the municipality and the province for the provision of a certain level of service within given fiscal framework. It has also formed the basis for negotiations with service providers for subsidized childcare services to be provided within the city and has guided budget and resource allocation. This service plan will continue to play these roles.

The Child Care Service Plan 2001 has also been developed to address the requirements of the provincial government. These expectations are laid out in the Ontario Child Care Service Management Guidelines (Appendix 1.B) which describe service planning as an "annual process through which delivery agents will determine the mix and level of child care services appropriate to local needs and priorities within a framework of provincial legislation, regulations, standards, policies and priorities."

The current service plan also represents a first step towards fulfilling the provincial requirement that communities develop early years action plans to guide the creation of a "seamless system of supports that involves parents/caregivers, families and all sectors, including the education, social services, health, recreation, business, voluntary and charitable sectors."  

Development and Consultation Process

The process of developing this service plan began after the municipality had officially started carrying out its responsibilities as the Consolidated Municipal Service Manager on July 1, 1999. Due to the size, complexity and fragmentation of the child care system in Toronto it has taken a considerable period of time to gain sufficient understanding of past provincial and operator practices before city staff felt that a service plan could be successfully prepared and implemented. Even at the time of writing this document, work continues on complete reconciliation of the downloaded programs.

On the other hand, the development of the service plan has significantly benefited from the joint efforts of the city and community in producing the annual Report Card on Children in Toronto which resulted in comprehensive mapping of services and, even more importantly, establishing the principles for intra-sectoral coordination and planning. Annual Action Plans developed by the City of Toronto Children and Youth Action Committee, and numerous surveys dealing with issues ranging from client satisfaction to the cost of informal child care have also informed the service planning process.

The Service Plan is a result of intensive work effort by Children's Services and its service partners. Working groups were established in 2000 and many of them will continue working into 2002 on issues that could not be fully addressed or resolved at this time.

Community consultation has been a cornerstone of the service planning process and the development of this plan. In an effort to be as inclusive as possible, both users and providers of service are being consulted. Four phases of consultation are being undertaken.

Phase 1 - Work Groups
In September 2000, work groups were established for each funded service sector- special needs, family resource programs, home child care as well as for wage subsidy/funding issues in the licensed care sectors. Focus groups were also held with the Aboriginal and francophone communities. Terms of reference were established for each of the work groups. During October and November of 2000 the work groups established principles that directed the planning exercise (a list of participants, minutes and summary of principles developed by the workgroups are included in Appendix 5.). In addition, operational issues were identified and formed the ongoing work plan for the groups.

Also consulted was the Child Care Advisory Committee which represents over 600 child care centres, home child care agencies, family resource centres, special needs resourcing agencies, as well as organizations that support the provision of quality child care. Separate presentations were also made to the Metro Association of Family Resource Programs, the CYAC, Home Child Care Association and representatives of francophone child care programs. A wider forum was held on November 17, 2000 for all members of the child care community to be informed and to provide input.

Phase 2 - Integration of Services
The vision for delivery of services to children in the City of Toronto, as adopted in the Children's Strategy, involves a holistic approach to issues affecting the well-being of children. As an outcome of the specific work group consultation, a forum was held on April 20, 2001 in order to bring the groups together to discuss issues of joint interest. A central issue to this forum was how to better integrate a system of services for children. As a result, a principle for integration of services was added (Section 3.2).

Phase 3 - Cross Sectoral Planning
The city's Strategy for Children also provides the framework to assist in planning for all city divisions that serve children and families including Children's Services, Libraries, Parks and Recreation and Public Health. Council recommended the establishment of a cross-departmental steering committee of commissioners and senior staff to ensure an integrated approach to service planning. A half-day inter-sectoral planning session, organized by Children's Services, was held in December 2000 under the direction of the steering committee. This planning day was the first step to enhance ongoing inter-sectoral co-operation in delivering City of Toronto services for children. Further meetings are planned with the city departments and external funders to achieve a better integration of service planning and delivery.

Phase 4 - Public Consultation
An important component to the service plan involves consulting the consumers of the service. The intent is to describe the vision and how it will be implemented and to ask for community input on issues relevant to local communities. Six town hall meetings will be held in various parts of the city during the fall of 2001 to give the public an opportunity to discuss the service plan and issues of local concern. Further public consultations will be held during the development of community action plans in 2001 and 2002.        

1. Toronto's Child Care System

1.1 Our Clients

According to the latest available data (the1996 Census), there are over 290,000 children in Toronto aged 0 - 9. These children live in 189,000 families. Seventy-one per cent of families with children of this age are fully participating in the labour force. This translates to approximately 207,000 children who require some non-parental care for at least part of each day.

However, the child care needs of Toronto's families go beyond custodial care of children while their parents work or attend school. The child care system is also about meeting children's developmental needs and supporting parents to meet their role as primary caregivers. In addition to licensed child care, families can also access a network of family resource programs that provide a variety of parenting supports such as parent drop-in, toy lending libraries, caregiver training and playgroups. In turn, these service form part of a larger continuum of supports that include the recreation, libraries and education sectors. Although the services provided by family resource programs should be available to all the families with young children, there are many areas of the city where it is not easy for families to take advantage of these programs. A survey carried out in 1998 showed that only 15 per cent of families with young children have accessed any resource programs. The city is working with the family resource programs to develop a system of reliable and comprehensive data on families who use these programs. Historically these programs have been funded by a variety of funders including the province, the City of Toronto, United Way, federal government, and private and public foundations; because of this there was not a high degree of planning or accountability built into these programs.

The city's child care system attempts to provide supports to families who have special needs. At any given time over 900 children who have documented special needs are enrolled in the child care system and supported by trained resource teachers.

Unlike its regional neighbours, Toronto has a high proportion of children living in low-income families. The level of child poverty is more than twice the average of other regions in the Greater Toronto Area (see Chart 1). Because of the preponderance of nuclear families who cannot depend on extended families for their child care needs, higher cost of living and higher labour force participation rates, child care is essential to support families' economic activity. Families have adopted a variety of approaches ranging from licensed child care to babysitting, to leaving school-age children unattended for periods of time, or in the care of siblings or relatives. Although surveys have repeatedly proven that licensed child care is the preferred option for most families (that require child care), only little over 20 per cent of children can access it. Lack of capacity, long waiting lists and high cost of care present major deterrent for many families. Over 45,000 children are enrolled in licensed child care programs across the city; of these more than half are subsidized.

(click on image for larger view)

Of the 24,216 budgeted subsidies, 77 per cent are used by single-parent families; 34 per cent of subsidized spaces are used by children of Ontario Works recipients (8,386 children in 5,499 families as of May 15, 2001). The single largest client group for subsidized childcare (25.2 per cent) consists of single-parent families with one child, in which the parent is employed and has an average net annual income of $20,023. The average child care cost of $7,188 is well beyond the reach of this average family, and even the $1,400 average user fee they must pay ($5.36 per day) represents a significant strain on limited financial resources.

Clearly, subsidized child care plays a major role in maintaining the employment and income security of parents. It is both a beneficial and cost-effective alternative to social assistance. After user fees are subtracted, the subsidy is approximately one half of the value of a social assistance benefit for a single family with one child (See Appendix 2.1. for a detailed statistical summary of subsidized families). The significant decline in children aged 0 - 12 in families receiving social assistance (25 per cent between April 1999 and December 2000) can be only sustained by increased child care supports. Escaping welfare does not mean escaping poverty, and the system has enough subsidies to meet the needs of only 22 per cent of all children in families below the Low Income Cut-Off.

It is clear that the child care system cannot meet the existing demand. In May 2001, over 15,100 children were waiting for subsidy, a significant increase from the 1999 waiting list of 13,000. Although 30 per cent of subsidies are used for part time care this, generally, is part-day, as opposed to some-day only care. There is also significant unmet need for care outside the usual (Monday - Friday, 7 a.m. - 6 p.m.) hours. Access to subsidies is not equitably distributed across the municipality and, in particular, there is a huge gap between availability and demand for infant spaces. Similarly, there are equity issues for access to family resource programs and to supports for children with special needs. Section 3 of the Service Plan discusses these issues in further detail.

Provincial policy changes regarding post-secondary students, treatment of RRSPs and, eligible hours of care have all affected the ability of parents to access the subsidy system. The service planning process can address issues such as equity of access; however significant changes in current provincial policies are required before all children who require care can attend quality developmental programs while their parents work or attend school.  

1.2 Overview of the Service Sector

Effective July 1, 1999, Children's Services Division was designated as the service system manager for child care services in Toronto. As a result of the transfer (or "downloading") of management of child care services from the province to the city, as well as through the city's own amalgamation and harmonization of services, Children's Services is now responsible for the planning and funding of a broader child care system. This system includes licensed group and home child care, family resource centres, specialized supports to children with special needs, before and after school programs, and summer day camps. In order to achieve its service goals, the city funds over 900 different service providers including 58 municipally operated programs. These include:
  • 594 licensed child care centres serving subsidized clients, including 21 licensed Before- and After-School Programs in the former City of York
  • 21 licensed home child care agencies
  • 193 licensed child care centres receiving wage subsidy only
  • 62 family resource centres
  • 27 agencies serving families with special needs children
  • 32 summer day programs

Just as there is a range of child care services there is also a variety of contractual relationships. Besides directly operating 58 child care centres and 1 home child care agency, the city has service contracts with non-profit organizations, private operators and sole proprietors. The majority of programs are non-profit and operated by a board of directors. Over 80 per cent of available funding is spent through service contracts. (See Chart 2.)

Chart 2
Centre-based Child Care by Operator Auspice

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Licensed Centre - Based Child Care
Licensed child care centres are those locations in which care is provided for a continuous period of time for more than five children who are not of common parentage. Service providers responsible for the operation obtain a license from the Ministry of Community and Social Services. Toronto Children's Services has the ability to enter into a service contract with licensed service providers for the provision of fee subsidies for families eligible for fee assistance.

Licensed Home Child Care
A license is issued to an agency to provide supervised home child care in more than one location. The agency contracts with home providers to care for up to five children in their home. The providers are paid for the services provided based on the hours of care and ages of children served. Children's Services has the ability to enter into a service contract with home child care agencies for the provision of fee subsidies for families eligible for fee assistance.

Informal Child Care
Eligible Ontario Works clients, who require short term or part time child care arrangements, may choose to work out their own arrangements with a service provider of their own choice. Although usually a neighbour or a relative, the service provider can also be a licensed child care program. The payment is limited to $346 and $390 per month for a preschool and school-age child respectively, and is prorated on the basis of days and hours of service provided. The client is responsible for negotiating the terms of service and for quality assurance.

Family Resource Centres
The Day Nurseries Act defines family resource centres as:

  • Resource centres that provide information, public education, consultation, supports and services to individuals, including parents, with respect to the care they give to children. (Reg.262,s.66.1 (2)3).

The Ministry's Child Care Management Guidelines and the Family Resource Centre Policy (1994) identify seven core services that may be funded in a family resource centre: child care registry, warmline, drop in, playgroup, toy lending library, and caregiver education. Centres are contracted by the city to provide one or more of these services to families.

Family resource centres receive funding from a variety of sources including all levels of government in addition to the United Way and local grants and fundraising. Not all the municipal funding of resource centres is cost-shared with the province. Additional funding has been made available to provide services not eligible for cost-sharing or to enhance the core services. Services funded without provincial contribution include outreach and community development.

Specialized Support Services to Children with Special Needs
The Day Nurseries Act refers to the work of special needs resourcing programs as follows:

  • The provision of staff, equipment, supplies or services in a place where private-home day care is provided or in a day nursery with respect to the special needs of handicapped children (Reg.262 s.66.1 (2) 4).

The Ministry's Child Care Management Guidelines encourage municipalities to integrate children with special needs into community child care services with their peers. This service is entirely funded through cost-sharing with the province and carries no fee requirement for families.

The delivery of specialized support services varies. Services may, for example, be provided through specialized licensed nursery schools where services tend to be more intensive and use highly specialized staff such as occupational therapists and physiotherapists. Or a resource educator may be employed at a licensed child care program to support children with special needs. Or specifically designated providers may be contracted by the agency to provide care to children with special needs in a home child care setting. Most specialized services are provided through a consultation model. Within a larger children's mental health organization or developmental service agency, funds are provided to hire staff to provide consultation services both client specific and general to the child care sector.

Summer Day Programs
These unlicensed programs operate during the summer for eight weeks or less and are generally offered to school-age children. The programs usually operate in high-needs areas, are recreationally based and operate for a full day. The city along with other funders provides program funding to agencies to operate programs, allowing them to set a nominal fee to participate. Families therefore do not require fee assistance from the city. Summer day programs are currently not cost-shared with the province.

York Before- and After-School Programs
In 2000, the City of Toronto entered into a partnership with the Toronto District School Board and 21 programs in the former City of York to provide up to $400,000 for before- and after-school programs during the 2000-01 school year. The school board previously funded these programs but due to changes in the province's education funding formula, was unable to continue funding beyond June 2001. Although the municipal contribution was to end at the same time, City Council has voted to extend its participation into the next school year. As of May 18, 2001, 733 children were enrolled in these programs.

Funding Supports to the Child Care System

Aside from the traditional funding, the city also provides direct support to operators of child care programs in the form of wage subsidies and operating grants. The city also pays rent to both public school boards on behalf of all child care programs located in schools.

Child Care System Management
The City of Toronto is designated by legislation as the Consolidated Municipal Service Manager. Children's Services Division is responsible for the child care system planning and management, including determination of eligibility for subsidy and contract management with service providers. The cost of system management is approximately 4.9 per cent of the 2001 gross budget. The most recent available data show that the city's management cost per subsidized space is approximately 56 per cent of the GTA average.

Under the Day Nurseries Act, service providers delivering licensed child care services are required to notify the Ministry within 24 hours of serious occurrences. As a part of the transfer of system management functions from the province to the municipality, a joint protocol for responding to serious occurrence reports and public complaints or inquiries was established. Child care operators are now required to report serious occurrences to Toronto Children's Services. Extending access to the city's automated reporting system to MCSS licensing staff has ensured that staff in both organizations are simultaneously notified and kept up-to-date on any developments.  

1.3 Funding of Child Care Services

The City of Toronto Council has allocated $275.3 million within the Children's Services 2001 operating budget for the operation of its child care system. The funding responsibility is shared between the province, city and subsidized child care users. Chart 3 illustrates a high level picture of the funding shares accruing to the individual partners assuming that the Ministry of Community and Social Services provides the required funding. The chart demonstrates how, as a result of downloading, sideloading and regulation changes, additional child care investment by the city had to grow just to preserve the existing service system. The seemingly declining share of user revenue is a reflection of addition of downloaded programs as opposed to any reduction in user revenue.

Chart 3
Funding Sources

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The province funds up to a predetermined ceiling:

  • 80 per cent of the net cost of "prescribed services" exclusive of administration

    • Regular child care subsidies
    • Ontario Works (OW) subsidies, formal and informal
    • Family resource programs (up to a pre-determined ceiling)
    • Special needs resourcing
    • Wage subsidy (paid to non-profit and commercial operators, including licensed child care, special needs resourcing and family resource programs)
    • Health and safety expenditures

  • 50 per cent of approved administrative costs (excluding OW administration).
The city funds:
  • 20 per cent of the net cost of "prescribed services" exclusive of administration
  • 50 per cent of approved administrative costs
  • 100 per cent of any costs not approved through a negotiated service contract or costs above the approved level even if eligible for cost sharing. Currently these include:
    • School rents
    • Summer day programs
    • Contribution to the Child Care Capital Fund and expenditures therefrom
    • Operating support to child care centres
    • Some family resource programs or services
    • The York Before- and After-School Program

Fees collected from child care users accounted for approximately $17 million in 2000. User revenue is subtracted from the total eligible expenditures to determine the net amount to be cost-shared between the Ministry of Community and Social Services and the municipality. Licensed child care users are assessed user fees which are then used to reduce the provincial and municipal contribution to the overall budget. Approximately 5.9 per cent of the overall system cost is funded from user revenue.

Subsidized clients are assessed fees according to a provincially mandated needs test and a municipally mandated income test. The higher of the two fees applies. The formula that is used to compute the income-based user fee consists of a basic exemption based on family size and a tax-back of 27 per cent of all net (after-tax) income above that. (See Appendix 2.4 for a sample fee schedule). There is no minimum user fee assessed against any client and user fees are only collected from subsidy clients using licensed child care programs. Currently approximately 50 per cent of subsidized families (representing 50 per cent of children) pay no user fees. Ten per cent of families with the highest incomes generate over forty per cent of all user revenue (see Chart 4).

User revenue is a very volatile source of funds. Every one cent change in the average user fee represents approximately $65,000 in annual revenue. Because of the first-come, first-served policy, each child that leaves subsidized child care can be replaced with

Chart 4
Distribution of Subsidized Families and
User Revenue by Annual Income

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Click to Enlarge

another who may owe much different (lower or higher) user fees. Similarly, a further infusion of Ontario Works clients could result in a significant reduction in user revenue and affect the system's ability to provide the targeted number of subsidies. Alternatively, any shortfall in user revenue has to be either covered by the province and the municipality on an 80:20 basis, or a corresponding service cut must be implemented. The $17.2 million user revenue budgeted in 2001 represents funding for approximately 2,300 subsidies.

Beginning in 2001, $2.2 million from National Child Benefit "claw-back" has been allocated to Children's Services, in part to offset the loss of user revenue associated with enrolment of Ontario Work or other low income clients.

1.4 Current Service System Issues

For several years the child care system in the City of Toronto has been under a severe pressure arising from high levels of unmet needs and constrained funding. Many of the issues listed in this section have been identified before. Repeated task forces and reviews have identified the significant funding issues facing the service providers and the city as the service manager. In 1998, a major review conducted by KPMG on behalf of the Ministry of Community and Social Services confirmed the city's position that a significant expansion of the system is required in order to meet the needs generated by Ontario Works. Following the publication of the 1999 Report Card on Children in Toronto, Council considered and approved a report entitled "A Comprehensive Summary of Child Care Issues, and a Proposed Plan and Timetable for Action" in November 1999. At that time the estimated cost of addressing the most pressing issues was $43 million gross and $7.5 million net. Since that time some progress has been made, especially in the area of payment of actual costs and playground rehabilitation.

To inform the service planning process, working groups were established for each funded service sector. Although many issues were specific to particular service sectors, there were also similarities identified between sectors. The working groups asked the city to address the following pressures facing the child care system as a whole:

  • A need to pay service providers the actual costs of doing business
  • Support for staff and provider training
  • Barrier-free child care access
  • A need to explore differentiated funding mechanisms to support special needs children and high-risk families in achieving service equity
  • Service equity for all sectors
  • Flexible funding for administration
  • Playground retrofit or replacement costs.

In addition, each sector faces its own particular challenges. The home child care sector, for example, identified the need to co-ordinate caregiver support with other sectors providing similar services to ensure that at a local level services are integrated to maximize opportunities for caregivers. This group also identified the need to review the adequacy of provider payments to reflect training received and hours of care. As a result of new ward boundaries, home child care agencies will be required to adjust their service boundaries to reflect these changes. New service areas will be negotiated within the current service plan. In addition, the city will explore with the home child care agencies and the province new models of delivery such as direct licensing of home child care providers.

The future funding and distribution of wage subsidy is another issue that continues to be of interest to most service providers in Toronto. A sore point with commercial operators, the unequal distribution of wage subsidy presents a possible $25.3 million pressure for the system funders. However additional funding is not anticipated from the Ministry of Community and Social Services. While the city works with the community to determine options for the distribution of wage subsidy, any surpluses in the system will be reserved to support age and geographic equity in accordance with the service plan.

The combination of quality and financial viability is critical for the successful operation of a child care program. In order to ensure quality, a program needs adequate financial resources and efficient administration as well as high caliber, motivated staff who provide a secure, nurturing environment to children. Financial viability requires a quality program that attracts and retains a full enrolment of children.

A new challenge to the service planning process is the integration of children with special needs into the mainstream of the child care system. Because specialized supports are provided by a limited number of agencies, it is important to ensure that the child care sector across the city is ready to accept children with special needs. This requires addressing the issues related to barrier-free access, availability of trained staff and consideration of administrative practices which would not penalize regular child care centres for lower that "optimal" enrolment levels.

Francophone and Aboriginal communities face particular barriers in accessing service because of the difficulties in establishing viable programs. Although francophone children comprise over eight per cent of the child population, only nine child care centres provide service in French. The situation is even more stark for the Aboriginal community; although approximately five per cent of all the child population, only two child care centres with fee subsidies are dedicated to the developmental and care needs of this community. In addition, finding culturally and linguistically appropriate supports for special needs children remains a challenge.

Clearly, most of the issues identified above are related to the availability of resources both in terms of meeting the actual costs of providing service as well as meeting the identified needs and demand. The Council of the City of Toronto has repeatedly, and without much success, offered to match any increases in provincial funding that would be dedicated to meeting those identified needs. Instead, as a result of provincial downloading and sideloading the city's financial contribution has increased by $29.3 million or 123 per cent since 1997 without any appreciable increase in service levels.

2. Current Management Principles and Practices

Toronto Children's Services manages the range of services described in the previous section in accordance with provincial legislation and policy as well as with the policies laid out by Toronto City Council. In addition to the requirements of the Day Nurseries Act, the province has provided Children's Services with the Child Care Service Management Guidelines (Appendix 1.B) and assorted Ontario Works guidelines to assist in fulfilling the division's responsibility as delivery agent for child care.

City of Toronto policies approved by Council, including the Service Plan for Child Care, 1993, Operating Criteria for Child Care Programs, and Operating Budget Guidelines are designed to ensure that high quality financially viable services are delivered equitably throughout the city in a manner that maximizes the use of public funds. Children's services programs that fulfill the requirements of the service plan and meet both the city's operating criteria and financial requirements may enter into a service contract with the city.  

2.1 Service Plan

The original Service Plan for Child Care Services in Metropolitan Toronto adopted by Council in 1993 provides a framework for management of licensed child care. The plan is founded on principles that ensure service is delivered in a rational, accountable and equitable manner that maximizes the use of available resources.

In determining whether programs meet the requirements of the service plan, applications are reviewed against the principles of age and geographic equity and the requirement to operate in an efficient manner. (See Section 3 for equity definitions.) Applications for age groups or wards that are currently relatively well served, in terms of the current level of resources available for that age group or ward, are not approved. As a result not all licensed programs have a service contract with the city for the provision of fee subsidies.

2.2 Budget Guidelines and Accountability

Services are funded, delivered and governed in accordance with a service contract. Children's Services has a standardized service contract which lays out the expectation of service providers for the provision of funding in addition to the relevant policy and procedures governing both the service level and funding.

Service providers with whom the city has a service contract for fee subsidies, family resource centre or special needs funding submit both an initial and an annual operating budget. The budget document allows service providers to describe their actual and expected expenditures for the previous year and to project their costs for the coming year. Expenses are categorized in the budget as salaries, benefits, administration, program expenses, food, property operation and other related costs such as insurance, office supplies, advertising, telephone, legal, etc.

Costs listed in the annual budget generally reflect the previous year's experience, except for large purchases or renovations which are amortized over a five-year period or term of a lease. There are Council-approved ceilings for salaries, benefits, casual staff costs, and business travel but all other items are as indicated by the service operator. The operator's submitted budget is reviewed in accordance with budget guidelines approved by Council and the service contract between the city and the operator reflects the funding agreement based on the service provider budget as approved.

In the case of licensed child care, operators are paid a per diem rate which reflects the lower of their daily cost or fee charged to the public or their approved costs. Based on the direction that the subsidy per diem should not pay for vacancies, the budget guidelines ensure that rates are calculated assuming optimal enrolment or that programs are generally full. In addition, rates are calculated on the most efficient staffing configurations.

Family resource centres and special needs resourcing agencies are paid quarterly based on their approved budget. The division is currently working with these service providers to refine the existing budget guidelines to better reflect the costs of these programs.

In accordance with Council requirements, service operators are expected to submit audited financial statements each year if they have received more than $30,000 in funding. The division reviews all operating costs against audited financial statements and T4 analysis. In addition, in accordance with provincial requirements, family resource centres and special needs resourcing agencies are required to submit quarterly financial and service targets statements.

For every program under contract, the city compares the actual expenses for the previous year to the approved budget for that year as well as to the budget submission for the current year. The purpose of this comparison is to ensure that service operators do not receive more money than it costs them to deliver service. Overpayments are recovered and used to fund additional service. Operators are not precluded from re-allocating expenses between line items provided these expenses do not exceed the limits set for salaries, benefits and business travel. While the city reviews line by line variances to assess reasonableness, recoveries are made only if there are unallowable expenses or total under expenditure from the approved budget.

Wage subsidy is monitored through the use of an annual utilization statement. Programs receiving more than $20,000 in wage subsidy must also provide an audited financial statement and special purpose report to verify that the funds were used for the purposes for which they were intended.  

2.3 Operating Criteria

Consistent with the Provincial Child Care Objectives, the city's operating criteria outline the program and financial requirements which programs must meet to be eligible for a service contract with the city.

Through its operating criteria, the city is able to offer further and more specific definition to the Day Nurseries Act and to reflect local community interests. The criteria provide operators with clear expectations and reflect the service contract terms and conditions.

They are also intended to allow service operators to evaluate and monitor their own programs against municipal standards. To this end, Children's Services reviews service applications against the Council approved operating criteria before entering into a service contract for fee subsidies for both centre-based and home child care programs. Children's Services is in the process of developing operating criteria for family resource programs. Revisions of the existing licensed child care criteria is planned to address the provision of supports to children with special needs as well as the delivery of services to school-age children by the recreation sector.  

3. Implementing Toronto's Vision for Its Child Care System

3.1 Meeting Diverse Needs

The City of Toronto is a multicultural community that is continually changing and renewing itself. Despite the ever-growing variety of ethno-cultural backgrounds, the basic developmental needs of children and the support needs of their parents are essentially the same. All children, regardless of race or socio-economic status benefit from developmental opportunities. In order to work or study, all parents should have access to quality child care arrangements.

Toronto is a large city in which the nuclear family is the norm, rather than the exception. Yet within this universe, the individual needs of children and families often differ significantly. For example, in the 1998 Child Care Needs Survey, 80 per cent of families who encountered problems in finding suitable child care identified shift work or need for part time care only as the major reasons. However, because of financial risk and the fact that demand far outstrips the supply of the traditional (weekday 7 a.m.- 6 p.m.) quality child care spaces, there are not many reasons for child care providers to venture into provision of extended hours, weekend service or service to high-need populations without significant expansion and/or enhancement of the existing system.

Families with children with special needs face an additional set of challenges while trying to meet their children's developmental and child care needs. Although specific funding is set aside for this group, the real challenge lies in successfully integrating children with special needs into the mainstream of the child care system.

This service plan also supports the development of services to Aboriginal and francophone populations, as well as on children at risk of negative developmental and health outcomes due to poverty and other social and environmental circumstances. Specific funding and access provisions are made for children of Ontario Works recipients, especially those who are either mandatory or voluntary participants in the Learning, Earning and Parenting (LEAP) program.

3.2 Integrating Service Delivery Systems

In the past, the different child care sectors tended to operate in isolation, reflecting their individual mandates and points of view. Although there are some examples of holistic approaches to meeting the needs of children, families and communities, this in general, has not been the practice. The current state of fragmented policy and funding approaches is not helping.

The need and opportunity for an integrated system of services to children and families is not limited to the child care sector. As a first step towards developing a shared vision of an integrated early childhood development system, consultations have been initiated with Parks and Recreation, Public Health, and Libraries. The focus of the consultations has been on assessing community needs and promoting local service partnerships.

On Council direction, a cross-sectoral study will be implemented in 2002 that will provide a comprehensive assessment of needs, opportunities and barriers to ensure that all investments in programs for children and families are planned and connected in a way that is consistent with the city's Strategy for Children. Various models of cross-sectoral integration are being explored through the Early Childhood Education, Development and Care Pilot projects, the first of which is scheduled for implementation in September 2001.

Families and children benefit from the ability to access a full range of quality services that meet their developmental and care needs. The key components of the Children's which identify the importance of an integrated system are:
  • The city demands a holistic as opposed to a sectoral or program response to issues affecting children's well-being.
  • The city promotes both, equity of access and responsive service approaches to children through integrated service planning at the neighborhood level.
  • The city builds and strengthens local community partnerships and negotiates the fullest and most prudent use of shared community resources.
Implementation Principle - Integration of Services
  • Children's Services, through the local service planning process and its operating policies and practices, will ensure that existing and new services reflect the principles of the Children's Strategy. To this end, Children's Services will ensure that service development and service contracts promote integrated, efficient and accountable services.

Inter-Sectoral Planning
Child care services do not stand alone. Education, as well as the city's recreation, library and public health programs all support healthy child development and family functioning. Ultimately, child development and child care plans must be prepared as a joint effort among all the sectors. The recent entry into service planning by the provincially mandated early years initiatives presents as much a challenge as an opportunity to improve the service co-operation and integration.

Lack of Information
Through the process of developing and regularly publishing the Report Card on Children in Toronto, there is now a wealth of information on the location of all services supporting the families and children in Toronto. However, with exception of licensed child care programs where detailed attendance records must be kept, the knowledge about the usage of other programs is generally limited to registration records and counts of attendees in individual programs. Aside from limited survey data, there is no knowledge on cross-sectoral service access. In a 1998 child care needs survey, some questions were asked about usage of library, recreation, resource centre and other programs by Toronto's families with young children. The results indicated usage of multiple services by a high proportion of families. This would indicate that usage counts from individual sectors are not entirely cumulative and that a large segment of families with young children do not access any services at all. More and better information must be collected on a cross-sectoral basis in order to successfully plan and deliver services. Recently the City of Toronto Council has adopted a recommendation of the Children and Youth Action Committee to design and carry out a comprehensive cross-sectoral survey to determine the usage and barriers to usage of programs serving the developmental and care needs of children and families in Toronto. The survey will be designed in 2001, and implemented and analyzed in 2002.

Unclear Policy Context
A major opportunity for cross-sectoral co-operation exists in the area of school-age child care and recreation. In the fall of 2000, the Ministry of Community and Social Services changed DNA regulations to allow the expenditure of child care subsidies in the recreation sector for the care of school-age children. Although this possible partnership has a potential for improving quality, service options and access, numerous policy and implementation issues must be addressed before a full scale partnership between child care and recreation can be introduced. The issues include user fees, quality assurance, attendance monitoring practices, and impacts on existing service providers.

Despite provincial expectations, it is not likely that the use of child care funds in recreation will result in more service for less funding. In the absence of additional funding, there will continue to be strong opposition from child care providers to any diversion of funds from child care to recreation. This service plan proposes to make use of the recreation sector in areas where there are insufficient levels of school-age child care and a lack of other suitable options. Meanwhile, work will continue on development of a comprehensive plan for child care needs of school-age children, including operating criteria for unlicensed school-age programs.

Funding Complexities
One of the major barriers to a large scale co-ordination of the recreation and child care sector is the complicated web of funding arrangements and the requirements to generate user revenue. In licensed child care, individual children receive funding, while in recreation, programs are base-funded. In child care, user fees are assessed according to a legislated formula while in recreation they may, or may not be charged depending on the nature of the program and on community need.

3.3 Promoting and Ensuring Accountability

Through processes embedded in the 1993 Service Plan, the Children's Services Division has sought a continuous improvement in the effectiveness and efficiency of child care services. Effective services are those that meet the child's, parent's and community's needs as efficiently as possible. The basic principle of the city's Children's Strategy is that in order to achieve equitable and beneficial outcomes for all children, the city investments must be tailored to the specific needs of individual communities and special focus populations.

Effective outcomes are built on eliminating the ambiguity about the purpose of traditional child care. It is healthy child development in a safe, nurturing and stimulating environment or ongoing support of parents' obligation to provide for their family's economic security through work or schooling. It is an underlying tenet of this plan that these purposes rather than being in conflict, are, in fact, highly compatible and that a high quality child care is the best way to achieve them both.

As a result of the 1993 Service Plan, the Children's Services Division already has in place numerous mechanisms to ensure that service in the licensed child care sector is as efficient as possible. The focus of this plan is on developing acceptable levels of accountability in the downloaded programs. Already underway is the development of operating criteria for family resource programs and a more detailed examination of allocation of wage subsidies.

It is important to understand that the efficiency of programs cannot be equated with the unit cost of service alone. There are several cost-drivers that affect the unit costs including age mix, occupancy costs, hours of operation (centres away from downtown often operate longer hours), proportion of qualified staff, and staff salaries. Training of staff and teaching salaries have been consistently identified through research as major contributors to quality of care. In 2000, as a part of the initiative to pay the actual costs of operation, the city provided additional funding to operators who agreed to increase the minimum salaries for trained Early Childhood Educator (ECE) staff to a minimum of $13.00 per hour. Subject to availability of funding, this initiative will continue in 2001 and beyond.

Implementation Principles - Accountability

  • The payment of adequate staff salaries and the provision of professional development opportunities for staff and boards of directors encourage positive service outcomes for children and families.
  • Caregiver rates should be structured to adequately reflect costs, training, hours of care and to provide an incentive for providers to stay in regulated home child care.

3.4 Actual Costs of Child Care Programs

Evaluation of the effectiveness and efficiency of programs cannot be undertaken without addressing the adequacy of funding. Beside the fact that there are service gaps and unmet needs, current funding levels do not meet the actual costs of operation of child care programs. Due to ongoing fiscal restraint policies of the province and the city, rates paid to licensed care providers were frozen from 1993 until 1999, and decreased for family resource programs prior to downloading in 1998. In November 1999, Toronto City Council made a commitment to a multi-year plan for return to payment of actual costs.

The process of determining actual costs of operation for licensed child care providers is fairly straightforward because a detailed budget analysis of every service contract is undertaken every year. The gap between the rates that Children's Services pays for subsidized clients and the actual costs as determined through analysis of agency budgets was approximately $5.5 million in 2000. The gap between full fee (public) rates and the rates that the city pays was approximately $10 million.

While there is no question that family resource programs and programs serving children with special needs have had their funding constrained for several years, their actual cost funding requirements are much harder to determine. Due to complex program and funding arrangements, more analysis is required before a determination can be made of the amount of funding that is required for actual costs of operation beyond the inflation-related increases. Children's Service will work with the service providers and other funders, including United Way, Health Canada and the Province of Ontario to develop a mechanism for funding of actual costs and ensuring the accountability of these programs.

While adequate funding of administrative costs is an issue for the whole child care system, nowhere is it more glaring than for family resource programs. None of the existing funders specifically provide for administration costs associated with running the programs, meeting reporting requirements, or training staff and board members. The city's operating criteria for family resource programs, which will be in place by 2002, will address the accountability issues as well as the associated funding requirements.

While rightfully demanding accountability and efficiency, child care funders must recognize that the ability of any child care program to deliver an effective program that meets the needs of the children, parents and the community, depends upon adequate resources.

Implementation Principles - Actual Costs

  • Child care programs should be paid their actual costs, including recognition of administrative costs
  • Operators should submit budgets that reflect their costs of doing business.
  • Budgets will be reviewed against a common set of guidelines.

3.5 Improving Equity of Access to Child Care Services

    Basic Assumptions

  • The Child Care Service Plan 2001 is guided by several basic assumptions about equity of access to child care services:

  • Equity is fundamental - Equitable access to services for children is part of the prime directive provided by City of Toronto Council in November 1999 through adoption of the Children's Strategy and Service Planning Guidelines. Equity is not a new concept, however it has proven a rather elusive one in the absence of specific targets and resources.

  • Equity does not necessarily mean adequacy-The discussion of equity is not meant to displace any discussion of adequacy of services. Through this document there are occasional references to "over-served" and "under-served" areas, communities and wards. The intent is to reflect whether the given community is above or below its equitable share of existing resources, rather than to reflect on the adequacy of resources.
For child care subsidies, it is relatively easy to estimate the level of unmet needs. However for other services, such as those provided by family resource programs, there is not a body of knowledge that allows us to define what is the minimum acceptable level of services for any community. All we know is that the existing resources are sufficient to support only a small part of the families that would benefit from the services provided by these programs.
  • Different sectors require different definitions - How equity is defined depends upon the specific characteristics of each service sector. The definitions contained within the 1993 Child Care Service Plan are specific to the child care sector only. Even within child care, different definitions must be used to distinguish between services that are targeted and those that are universal.

  • Two basic options- Data from all child care sectors clearly show that access to resources is not fairly distributed throughout Toronto. If the status quo is not acceptable, then equity can be achieved either through infusion of new resources into under-served areas, through re-allocation of existing resources, or through any combination of the two which achieves the desired result within an acceptable time frame.

  • Need for expansion funding- Obviously, it is preferably to achieve equity in the system through continuous expansion without having to reduce accessibility in the wards that currently have more than their share of resources. As history shows, growth in child care funding occurs somewhat sporadically, but it does happen. The challenge is to develop a plan that adapts to the changing circumstances of availability or lack of growth of resources.
  • Time frame for achievement - Although this plan is built on an assumption that the preferable way to improve access and achieve equity is through growth, the fundamental question remains: How long are we prepared to live with inequity? This plan sets out a five-year time frame for achieving equity with annual reviews of progress and adjustment of targets depending on the availability of new resources. In July of every year, following the reconciliation of the child care budget approvals by the City Council and the regional office of Ministry of Community and Social Services, an appropriate adjustment in equity targets for the following 12 months will be made. A major review of targets will follow the release of 2001 Census data in 2002-03

  • First-Come, First-Served - City Council directives for the Child Care Service Plan demand that access to child care subsidies be granted on a first-come, first-served basis, subject to equity considerations. In practical terms, this policy is being implemented on a municipal ward and age-group basis.
  • First-Come, First-Served and Ontario Works - The provincial Child Care Service Management Guidelines dictate that "Ontario Works participants making the transfer to employment are a priority group for child care fee subsidies." Within the Children's Services budget $13.467 million has been allocated specifically to Ontario Works clients to ensure timely access to child care. This translates into approximately to 2,050 subsidies dedicated primarily to school-age children.
The priorities for granting child care subsidies from this allocation are determined by Social Services Division. The child care system's ability to accommodate a large number of Ontario Works clients depends upon the availability of funding to offset the user revenue that is lost when a regular subsidy client is displaced (approximately $1,300 per client). Therefore, priority admissions for Ontario Works clients outside the specifically allocated 2,050 spaces can be granted only as far as the financial balance of the system is maintained. Additional funding of $2.7 million has been set aside for the child care supports for OW families in which parents are under 21 years old and participates in the Learning, Earning and Parenting program. Such participation is mandatory for those who are 16 or 17 years old.

Equity of Outcomes
In an ideal world, equity is measured not in terms of access to resources, but in terms of outcomes. The framework adopted for the Toronto Report Card on Children and for the development of service plans clearly identifies the need to focus on achieving equity of outcomes. The process of developing benchmarks, measuring progress, and proposing corrective action is being undertaken under the aegis of the City of Toronto Children and Youth Action Committee through the annual Report Card on Children and CYAC Action Plan. Service plans reflect individual sectoral (departmental) proposals on how to best achieve the Council directions within given resources. In this context, equity is viewed in terms of allocation and access to child care resources

Child Care Subsidies
Subsidies are available to offset the cost of child care to those families who require it in order to engage in work or study. Subsidies are also available for families who have special needs and cannot afford the full cost of child care. (NB: this definition does not apply to Ontario Works clients.) Families' ability to pay is determined by their financial resources as measured by a needs test administered according to the provisions of Day Nurseries Act and associated regulations.

Implementation Principle - Equity for Child Care Subsidies
For planning and allocation purposes, resources are allocated on the basis of the number of children in a ward who live in families with incomes below the Statistics Canada Low Income Cut-Off (LICO) as a proportion of all children in the City of Toronto who live in families with incomes below the LICO.

In other words, any given municipal ward should have the level of resources that equals its share of the city-wide total of children in families with incomes below LICO. This is referred to as the ward "ceiling" (See Chart 5). This does not mean that subsidies are restricted to families whose incomes are below LICO. Assuming that a family passes the financial need test, subsidy is allocated on a first-come, first-served basis and user fees are assessed according to each individual family's income.

Chart 5
Children Aged 0 - 9 by Ward (1996 census)

For licensed child care programs, equity requirements also apply to access by different age groups of children. Historically the age equity shares have been defined for all areas of Toronto as follows:

Currently, the proportion of infant and toddler subsidies is significantly below its allocated level. This is entirely due to lack of system capacity to accommodate these age groups. Because the financial risk associated with the cost of vacant spaces, many operators are reluctant to provide centre-based care for infant and toddlers despite long waiting lists. Virtually every ward is below its ceiling for infant care. In order to encourage child care operators to increase the licensed capacity for the youngest children, this service plan provides for maximum possible enrollment in infant and toddler centres without respect to the geographic equity criteria.

Implementation Principles - Age Equity

  • Allocation of subsidies to each ward and subsidy grants to clients are subject to the individual age group ceilings: 15per cent infant, 15per cent toddler, 45per cent pre-school and 25per cent school age.
  • Every attempt will be made to fill all vacant licensed infant and toddler spaces.

Principles of Equity for Population-Based Programs
On the basis of current research, this service plan assumes that the incidence of developmental disabilities is evenly distributed within the population without regard to the socio-economic status of families. Family resource programs focus on providing supports and developmental opportunities to all families and children regardless of income or employment status.

Implementation Principle - Equity for Population-Based Services

  • For planning and allocation purposes, the service plan proposes that resources be allocated to each ward on a per capita basis for special needs resourcing programs and family resource programs.

Resources for Children and Families at Risk and High-Need Areas
It must be recognized that in order to secure equitable outcomes for all children, additional investments may be required for families and children living in high-need areas or in circumstances that put children at risk of long-term negative outcomes. This service plan uses the definition contained in the Toronto Report Card on Children: High-needs areas are those neighbourhoods that have a very high concentration of children in low-income families and children in single-parent families (see Map 1). In addition, some service providers by virtue of their location or specialization serve predominantly high-need children or children at risk. At this time a child care centre will qualify if at least 50 per cent of the operating capacity is occupied by children who pay no user fee; by this definition alone, approximately 24 per cent of all centres would qualify.

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Implementation Principle - Supports for High Needs

  • Child care providers serving children in high-need areas will be afforded protection and support through the following measures:
    • Lower optimal capacity than the usual 98 per cent (to be negotiated on an individual basis)
    • Better teacher-child ratios where warranted
    • Support of re-adjustment of salary costs to accommodate all trained staff

Services for Aboriginal and Francophone Populations
Child care programs serving Aboriginal and francophone populations are usually associated or co-located with other dedicated facilities such as schools or housing co-operatives. In order to ensure the viability of these programs and to promote their growth, the normal interpretation of the service plan as it applies to the location of new or expanded facilities in over-served wards will not apply.

Implementation Principle - Aboriginal & francophone programs

  • Aboriginal and francophone programs are able to locate in any area of the City of Toronto without consideration to the service levels provided by other child care operators

Equity, Need and the Waiting Lists
Over the years there has been a tendency to define need and to allocate new resources in terms of waiting lists. However research conducted for the 1993 service plan clearly demonstrated that waiting lists are to a large degree a function of density and visibility of existing services. In other words, the more services that are visible and accessible, the more demand they will create. Making quality services available is a key to generating demand and improving equity of access in under-served areas.

Growing Wards and Neighbourhoods
The demographic data upon which the ward allocations are based will be always somewhat out of date. However the magnitude of population change within individual wards has to be quite significant in order to affect the overall distribution of resources. (For example, the ward with the highest level of service above the absolute equity level would have to grow in population by more than one-third in order to have a level of population that would warrant the level of service the ward currently receives. Such population growth would have to happen without any growth in the rest of the city.)

3.6 Achieving Equity

Equity Does Not Happen on Its Own
Past experience suggests that without intervention there is very little likelihood of ever attaining equitable allocation of resources across the city. Experience also teaches us that without a timetable supported by annual setting of targets and review of progress, the chances of success are limited at best. However, without providing tools that allow for development of child care services in under-served areas, without public education, and without co-operation among the various service sectors serving, setting targets alone is not sufficient.

Barriers to Equity
Among the barriers to greater service equity are:

  • Resistance among existing service providers to the possibility of having to re-allocate resources from one area of the city into another.

  • An insufficient supply of licensed spaces, or vacant licensed spaces or home child care in some areas of the city. This capacity needs to be developed through locating child care spaces in existing facilities, or, if necessary, the capital development of new facilities.

  • For a variety of personal, cultural and perceptual reasons, subsidized child care in some wards may be relatively under-utilized. However, given changing ward demographics and perceptions as well as the fact that no ward has child care resources for much more than 20 per cent of eligible children, the resource allocation system has to be based on actual distribution of children in low income families.

Overcoming Barriers
New, or re-allocated subsidies alone are not sufficient if there is not a sufficient licensed capacity to take the available subsidies. Often the greatest barrier to expanding the supply of licensed child care services in under-served areas is the lack of ongoing supports such as wage subsidies or the uncertainty related to start-up and first-year operating costs. The city will use the limited resources at its disposal to provide the incentives necessary to develop new services.

The available funding instruments are:

  • The Child Care Capital Reserve Fund (for a fuller discussion see Section 3.10)
  • Wage subsidy (any unallocated surplus can be redirected as necessary)
  • Expansion funding dedicated to a particular target.

New construction is very capital intensive. Given current construction costs of $15,000-$20,000 per space and the lack of provincial contributions to child care capital projects, it is not likely that many new facilities will be built from the ground up with public funds alone. Because the Child Care Capital Reserve Fund is not sufficiently large to sustain a building program across the whole city, it is important that it be used to address equity issues. Partnerships and innovative uses of the fund, such as revolving loans, build-to-lease projects should enable the most effective use of the scarce capital funds.

Implementation Principle - Investing in equity

  • Future capital and operating investments should promote, rather than hinder the achievement of equity.

A limited amount of wage subsidy funding becomes available every year as child care operators close or change their operating capacity; the annualized value of the surplus is .415 million in 2001. This surplus will be re-allocated in a manner that supports the geographical and age equity of the plan.      

Implementation Principle - Surplus wage subsidies

  • Surplus wage subsidies will be used to promote the age and geographical equity targets of the service plan

3.7 Equity Scenario

Licensed Child Care

Chart 6 shows the current variance from the equity distribution. On a per cent basis the biggest shortfalls are in wards 16, 39 and 41. Because of the differences in size of child population in families below LICO, it is also useful to look at the absolute number of subsidies currently above or below the equity level. Chart 7 shows that several wards are more than 100 subsidies below and three wards are more than 1000 subsidies above their share. It will take approximately five years of expansion of 2,000 spaces each year to achieve geographical equity without reduction in any of the over-served wards. It is important to ensure that new growth is directed to those areas that do not currently receive their share of resources and that these areas are ready to accept any such growth. In the areas in which there are not sufficient licensed spaces for school-age children, the plan will permit eventual placement of subsidized children into recreational programs after technical and policy issues have been satisfactorily resolved.

While it is preferable to achieve equity through expansion, it is by no means guaranteed that sufficient provincial and municipal funding will be made available to do that. In that case it will be necessary to provide for a gradual re-allocation of resources. Based on the turnover of clients (7,000 - 9,000 per year) it is possible to develop annual targets for re-allocation of subsidies without affecting the child care arrangements of any existing client.

Appendix 6.A and 6.B contain two scenarios for ward subsidy ceilings for each of the 44 wards for the period July 1, 2001 to June 30, 2002. The first scenario assumes that the province will approve the city's request for an additional 2,000 subsidies and that no re-allocation of subsidies between wards will be necessary because all new subsidies will be allocated to under-served wards. The second scenario assumes that no new resources are forthcoming and therefore subsidies must be moved among wards to achieve any progress toward equity. This re-allocation will be achieved without displacing any existing child from subsidized care since naturally occurring withdrawals are far in excess of any reduction of spaces.

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Special Needs Resourcing
Analysis of the downloaded programs indicates that children with special needs across the city have reasonably equitable access to services and supports. Nevertheless some children and families travel much longer distances to services than others. Consultations with service providers also reveals the need for better information, co-ordination of service access and removal of physical barriers to access child care centres.

Implementation Principles - Special Needs

  • Children with special needs should have access to a range of service options in their community. In 2001, Children's Services staff will complete an analysis of the location and utilization of resources and develop a plan and timetable for achieving equity to be implemented in 2002.
  • New expansion funds will be used to promote increased accessibility to supports for children in high-need areas in equitable fashion.

Family Resource Programs
As Map 2 shows, funding for family resource activities (measured by the city's expenditure per child) varies greatly across the city. This pattern of inequitable funding has developed historically through lack of planning and co-ordination among funders. In addition, some program components are delivered by recreation providers or by Public Health. It will take some time to determine the amount of funding that is available to individual communities and exactly what services are being provided. However, even at this point it is clear that several wards are significantly under-served, and new funding will be directed toward development of services in these areas.

Implementation Principle - Expansion of Family Resource Programs

  • Available expansion funds will be used to develop family resource programs in under-served areas. Emphasis will be on integrating family resource and licensed child care programs wherever possible.

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3. 8 Developing the Child Care Budget

The city's annual budget cycle begins early each summer. In developing the child care budget, the following factors must be considered:

  • City Council directions
  • The existing provincial-municipal service agreement
  • Analysis of service patterns, costs and user revenues
  • Analysis of purchase of service budgets
  • Analysis of needs
  • Service plan targets.

City Council approves the budget in late April and when approved the child care budget is then presented to the Regional Office of the Ministry of Community and Social Services which reviews and adjusts the budget according to its own criteria.

Following provincial approval, the Children's Services Division informs the Council about which parts of the budget have received provincial funding and which did not. (NB: following the approval of this service plan, the division will present revised service targets and equity options for the following 12 months).

Current Council Directions
Council provides direction through approval of initiatives proposed either by the community (as expressed through bodies such as the Children and Youth Action Committee and the Child Care Advisory Committee), the department or in response to initiatives by other levels of government. Since 1999, the directions have been set in response to the findings of the annual Toronto Report Card on Children, and the Children's Action Plan. Besides continuing with the existing service delivery, the directions for 2001 include:

  • Progress toward payment of actual costs of service
  • Preservation/expansion of licensed child care system
  • Expansion of family resource programs
  • Expansion of services for children with special needs
  • Continuing retrofit of playgrounds
  • Continuing City support for the York Before- and After-School Programs

Most of the Council-approved directions have cost implications and usually require matching support from the Ministry of Community and Social Services. In fact, all program expansion requests are usually approved subject to provincial cost-sharing. Due to municipal and provincial budget cycles, it is rarely possible to implement any new program initiative before July of the year in which the funding is approved. However this consideration does not apply to actual cost funding which can be distributed on a retroactive basis back to January of the current year. The child care budget as approved by the City of Toronto Council on April 26 - May 1, 2001 is outlined on a high level in Chart 8.

Not included in the overall budget allocation is a separate request by the City Council to the province for cost-shared funding of 2,000 additional subsidy spaces.

Existing Provincial- Municipal Service Agreement
Provincial funding of the child care system is based on an annual service contract between the Province of Ontario and the City of Toronto. The service contract specifies fiscal commitments and service level expectations for the coming year. As a result of provincial regulation changes and constrained funding, the actual share that the province is funding under the contract has been decreasing. Given the increasing costs, the system is increasingly dependent upon 100 per cent municipal funding, or funding from outside sources such as revenue from STEP clients. In 2001, the base funding from the Province must increase by at least $4.7 million or the existing service level of 24,216 subsidized spaces cannot be maintained. In 2000, the Consumer Price Index increased by 2.96 per cent. This should translate to approximately $5.5 million increase on the approved 2000 provincial contribution of $184.5 million. Instead, the projected base contribution has been adjusted downward to approximately $176.0 million, an $8.5 million reduction.

3.9 Provincial Funding in 2001

The city's funding request to the Ministry of Community and Social Services is divided into two major areas. The base budget request, which includes the costs associated with the provision of 24,216 subsidy spaces, annualization of costs associated with actual costs committed in 2000 as well as a $4.0 million contribution towards the cost of refurbishing or replacing playgrounds in order to meet provincial licensing requirements.

The expansion budget request contains $11.8 million for 2,000 new subsidies and an additional $.8 million for expansion of special needs resourcing and family resource programs as directed by Council on April 24 - May 2, 2001.The total request for provincial funding amounts to $201.8 million for 2001.

The three-year forecast, which is based on annual expansion of 2,000 subsidized spaces, fourth and fifth year contributions towards the restoration of actual cost of service, and an annual adjustment for anticipated inflation is shown in Chart 9.

3.10 Capital Funding

A Brief History of Capital Funding

Capital funding was formerly a mixture of government and private funding. However, since 1995 the provincial government has not made any capital investments in child care.

Even before the end of provincial capital funding, very few stand-alone centres were ever built and those that were, were mainly constructed by government on government-owned land. Private developers (including housing co-ops) have in the past built child care facilities as a part of larger developments either on their own or as a part of development agreements. While limiting flexibility somewhat, this kind of construction is usually more efficient because it allows infrastructure costs to be shared.

The city (in the form of the previous Metro government) has a long history of developing new child care spaces either on its own, in partnership with other levels of government or with private industry.

Available Capital Strategies
There are a number of ways that development of new child care spaces can be supported, however, most of them require some level of government funding. The city is interested in developing additional capacity to serve the youngest children. The cost of developing infant spaces is much higher that any other type of spaces because infants require separate play and sleep areas. Even renovations of existing space presents challenges as compared to accommodation for older age groups. In order to ensure that any capital expenditures are made in as effective a manner as possible and in accordance with the provisions of the service plan, a capital plan identifying development priorities and target areas will be prepared subsequent to the approval of this document.

The city can support the development of new child care spaces through many different avenues:

  • The Child Care Capital Reserve Fund-The purpose of the fund is to protect the existing supply of spaces and to provide for development of new spaces in support of the equity provisions of the approved service plan. The reserve fund which was originally funded by excess user fees (i.e. user fees not required to support the approved service levels) has in recent years been funded through any unspent city contribution to cost-shared child care programs. Additionally in 2000, City Council approved an annual contribution of $320,000 through the operating budget. However, during the 2001 budget approval process, the Council deferred the planned contribution until the 2002 budget year. Currently the uncommitted fund balance stands at $7.8 million, with an additional $1.7 million held in reserve for previously approved projects. According to the city's expenditure by-law, any projects to be paid for from this fund require specific Council approval.

  • Loan Guarantees- Over the last decade, the city has provided loan guarantees to several non-profit organizations throughout Toronto to assist with expansion or development of new services. Generally, to qualify for a loan guarantee, the proposal must support the objectives of the service plan and demonstrate financial viability. Agencies repay the cost of a commercial loan through user fees over a period of time. In order to secure its interest in the loan, the city usually insists on security of tenancy and a level of fiscal reporting above and beyond the usual requirements of subsidy contracts.

  • Section 37 and Developmental Agreements- In the growth areas of Toronto it is sometimes possible through developmental agreements to secure funding or actually build a facility within large scale commercial buildings. Through experience it has been found that the most successful facilities concentrate on infant, toddler and pre-kindergarten children, essentially serving as workplace child care facilities. It is important to ensure that these facilities are built on a sufficient scale to maintain financial viability.

Occasionally, development of new child care centres comes as a result of employers' attempts to retain skilled employees who might otherwise leave the labour force for a prolonged period after the birth of their children. This kind of development, though welcome, is very rare. Recently the provincial government announced a tax measure to assist employers to contribute toward development of child care facilities.

 

Principles for Allocation of Funding from the Child Care Capital Reserve Fund

1. Subject to upholding the equity, accountability and operating effectiveness principles of the service plan, the Child Care Capital Reserve Fund may be used for the following types of projects:

  • Relocation of child care centres that lose tenure due to closure of schools or other publicly operated facilities
  • Renovations for the purpose of operating a more efficient child care site
  • Renovations for the purpose of introducing or enlarging the infant component to a child care centre
  • Development of new child care facilities, either stand-alone facilities or those integrated into larger developments.

2. Funding can be made available to non-profit or municipal child care agencies subject to the following restrictions:

  • Resulting programs must be financially viable
  • The operators must provide an agreement for security of tenure or a proportional repayment of the capital grant in case of loss of tenure
  • Priority for funding will be assigned to programs caring primarily for subsidized children located in areas designated as under-served in the service plan, or areas with high proportion of at-risk children.

3. The service plan and its annual update will identify areas in need of new licensed child care spaces. Children's Services will issue an annual request for proposals to generate new service capacity with the aid of the Child Care Capital Reserve Fund.

4. Although the purpose of the fund is to promote the growth in licensed child care spaces, priority and additional funding may be given to projects that build on synergies gained through integration of services.

5. The Child Care Capital Reserve Fund may not be used for the purpose of building or renovating stand-alone, single-use, school-age space.

6. The Child Care Capital Reserve Fund may be used as a revolving fund which grants loans to the operators to be repaid through user revenue.

3.11 Guidelines for Community Action Plans

What are Community Action Plans
The community action plan is a result of a process which brings together all stakeholders including parents, service providers and the community at large for the purpose of developing an implementation plan for child care services within the parameters and vision embodied in the city-wide service Plan.

Defining a community
The task of defining distinct communities within the contiguous urban areas is not an easy one, even less so when a degree of precision is required. There are not many clearly defined areas such as the Lakeshore in Etobicoke or the Flemingdon Park area in North York. The planning areas have to make sense; that means that sometimes, for the purpose of development of community action plans, wards should be aggregated into larger areas such as East Toronto (incl. Wards 29, 30, 31 & 32).

For practical and accountability purposes, resources are allocated to each of the 44 City wards on the basis of the principles defined in the equity section. However this does not pre-empt the need to look at smaller areas because of their geography or the nature of the community. Wherever possible information will be made available for smaller areas as defined through the planning process. Subsequently resources may be allocated on the basis of those smaller areas as well.

Implementation Principles - Community Action Plans

  • Community action plans will focus on implementing overall direction of the service plan which is based on current knowledge, research and city-wide expectations. Local plans are about finding the best way of implementing this framework and not about setting or amending the city's child care vision.

  • The City's Children's Strategy and the Child Care Service Plan focus on equitable outcomes for children and families, not on equal allocation of city's resources. This means that for community planning process a thorough assessment of community assets is required; these include investment by other funders such as the United Way, various foundations and the federal government.

  • The planning process must focus on cross-sectoral integration and inclusion of all children and families.

  • Ensuring maximum possible accountability and effectiveness of services must be an integral part of the planning process

  • Participation of related sectors including, but not limited to, Libraries, Parks and Recreation and, Public Health is essential to successful development of community action plans.

Priorities for Development of Community Action Plans
Municipal and community resources are not sufficient to proceed with the development of action plans in all wards at the same time. It is therefore necessary to select those areas where the need is high. In general these are wards that are significantly below the equity level for child care subsidies and where no spare capacity for expansion exists. Generally it takes approximately two years to bring new spaces on line and, therefore, the community planning should be undertaken in those areas first. However, the fact that a community action plan might not be fully in place should not preclude service development (licensed childcare, family resource centres and special needs programs) where the implementation principles of this service plan are met. Also, wards that are significantly above their equity level will be considered for an early action plan implementation in the event of lack of expansion funding.

The first wave of development of community action plans should include under-served wards 41, 39, 16, 23, 14 and, over-served wards 42, 27, 11, 44, 43.

3.12 Conclusion

This service plan document has reviewed the city's service planning history, provided an overview of the service management principles and policies currently in use, and presented a profile of the range and level of current child care services available. This service profile has been analyzed within the context of the city's needs and a three-year action plan which addresses service gaps, inequities and inadequacies has been proposed.

As discussed throughout the document there are many service issues to be addressed over the next few years; including the plan for school-age care, exploration of models of supervised home child care delivery and the development of community action plans. This document will be updated on annual basis as a part of the municipal and provincial budgeting cycle.  

Appendices 

APPENDIX 1 - SERVICE PLANNING MANDATE DOCUMENTS
1.A The City's Strategy for Children
1.B Ontario Framework for Child Care Service Planning
 
APPENDIX 2 - CLIENT DATA
2.1 Profile of Families Receiving Subsidized Child Care
2.2 Employment Status of Parents with Child Care Subsidy, May 2001
2.2a Employment Status of Parents with Child Care Subsidy, October 1992
2.3 Enrolment as of May 28, 2001
2.4 Sample Schedule of User Fees
2.5 Access to Special Needs Resourcing
 
APPENDIX 3 - SERVICE MAPS
3.1 Child Care Centres
3.2 Home Child Care Providers
3.3 Informal Child Care Providers
3.4 Funding of Family Resource Programs
 
APPENDIX 4 - PROVINCIAL FUNDING
4 Provincial Subsidy 1999 - 2001
 
APPENDIX 5 - MINUTES OF SERVICE PLANNING MEETINGS

Focus Groups

Special Needs - Standards of Service
Special Needs - Service Equity
Family Resource Programs - Access and Units of Services Measurements
Family Resource Programs - Budget Guidelines
Home Child Care - Funding
Home Child Care - Access
Actual Costs - Wage Subsidy
Actual Costs - Budget & Financial Accountability
Francophone Community - Service Equity Group
Native Aboriginal Working Group
 

Integration Forum - April 20, 2001

Special Needs - Program Supports
Special Needs - Funding Supports
Home Child Care & Family Resource
Integration
 
APPENDIX 6 - EQUITY TARGETS
6.A Subsidy Ceilings Based on 26,216 Subsidies
6.B Subsidy Ceilings Based on 24,216 Subsidies

APPENDIX 7 - COMPENDIUM OF IMPLEMENTATION PRINCIPLES

Integration of Services

  • Children's Services, through the local service planning process and its operating policies and practices, will ensure that existing and new services reflect the principles of the Children's Strategy. To this end, Children's Services will ensure that service development and service contracts promote integrated, efficient and accountable services.

Accountability
  • The payment of adequate staff salaries and the provision of professional development opportunities for staff and boards of directors encourages positive service outcomes for children and families.
  • Caregiver rates should be structured to adequately reflect costs, training, hours of care and to provide an incentive for providers to stay in regulated home child care.
Actual Costs
  • Child care programs should be paid their actual costs, including recognition of administrative costs
  • Operators should submit budgets that reflect their costs of doing business.
  • Budgets will be reviewed against a common set of guidelines.
Equitable Allocation of Child Care Subsidies
  • For planning and allocation purposes, resources are allocated on the basis of the number of children in a ward who live in families with incomes below the Statistics Canada Low Income Cut-Off (LICO) as a proportion of all children in the City of Toronto who live in families with incomes below the LICO.
Age Equity
  • Allocation of subsidies to each ward and subsidy grants to clients are subject to the individual age group ceilings: 15 per cent infant, 15 per cent toddler, 45 per cent pre-school and 25 per cent school age.
  • Every attempt will be made to fill all vacant licensed infant and toddler spaces.

Equity for Population-Based Services

  • For planning and allocation purposes, the service plan proposes that resources be allocated to each ward on a per capita basis for special needs resourcing programs and family resource programs.
Supports for High Needs
  • Child care providers serving children in high-need areas will be afforded protection and support through the following measures:
  • Lower optimal capacity than the usual 98 per cent (to be negotiated on an individual basis)
  • Better teacher-child ratios where warranted
  • Support of re-adjustment of salary costs to accommodate all trained staff

Aboriginal & francophone programs

  • Aboriginal and francophone programs are able to locate in any area of the City of Toronto without consideration to the service levels provided by other child care operators.

Investing in equity

  • Future capital and operating investments should promote, rather than hinder the achievement of equity.
Surplus wage subsidies
  • Surplus wage subsidies will be used to promote the age and geographical equity targets of the service plan
Special Needs
  • Children with special needs should have access to a range of service options in their community. In 2001, Children's Services staff will complete an analysis of the location and utilization of resources and develop a plan and timetable for achieving equity to be implemented in 2002.
  • New expansion funds will be used to promote increased accessibility to supports for children in high-need areas in equitable fashion.
Expansion of Family Resource Programs
  • Available expansion funds will be used to develop family resource programs in under-served areas. Emphasis will be on integrating family resource and licensed child care programs wherever possible.
Community Action Plans
  • Community action plans will focus on implementing overall direction of the Service Plan which is based on current knowledge, research and city-wide expectations. Local plans are about finding the best way of implementing this framework; and not about setting / amending the City's child care vision.

  • The City's Children's Strategy and the Child Care Service Plan focus on equitable outcomes for children and families, not on equal allocation of city resources. This means that for community planning process a thorough assessment of community assets is required; these include investment by other funders such as the United Way various foundations and the federal government.

  • The planning process must focus on cross-sectoral integration and inclusion of all children and families.

  • Ensuring maximum possible accountability and effectiveness of services must be an integral part of the planning process

  • Participation of related sectors including, but not limited to, Libraries, Parks and Recreation and, Public Health is essential to successful development of community action plans.

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