September 1, 1998
To:Community and Neighbourhood Services Committee
From:Commissioner of Community and Neighbourhood Services
Subject:Transfer Plan for Child Care Services and Adjustments to Child Care Support for
Ontario Works
Purpose:
This report outlines the transfer plan for child care jointly negotiated between the City and
the Ministry of Community and Social Services. It also outlines the additional provincial
subsidy available to support the child care needs of Ontario Works participants and
describes the associated adjustments the City is expected to make in its child care strategy
for Ontario Works clients.
Funding Sources, Financial Implications and Impact Statement:
In letters dated July 3, 1998 and August 18, 1998, the Ministry of Community and Social
Services advised the City that an additional $3,147,500. in annualized provincial subsidy
was available bringing the total annualized provincial contribution for Ontario Works child
care funding to $11,093,600. This additional provincial subsidy is conditional upon
municipal cost sharing approval and some refinement to the child care targets and strategy
for Ontario Works outlined in the Business Plan originally approved in 1997. The $590,156.
required as the 20 percent municipal contribution can be funded fiscally from the surplus
user revenue in the Children's Services appropriation identified in the June 30, 1998
Corporate Variance Report. An annualized increase of $786,875. in the net base budget of
Children's Services is required as part of the 1999 budget process to maintain the approved
service levels and is recommended in this report.
On August 11, 1998, the Ministry of Community and Social Services further advised the
City that $338,000 in 100 percent one time funding was being approved to support the
transitional technological activities outlined in the "Child Care Plan for Transfer of
Responsibility for Managing Child Care Delivery".
The financial implications and recommendations contained within this report have been
discussed with the Finance Department and have the concurrence of the Chief Financial
Officer and Treasurer.
Recommendations:
It is recommended that:
(1)the $590,156 required as the 1998 municipal cost sharing contribution to the additional
$3,147,500 provincial subsidy offered to enhance the funding support for child care within
the Ontario Works program be found from the surplus user revenue identified within the
Children's Services appropriation in the June 30, 1998 Corporate Variance Report and
approval be given to adjust the 1998 and 1999 Children's Services budgets accordingly;
(2)the City negotiate with the Province the fiscal use of the additional provincial funds to
meet the costs associated with the current level of Ontario Works child care in 1998 and
develop a strategy for implementation in 1999 that would increase the number of Ontario
Works clients' children who could be supported with the annualized enhanced provincial
funding;
(3) the City accept the $338,000 in one time provincial transitional funding to support the
technological activities identified in the child care transfer plan;
(4) the Department consult with the community concerning the most appropriate strategies
for implementing the requirements of Ontario Works Child Care and report further on the
outcome of this consultation recommending specific changes in response to the enhanced
level of provincial funding and in response to unmet child care service demand;
(5) the jointly negotiated plan for the transfer of child care services be approved and the
Department continue negotiations with the Province for adequate administrative support for
the increased program responsibilities and an expeditious transfer date;
(6) the Office of the Mayor, with the assistance of the Children's Advocate and the support
of the Commissioner of Community and Neighbourhood Services continue to advocate to
the Province the City's need for child care subsidy expansion to meet the significant service
demands of Ontario Works and other eligible clients; and
(7) the Department report back to Council on the results of the ongoing negotiations with
the Province.
Council Reference/Background/History:
On June 10, 1997, a strategy to meet the child care needs of Ontario Works clients was
approved as part of Toronto's Ontario Works Business Plan. At that time, an annualized
budget of $9,627,900 (gross) was approved to support a target of 2,050 units of child care
service for Ontario Works participants. As part of the 1998 budget approval process,
Toronto Council also authorized the creation of a Social Services Reserve and agreed to
fund up to 2,000 additional child care subsidies for Ontario Works participants from it,
conditional upon provincial cost sharing approval. A provincial response to this subsidy
expansion request is still outstanding.
As part of the 1998 budget process, the Children's Services base was increased by
$37,439,300 in recognition of the additional cost shared child care services being transferred
from the Province to the City. These additional child care programs include: wage subsidy,
special needs resourcing, approved corporations and family resource centres. Since January,
departmental officials have been working with provincial officials to develop a detailed
transfer plan for these services. The development of that plan has now been completed and
is currently being reviewed provincially. While the City has been cost sharing these
additional programs since January 1, 1998, the actual transfer of the system management
responsibility for them awaits formal approval of the plan which is now expected to occur
by calendar year end. This report summarises the components contained within the child
care transfer plan and highlights as yet unresolved issues related to the level of
administrative support and the timing of the transfer. This report also identifies the
confirmed level of provincial support for transitional funding required for transfer of the
programs.
One particularly significant component of the Child Care Transfer Plan involves suggested
revisions to the Ontario Works child care strategy. New approaches are being proposed in
response to increased service pressure for child care from the sole support caseload being
transferred to the City and in response to provincial conditions associated with an offer of
additional funding available for Ontario Works child care. This report highlights these
proposed new directions for publicly assisted child care in both the short and longer term,
and recommends advising and consulting the community prior to Council consideration of
any recommended changes.
On July 3, 1998, the Province advised the City that provincial child care funding for Ontario
Works child care could be increased on an annualized basis by $3,147,500. A subsequent
letter dated August 12, 1998 clarified the provincial expectations. This increased provincial
funding support is offered to the City on three conditions. First, the City must contribute its
matching 20 percent portion ($590,156 fiscally, $786,875 annualized). Secondly, the City's
child care strategy as approved in the 1997 Ontario Works Business Plan must be modified
in accordance with certain provincial suggestions (e.g. greater use of part-time and informal
care options). Thirdly, the increased funding must be used to increase the level of child care
service available to Ontario Works participants.
Comments and/or Discussion and/or Justification:
The Child Care Transfer Plan
A copy of "The Joint Implementation Plan for the Transfer of Responsibility for Managing
Child Care" has been filed with the Clerk's Office. The Child Care Transfer Plan provides a
brief history of this municipality's longstanding involvement in child care and describes the
structure, processes, policy and accountability framework for managing the existing child
care subsidy system. The Plan also details how the transferred services (approved
corporations, family resource centres, wage subsidy and special needs resourcing) will be
integrated and managed by the Children's Services Division. Specific detail is provided with
respect to planned modifications to the approved Ontario Works child care strategy and to
the integration of the Serious Occurrence/Complaint Reporting Protocol. Resourcing needs
related to the program transfer are also outlined.
The Province has confirmed one time 100 percent provincial transitional funding in the
amount of $338,000. for the technological activities necessitated by the transfer of the
additional child care programs and responsibilities. Discussions continue concerning both
the exact timing of the transfer and the level of administrative support required by it. The
Plan proposes transfer of the child care programs by calendar year-end.
Ontario Works Child Care Strategy
The transfer plan contains a detailed section on the kinds of revisions to the Ontario Works
child care strategy required to respond to increased service demand within current funding
limitations. While the Province has not formally responded to the City's Social Services
Reserve Initiative and its request to cost share up to 2,000 additional fee subsides, it has
offered $3,147,500 as an annualized funding enhancement to the Ontario Works child care
envelope. As described above, this provincial offer is conditional upon municipal cost
sharing, upon certain revisions to the Ontario Works child care strategy, and upon assurance
that more service for Ontario Works clients can be provided as a result of this increased
provincial funding.
This report proposes a City response to the provincial offer. With more than 21,000 children
of social assistance recipients who have a mandatory participation requirement under
Ontario Works, the City's current child care service target of 2,050 units of care is
inadequate. The City, therefore, welcomes the provincial offer of $3,147,500 in additional
annualized funding for Ontario Works child care and can find the necessary matching
municipal fiscal contribution of $590,156 from surplus user revenue.
As already described in the "Joint Implementation Plan for the Transfer of Responsibility
for Managing Child Care", the City has outlined ways in which the child care portion of the
Ontario Works Business Plan can be modified in keeping with the Ministry suggestions
contained in its July 3, 1998 offer of additional funding.
To maximize the use of the available dollars, the Ministry is encouraging the City to
consider using more part-time care by tying a child's care arrangement to the actual amount
of time a parent is required to be engaged in a qualifying activity. Basing a child's care plan
on a parent's entitlement time is a significant departure from the current practice of
providing a full day developmental service for children when so requested by subsidy
eligible parents. Making the proposed entitlement change would maximize scarce resources
but would also narrow parental choice, reduce some children's program participation and
affect operators' enrolment and funding patterns.
In its July 3, 1998 letter, the Ministry has also clarified the flexibility available to the City to
use informal care funding to purchase care for children from non-licensed community
programs (e.g. Parks and Recreation programs, summer day camps, family resource centres,
on-site child minding services, etc.) and is encouraging the City to use such informal care
arrangements to meet the diverse needs of many clients who require care on an irregular
schedule, for a limited time period, or outside of the normal working day hours of service.
In the Department's ongoing discussions with the Ministry, staff have been assured that
different models of school aged care may be given future consideration provided they
conform to legislative requirements. Different models of school aged care can, in the longer
term, help to expand the service potential of the existing system and serve a greater number
of children more effectively and cost efficiently.
The Community and Neighbourhood Services Department and the former Metro Council
have always been willing to give full consideration to a range of service strategies that make
the most effective use of available resources and support the needs of both Ontario Works
participants and other parents who are working, studying or coping with special needs.
However, any revision to the existing policy framework that governs the provision of
publicly assisted child care requires full discussion with service partners in the community
As most child care services are delivered by community agencies and programs, it is
essential that they be well informed of proposed changes and actively consulted on
implementation issues. It is also important that the financial and service impacts of any
proposed changes be identified, analyzed and discussed prior to decisions by Council. The
Department proposes engaging the community in such a dialogue and bringing
recommendations to Council later in the fall.
Meeting the third condition of the provincial offer of enhanced funding will take a little
longer to achieve. An increase in the level of child care service that may be provided with
the annualized increase in funding can be achieved in 1999. But, the increased level of
provincial funding will be needed during 1998 to meet the current costs of providing the
contracted 2,050 units of care.
As has already been discussed with provincial officials and outlined for Council in the
Department's March 12, 1998 report entitled "Child Care Demand Related to the Ontario
Works Program", the original level of funding approved is inadequate to meet the current
costs of providing the contracted 2,050 units of care. The average unit cost of service for
children of Ontario Works clients is higher than originally forecast ($28.31 per day vs.
$18.46 per day) for several reasons. First, high proportions of younger aged children are
being served. This is partly because the provincial regulation governing mandatory
participation which was announced after program costing had been done, includes children
of junior kindergarten age. Fifty-seven percent of the Ontario Works children in care are
under four years of age. Serving children of this age is decidedly more expensive than
serving older school aged children on whom the original cost forecast was based. There is
also a higher proportion of younger aged children because of the large number of voluntary
participants who have very young children requiring care. Seventy-five percent of children
currently in receipt of care funded by Ontario Works have parents who are participating
voluntarily in the Ontario Works program.
The child care costs are also higher than forecast because of parental choice. The majority of
Ontario Works clients choose formal licensed child care as the service of choice for their
children rather than the less expensive informal care alternatives. Only 2 percent of Ontario
Works clients in receipt of child care currently are using informal care. The average actual
cost of informal care is $12.89 per day as opposed to $28.45 for licensed care.
Not only is the provincial funding enhancement needed to meet current program
commitments, but there is also insufficient lead time to make the service strategy
modifications necessary to increase future service levels before 1999. The City needs time to
inform its community service partners and discuss the implementation of proposed changes
with them. Time is also needed to discuss the financial and service implications of proposals
and to secure Council approval of planned changes. Any changes in service strategy
approved by Council will require a phased implementation to avoid disrupting current
service arrangements for clients already in receipt of care. Therefore, while some service
expansion is achievable in 1999 through modification of service strategy, the full annualized
effect is not likely to be seen until the year 2000.
The Department is continuing its discussions with the Province to negotiate an achievable
plan for the use of the new funds for Ontario Works child care and will report further to
Council on the success of these discussions.
Although the revisions and refinements to the Ontario Works child care strategy being
considered could help address some of the unmet need for care, these strategies alone will
not be sufficient. The Department has identified up to 21,500 children in families with
mandatory Ontario Works participation requirements who will require child care support.
There are currently over 15,000 children on the subsidy waiting list whose parents require
care to continue working, studying or coping with special needs. Future referrals from the
Healthy Babies, Healthy Children Initiative will further increase this demand. The need for
subsidy expansion is great.
The City has made provision for its 20 percent share of up to 2,000 additional child care fee
subsidies from the Social Services Reserve established in 1998. The City's request to the
Province for 80 percent cost sharing for this expansion has as yet gone unanswered. The
City is aware, however, that the Province will be announcing how it intends to distribute the
$25 million in LEAP (Learning, Earning and Parenting Program) funding identified in the
last provincial budget as a support to young single parents. It is imperative that the City
continues to advocate to the Province its pressing need for child care subsidy expansion.
These discussions with the Province must also highlight the need to increase the supply and
range of care options for parents. Reinstating a cost shared capital program to encourage
licensed child care development is one important proposal for the City to discuss with the
Province.
Conclusions:
Significant progress has been made in the planned transfer of the child care programs from
the province to the City. It is important for Council to endorse the transfer plan and for the
City to continue to press the Province for adequate administrative support for these
transferred programs and for as expeditious a date of transfer as possible.
The additional $3,147,500 in provincial funding is needed to provide child care support to
Ontario Works participants. It is critical that the City cost share this provincial funding
enhancement; the $590,156 municipal share is available from the surplus user revenue
identified in the Children's Services 1998 operating variance forecast. As a condition of this
additional provincial funding, it is imperative that the City actively consider modifications
to its existing child care service strategy for Ontario Works. For this reason it is vital that the
Department initiate a dialogue with the community on how a broader, more inclusive, range
of community services for children could help meet the child care needs of Ontario Works
families. In particular, the Department needs to explore further the impact of basing a child's
care entitlement on the number of hours a parent is involved in work, study or community
placement. Assisted by community implementation advice, the Department would make
specific recommendations to Council for consideration later in the fall.
In the meantime, the Department recommends continuing discussions with the Province to
use the money fiscally in this calendar year to cover the costs of the current child care
service being provided to Ontario Works clients while an implementation plan that allows
some expansion of service in 1999 and 2000 is negotiated. The Department will also report
to Council on the results of this negotiation.
Contact Name:
Marna Ramsden
General Manager of Children's Services
Tel.: 392-8128
General Manager of Children's Services
Commissioner of Community & Neighbourhood Services
