Entrepreneurship & Small Business

Does election of NDP mean the death of Private Daycares and Home operators?

  • Last Updated:
  • May 27th, 2018 6:47 pm
[OP]
Deal Addict
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Dec 26, 2007
1048 posts
216 upvotes

Does election of NDP mean the death of Private Daycares and Home operators?

By now most people know of Andrea Horwath and the NDPs platform on Daycare. Essentially they are going to pump a ton of tax payer cash into the system in order to make Daycare free or extremely cheap for children. In her platform, they will only be funding government run centres and so-called not-for-profit. As an aside, I scoff at that notion because she declares they will "not be padding the pockets of private daycares" as if they are some heinous organization, while most of those non-profit businesses are funneling money through holding companies, or have very high paid CEO's and managers, or funneling into a religious institutions (government giving money to religions?)

I digress, my main question of interest - what is going to happen to all the Private run daycares after the NDP are elected. Will they be forced to shutter their doors as they cannot compete with the deep tax funded pockets of the government? What about the Home daycare operators, the people who stay home with their children and run daycares to subsidize their income? Will they be forced to warm up their resumes and take their children to daycare because they can't afford to stay at home? (an oxymoron?)

(This isn't a post about which Party is better, bashing NDP or PC - so please keep it on point on Public funding of daycares)
9 replies
Member
User avatar
Dec 28, 2010
495 posts
206 upvotes
I think she learned her marketing tactics by making statements like that and if you put it on a national forum she's pretty good at it! She won!
Actions speak louder than words
Deal Guru
Mar 22, 2004
12360 posts
2892 upvotes
RFD
They are all the same, just you wait and see. The taxpayers will not be happy, we always suffer. She is as great as Wynne at spending money.
Deal Expert
Aug 2, 2001
15929 posts
6112 upvotes
Personally I would look towards Alberta as an example. They elected a NDP government and one of their big promises was $25/day daycare. Within the past 3 years they have rolled out spots on two occasions - with the criteria of it being non-profits only. The amount of spots they rolled out is minimal because it's a "pilot".

I would suspect Ontario would be in a similar position to "pilot" the program because it would cost too much to implement all at once. Expect a situation similar to the Alberta NDP where they have big dreams, not enough money, and unwilling to raise taxes to meet their commitments in whole. It's a problem that any incoming government would face when they campaign on large spending increases, no decreases in areas of biggest expense (wages unfortunately), and little increase in taxes.

(I have no idea if the Ontario NDP follow that model as I have not read any of their promises / platform)
Member
Jun 25, 2011
336 posts
112 upvotes
Alberta
May be if all these private day care stop ripping off Canadian parents for obscenely charging above $1,000 to baby sit their child then may be people will have sympathy for them. I do not see govt funding changing the situation much. The only effective way to handle this situation will be increasing the supply which means remove all the red tapes to open the day care without compromising the safety and security of children.
[OP]
Deal Addict
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Dec 26, 2007
1048 posts
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albertaguy wrote:
May 26th, 2018 9:54 am
May be if all these private day care stop ripping off Canadian parents for obscenely charging above $1,000 to baby sit their child then may be people will have sympathy for them. I do not see govt funding changing the situation much. The only effective way to handle this situation will be increasing the supply which means remove all the red tapes to open the day care without compromising the safety and security of children.
Hmm - why do you think Daycares are ripping people off? If you look to GTA for instance, infant care can cost $1400 per child per month (more or less on location). However, due to Daycare act regulations, you can only have 3 infants to 1 teacher. Let says you have one room with 9 children and three teachers who are making a fair wage of $18 (not including some get benefits). Your revenue is $12,600 for the three infants. However, your expenses can make that disappear quickly 3 teachers x $18 an hour x 8 hours (most rooms are not fully staffed all 12 hours) x 20 days a month. Your gross payroll is ballpark $8,700 for that one room. Then you include CPP and EI matching - you get closer to $10,000+. You still have to pay your Supervisor, RENT, vacation pay, benefits (for some), food (older children). When you think about it, there is not much meat left on the bone.

In contrast, you have organizations like YMCA, Family Day, and other not-for-so-called-profit. The are the ones receiving all the majority of government grants and funding, which yes goes to field staff (good)- but then also the pockets of upper echelon management. Or what about some of the not-for-profits running shell corporation foundations where they funnel the money and pay the "CEOs" very high salaries.

You mentioned something interesting about Red tape (some we need for safety) and how it is forcing daycare operators to drive up their costs. Government agencies and Not-for-profits have been somewhat insulated against these cost causing increases because they receive grants, and can also accept families with Subsidy (note in Toronto, Private daycares are not able to accept subsidized families). When costs go up, they just increase their fares and continue to accept subsidy. And these same organizations will continue on once Private daycares are forced to close. (Something going on behind the scenes?) The present government, and NDP led Horwath (looking good for them to win) particularly, have been quick to vilify Private operators - and, yes, I think it's probably wants to shut them down. But
why is that? Anyway, I digress - the model is a mess and fullday child care is going to bankrupt the province. I think it's not fair to say Private daycares are rolling in the dough - cause so are the others ones (but maybe I just accidentally hit the nail on the head "rolling in the dough" and the Province has seen there is money to be made in daycare).

(Ha! You would think I own a daycare - but close enough with three children. However, I've just been thinking this through and how expensive Free daycare will be to the tax payer. Needless to a quick search has articles showing full day kindergarten in Ontario costs billions - and that is with 30 kids to a room with 1 teacher and one ECE. Imagine how much this will cost).
Deal Expert
May 30, 2005
42407 posts
3089 upvotes
Richmond Hill
To put it simply, education is free, but there is still a market for private and semi-private schools. Given that, no, I don't think private daycares will cease to exist. Of course, there will be definitely a reduction.
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Deal Expert
Aug 2, 2001
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albertaguy wrote:
May 26th, 2018 9:54 am
May be if all these private day care stop ripping off Canadian parents for obscenely charging above $1,000 to baby sit their child then may be people will have sympathy for them. I do not see govt funding changing the situation much. The only effective way to handle this situation will be increasing the supply which means remove all the red tapes to open the day care without compromising the safety and security of children.
Have you looked at the costs?

$1000/child and a ratio of 6 children to 1 caregiver. So let's say 12 children and 1 caregiver. Now daycares are generally open 10-11 hours per day, and many children are there well beyond 8 hours so let's assume that we need to cover off 10 hours / day in wage.

For the $6000 revenue we have labour expenses of:
a) $3000 wage (10hr/day * 20 days @ $15/hr)
b) $120 vacation (4% of wage)
c) $100 deductions (CPP/EI)
d) $50 blue cross
= $3270

So now we have about $2800 to cover: food, rent, insurance, advertising, unpaid spaces (as you might not have a giant waitlist especially with all the $25/day daycares in alberta now or people dropping off mid month), craft supplies, toys, sick days for staff, misc. business costs (payroll, accounting, etc.). The list goes on and on.


As well - I do not think there is much "red tape" to opening a daycare, and even being accredited. Daycares in my city have been opening up all over the place in response to the giant wait lists that existed previously.
Banned
User avatar
Jun 8, 2008
3977 posts
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Toronto
I could see for-profit more corporate daycares being affected, like Kids and Company but I don’t see it affecting home-based daycares. There aren’t enough spots, childcare workers should earn a decent living, I hope childcare becomes more affordable for families, but people will still need care and I don’t see it all being funded by the government,
Deal Addict
Aug 28, 2007
1857 posts
253 upvotes
Calgary
Regarding OP's initial question, I am confident not much will change regardless of who wins any election, including daycares in Ontario.

There are 2 parts to changing something in government. First you need to get elected to achieve a governing position. Secondly, you then need to run the province or country. To get elected means telling the electorate what they want to hear so they vote for you. That means telling them you will solve their complex problems with a simple solution that will incur no new costs or diminish any existing services. As business people in this forum, we all know it is fundamentally impossible to do with the vast majority of issues. That is a thorny truth that re-appears in the second part.

So voters will elect the party with the best collection of promises covering the largest number of issues. Simple dramatic promises work best because they don't need explaining at the time, like offering cheap public daycare without explaining how to pay for it.

Once the election is over, the winning party gets to govern. They shift gears to run the province because they are now faced with that impossible truth. Quality daycares are expensive to run so they have a choice. Will that government raise taxes to pay for them? Or will they terminate other programs to pay for them? You and I both know the answer is neither. They will just muddle like they always do. These problems are complex and inter-related with dozens of groups with opposing ideas & positions. The time and money needed for the required collaboration and consultation to establish any consensus on a course of action gets geometrically immense. That's why I say not much will change with daycares in Ontario after the election.

Unfortunately elections have become popularity contests polarized around political parties with simple canned solutions. Voters confuse the campaign part with the governing part. Just because you run a populist campaign doesn't mean you are any good at running a government.

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