An article recently written by a social Justice reporter Laurie Monsebraaten was posted on thestart.com. The article pointed out the facts that how the change in minimum wage affects thousands of middle-class parents. The birth rate in Ontario has been continuously decreasing from 1.53 to 1.50 from 2010 according to Statistics Canada. The reasons are multi-facets. One of the reasons is the childcare costs are way too high. As spoken to some clients having kids in childcare centers, they were joking by saying having two kids in childcare centers like making two mortgage payments. It is going to be tough for a lot of working parents, well, a lot of middle-class parents.
From operators’ perspective, while minimum changes cannot be avoided, as heard from the radio, Ontario government plans to hire 100+ auditors to ensure the policy was implemented properly in businesses. How can operators react on this? Operation efficiency and value creation are two practical solutions as raising the price might have a negative impact on the clientele. I will have a post on how to make childcare center more profitable in future blog.
.Here are the excerpts from the article:
Parents:
Some Toronto-area parents, whose child care costs are already the highest in the country, say their fees have jumped by as much as 24 per cent this month in the wake of Ontario’s new $14 minimum wage.
In Barrie, Taryn Aitken has been hit with a $368 increase this month for her two youngest children, ages 1 and 3, who attend a privately run center near her home.
The 18-per-cent fee hike means she and her husband, both public servants who work in Toronto, are forking out an average of more than $2,426 a month for daycare. Mercifully, their 13-year-old daughter no longer needs care, Aitken said.“Child care is a luxury for the upper class who can afford it,” she said. “Lower income families are subsidized, but where are we left in all of this?”
In Burlington, a parent is grappling with a 24-per-cent increase. Monthly fees at MacFadyen Preschool Academy have shot up to $1,776 for infants, $1,598 for toddlers and $1,506 for preschoolers.
Childcare operators:
First Friends Preschool and Daycare told the couple the center is increasing fees to reflect a variety of rising costs, including rent, food, gas and hydro. “Unfortunately, the increase to minimum wage is only a small portion of our expected increase,” owners Sandra Balzan and Noeleen Huston wrote in an email to Scott Davis in December. “We understand that a fee increase is difficult.” She credits the unionized non-profit center her children attend in Toronto that already pays its workers a living wage. Gregory says her sister’s situation highlights the need for a comprehensive child care system in Ontario that supports both workers and parents.
Government:
Last June, the province launched a five-year child care “transformation framework” to begin building a high quality, affordable child care system for all families. It includes $1.6 billion in new capital funding to kick-start a pledge to add 100,000 licensed spots for children under age 4. Provincially appointed experts are expected to report this year on an affordability plan and a labor force strategy to boost staff training, pay and working conditions.
The provincial fee stabilization fund, an interim measure to address potential fee increases arising from the $14 minimum wage, is being administered by municipalities, said a spokesperson for Indira Naidoo-Harris, provincial minister responsible for early learning and child care. “Local service system managers will need to go through their local processes and approvals in order to distribute the funding,” Eric McLean said.
To receive the funding, daycares must show how they would use the money to mitigate fee increases, according to ministry guidelines. Almost half of the fund has been earmarked for GTA daycares with Toronto receiving almost $2.8 million; Peel just over $1.2 million; Durham almost $659,000; Halton about $765,000; and York almost $1.4 million.
If you are interested in reading the entire article, please click the link as follows: https://www.thestar.com/news/gta/2018/01/14/daycare-fee-sticker-shock-linked-to-minimum-wage-hike.html
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