Alberta entrepreneurs fear increased hardship under $10-a-day childcare subsidy program

A new subsidy program aimed at bringing child care fees in Alberta down to $10 a day by 2026 raises signals for owners of some for-profit child care centers, who fear the program allows too much government control on their private enterprises.

In Fort McMurray, Krystal Churcher said she felt like her hands were tied when the province offered her a contract for the child care subsidy.

While affordable childcare is great for families, the owner of the Early Start Learning Center wondered if the subsidy would limit her as a homeowner.

Months later, Churcher says that’s exactly what happened.

The grant scheme has grandfathered in existing private childcare centers and added an additional 2,700 eligible places, according to Andrew Reith, press secretary to Matt Jones, the minister for children’s services.

Now that Churcher has signed the agreement, students at his center are benefiting from the scholarship program.

However, if it were to expand or open a second location, new students would not. This means that his new spaces or his new business would be at a financial disadvantage and would probably not be viable.

“It reduces the value of my business,” Churcher said.

Krystal Churcher runs the private Early Start Learning Center preschool in Fort McMurray, Alberta. (Submitted by Krystal Churcher)

But without the grant wage top-up, she wouldn’t be able to have a competitive salary for her staff, as most of the other child care centers have signed the agreement.

“I don’t know of any other industry in Alberta where small private business owners are restricted and chained like this,” Churcher said.

Prior to signing the deal, Churcher was considering expanding his business to a second location. A few weeks ago, she pulled the plug, saying the financial risk was too great.

Currently, United Conservative Party candidates are vying for leadership, and Churcher said she would like to see candidates fight for childcare contractors.

In an email, Reith said the federal government was clear that nonprofit care would be prioritized, but noted that private centers account for 67% of licensed child care spaces in Alberta. “The Government of Alberta will continue to fight for the expansion and inclusion of private entrepreneurs,” he said in the email.

Once a cost control framework for for-profit businesses is developed, newly authorized programs can be part of the funding program, Reith said.

Currently, the province is working with the federal government to develop a private expansion plan and cost control framework to add more private spaces to the program, Reith wrote.

But this setting is troubling for Kathryn Babowal, director of Les Petits Soleils in Calgary.

A screenshot of the presentation given to business owners on a proposed cost control framework. Kathryn Babowal fears that if salary and income caps are put in place, her business will become a nonprofit. (Submitted by Kathryn Babowal)

She recently joined a group of child care entrepreneurs in Alberta after becoming frustrated with the provincial government subsidy program.

“We are thrilled that parents have the option of having affordable child care,” Babowal said.

But that shouldn’t mean losing control of your business.

In May, the province asked for-profit child care operators to comment on a cost control framework. The framework included a salary cap and a potential revenue cap in the upcoming grant application process for 2023. The current agreement already includes a 3% cost increase cap for companies.

“They basically intend to restrict us to becoming non-profit centers,” Babowal said.

She said private industry is good for parents and children. “Competition drives quality,” she said.

Kathryn Babowal, owner of Les Petits Soleils Inc., worries the government will have too much say in her business with a cost control framework. (Submitted by Kathryn Babowal)

In the email, Reith said the province has heard a lot of concerns about the framework from operators and “there will be ongoing communication and collaboration with operators and parents.”

Shannon McKenzie, owner of PuddleDucks Preschool, also said she has concerns about how the grant program is affecting her self-reliance.

PuddleDucks Preschool is an expensive program that helps children with higher needs.

This year, she wanted to raise her fees, but she had to get special permission from the government because the contract says she cannot raise her fees by more than three percent. McKenzie ended up getting approval for a 6% raise, which she says is still below inflation.

“I would like to have more flexibility on raises,” said McKenzie, who wants to make sure staff — including herself — can earn a living wage.

She made $27,000 last year, she said.

The new grant contract with a cost control framework is expected to be completed by the end of the year.

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