Canada – Newfoundland and Labrador Early Learning and Child Care Agreement - 2017-2020

2.1 Objectives

2.1.1 Canada and Newfoundland and Labrador agree that over the period of this Agreement, with financial support from Canada, Newfoundland and Labrador will further build its early learning and child care system by addressing local, regional and system priorities that have an impact on families more in need by increasing the quality, accessibility, affordability, flexibility and inclusivity in early learning and child care, towards achieving the objective of expanding existing services and programs and introducing new initiatives to enhance the quality, sufficiency, affordability and inclusivity of early learning and child care. Newfoundland and Labrador's policy towards Early Learning and Child Care and approach to achieving these objectives is set out in their Action Plan attached as Annex 2.

2.2 Eligible areas of investment

2.2.1 Newfoundland and Labrador agrees to prioritize funds provided by Canada under this Agreement in regulated early learning and child care programs and services, as per the Newfoundland and Labrador Child Care Act, for children under the age of six where:

1. Regulated programs and services are defined as those that meet standards that are established and/or monitored by provincial/territorial governments.
2. Early learning and child care programs and services are defined as those supporting direct care and early learning for children in settings including, but not limited to, regulated child care centres, regulated family child care homes, early learning centres, preschools and nursery schools.

2.2.2 In developing and delivering its early learning and child care programs and services, Newfoundland and Labrador agrees to take into account the needs of the official language minority community in Newfoundland and Labrador.

2.2.3 Types of investments include but are not limited to: capital and operating funding for regulated early learning and child care, fee subsidies, training, professional development and support for the early childhood workforce, quality assurance, parents' information and referral, and administration costs incurred by Newfoundland and Labrador in implementing and administering this Agreement.

2.2.4 Canada and Newfoundland and Labrador also agree to promote, define, and deliver identifiable innovative approaches to enhance the quality, accessibility, affordability, flexibility, and inclusivity of early learning and child care systems, with consideration for those more in need.

2.2.5 Canada and Newfoundland and Labrador agree that funding will be targeted toward programs and activities, as described above, with priority for children under the age of six, that will have an impact on families more in need such as lower-income families, Indigenous families, lone-parent families, families in underserved communities; those working non-standard hours; and/or families with children with varying abilities. Needs also include having limited or no access to early learning and child care programs and services in the children's official language in official language minority communities.

3.2 Renewal of bilateral agreements

3.2.1 Canada commits that the annual allocation for all provinces and territories for the period 2020-21 to 2027-28 will be no less than the annual allocation of this current agreement. Funding for future years will be provided upon the renewal of bilateral agreements conditional on Canada's acceptance of new action plans and informed by the assessment of the results achieved under the action plan set out in Annex 2.

3.2.2 The renewal will provide Newfoundland and Labrador and Canada the opportunity to review and, if required, realign new priorities in future bilateral agreements based on progress made to date.

4.2 Allocation to Newfoundland and Labrador

4.2.1 Canada has designated the following maximum amounts to be transferred in total to all provinces and territories under this initiative with a fixed base rate of $2 million per year for each province and territory and the balance of the funding on a per capita basis for the period starting on April 1, 2017 and ending on March 31, 2020.

1. $399,669,692 for the Fiscal Year beginning on April 1, 2017
2. $399,347,695 for the Fiscal Year beginning on April 1, 2018
3. $399,347,695 for the Fiscal Year beginning on April 1, 2019

4.2.2 Subject to annual adjustment based on the formula described in section 4.2.3, Newfoundland and Labrador's estimated share of the amounts described in section 4.2.1 will be:

*Illustrative levels based on July 2017 population projections

Canada commits that the annual allocation for all provinces and territories for the period 2020-21 to 2027-28 will be no less than the annual allocation of this current agreement under the conditions set in section 3.2.1.

4.2.3 For the per capita funding allocation set in section 4.2.1, the final yearly amount to be paid to Newfoundland and Labrador will be calculated using the following formula F x K/L, where:

F is the annual total funding amount transferred to provinces and territories minus the base funding;

K is the total population of Newfoundland and Labrador, as determined using annual population estimates from Statistics Canada;

L is the total population of Canada, as determined using annual population estimates from Statistics Canada.

4.2.4 For the purposes of the formula in section 4.2.3, the population of Newfoundland and Labrador for each Fiscal Year and the total population of all provinces and territories for that fiscal year are the respective populations as determined on the basis of the quarterly preliminary estimates of the respective populations on July 1 of that fiscal year released in September of that fiscal year by Statistics Canada.

4.3 In this Agreement, “fiscal year” means the period commencing on April 1 of any calendar year and terminating on March 31 of the immediately following calendar year.

4.4 Payment

4.4.1 Canada's contribution will be paid in approximately equal semiannual installments as follows:

The total payment for Fiscal Year 2017-2018 will be paid within 30 days after the signatures from both parties are affixed to the Agreement.

In 2018-2019 and 2019-2020, the first installment will be paid on or about June 15 of each Fiscal Year. The second installment will be paid on or about November 15 of each Fiscal Year.

The amount of the first installment will be an amount equal to 50 per cent of the notional amount of Canada's maximum contribution to Newfoundland and Labrador for the fiscal year, which will be calculated in the manner described in sections 4.2.3 and 4.2.4.

The amount of the second installment will be an amount equal to the balance of Canada's contribution to Newfoundland and Labrador for the fiscal year based on the actual amount of the contribution determined under sections 4.2.3 and 4.2.4 for the fiscal year.

Canada will notify Newfoundland and Labrador at the beginning of the Fiscal Year of their notional amount. The notional amount will be based on the Statistics Canada quarterly preliminary population estimates on July 1 of the preceding Fiscal Year. Canada will notify Newfoundland and Labrador of the actual amount of the second installment in each Fiscal Year as determined under the formula set out in section 4.2.3 as soon as possible following the release in September of each year of the Statistics Canada quarterly preliminary population estimates referred to in section 4.2.4.

Canada shall withhold payment of its second installment for the fiscal year if Newfoundland and Labrador has failed to provide its annual audited financial statement for the previous fiscal year in accordance with section 5.2.1 (d) until such time as the annual audited statement is provided.

Payment of Canada's funding for each fiscal year of this Agreement is subject to an annual appropriation by the Parliament of Canada for this purpose.

4.5 Maximum annual contribution in respect of administration costs

4.5.1 Canada's contribution in respect of Newfoundland and Labrador's administration costs referred to in section 2.2.3 shall not exceed:

In Fiscal Years 2017-2018, 2018-2019, 2019-2020 an amount up to 10 per cent of the maximum amount payable for those fiscal years.

4.6 Carry forward

4.6.1 At the request of Newfoundland and Labrador and subject to the approval of Canada's Treasury Board, Newfoundland and Labrador may retain and carry forward to Fiscal Year 2018-2019, an amount of up to 50 per cent of the contribution paid to Newfoundland and Labrador for 2017-2018 under section 4.2.3 that is in excess of the amount of eligible costs actually incurred by Newfoundland and Labrador in that fiscal year, and may only use the amount carried forward to 2018-2019 for expenditures on eligible areas of investment under section 2.2 incurred in that Fiscal Year.

4.6.2 For greater certainty, the amount carried forward to Fiscal Year 2018-2019 under this section is supplementary to the maximum amount payable to Newfoundland and Labrador under section 4.2.3 of this Agreement in 2018-2019.

4.6.3 The amount carried forward pursuant to section 4.6.1 must be spent by March 31, 2019. Newfoundland and Labrador is not entitled to retain any such carried forward amounts that remain unexpended after March 31, 2019, nor is it entitled to retain any balance of Canada's contribution for fiscal year 2018-2019 paid pursuant to section 4.2.3 that remains unexpended at the end of that fiscal year. Such amounts are to be repaid to Canada in accordance with section 4.7.

4.6.4 At the request of Newfoundland and Labrador and subject to the approval of Canada's Treasury Board, Newfoundland and Labrador may retain and carry forward to Fiscal Year 2019-2020, an amount of up to 10 per cent of the contribution paid to Newfoundland and Labrador for 2018-2019 under section 4.2.3 that is in excess of the amount of eligible costs actually incurred by Newfoundland and Labrador in that fiscal year, and may only use the amount carried forward to 2019-2020 for expenditures on eligible areas of investment under section 2.2 incurred in that fiscal year.

4.6.5 For greater certainty, the amount carried forward to Fiscal Year 2019-2020 under this section is supplementary to the maximum amount payable to Newfoundland and Labrador under section 4.2.3 of this Agreement in 2019-2020.

4.6.6 The amount carried forward pursuant to section 4.6.4 must be spent by March 31, 2020. Newfoundland and Labrador is not entitled to retain any such carried forward amounts that remain unexpended after March 31, 2020, nor is it entitled to retain any balance of Canada's contribution for fiscal year 2019-2020 paid pursuant to section 4.2.3 that remains unexpended at the end of that fiscal year. Such amounts are to be repaid to Canada in accordance with section 4.7.

4.7 Repayment of overpayment

4.7.1 In the event payments made to Newfoundland and Labrador exceed the amount to which Newfoundland and Labrador is entitled under the Agreement, the amount of the excess is a debt due to Canada and Newfoundland and Labrador shall repay the amount within 90 days of written notice from Canada.

4.8 Use of funds

4.8.1 Canada and Newfoundland and Labrador agree that funds provided under this Agreement will only be used by Newfoundland and Labrador in accordance with the areas for investment outlined in section 2.2 of this Agreement.

4.8.2 Canada and Newfoundland and Labrador agree that, within each fiscal year of the period of this Agreement, Newfoundland and Labrador may move funding between the individual programming categories outlined in its Action Plan in Annex 2 to ensure the maximum use of funding. Newfoundland and Labrador agrees to notify Canada in writing of any such change in funding allocation, including the rationale for the change.

5.1 Action plan

5.1.1 Newfoundland and Labrador has completed and shared its Action Plan for the years 2017-2018 to 2019-2020 of federal funding with Canada, as set out in Annex 2. Upon signature of this Agreement by both Parties, Newfoundland and Labrador will publicly release their Action Plan which:

1. identifies specific priority areas for investment and objectives, within the Framework's parameters, which build upon progress to date in the quality, accessibility, affordability, flexibility and/or inclusivity of their early learning and child care system, with consideration for those more in need;
2. describes how Newfoundland and Labrador plans to address the early learning and child care needs of its children/families more in need, including families that have limited access to programs and services in their official language in official language minority communities;
3. outlines their planned innovation spending;
4. demonstrates that federal investments will be incremental, and will not displace existing Newfoundland and Labrador early learning and child care spending, in particular spending dedicated to Indigenous populations;
5. outlines the indicators that will be reported on annually according to their planned investments;
6. identifies specific targets for each indicator that will be reported on annually for tracking progress in relation to the objectives of the Agreement;
7. identifies additional jurisdiction-specific indicators for tracking progress in relation to the objectives of the Agreement;
8. identifies consultation processes referred to in section 5.1.2, the type of groups consulted and annual priorities related to stakeholder feedback.

5.1.2 Newfoundland and Labrador will complete targeted engagement with parents, child care providers, experts, Indigenous peoples, official language minority communities and other interested residents of Newfoundland and Labrador as an important step in developing and revising its Action Plan. The engagement will include, but is not limited to, face-to-face sessions; online sessions; written submissions, and; surveys. The goal of this engagement is to gather input on how to better address the early learning and child care needs of Newfoundland and Labrador communities.

5.2 Reporting

5.2.1 In the first fiscal year, Newfoundland and Labrador agrees to provide available baseline data on indicators set out in their Action Plan as soon as possible after the Parties signing this agreement and no later than December 31, 2017.

5.2.2 By no later than October 1, 2019 and October 1, 2020, Newfoundland and Labrador agrees to:

1. Report to the people of Newfoundland and Labrador and to Canada on the results and expenditures of early learning and child care programs and services. The report shall include the number of children benefiting from subsidies, number of licensed early learning and child care spaces broken down by age of child and type of setting. The report shall show separately the results attributable to the funding provided by Canada under this Agreement.
2. Continue to provide to Canada data required for the publication of the joint Federal-Provincial/Territorial report on Public Investments in Early Childhood Education and Care in Canada.
3. Provide to Canada an Annual Report in the format and manner decided jointly by Canada and Newfoundland and Labrador. The report shall show separately the results attributable to the funding provided by Canada under this Agreement and shall include:
   1. a brief description of the activities, expenditures and results of the Canada-Newfoundland and Labrador Early Learning and Child Care Agreement as set out in Annex 2;
   2. results achieved according to the indicators and targets referred to in Annex 2;
   3. the impact on families more in need, including families that have limited access to programs and services in their official language referred to in Annex 2;
   4. results achieved on innovation referred to in Annex 2;
   5. a description of consultation processes consistent with section 5.1.2, the types of groups consulted and annual priorities related to stakeholder feedback; and,
   6. any additional results of evaluation activities undertaken in the Fiscal Year, as available.
4. Provide to Canada an audited financial statement of revenues received from Canada under this Agreement during the fiscal year including:
   1. the revenue section of the statement shall show the amount received from Canada under this Agreement during the Fiscal Year;
   2. the total amount of funding used for early learning and child care programs and services under section 2.2;
   3. the administration costs incurred by Newfoundland and Labrador in developing and administering early learning and child care programs under section 2.2.3;
   4. the amount of any amount carried forward by Newfoundland and Labrador under section 4.6, if applicable; and
   5. if applicable, the amount of any surplus funds that are to be repaid to Canada under section 4.7.

The financial statement shall be prepared in accordance with Canadian Generally Accepted Accounting Principles and the audit shall be performed by the Newfoundland and Labrador Auditor General or his/her delegate, or by an independent public accounting firm registered under the laws of Newfoundland and Labrador and shall be conducted in accordance with Canadian Generally Accepted Auditing Standards.

5.2.3 Canada, with prior notice to Newfoundland and Labrador, may incorporate all or any part or parts of the said report into any public report that Canada may prepare for its own purposes, including any reports to the Parliament of Canada or reports that may be made public.

5.3 Audit

5.3.1 Newfoundland and Labrador will ensure that expenditure information presented in the annual report is, in accordance with Newfoundland and Labrador's standard accounting practices, complete and accurate.

5.4 Evaluation

5.4.1 As per established policies and processes with respect to program effectiveness, Newfoundland and Labrador will evaluate programs and services receiving funds provided under this Agreement and make public the results of any such evaluations.

Early Learning and Child Care System in Newfoundland and Labrador

The Government of Newfoundland and Labrador has a long history of providing a range of early learning and child care programs and services for young children and their families, while striving to increase access to affordable, high quality child care.^{Footnote 1}

Child care for children below school age (birth to five years) is now governed by the new Child Care Act (2017). In Newfoundland and Labrador, approximately 37 per cent of children aged 0 to 4 attend regulated programs in a child care centre or a family child care home, either full or part-time.

In 2012, Newfoundland and Labrador launched its 10-year child care strategy Caring For Our Future: Provincial Strategy for Quality, Sufficient and Affordable Child Care in Newfoundland and Labrador 2012-2022. The strategy builds on three key pillars: quality, sufficiency and affordability. These pillars of the strategy align well with the principles of the Multilateral ELCC Framework. Funding available under this agreement will enhance the direction taken in the strategy, allowing the province to accomplish enhanced results by setting new targets for the remainder of the strategy.

The 10-year child care strategy was built on existing programs and services and introduced new initiatives to address child care needs based on positive practice, cross-jurisdictional research and an extensive stakeholder engagement process.

Newfoundland and Labrador has put in place three core programs and services to improve quality, sufficiency and affordability of early learning and child care:

The Child Care Services Subsidy (CCSS) program in Newfoundland and Labrador assists eligible families with the cost of regulated child care services by supporting low and moderate income families. The net family income (after income testing) is used to calculate the parental contribution towards the cost of child care. The subsidy is paid to the parent's chosen child care service based on daily subsidy rates set under program policy. Child care services may set their daily parent fee above the subsidy approved rate (with the exception of child care centres participating in the Operating Grant Program).

The Operating Grant Program (OGP), launched in 2014, provides grants to participating child care centres to improve the affordability and sustainability of child care services for families with young children. The OGP sets conditions for receiving operational grants which include setting caps for parent fees, serving healthy snacks and lunches, and setting minimum wages for Early Childhood Educators (ECEs) working in the centre. This program lowers the cost of child care for all parents, and is particularly beneficial to those more in need who are eligible for a child care subsidy.^{Footnote 2}

The Child Care Capacity Initiative (CCCI) program provides developmental, capital and start-up funding to not-for-profit community groups who want to develop child care spaces in underserviced areas of the province, which includes linguistic minority communities, Indigenous communities, and areas of the province where vulnerabilities in early learning have been demonstrated.

Recent initiatives in Newfoundland and Labrador

There are a number of provincial early learning and child care initiatives^{Footnote 3} that were introduced over the last year in Newfoundland and Labrador, that support the direction of this Action Plan:

• Full-Day Kindergarten for five-year old children was launched in the 2016-2017 school year. Full Day Kindergarten is a child-centred, developmentally appropriate, integrated program of learning through play available to all five-year-old children in public schools.
• In November 2016 a Premier's Task Force was appointed to conduct a review of the K-12 education system in Newfoundland and Labrador and to consider priority areas, including early learning. The Task Force gathered extensive input from parents, key stakeholder organizations and educators. Some key recommendations of the Premier's Task Force for the early years are: to expand the Operating Grants Program, and to develop upgrading and professional learning opportunities for early childhood educators.
• The new Child Care Act and Regulations came into effect on July 31, 2017. The new legislation clarifies, strengthens and modernizes the previous legislation. Key changes include enhanced qualifications requirements for early childhood educators, changes in age ranges, and an opportunity to provide child care services outside regular hours. The changes provide flexibility for licensees and increase the quality expectation of newly licensed services (licensed child care centres, licensed family child care homes and family child care homes approved under a family child care agency's licence)^{Footnote 4};
• Navigating the Early Years: An Early Childhood Learning Framework, the new curriculum framework, has been developed and piloted in regulated child care centres and in family resource centres over the past two years. The Framework will guide the practice of ECEs in many settings. It is anticipated that the Framework will be launched in 2017-2018.

Early Learning and Child Care challenges in Newfoundland and Labrador

Despite these developments, Newfoundland and Labrador is facing unique challenges related to accessibility, affordability and quality of its early learning and child care system.

• Challenges related to accessibility: While 37 per cent of children aged birth to four years attend regulated programs in a child care centre or a family child care home, there is space for 41.6 per cent of children at a provincial level, with overcapacity in some areas and shortages in others^{Footnote 5}. The availability of child care spaces varies greatly across the province, as accessibility challenges exist in some neighborhoods in urban communities,^{Footnote 6} and in some rural and remote communities. The large geographic area and the fiscal realities of Newfoundland and Labrador, combined with the small population, presents challenges in developing child care services that will meet the needs of smaller, rural communities.^{Footnote 7}
• Challenges related to affordability: In Newfoundland and Labrador, most licensed child care centres are privately owned and operated (approximately 65 per cent commercial and 35 per cent not-for-profit), setting their own rates and operational policies. The cost of child care is particularly high in urban areas. The Parent Trap report, released in December 2014 by the Canadian Centre for Policy Alternatives (CCPA), indicated that St. John’s had the second highest parent fees of major cities in Canada with a median monthly child-care fee of $1,400 for an infant space.^{Footnote 8}
• Challenges related to quality: According to the Association of Early Child Educators of Newfoundland and Labrador, those working in the early childhood education sector can range from 42 per cent having entry level credentials to four per cent having Level IV certification.^{Footnote 9} The qualification held by child care providers is linked in research to the quality of the service. In addition, a number of child care services are in need of renovations.^{Footnote 10}

This Action Plan aims to assist in addressing these challenges through the priority areas described below.