Federal funding has supported improvements in early learning and child care across Canada
Canada-Wide Early Learning and Child Care System
Report metadata
- Tabling date:
- Audited entities:
- Employment and Social Development Canada
- Report type
- Auditor General reports
At a glance
Overall, Employment and Social Development Canada supported provincial, territorial, and Indigenous initiatives to improve early learning and child care in Canada. Most regulated early learning and child care spaces had become more affordable since 2021 in part because of federal funding.
The government committed to providing $35 billion over 5 years from April 2021 to March 2026 to provincial and territorial governments and Indigenous partners to support a Canada‑wide early learning and child care system. It also committed to providing ongoing funding after those 5 years had elapsed. We found that as of March 2024, provincial and territorial governments reduced the average out‑of‑pocket fees for regulated child care spaces that received federal funding to approximately $16.50 per day across Canada. The target is to reach an average of $10 per day by March 2026. As of March 2024, 5 provinces and 3 territories had already met this target.
The department’s 5‑year targets included not only lowering daily fees but also increasing the available number of regulated early learning and child care spaces by 250,000. However, over 3 years, we found that a little more than 112,000 new spaces had been created. With more than half of the spaces to be created in the final 2 years, there is a risk that the target could not be met, which would mean that families in Canada will have less access to early learning and child care than was planned.
Not only are fewer spaces being created than anticipated, but those spaces may also not be equitably accessible to diverse or vulnerable families. The department did not collect sufficient information to analyze whether the implementation of provincial and territorial plans would provide equitable access, despite that objective having been set out in funding agreements.
The department also lacked information to provide timely or comprehensive reports. For instance, it could not report on progress on initiatives for Indigenous early learning and child care, such as facility renovations or repairs. The department also had difficulty evaluating the performance of provincial and territorial governments, as it did not have comparable information. These gaps in data need to be addressed for the department to better understand whether the system is both financially sustainable and meeting the needs of families in Canada.
Why we did this audit
- The federal government committed $35 billion to provincial and territorial governments and Indigenous partners to support the implementation of a Canada‑wide system for early learning and child care.
- Many families in Canada, particularly families more in need, benefit from having access to affordable, inclusive, and high‑quality child care.
- In Budget 2021, the government indicated that a Canada‑wide early learning and child care system would drive economic growth, increase women’s participation in the workforce, and give every child in Canada the same head start.
- The government committed to helping close some of the persistent gaps faced by Indigenous people in accessing high‑quality, culturally relevant child care programs and services.
Highlights of our recommendations
- Employment and Social Development Canada should work with Indigenous partners to complete the implementation of the performance measurement plan to support timely and comprehensive reporting on outcomes for Indigenous early learning and child care as part of the Canada‑wide system.
- Employment and Social Development Canada should work with provincial and territorial governments to obtain comparable performance information to accurately compile results and effectively assess outcomes of the Canada‑wide early learning and child care system.
- Employment and Social Development Canada should report annually to the Canadian public about federal investments made in respect of the Canada‑wide early learning and child care system and the progress being made toward objectives.
Key facts and findings
- According to Statistics Canada, there were more than 2.2 million children aged 5 years and under in Canada in 2021. As of early 2022, a little more than half of these children were in some form of child care, at an average cost of $31 per day for full‑time care.
- In the 3 fiscal years ending March 31, 2024, provincial and territorial governments spent $12 billion of the $15 billion in federal funding provided through funding agreements for early learning and child care initiatives. Indigenous partners spent $1.9 billion on initiatives, which was nearly all of the $2 billion available through various federal programs and initiatives.
- Employment and Social Development Canada was more than 4 years behind on reporting to the public about the results of the Canada‑wide program through national progress reports. Recent legislation added requirements for the Minister of Jobs and Families, who is supported by the department, to prepare annual reports on progress.
Exhibit highlights
Positive effects of early learning and child care
Text version
This exhibit outlines some of the positive effects of early learning and child care under 4 main themes, which are represented by illustrations.
The first illustration is of a bar chart showing an amount of money increasing. Under the illustration, the following positive effects are listed:
- Economic contributions
- Labour force participation
- Job creation
The second illustration is of a school. Under the illustration, the following positive effects are listed:
- Social outcomes
- Socio-economic equality
- Financial stability
The third illustration is of a family with 2 adults, each holding a small child and standing beside a stroller. Under the illustration, the following positive effects are listed:
- Support to parents
- Improved well‑being
The fourth illustration is of a child’s mobile. In the centre of the mobile is a heart. On 1 side is a speech bubble with an ellipse inside of it, and on the other side is a lightbulb with several nodes inside of it. Under the illustration, the following positive effect is listed:
- Social, emotional, cognitive, and physical child development
Source: Based on various public studies on early learning and child care
Federal funding for Indigenous early learning and child care programs and initiatives for the 2021–22 to 2025–26 fiscal years
Text version
This graph shows the breakdown of federal funding for Indigenous early learning and child care programs and initiatives for the 2021–22 to 2025–26 fiscal years. The total amount of funding approved was $4 billion. This amount is rounded.
The funding approved for the Indigenous Early Learning and Child Care Transformation Initiative was $2.17 billion.
The funding approved for the Aboriginal Head Start on Reserve Program was $957 million.
The funding approved for the First Nations and Inuit Child Care Initiative was $703 million.
The funding approved for the Aboriginal Head Start in Urban and Northern Communities Program was $201 million.
Dollar amounts include legacy and new funding for grants and contributions provided by Employment and Social Development Canada, Indigenous Services Canada, Crown-Indigenous Relations and Northern Affairs Canada, and the Public Health Agency of Canada.
Note: Dollar amounts include legacy and new funding for grants and contributions provided by Employment and Social Development Canada, Indigenous Services Canada, Crown-Indigenous Relations and Northern Affairs Canada, and the Public Health Agency of Canada.
Source: Based on federal budgets and other documents from Employment and Social Development Canada
More parents and guardians reported difficulty finding care for their children in their communities in 2023 than in 2020
Text version
This chart shows the number of children whose parents and guardians had difficulty finding child care for them in 2020 and 2023.
In 2020, parents and guardians reported difficulty in finding child care for a total of 118,210 children.
In 2023, parents and guardians reported difficulty in finding child care for a total of 156,500 children.
This was a 32% increase from 2020 to 2023.
Source: Statistics Canada, Survey on Early Learning and Child Care Arrangements and Canadian Survey on Early Learning and Child Care, 2020 and 2023
Between the 2021–22 and 2023–24 fiscal years, provincial and territorial governments spent less than the available federal funding
Text version
This chart compares the provincial and territorial governments spending and the available federal funding between the 2021–22 and 2023–24 fiscal years.
In the 2021–22 fiscal year, the funding from agreements was $3.77 billion, and the spending by provinces and territories was $1.57 billion.
In the 2022–23 fiscal year, the funding from agreements was $5.01 billion, and the spending by provinces and territories was $4.45 billion.
In the 2023–24 fiscal year, the funding from agreements was $6.18 billion, and the spending by provinces and territories was $6.13 billion.
In total, the funding from agreements was $15 billion, and the spending by provinces and territories was $12 billion. These total amounts are rounded.
Source: Based on information from funding agreements with provincial and territorial governments, related annual reporting from provincial and territorial governments, and respective federal funding provided to the Government of Quebec