Open letter to the Houston Government of Nova Scotia from concerned Nova Scotians

 

Dec 5, 2022 (Draft; circulated for input)

 

Re: Treatment of Private Daycare Operators in the Transition to the Canada-Wide Early Learning and Child Care Agreement (CWELCCA)

 

To the Houston Government of Nova Scotia;

We are writing as concerned parents and Nova Scotians about the implementation of the Canada-Wide Early Learning Child Care Agreement (CWELCCA). Our primary concerns are outlined below.

 

1.       The emphasis on operators’ business models is misguided.

In any social space (e.g. childcare, health care, etc.) there are a mix of for-profit and not-for-profit (NFP) operators. This is entirely normal when most jurisdictions historically have not had a separate legal structure for social enterprises, although Community Interest Companies (CICs) now present an opportunity for business owners in Nova Scotia to operate a for-profit company for the purpose of their community. Many social enterprises have mixed income models and rely on a combination of government grants, subsidies, and revenue from selling products or services.

Importantly, regardless of business model, operators in any industry can deliver a range of outcomes, from less desirable to highly desirable. For example, some NFPs struggle to provide high quality service with limited and inconsistent budgets. On the other hand, we acknowledge that some private operators are willing to compromise on quality to enhance profitability. Why is funding tied to the operators’ business model when what we really want is high quality services from any organization?

Although the Government of NS has stated there is space for private daycare operators, this space is very narrow. The options are either to forego provincial funding and operate entirely in the private sector, making many operators non-viable unless parent fees are increased to over $60/day. The other option is to allow the government so much control over their business that private operators are effectively operating as an arms-length government agency, significantly affecting their ability to provide high-quality, responsive, innovative, and supportive childcare.

We call on the Government of NS to implement a solution that is not only inclusive of private operators, but also allows them to operate their organizations independently according to the needs of the children in their care and their community.

 

2.       We are not willing to compromise on the quality of childcare in Nova Scotia.

While we wholeheartedly agree that affordable childcare is desirable and that more spaces need to be created, we argue that the quality of childcare is most important. Children are our future, and the early years are critical in their development. We are unwilling to compromise on the quality of care provided to the children of Nova Scotia. All operators must be held accountable to achieving high standards of care for our children.

The Government of NS currently has a program, Quality Matters, which holds all operators accountable to quality outcomes while also allowing operators the flexibility to respond to the needs of their stakeholders. Anecdotally, we have heard from several operators that these outcomes have decreased in relevance in their most recent audits, during the transition to the CWELCCA. We are concerned that the Government of NS is more focused on creating low-cost childcare spaces in the not-for-profit sector than on the quality of those spaces.

We call on the Government of NS to implement a solution that is outcomes-oriented, regardless of how an organization is structured. 

 

3.       The role of government in early childhood education should be that of regulator and auditor; not of operator.

We fully support the Government of NS in their efforts to regulate childcare centers across the province to ensure accountability and quality. However, government operated childcare does not serve the needs of Nova Scotians. To underscore this, we can look to the recently implemented pre-primary program for four-year-old children across the province. In July 2021, the Auditor General issued a critical report of the program, highlighting that it was not adequately planned, was rolled out too fast, and had insufficient consultation with the early childhood sector and communities.  As per our first two concerns, the report highlighted that the Department of Education and Early Childhood Development did not set specific measurable goals to evaluate the program’s effectiveness or create a process to monitor risk.

The NS government is attempting to effectively control the operations of all providers in the province, regardless of business model. Even if private operators agree to transition to a NFP business model, which many are willing to do, it is unclear as to whether they would be permitted to have an independent, locally controlled Board of Directors (BoD). Government presence on a BoD could significantly limit the capacity of individual childcare centers to respond to the needs of parents and communities. The government would also retain control over pricing (parent fees), employee wages, and programming. This is effectively creating government-operated childcare.

We call on the Government of NS to allow NFPs to create an independent Board of Directors and to allow all operators (private and NFP) greater operational flexibility.

 

4.       Assuming that private operators remain part of the childcare solution in NS, they should be allowed to expand their services to better meet the needs of our communities.

The Government of NS is committed to creating new childcare spaces across the province. Historically, private operators have contributed 2 out of 3 childcare spaces across Nova Scotia. Many are ready and willing to expand. If one of the purposes of the CWELCCA is to create additional childcare spaces, why is the government preventing private operators from expanding?

Frustratingly, there are childcare centers in the province that had licensed spaces open previously and now are not able to fill them. One center had 30 spaces that were temporarily inactive on the date the CWELCCA was adopted in Nova Scotia. Although this center has over 170 children on its waitlist, it is unable to use the 30 licensed spaces because the province has deemed this to be an unacceptable ‘expansion’ by a private business. On the contrary, parents in the area would celebrate this expansion as a contribution to servicing a long-standing need in the community.

Moreover, many of the so-called ‘new’ spaces that the Government of NS is creating are simply the transition of private childcare spaces to not-for-profit spaces as the government continues to support the acquisition of private operators by NFP entities.

We call on the Government of NS to allow private operators to create additional childcare spaces in Nova Scotia.

We call on the Government of NS to transparently report whether ‘new’ spaces resulted from the creation or expansion of organizations, or whether they were the result of transitioning spaces from private operators to NFP operators.

 

5.       The Early Childhood Educator (ECE) wage scale is inadequate.

The Government of NS has recently announced wage increases for early childhood educators (ECEs). We support efforts to increase compensation for this incredibly important vocation. However, embedded in this agreement were terms and conditions that significantly impair the ability of operators to fairly compensate their staff.

Government-imposed restrictions on parent fees, which centers have not been permitted to increase since 2016, and restrictive subsidy eligibility conditions means that many childcare centers have little or no money left over after expenses are paid. Although the government allows operators to provide compensation in excess of the mandated wage scale, in practice the terms and conditions imposed in other areas of centers’ operations are prohibitively restrictive and operators do not have the resources to increase compensation. Moreover, the government will only provide wage subsidies based on their approved scale.

This significantly affects both younger and older childcare workers. Younger workers who are working towards their qualifications would be placed at the low end of the new wage scale, with government providing the minimum subsidy possible, thereby preventing operators from using compensation as a recruitment and retention tactic. Older workers, primarily women, who have not needed formal qualifications but have years of experience may have actually seen their compensation decrease. This is because the subsidies provided for these roles are tied to formal education and operators cannot afford to continue to pay higher wages based on experience without the same amount of subsidy. This system prevents operators from rewarding excellence and loyalty, both of which are highly valued in any organization.

Additionally, the government wage scale causes needless administrative hassle. For example, an employee who has an ECE Level 1 qualification may also be responsible for cooking the meals at the center. According to the government, the center must track the hours of this employee according to their role, and the wage subsidy only applies to the eligible educator role. This system not only fails to acknowledge the team effort that occurs at many childcare centers, but also the overall contribution of each task, be it cooking, cleaning, or teaching, to the overall quality of care experienced by children at these centers.

Lastly, quality childcare starts with providing ECEs a living wage. Early Childhood Educators across the province striked again on November 30, 2022 for this cause. Why won’t government support a living wage for ECEs? Why won’t government provide compensation that is equivalent to that provided in pre-primary programs, where ECEs do the same type of work?

We call on the Government of NS to modify their wage scale once again to reflect living, equitable wages for ECEs across the province, regardless of place of employment.

We call on the Government of NS to remove restrictive terms and conditions on grants and subsidies, to allow operators the flexibility to use compensation as a recruitment and retention tool.

 

6.       There is a risk that one NFP, the YMCA, will become the dominant daycare provider in the province. A single, centralized program is not responsive to the needs of our children or our communities.

There are two possible ways for private operators to become NFPs: they can be acquired by an existing NFP, or they can create a new NFP that then acquires the business. Either way, the NFP requires adequate resources to purchase an existing business, which may also include assets such as a license to operate and a building.

In Nova Scotia, the NFP that has been active in the acquisition of private operators throughout the province is the YMCA. The YMCA is being supported by the Government of NS in their efforts to acquire and consolidate private daycares. While we respect the mandate and prerogative of the YMCA to conduct such activities, it raises several concerns.

First, we are concerned that this will reduce the ability of individual centers to respond to the unique needs of its children and the community. The YMCA is an international organization and its Board of Directors operates at the organizational level, not at the scale of individual centers. Moreover, two private daycares in Nova Scotia have already been acquired by the YMCA and one has already closed, citing not enough demand (contrary to the opinion of the former private operator and parents in the area). Details on these transactions are scarce, as the operators who transferred their businesses to the YMCA have been required to sign non-disclosure agreements. This significantly limits the availability of information for other operators and the public, who are seeking clarity around the potential benefits, drawbacks, and costs of transitioning to a NFP model under the YMCA.

We are also concerned about the ability of the YMCA to operate daycare centers at scale. In Antigonish alone, this organization has recently attempted to provide before and after school care. However, execution has been fraught with difficulties. First, they promised to open in Jan/Feb 2022, but the opening was delayed. Then, in August 2022, they had to reduce the number of children in the program as they were short staffed. Staffing concerns have continued into the fall of 2022. Questions have also been raised as to the level of training and experience the educators in this organization have.

Finally, in their negotiations with private operators, supported by the province, the YMCA has expressed interest in valuing and acquiring only private operators’ license to operate. This does not consider other assets that would be stranded (e.g. buildings) and liabilities that the business has, that would leave private operators with no way to generate revenues to service their debts. Private operators, mostly women, risk being saddled with debts related to the businesses they no longer own or operate. Not only is this ethically immoral, it is highly unfair to these women who have dedicated their lives to educating our children and who have invested their personal finances into providing services where previously the government has been unwilling to do so. Moreover, it has been suggested by the government that the supplies and materials within private daycare centers should just be handed over as ‘goodwill’.

We call on the Government of NS to provide funding for legal services for private operators to ensure that they are receiving a fair deal and are not personally saddled with debt from their businesses if they decide to be acquired by a NFP.

We call on the Government of NS to ensure diversity of ownership, operation, and programming in daycares across the province, allowing for locally and culturally relevant childcare options.

 

7.       We want the Alberta Agreement.

The roll out of the CWELCCA in Nova Scotia has been fraught with challenges. It has been rushed, opaque, and, in some cases, underhanded. The Houston government has been more interested in public announcements of easy political wins, without consideration of the effect these announcements have on operators. For example, operators were required to implement parent fee reductions before funding was received from the government to cover the lost income from parents. This meant many operators struggled to pay their bills, including covering payroll, while they awaited funding promised by the government. As well, although consultation and communication with the sector has been highly praised in the media, within the sector there is much confusion and a lack of understanding as to what is happening. The back-and-forth messages between operators trying to figure out what is going on is wasting staff time and energy that could be better put into quality care and is leading to burnout amongst some operators. There has been high staff turnover in the government department responsible for the transition, making it difficult for both operators and parents to get answers to their questions. Yet, the government insists on pushing on.

There is, however, a solution. The agreement that was signed in Alberta allows space for private operators and recognizes that the solution to affordable, accessible, and high-quality childcare will be an effort that needs government, NFPs, and private operators to be included. The Houston government wants citizens to believe that they are constrained by a poor agreement negotiated by the former Liberal government. They are passing the blame. There is a clause in the CWELCCA that allows any province to modify their agreement with the federal government if it is mutually agreed to, which conceivably includes the ability to adopt the agreement of another province if it suits their needs better than what they have negotiated for themselves. In this case, we look to the province of Alberta and wish to adopt their agreement.

We call on the Government of NS to adopt the agreement that Alberta has negotiated under the CWELCCA.

 

In closing, we are calling on the Houston Government of Nova Scotia to heed our suggestions. We want a solution that:

·       Commits to high-quality childcare for our children;

·       Respects and includes all operators, who are mostly women; and,

·       Recognizes the important contributions of the private sector in the childcare space, including responsiveness to the needs of children and communities, innovative programming, and creating and expanding spaces in areas where the government and NFPs are either unwilling or unable to do so.

 

Signed,

 

Parents and concerned citizens of Nova Scotia