EVIDENCE

Standing Committee on Public Accounts NUMBER 017 1st SESSION 45th PARLIAMENT Thursday, November 27, 2025 Le jeudi 27 novembre 2025 Standing Committee on Public Accounts CANADA [Recorded by Electronic Apparatus] EVIDENCE November 27, 2025 Committee NUMBER 017 NUMBER 017 NUMÉRO 017 17 27 11 2025 2025/11/27 11:00:00 House Of Commons Comité permanent des comptes publics Standing Committee on Public Accounts PACP Chair John Williamson 1 45

(1100) [ Translation ]

The Chair (John Williamson (Saint John—St. Croix, CPC)) :

Good morning, everyone. I call this meeting to order. Welcome to meeting number 17 of the House of Commons Standing Committee on Public Accounts. [ English ] Today's meeting is taking place in a hybrid format pursuant to the Standing Orders. Members are attending in person in the room.

I don't believe anyone is joining us remotely. [ Translation ] Pursuant to Standing Order 108(3)(g), the committee is commencing its study of the report on the Canada-wide early learning and child care system, taken from the 2025 fall reports of the Auditor General of Canada and referred to the committee on Tuesday, October 21, 2025. [ English ] I would like to now welcome our witnesses. From the Office of the Auditor General, we have Karen Hogan, the Auditor General of Canada; Gabriel Lombardi, principal; and Ewa Jarzyna, director. It's nice to see you all.

From the Department of Employment and Social Development, we have Paul Thompson, deputy minister, along with his colleague Catherine Adam, senior assistant deputy minister, income security and social development. Thank you for coming in today. You'll each approximately five minutes for an opening statement. Ms. Hogan, you have the floor to kick us off, please.

[ Translation ]

Karen Hogan (Auditor General of Canada, Office of the Auditor General) :

Good morning, Mr. Chair. Thank you for the opportunity to appear before the committee to discuss our report on the Canada-wide early learning and child care system, which was tabled on October 21. I would like to begin by acknowledging that we are standing on the unceded traditional territory of the Algonquin Anishinabe people. As part of our audit, we examined whether Employment and Social Development Canada had fulfilled its responsibilities to support early learning and child care in Canada.

The federal government has committed $35 billion over five years to provinces, territories and indigenous partners to support the creation of high-quality, affordable, inclusive and flexible early learning and child care spaces. In the first three years of the funding agreements, provincial and territorial governments spent $12 billion of the $15 billion in federal funding for early learning and child care initiatives. [ English ] The audit found that as of March 2024, parents' out-of-pocket fees for federally funded spaces had been reduced to an average of $16.50 a day.

The target is to reach an average of $10 per day by March 2026. Federal funding also supported the creation of approximately 112,000 new child care spaces as of March 2024. However, with time running out, there is a risk that the goal of creating 250,000 new spaces by 2026 will not be met. The audit found that the department lacked information to track whether federal funding had met the objectives of supporting diverse and vulnerable children and families and supporting indigenous early learning and child care initiatives.

For example, the department could not report about progress achieved on initiatives for indigenous early learning and child care, such as facility renovations or repairs. While child care costs to parents have been reduced, Employment and Social Development Canada’s monitoring is not sufficient enough to know whether families' needs are being met. The department needs to collect consistent and comparable data across the country to track the program's overall performance, inform future decisions and support families across Canada.

Monitoring is also essential to assess the financial sustainability of the Canada-wide system going forward. This concludes my opening remarks. We would be pleased to answer any questions the committee may have. Thank you.

The Chair :

Thank you very much. Now, Mr. Thompson, if you have an opening statement, you have approximately five minutes or whatever you need.

Paul Thompson (Deputy Minister, Department of Employment and Social Development) :

Very good. [ Translation ] Thank you, Mr. Chair. I would like to thank the committee for inviting me to appear today. [ English ] I'd like to start by commending the Auditor General and her team for a thorough and thoughtful analysis of the early learning and child care program in Canada. The report appropriately captures some of the progress achieved through the early learning child care system. It accurately reflects a number of the challenges we've had in rolling the program out, and in so doing, it makes some very important recommendations.

I want to assure the committee that my department is already working to address and implement the recommendations in the report. (1105) [ Translation ] The goal of establishing a Canada-wide early learning and child care system is to ensure that all families have access to high-quality, affordable, flexible and inclusive early learning and child care services, no matter where they live. In its report, the Office of the Auditor General agreed that families are finding that their financial capacity is improving.

It found that all provincial and territorial governments had reduced the average fees associated with regulated spaces under the Canada-wide program by 50%, as of December 2022. [ English ] As of March 2024, five provinces and three territories reported achieving an average fee of $10 per day. This brought the average fees paid throughout Canada for full-time child care to approximately $16.50. However, the report also found that the target to create 250,000 new early learning and child care spaces by March 2026 was at risk.

The deadline for the space creation target is next year, as stated, and we continue to work with our provincial and territorial partners to achieve it. When the Government of Canada announced its intention to create an early learning and child care system in 2021, it was clear that there were two issues at the forefront: affordability and access. [ Translation ] As the Auditor General's report points out, our collaboration with the provinces and territories has already resulted in significant savings for families across the country.

However, the increase in capacity through the creation of new spaces is progressing at a slower pace. [ English ] What I think is important to note is that unlike fee reductions, which are a question of providing funding, the creation of spaces takes greater time. It involves complex multi-year projects and the development and support of the workforce. That is why in many cases, provincial and territorial action plans reflect a more gradual ramping up of the space creation goals, having first addressed some issues of affordability.

Their space creation goals are more heavily weighted in the last two years of the agreements. The Auditor General also identified that ESDC's reporting has not been timely, in part due to the necessity to both receive and review the information from our partners. Openness, transparency and accountability are guiding principles, and as deputy minister, I agree with the AG that proper data collection and reporting on the system are vital to ensuring that the program remains responsive to evolving needs.

There's no question that more work is needed to improve our reporting practices, which is why we are in constant dialogue with our partners to strengthen and better communicate progress. As an example, we have been co-developing results frameworks with first nations, Inuit and Métis partners to improve how we measure collective outcomes for indigenous early learning and child care. Furthermore, in March 2024, the Canada Early Learning Child Care Act received royal assent.

This legislation includes a requirement that the minister deliver annual reports to Parliament on federal investments and the progress being made under a Canada-wide system. With that, I would again like to thank the Auditor General and her office for the report and the recommendations, which are helping us guide the work forward on improving Canada-wide early learning and child care.

The Chair :

Thank you both very much. We'll now begin our first round, which will consist of three members for six minutes each. Ms. Goodridge, it's nice to see you here today. You will kick us off, please, for six minutes.

Laila Goodridge (Fort McMurray—Cold Lake, CPC) :

Thank you.

The Chair :

Ms. Goodridge, I'll let you know as a guest that when your time expires, if the witnesses are still answering the question, I let them finish. You can't interrupt them once your time has expired, but you will have your full six minutes and a few extra if you time them wisely. It's over to you.

Laila Goodridge :

That's fantastic. Thank you, Mr. Chair. I want to thank our witnesses for being here today. This is a very important topic. I think it's something that a lot of families have benefited from. In your report, Ms. Hogan, you highlighted that there was a risk of not getting the space creation. Are you confident, based on the information you were able to assess, that all of the spaces that were created were net new spaces?

Karen Hogan :

That was a challenge and why we talk about a risk that the target of 250,000 new spaces won't be met. The federal government has the information that's provided to it by provinces and territories, and there aren't clear parameters on exactly what to report back. There could be some that are not net new. There could be some that are created but are not used or taken up because there isn't staff for those spaces to be created. I think this speaks to one of our key recommendations: better gathering of data to be able to compare across the country apples to apples. That is definitely needed.

When we look at how many spaces were created in year three, while I recognize it's likely going to be back-end loaded, there's a lot of work left to be done.

(1110) Laila Goodridge :

In my province of Alberta, there were day homes and a lot of them were unregulated. Basically, we created regulated spaces. An unregulated day home can have five kids; a regulated day home can have six. That's a creation of one space, but I believe in this agreement.... Perhaps Mr. Thompson could give us some information on this. Did it count as six spaces or one space in a situation like that?

Catherine Adam (Senior Assistant Deputy Minister, Income Security and Social Development, Department of Employment and Social Development) :

If a private home care provider moved into the Canada-wide early learning and child care system and added a new space, I believe that would be counted as six new spaces created because they're coming into the Canada-wide system. By doing that, they're abiding by the guidelines the province has agreed to around affordability.

Laila Goodridge :

Ms. Hogan, I guess it opens up a big question, if that's the case. There were already five spaces. By moving them from one system into another system, now they count as six new spaces, but technically there were five spaces. Is that not really funky math?

Karen Hogan :

I think it's important to step back. Child care is regulated by the provinces, and there are unregulated spaces and regulated spaces. All the federal government can gain access to is information on regulated spaces. There are certain rules, and you're going to have certain rigour and improve quality. The goal of this program was to increase affordable, quality, flexible spaces. Yes, it would be bringing in new spaces. I agree that if I was a parent, I would say that there aren't six new spaces there. I think that's one of the biggest challenges of being able to show whether or not this funding is really meeting the net objective of creating 250,000 new spaces.

Laila Goodridge :

In your report, you talked about the fact that there were provinces using school-aged kids. Can you elaborate on which province or provinces were using school-aged children as part of their counts?

Karen Hogan :

We mentioned that about one province. I believe it was the province of Saskatchewan. I think in this case, what they were told was the space is occupied by someone over the age of six, but eventually when that person is no longer in that space, they'll redirect it. This is why you need to set out the parameters with provinces and territories at the outset. What are we going to count? What are we all going to agree is a new space under this program so that we're reporting accurate and comparable information nationally?

Laila Goodridge :

I think that's critically important. I'm a parent of two young kids. I have a four-year-old and a two-and-a-half-year-old, and we rely on child care. I think a lot of parents feel completely gaslit because they have access to wait-lists, but they don't actually have access to child care in so many provinces across this country. The federal government says that this is such a huge success; they've done such an amazing job and created all these spaces.

Parents are sitting there going, “No, this day home I used to go to is just now regulated, so there's one more space.” That's not six new spaces; that's one new space. When we hear things like some provinces are saying that because the information from the federal government wasn't clear, well, perhaps this was a case where the federal government should have left provincial jurisdiction alone and worked with provinces to create a program rather than imposing a program on a province. I'll just get off my little soapbox. My question on the Saskatchewan piece is, how many students were counted?

Karen Hogan :

I'll have to see if someone can give us that level of detail. The only comment I would make as they're searching for that information is that the agreement to develop Canada-wide early learning was a collaborative agreement. Provinces and territories contributed to what the five goals would be, and one of the conditions of accessing funding federally is to provide information. All I can point out is that the federal government should have set itself up better to get comparable and consistent information. I'm just going to see if someone can give you that answer. Do you want that answer?

(1115) Laila Goodridge :

I have one more quick question on this. Are we also counting how many spaces closed as a result of this? Are we tracking any of that?

The Chair :

Ms. Goodridge, the time is up. I will let you answer both of those questions, if you like.

Ewa Jarzyna (Director, Office of the Auditor General) :

Very briefly, it comes down to the wording in the agreements. Some agreements specified that the space creation targets were net new and some did not specify that. The measurement of what was reported against those objectives can be a mixed bag of things. For the Saskatchewan example, it is an estimated number of spaces, because about a quarter of the family home spaces in Saskatchewan are for school-aged children. That shouldn't have been counted depending on how you define the parameters of new space creation.

The Chair :

Thank you very much. Up next is Mr. Osborne. You have the floor for six minutes.

Tom Osborne (Cape Spear, Lib.) :

Thank you, Mr. Chair. For full disclosure, I will say that I was the minister of education in Newfoundland and Labrador when we signed the agreement and started this process. There is a huge benefit to transferring unregulated spaces to regulated. If they're unregulated, we can't measure quality. We had a huge concern in Newfoundland and Labrador, but not with all unregulated spaces. Some of them were fantastic operations and did a great job, but some of the unregulated ones did not.

I think there is some merit in counting transferring a space from unregulated to regulated, because now you know the quality, and there's a set of criteria they must follow. I'm wondering if Ms. Adam or Mr. Thompson wants to speak to that for a moment.

Paul Thompson :

Sure, I can start out. It was indeed our objective to expand the regulated child care space, and as an assurance of quality, the province has a degree of oversight on the quality of the care being provided. When we went into the program, we had a benchmark of approximately 908,000 existing regulated spaces across the country. That was the mark from which we were trying to grow by 250,000 regulated spaces.

It could indeed be the case that there are spaces converting from non-regulated, but similarly, we're not tracking the growth of the non-regulated space either, so it's possible they've been backfilled by other non-regulated spaces. The program is an investment to grow the regulated space with a greater degree of quality assurance. I don't know if Catherine wants to add anything to that.

Catherine Adam :

No, I think that's great.

Tom Osborne :

The second point I will make is that in Newfoundland and Labrador, when we transferred unregulated spaces to regulated, they took advantage of the $10 a day. They went from $25, $30 or $40 a day to $10 a day, so there's another benefit to going from unregulated to regulated. I'll leave it at that for a moment. When we signed the agreement, we went from whatever the price had been, and in some cases, it had been $40, $45, $60 or $70 a day. We initially went to $25 a day and then to $10 a day.

I will say that the number of spaces in Newfoundland and Labrador has increased significantly—not nearly where it needs to be yet, but it is growing. As costs go down, demand goes up, and that has created some issues with unmet demand. When we went to $25 a day, we saw a huge increase in demand. Going to $10 a day, the demand grew exponentially. There may be more people on the waiting list, but the demand is there because families that could not afford $50 a day can afford $10. They're now on a list, but the number of spaces also grew.

I understand, having signed the agreement and the objectives of the agreement, that growth is more heavily weighted in years three and four because, as we say in Newfoundland, you can't knit an early childhood educator. They have to be educated, and that takes two years. We had fewer than half of the spaces that were forecast, which was the goal. I'll ask you to speak to what the likelihood of meeting the 250,000 spaces is, but I understand that growth happens as early childhood educators are educated.

(1120) Paul Thompson :

We are optimistic that the last year of the agreement will be the biggest year for space creation. It's too early to say whether the target will be met, but we're working very hard towards that. We have definitely seen the dynamic that you've referred to, in that as you lower the price of child care, demand significantly increases. One of the constraints in increasing capacity has indeed been the supply of early childhood educators, but we have seen significant labour force growth in that space. There's been almost a 30% growth in the number of early childhood educators since 2021, when the program was launched.

That's a positive sign that capacity is gradually coming on. This strength will enable not only expansion but better utilization of the expanded spaces. There's no point expanding a space if you don't have the staff to operate it. Those two have to work in tandem, and there's been an emphasis on both.

Tom Osborne :

I know the AG report found that affordability has improved pay and training. Part of this was to recognize early childhood educators for what they do. If I'm putting my children into early childhood education, I am trusting that they will prepare my children for the K-to-12 system. I am calling it early childhood education, because it's not just child care. It's early childhood education. Having the system more regulated and more professional means that the professionals who educate our children and prepare them for school should be paid more than what they were. I think there's been huge success in that as well. I'm wondering if you can speak to that.

Paul Thompson :

Absolutely. This has been a big part of the effort as well. It's about affordability and space creation, but it's also about quality. One of the ways to underpin quality is the quality of the workforce—the competencies and training—but also wages. We've worked with provinces to encourage the development of wage grids. Ten of 13 jurisdictions now have a wage grid where early childhood educators can progress their salary with different levels of experience. It's early days in terms of other benefits, but we're pleased to see that three of 13 have pension programs in place. Four of 13 have benefit programs in place.

Those kinds of measures are critical to attracting and retaining the talent needed to assure quality. We continue to work with provinces on other aspects of quality assurance for the system as well. A core part of it is the quality of the workforce and the associated salaries.

The Chair :

Thank you. I'm afraid that is your time, Mr. Osborne. [ Translation ] Mr. Lemire, you have the floor for six minutes.

Sébastien Lemire (Abitibi—Témiscamingue, BQ) :

Thank you, Mr. Chair. Mr. Thompson, child care is a provincial responsibility. In 1997, Pauline Marois, the former premier of Quebec, announced the creation of early childhood centres with a fixed cost of $5 per day. Let me remind you that this initially covered all children aged four and, subsequently, those under four. It has been an incredible success, which Ms. Freeland noted when she created the federal program. For almost 30 years, Quebec has been a pioneer in this field, working independently. Why do Canada's other provinces need federal help to set up this type of system?

Paul Thompson :

Thank you for the question. The Quebec model was indeed an inspiration when we created this program. The level of investment, the benefits for families and the impact on the job market, among other things, demonstrate the impact of these investments in Quebec. I think the Quebec model is asymmetrical and that it provides greater flexibility. There is recognition of the progress already made in Quebec. The goal was to invest and improve the system across the country, trying to benefit from the same investments as in Quebec.

As far as provincial jurisdiction is concerned, the model provides them with a great deal of flexibility. Many aspects are under the jurisdiction of the provinces and territories, but we have overall targets with regard to the returns on investments. However, details on the ground are under provincial and territorial jurisdiction.

(1125) Sébastien Lemire :

You are correct in noting Quebec's success, which is historic. This success was achieved thanks to the money that was transferred as part of the program. What I observe is that the federal government wants to interfere in provincial jurisdictions. It has hit me even harder since I have been an MP. The federal government wants to put mechanisms in place to ensure that fewer projects are carried out. Indeed, the rules and standards are based on what happens in Ontario or elsewhere, and they are very poorly adapted. This is particularly true in the housing sector. In Quebec, this results in structural duplication.

In the case of the child care program, we decided to transfer the money to Quebec, and that has been working very well. There is also less spending on civil servants. The report showed that Quebec was more successful than other provinces with federal money. Targets changed, and then there was inflation. In 2021, Quebec's target was $10 per day, and this target has been reached. In Canada, in March 2024, the target was around $16.50. The investment of public funds means that it's almost double in other provinces. How can you explain this discrepancy?

Paul Thompson :

I would say the provinces have a lot of flexibility when it comes to managing the details. When it comes to administering day care fees, decisions about location and investment are left to the provinces, which know their own needs. In terms of progress, it was clear that there is a lot of pressure on the system. The rate of inflation and the cost of creating new spaces have risen, as have operating costs. That is why we are at $16.50, and not yet at $10.

Sébastien Lemire :

However, the constraints should be the same in Quebec. Personally, I think this program is a success, especially in Quebec, because the money has been transferred to the provinces, unlike the Canadian dental care plan. For that plan, a private company was offered $2 billion to manage the distribution of cheques, essentially. In my opinion, that is an incredible waste of money. The choice was made not to trust the provinces and the systems they have put in place. How much do you estimate the program's management and administrative costs to be? How many civil servants are working on it? How much does it cost to manage this program?

Paul Thompson :

Is your question about the federal government or the entire administration?

Sébastien Lemire :

I am talking about your department.

Paul Thompson :

I don't have the figures in front of me as far as our department is concerned. However, our secretariat is responsible for receiving and analyzing data for each province. This team also handles negotiations. We are currently negotiating the extension of agreements with the three remaining provinces. We could easily provide you with this information, but I don't have it at hand.

Sébastien Lemire :

I invite you to forward it in writing to the committee. The federal government has signed an agreement on child care funding that will expire in 2031. What will happen in the other provinces if the federal government withdraws in 2031? Will child care systems be threatened?

Paul Thompson :

My colleague can answer your question.

Catherine Adam :

Could you repeat the question?

Sébastien Lemire :

Is there a mechanism planned for when the funding ends in 2031? There's a lot of investment in infrastructure, and people depend on federal investment. What are the possible consequences if the federal government withdraws its funding because child care is not part of its jurisdiction?

Catherine Adam :

A bill has been introduced in Parliament. The federal government has promised to continue investing. However, there are always unforeseen circumstances. Examples show that the system works, even if it's completely new. It gives families who want to access the system the chance to secure a child care space. It allows families to manage their own budgets. (1130) [ English ] It's less expensive. [ Translation ] Many families are able to access child care spaces. This economic policy really helps families. In my opinion, the government has clearly expressed its intention to continue participating in the system.

There are undoubtedly areas for improvement, but we must continue to make progress. There's a considerable investment involved.

The Chair :

Thank you very much.

Sébastien Lemire :

I feel the passion you have for your program.

The Chair :

Thank you very much. We now begin the second round of questions. [ English ] Ms. Kusie, you'll have the floor for five minutes.

Stephanie Kusie (Calgary Midnapore, CPC) :

Thank you very much, Chair. Thank you to our witnesses for being here today. Ms. Hogan, your report showed that between 2020 and 2023, the number of parents who reported difficulty finding care for their children increased by more than 30%. This difficulty came after the program commenced. My colleague provided his insight into why he thinks this might have possibly been. I want to ask you directly why you think this dramatic increase occurred after the commencement of the program.

Karen Hogan :

I can simply speculate here, because the federal government hadn't really gathered information about whether the new spaces were actually being used and what the root causes were. In fact, they went to Statistics Canada in order to get that. I would start off by saying that when you raise costs, obviously increased demand is going to be there. The Statistics Canada survey highlighted that many people were saying the new spaces created didn't meet the needs of their children if they had special needs, that the timing didn't fit their work

schedule or that space wasn't available in their community. I think this speaks to the need for having the provinces provide information federally so they can have a better picture of how it's not simply about creating spaces, but about creating them where the need exists and about helping influence how that should be. Then you can speak nationally to whether or not it's meeting the needs of families.

Stephanie Kusie :

Thank you, Ms. Hogan. With that, I'll go to Mr. Thompson. As the Auditor General indicated, outside of Statistics Canada, your department didn't properly track or assess data. Can you tell us, please, how many families are currently on wait-lists?

Paul Thompson :

That, unfortunately, is a data gap in the system. Most provinces do not maintain centralized waiting lists. Individual providers have their individual wait-lists, but they would include the duplication of a lot of names. This is one of a number of issues where we fully agree with the AG's recommendations, and we have work under way with provinces to provide better reporting. In fact, we just launched a portal a week ago that will provide more timely and accurate information on the progress being made in space creation. We're going to continue to work with provinces as they upgrade their ability to report to citizens within each province and territory.

Stephanie Kusie :

Ms. Hogan, do you believe that if the government was following through on its own agreements and ensuring that guiding principles were being met, wait-lists would be shrinking and not growing by 32%, as you noted? We're hearing about the will to have these things, but should the government have included within the agreements more benchmarks, if you will, or anchors, as we've come to call them, financially to ensure that spaces are being created in an effort to receive the funding?

Karen Hogan :

We issued two recommendations, and that's probably one of the most key ones. If you want to show that Canadian funds met the objectives of this program, you should set yourself up at the front end to gather all that information, and there are some really important gaps. The agreements call for that kind of information sharing, so now you need to sit down with the provinces and territories. There needs to be the will on both sides to have the ability to gather and then a willingness to share.

In some cases, we see the federal government is not getting some information, but when they are getting information, they're not consolidating it in order to give a global portrait of what they might already have. I think there's some work to be done on both sides, but this should be thought of at the start of the creation of a program. What do we want to measure and how do we plan on getting there? It's also about making sure you have certain milestones a few years in in order to show progress so that you can keep pushing towards the ultimate goal.

(1135) Stephanie Kusie :

I would go so far as to say that perhaps the disbursement of funds should be contingent on these types of things. I find it completely ironic that on the day we are supposed to hear the announcement of an MOU with my province, there's a lack of details surrounding these things. This is, in fact, one of the flagship pieces of this government, which is a continuation of Prime Minister Trudeau's.

What I'm hearing you say, which is consistent with what they have done and what I expect they will do today, is they just announce things and put things in place without really doing the hard work of determining the data, the necessity and the requirements for implementation, or, as we've seen here with ESDC, doing the follow-up for it. Ms. Hogan, you mentioned that parents who do shift work or who live in rural remote communities are being offered limited opportunities. Pardon me; I'll address this to Mr. Thompson.

What concrete actions have you taken to make the program more accessible and more open to parents who don't work nine to five in an urban centre?

Paul Thompson :

This is an objective that the provinces have signed off on to make a service offering that is responsive to the needs in their own jurisdictions. Obviously, the federal government doesn't determine the allocation within a province to different centres. This is certainly a known area with our provincial colleagues, and they're endeavouring to try to make that type of service available. It's outside of the federal government's authority to allocate specifically within a province to meet specific needs, but there's a shared objective to do so.

The Chair :

Thank you. That is your time. Mr. Housefather, you're next, please, for five minutes.

Anthony Housefather (Mount Royal, Lib.) :

Thank you, Mr. Chair. I think the report generally shows that this program has been a pretty big success. It's created regulated day care spaces, over 112,000 up to early last year, that likely wouldn't have been created otherwise, entitling parents to find cheaper and more guaranteed, quality spaces for their kids and systems. Ms. Hogan, do you have any reason to believe that if the federal government had not created this program, those spaces would have been created?

Karen Hogan :

I wish I had a crystal ball and could tell you what would have happened. What I can tell you is there wasn't a clear agreement across the entire country that making spaces more affordable was needed, and federal funding has supported that. We have seen concerns around the long-term fiscal sustainability of this going on beyond 2026. It's clear that it has supported meeting some of these objectives, but the federal government has a long way to go in being able to demonstrate that all of those objectives are being met. The act had more than just affordability in it.

Anthony Housefather :

Of course, I completely agree. As to the question of everybody just remaining...and provinces being left to do whatever they want with respect to day care, it's likely that these spaces wouldn't have been created. You're looking at an innovative program that one province did and exporting it across the country with the aid of the federal government, but leaving provinces within their jurisdictions to have flexibility with respect to how the programs are managed. They have the right to sign agreements with the federal government, or not sign if they don't want the program. I think that's an important thing.

Let me come to another question, because I think a fair point was raised. Mr. Thompson, you know I like to ask a lot about contracts and their terms. What were the terms in, presumably, the template agreements we started with—obviously negotiating with each province with respect to reporting—and why was it difficult to have reporting initially? I assume that all of the provinces started from a different place with respect to the information they had available and the creation of systems that would allow them to know such things as whether or not they had a wait-list.

Can you talk to me about what was initially asked for by the federal government and what the negotiation process was like with respect to the different provinces on that point about data collection?

(1140) Paul Thompson :

First of all, it was a complex undertaking to start a system from a patchwork of different programs that existed, with the starting point in each jurisdiction being quite different. As a result of that, we did our best to tailor agreements to some of the provincial circumstances, so it wasn't a carbon copy in each single province. There was a bit of customization to match circumstances, which made it a bit more complex, but it was an effort to try to recognize these different starting points.

To comment on your question to the Auditor General, I think one additional benefit on top of the federal investment is that it's been a catalyst for provinces to invest significantly as well. Thus, alongside the additional federal investments, we've seen a very significant parallel increase by provinces and territories. The investments are working in tandem to increase the spaces, which are now, as of November, at 125,000 spaces created, according to the very last number. Space creation has benefited from both federal and provincial investments.

I don't know if Catherine wants to say anything more about the terms and conditions of the different agreements. You were a bit closer to some of the negotiations.

Catherine Adam :

That was a few years ago, but each province had a different starting point, and we needed common indicators and common areas that all provinces reported on. For some jurisdictions, it was a much easier goal for them to achieve. They had more robust, mature systems in terms of the kind of data they already collected. In other provinces and territories, it was a bit more nascent.

Being able to negotiate while recognizing where each individual jurisdiction was from in order to get to a common set of indicators that we could have a province report on took time, and it also necessitated some degree of flexibility about when and how data could come to us. Overall, though, all 13 jurisdictions have agreed on the importance of quality data. They committed to that within their agreements.

We have a federal-provincial-territorial data working group that has just recently been convened and is beginning to really dig in to make sure there's a common understanding and that help is being shared across the country for jurisdictions to meet reporting needs on data. It's a strong system.

Anthony Housefather :

I'll ask one other question. When they get to whatever the growth point is where they have the systems available, what data have we required them to provide in the agreement? What are the metrics they're required to provide after they've expanded their systems and have the ability to provide them? How long in the future is that, and are there penalties associated with not providing the data to allow us to determine if metrics are being met?

Catherine Adam :

With regard to penalties, every jurisdiction in the agreement commits to providing an annual report, which contains how they have met their space creation targets, metrics on for-profit versus not-for-profit ratio, and metrics on ECEs, workforce, and wage grids. It's a number of things. They are also to provide an audited financial statement of the previous year, so we get an annual report of the previous year and an audited financial statement. Failure to provide the annual report can result in a delay in the payment to be issued for the existing fiscal year.

There have been cases where there's been a delay in payment to jurisdictions because they haven't provided their annual reports. It's not a decision we take lightly. Families are depending on the investment to provinces and territories. However, that mechanism is very much in place, and it also applies to failure to provide an audited financial statement.

Anthony Housefather :

Thank you.

The Chair :

Thank you very much. [ Translation ] Mr. Lemire, you have the floor for two and a half minutes.

Sébastien Lemire :

Thank you very much. Mr. Thompson, in her report, the Auditor General asks Employment and Social Development Canada to do more follow-up. The fact remains that, in Quebec, the early childhood centre program is entirely a provincial responsibility. The unconditional transfer of federal funds has worked remarkably well. The data proves it. Speaking of data, I'd like to point out that Quebec's ministry of families dashboard lists subsidized and non-subsidized spaces in early childhood centres and family day care centres. I would like to pick up on my colleague Mrs. Goodridge's idea.

In our opinion, if there are five unsubsidized spaces in a day care centre, and we have access to public funds, this increases the number of spaces from five to six. Indeed, we now have the money to hire a new person. Each time, one more child will be able to enter the public system. We even keep track of how many children are on a waiting list and how many pregnant women are registered. In the answer just given, I understand the donors' desire to have access to data and to know precisely how the money has been used.

However, I'm still very concerned and vigilant, because trusting the provinces is a reflex that almost never exists at the federal level. Isn't it dangerous to add a layer of bureaucracy when each province is asked to provide specific, uniform elements? Earlier, you mentioned how difficult it was for the federal government to trust the provinces when it came to administering funds. Do you still have the will to trust the provinces?

(1145) Paul Thompson :

I reiterate that each province's starting point is different. There are differences between the agreements, as we noted above. We have common indicators for all provinces and territories in terms of overall objectives.

Sébastien Lemire :

Once everyone is brought down to a level that satisfies you, will the old federal reflex of imposing conditions and wanting to manage these affairs return? Is the federal government going to trust in a decentralization model that works?

Paul Thompson :

It's a hybrid model, involving federal investment and shared goals. An agreement is negotiated with each province and territory to meet their needs. There is a negotiation process, and the provinces have the opportunity to administer a program that meets their needs. The model has common overall objectives across the country, and it offers each province flexibility in terms of program administration.

Sébastien Lemire :

I am satisfied. Well done.

The Chair :

Thank you very much. Mr. Deltell, you have the floor for five minutes.

Gérard Deltell (Louis-Saint-Laurent—Akiawenhrahk, CPC) :

Thank you very much, Mr. Chair. Ladies and gentlemen, welcome to your parliamentary committee. I would like to welcome you and thank you for being here with us. My warmest congratulations to all of you on the quality of your French. It's really impressive. We appreciate it, and I know that Mr. Lemire joins me in extending our congratulations. Ms. Hogan, there is one sentence in your report that comes up a lot. I am paraphrasing here a bit, but I think it goes something like this: “We found that provincial and territorial governments, outside of Quebec…”.

I mention this because Quebec has had its own system in place for over 30 years. As Mr. Lemire so aptly put it, it was under the aegis of Pauline Marois, who later became premier of Quebec, that this system was developed and that the early childhood centres, or CPEs, that inspired Ms. Freeland were created in 1997. Is this not proof that the federal government is intruding into an area of jurisdiction that is entirely provincial, and that the provinces, and Quebec in particular, are capable of working things out for themselves, without the federal government interfering in their affairs?

Karen Hogan :

When it comes to education and early learning and child care, it's very clear that it's managed by the provinces. The sentence you mention recognizes the fact that the province is starting from a very different position than other provinces. One territory already had day care at $10 a day, but in the rest of the country, it was much more expensive. The agreement with the province of Quebec was also different. There is still accountability because federal money has been sent to the province. In the accountability process, no distinction was made between federal and provincial money.

It was just an accounting to show that we had discharged our responsibilities in this area. It was difficult for us to say whether child care spaces had been created or whether there had been any improvement thanks to federal funding. It was to recognize the fact that Quebec started from a very different position compared to the rest of the country.

Gérard Deltell :

On page 12, paragraph 18, you clearly state, “We were not able to identify the spending allocation for the Government of Quebec given that its agreements do not require annual reports on the use of federal funding.” You have had to objectively analyze the situation from coast to coast. Personally, I've never been a fan of one-size-fits-all solutions. I am more interested in adopting best practices. This doesn't mean we have to copy and paste. This means drawing on best practices and applying them according to individual needs. These vary not only between provinces, but also between sectors.

CPEs in the urban centres of Montreal and Quebec City are not quite the same as those in the regions. We must respect this reality. In your study, Ms. Hogan, were you able to assess best practices that could inspire Canadians from coast to coast? What do you think are the best practices for creating day care spaces?

(1150) Karen Hogan :

Maybe one of my colleagues could add something about best practices. What I can tell you is that the agreements with each of the provinces were very different. They recognized the particularities and needs of each province and provided them with flexibility. However, it was difficult to recognize whether flexibility had been given to a province because it was part of its best practices, or whether it was just its usual way of doing things. Admittedly, the reality is different in every province. Our aim in reviewing the agreements was not to highlight best practices.

There were five targets in the legislation, and we wondered how the federal government was going to be accountable to Canadians for the money spent. We have seen differences in the net number of day care spaces created. As mentioned earlier in the meeting, this was the net number of spaces in some provinces, and it was just new spaces in others. It's this lack of consistency in counting spaces that needs to be corrected. We need to have at least consistent measures across the country to be able to say that, across the country, we've created 250 new spaces, for example.

Gérard Deltell :

What you've just said shows the extent to which the federal government has to adjust to each province and region when it invites itself into areas of provincial jurisdiction. From our point of view, it's much better to let the provinces act according to their own wishes. That said, once it's done, it's done, and we try to make the best of it. Let me come back to what I was saying earlier. Beyond the distinctions that may exist between the provinces, there are still everyday realities, regardless of the province.

People who work and live in a densely populated city are able to walk their children to day care because it's on their way. In rural areas, it's different. I won't tell my life story, but my daughter and granddaughters live in a rural area. I'm very happy about it, and they're very happy about it. However, their reality is completely different from that of people in the suburbs or downtown. It's true in Quebec, and I'm sure it's true in Newfoundland and Labrador—

The Chair :

Please ask your question, Mr. Deltell.

Gérard Deltell :

All right. No matter which provinces you're talking about, how can you properly measure the day-to-day realities of rural and urban areas?

Karen Hogan :

The agreements gave the provinces flexibility. In other words, the province or territory could decide where to create the new spaces. This was not a federal requirement. In fact, each province was given flexibility. You would be better off asking the provinces. The important thing to know would be how they decide to create spaces in rural areas rather than in big cities, or vice versa.

The Chair :

Thank you very much, Mr. Deltell. [ English ] Next up is Ms. Yip. You have the floor for five minutes, please.

Jean Yip (Scarborough—Agincourt, Lib.) :

Thank you for doing this very important report. I'm glad all of you are here to answer our questions. Ms. Hogan, what is meant by “inclusive spaces”?

Karen Hogan :

We noticed there were different

definitions, across the provinces and territories, of what would be an inclusive space. That's why it was difficult to sit back and globally say, across the country, whether inclusive spaces had been created. One requirement we expected to see was whether there were more inclusive places per capita based on the number of children who were there. That information wasn't gathered. As for whether or not those spaces were filled by the families they were actually intended for, again, that information was not gathered. We saw this as an opportunity.

There could have been a little more comparability across the country, if you wanted to report on this. It was one of the outcomes, so you should have set out some key measures in order to check whether you met that outcome.

(1155) Jean Yip :

Why is it important for the provinces and territories to ensure eventual equitable access to regulated child care spaces?

Karen Hogan :

Usually, this means families that might have lower incomes or have children with special needs. At times, that means there are other expenses needed for child care—if you need extra help or different tools. These are all things the provinces need to figure out and define. If the goal is just simply creating more inclusive spaces and making sure they're used, the federal government has to figure out the metrics to measure that.

Jean Yip :

Mr. Thompson, what steps are being taken to ensure equitable access for diverse and vulnerable families, including those in rural and remote areas?

Paul Thompson :

To start out with your earlier question on inclusive spaces, I would note that an important pillar in the legislation is laying out the objective of supporting inclusive spaces in the expansion and operation of an inclusive ELCC system. Whether that's for official language minority communities or indigenous communities, that's laid out as a legislative parameter. There are also explicit objectives in our infrastructure agreements, in which funding is targeted to advance those objectives.

In the recent extension agreements we negotiated with provinces for the next five years, there's increased emphasis on the reporting of inclusion metrics about meeting some of the needs of different communities. Those are some of the measures we have in place.

Jean Yip :

Mr. Thompson, could you comment on the data discrepancies, as the provinces started from different places?

Paul Thompson :

As I said, an easier way to have made early progress was on the affordability part of this by providing greater subsidies. We saw early progress, and that progress was noted in the Auditor General's report. The harder lift, if you will, was on the expansion of the child care spaces themselves. Some provinces were starting from a very low position. Others had a higher level of space creation already and perhaps had more momentum. Some provinces were starting from an earlier starting point and without a lot of momentum. Quite a variety of circumstances were met in reaching the expansion programs.

There was also a bit of a difference in the timing and signing on of the agreements. Ontario, for example, signed on quite later, so there were variations in the times at which different jurisdictions signed on. Those are a few of the factors that influenced the rate of space creation in the different provinces.

Jean Yip :

I'll continue with you, Mr. Thompson. One risk identified says, “For most provincial and territorial governments, [ESDC] did not assess whether the increase of educators who fully met certification requirements”.... With the increased demand for educators and the fact that they need to be certified, how can we be sure they will meet the full requirements and that shortcuts won't be taken?

Paul Thompson :

I have a few points on this. As I said, it has been a collective objective of the federal, provincial and territorial governments to advance quality and to do so in the form of a workforce strategy. That has entailed issues like wage grids and benefits, where there's been some progress. There's also been good discussion on competencies. This is more complicated, because each province—coming back to provincial jurisdiction—has jurisdiction over occupational competencies and requirements.

We're not looking at a complete harmonization but more of a sharing of best practices on what constitutes good, quality standards. As a result of our process, there's much more dialogue between provinces and territories on issues of certification and best practices in that space. I mentioned that we had a 30% increase in the workforce, so that is very encouraging. One last thing I would note is that there are two other measures the federal government has put in place.

We're in the process of rolling out $7.5 million through our sectoral workforce solutions program to support the development of competencies across the country and to work with partners on advancing labour market information, competency assessments and issues like that to facilitate the growth of the workforce. I would also note that Canada student loan forgiveness, as per the last budget, is being expanded to include certified early childhood educators who move to remote areas. They can see a portion of their student loan forgiven. That's one of the expanded occupations to which that applies.

There are a few things the federal government is doing. This is also a deep area of provincial expertise, and we're trying to work a lot on dialogue and collaboration.

(1200) The Chair :

Thank you. That is your time, Ms. Yip. We are beginning our third round and going back to Ms. Goodridge. You have the floor for five minutes, please.

Laila Goodridge :

Thank you, Mr. Chair. Mr. Thompson, one of the most flawed pieces in this system is that the federal government limited the number of spaces available to entrepreneurs. Specifically, in my home province of Alberta, it put in caps so that we couldn't expand child care. Child care operators are primarily women, so women entrepreneurs have been left out and are sitting there struggling. This means that families don't have access to care, because in these programs, child care spaces exist, but families are not able to access the grant because of arbitrary caps put in place by the federal government.

Why was there such a focus on limiting access to these spectacular female entrepreneurs in expanding the businesses that already existed in many cases?

Paul Thompson :

It was certainly the policy intent of this investment to support the expansion of primarily the not-for-profit sector. There was no prohibition on expanding the for-profit sector. It was—

Laila Goodridge :

You guys did put caps in place, and very strict caps in—

Paul Thompson :

The policy objective was that the not-for-profit sector should grow at a faster rate than the for-profit sector with the investment. Both could grow, but the ratio was expected to shift more heavily towards not-for-profit. That was the policy objective. I would make two other observations. One, home operators were excluded from the definition of for-profit, so if you're operating out of your home, you're not considered for-profit—

Laila Goodridge :

If you have a really small business, you're excluded, but if you have a 30-kid day care and have a few employees.... That's a problem, but let's have these giant not-for-profit day cares in large centres, and that's A-okay. The part that really hits me hard, as I live in a rural community and represent a rural riding, is that we're not talking about large centres, by and large. We're talking about small centres. Those small centres are generally served by owner-operators, and your guys' systems completely left those out. That, to me, is a huge issue. There's another piece I want to hit on.

I'm incredibly proud to represent 4 Wing Cold Lake and the amazing men and women who serve in the Canadian Armed Forces there. The child care deals, as they are currently written, do not meet the flexibility requirements of the parents who have children and are serving our country, serving our national security needs. They don't typically work Monday to Friday, nine to five, and they often need outside care. These deals have left these families in Cold Lake completely out in the cold.

What is your government doing to make sure that families who are serving our country are actually able to get the flexible care they desperately need?

Paul Thompson :

I have a few points on that. First of all, as I said, there's no prohibition on for-profit expansion. It can be done. There's nothing to stop provinces from making additional—

Laila Goodridge :

That's not accurate, because in my province of Alberta, they are actually limited.

Paul Thompson :

There's a ratio.

Laila Goodridge :

Yes, there's a ratio, so you have limited the number of spaces that can be created because you guys have set an arbitrary number, not understanding the reality on the ground in Alberta.

Paul Thompson :

That ratio only applies to the federal investment. As I mentioned, provinces have invested quite significantly in this as well.

Laila Goodridge :

I'm very proud of my province of Alberta for stepping up when the federal government decided to set arbitrary limits.

Paul Thompson :

There's latitude for provinces to make that investment, and they are making that investment. The latitude for private operators also includes—and this is a consensus among provinces and territories—looking at the guardrails and making sure you have financial controls, which need to be a bit more robust in the case of private operators, and have quality assurances—

Laila Goodridge :

That's really frustrating to the operators stuck in these systems. Inflation, which has been out of control, has hit them hard, and they are struggling to make ends meet. You guys continue blaming these amazing female entrepreneurs, these owner operators. To me, that's absolutely not okay, and I will stand up against this every single day. Ms. Hogan, could you perhaps explain to us how flexibility is being measured? Are they actually meeting the needs of the parents who need outside care? Your report very clearly states that there aren't guardrails in place to make sure that flexible care is being met.

(1205) Karen Hogan :

Many of your questions point to policy choices, and as you know, those are not things that my office will comment on. We comment on the implementation of the policy choice that has been made. When it comes to flexibility, again, I think it's an area where very few parameters were put out for the government to report back on flexibility. I think it was just given to the provinces with the message, “You understand your needs, and you set them.” There were certain criteria, as the deputy minister talked about, on increasing regulated spaces in the not-for-profit sector that were policy choices that had been made.

The rest of the flexibility on where funding went specifically was left with the provinces.

The Chair :

I'm afraid that is your time. Up next is Ms. Tesser Derksen for five minutes, please.

Kristina Tesser Derksen (Milton East—Halton Hills South, Lib.) :

Thanks so much, Mr. Chair, and thanks so much, witnesses, for coming in. This topic speaks really personally to me. I have four children. They're young adults now, but for years, when I was going to school and after university when my husband was starting up a small business, child care caused us a lot of anxiety, a lot of sleepless nights. Having reliable, affordable, accessible child care is extremely important in my community and I'm sure in communities all across the country, so I appreciate the work you're doing in assessing how the government is delivering this program.

I want to start off by noting to the Auditor General that in the conclusion, your report basically finds that ESDC “fulfilled its responsibilities to support the quality, affordability, access, inclusion, and flexibility of early learning and child care across Canada”, which is good. Thank you for that. There are critiques, of course, and recommendations. They seem to really focus on the theme of the inability to assess the effectiveness of the program because of these data gaps that we keep bringing up in our questions. I understand the jurisdictional realities.

The program allows provinces and territories to allocate funds at their discretion. That's perfectly understandable. I'm noting, however, that it's resulting in some limited or inconsistent information being gathered, which is hindering our ability to assess whether this program is actually meeting its goals.

In paragraph 23, on page 12, the report notes, “The funding agreements required provincial and territorial governments to report annually, if able, on several elements, including information about unmet demand.” “If able” is a rather powerful qualifier, so I'm wondering if you could provide some comment on what the rationale was for including that type of discretion in the agreement.

Karen Hogan :

I believe that question would be best asked of the deputy minister, but listening to his previous responses, I think it's about reflecting that provinces all started in very different places. Some had very robust systems and some didn't. Some did not even have a global picture in the province of regulated spaces. Each organization would have that information. I'm seeing Deputy Minister Thompson nodding his head in agreement with me.

Paul Thompson :

I would just add that, again, provinces were coming at this from different starting points and with different data systems. I would say the scale of provincial operations is also an issue. Ontario, for example, has a very large, complicated system, much larger than those in other jurisdictions. Thus, the ability to collect data varied widely across provinces and territories, and very few had a centralized waiting list capability to know how many waiting lists an individual parent might be on. The actual number of parents not able to access child care is a data point that we wish we had more insights into, but that has not been available in most cases.

Kristina Tesser Derksen :

Building off that point, is there a potential to amend these types of agreements or, if we do extending agreements, to build in that kind of specificity so we can be more customized when we're dealing with specific provinces based on their ability to collect this data, making sure they're collecting the data to the best of their ability?

(1210) Paul Thompson :

Yes, there are indeed opportunities to do that. I mentioned that we have a very active federal-provincial working group looking at different ways of collecting the data. Coming back to the point made earlier about sharing best practices, this is an area where some provinces and territories have more innovative ways of doing this. We are seeing dialogue and interest in sharing some of the capabilities that might exist. They might even just replicate a system and transport it to another area. That's an area of promise.

I would say that in our extension agreements, we have a renewed and bolstered commitment to working together on better reporting as well. It's reflected in legislation and in new agreements. I certainly see a will among provinces to work together on improving it.

Kristina Tesser Derksen :

That's great. Following along that theme, what types of responses have we been getting from provinces in general about the program, about the effectiveness of it or the ease of the implementation of program requirements? Have we received feedback from provinces individually?

Paul Thompson :

We work very regularly with them. I certainly meet with my deputy minister counterparts at least three times a year. I have a meeting with them in a month's time. There's regular opportunity for dialogue. Some of this relates to the status of agreements and funding, but a lot of it relates to dialogue that wasn't happening previously on how we can operate collectively a better child care system. It's basically a forum to share some of these practices and build a system together that operates out of a federal framework with funding but allows latitude for provinces to meet some of their specific needs on the ground.

Kristina Tesser Derksen :

Generally, it's well received by the provinces. They're eager to continue and to build the programs, you're saying.

Paul Thompson :

They're all enthusiastic participants. As you said, three provinces are in the process of finalizing extension agreements, so I take it that all the others that have signed on are enthusiastic about continuing the work together. We're very close to having a renewed commitment as well with the remaining three provinces. That's a pretty good indicator of their interest in continuing with the program.

Kristina Tesser Derksen :

That's good to hear. In—

The Chair :

Can you make it quick? You're over your time, but you're on a roll. If you have a short wrap-up, please go ahead.

Kristina Tesser Derksen :

Okay. In some ways, the program has been a victim of its own success, because there is some unmet demand. I was reading an

article just the other day about the province of Manitoba. There were some criticisms about the ability to staff and to roll out more spaces. I'm just adding that to my comments. You don't have to respond. Thank you.

The Chair :

Do you want to give a response to that? You don't have to.

Paul Thompson :

I think I've answered it.

The Chair :

Thank you. [ Translation ] Mr. Lemire, you have the floor for two and a half minutes. You will then have one more turn to speak.

Sébastien Lemire :

Thank you, Mr. Chair. I like feeling the passion of the witnesses. We can see that children's education is very important to them. Ms. Hogan, in your report, you highlight the fact that there are not enough obligations or funding regarding first nations. Can you tell us more about the work you've done in this area and its impact on communities? Is there data? How does it work?

Karen Hogan :

This part of the report was a little more difficult. We only included Employment and Social Development Canada, but existing programs were managed by other departments. Funding was included in this program to improve spaces and services for indigenous communities. Employment and Social Development Canada is the department that was responsible for managing it horizontally, so we expected that department to have much more information than what was provided. There was also a great deal of collaboration with indigenous communities to establish measures and targets.

We received the same feedback, and the recommendation was the same in the rest of the country. Due to the lack of information, we were unable to demonstrate whether there had been any improvements. Let me give you an example. Funds have been earmarked for structural improvements. However, the federal government did not collect information on how many buildings had actually been improved or enlarged. The lack of information does not allow us to demonstrate the value added with the funds granted.

Sébastien Lemire :

In 2021, Quebec launched a call for projects to allocate 1,000 new day care spaces. Adding these to the existing ones gives us a total of 4,500 available spaces in Quebec. What happens in a context like that? Are there negotiations with first nations? We know there's a certain amount of confusion in this area, and that means Quebec doesn't get its fair share. Does Quebec receive its fair share of programs reserved for first nations?

(1215) Karen Hogan :

I hope Mr. Thompson can answer that question. I can tell you that, for a decade, we have been working with indigenous communities and third parties to develop a performance measurement plan. This concerned money spent on indigenous communities. Mr. Thompson, would you like to add anything to that?

Paul Thompson :

Many indigenous communities rely on three existing programs, namely those of the Public Health Agency of Canada, Indigenous Services Canada and Employment and Social Development Canada. The new investments are designed to ensure the continuation of those important programs for indigenous communities. We need new ways of offering programs developed in conjunction with our partners. This is a continuation of those three programs, but with an increase in investment. There are 60 consultation tables across the country. They are discussing new ways of setting priorities and the performance framework.

Our work has progressed a long way. It's been a little slower than expected, but we have almost completed the development of a performance framework for new investments in indigenous communities. We obviously need the approval of indigenous communities and their leadership. However, we will soon be ready to present a new framework for this program.

The Chair :

Thank you very much, Mr. Lemire. Mrs. Kusie, you have the floor for five minutes.

[ English ]

Stephanie Kusie :

Ms. Hogan, you noted specific risks that the government would not meet their guiding principles. In

summary, do you feel as though the government has met their guiding principles with this program or not?

Karen Hogan :

I think our audit showed that federal funding led to improvements. I think the most noticeable would be in affordability. There's definitely been a decline in the costs for child care per day and there's definitely been a creation of spaces, but what's missing is whether or not the government, by the end of 2026, will be able to show whether all of those goals have been missing, because there are gaps in information. There's a failure in making sure they've set themselves up to get that information, but it's clear that the funding has helped make child care more affordable across the country.

Stephanie Kusie :

In your view, do you believe ESDC has properly tracked and kept data to assess whether or not the government will meet its guiding principles?

Karen Hogan :

I believe most of our testimony today has been around exactly that: a gap of missing information. There's a key recommendation about gathering better information. I think it's easier to track the number of spaces; it's hard to know whether they're being used. It's hard to know whether they're inclusive and whether the right families are using those spaces. I think there's a lot of opportunity for improvement on data gathering and reporting.

Stephanie Kusie :

Is there any other program that has been created and implemented by this government that you could use as a comparison, or alternatively a principle of IFRS that would be applicable here in terms of the outcome of the fund delivery?

Karen Hogan :

That's a very difficult question for me to look at. There are so many programs across the government, and I think some of the findings here about the need to establish how to measure things when you're in a space regulated by a province are findings we're seeing in other programs. We saw that when gathering health information during the pandemic. You see it in housing. I think there needs to be a way for the federal government to work out better reporting and exchange mechanisms with the provinces and territories, because often there is a commingling of federal money, provincial money and municipal money.

How do we talk to Canadians about a program on a national level when we don't have good information-sharing agreements for all of these programs? I think there's an opportunity for all levels of government to show Canadians how money is being spent in a better way.

Stephanie Kusie :

I agree. In addition to the example I gave earlier about the pipeline MOU, which is supposed to be announced today, I'm thinking of another example within my city specifically. The government is going to withhold funding for housing, should they decide to repeal blanket rezoning, so it comes with strings attached. It's not “this is for the good of your community and what you decide”; it has to adhere to things. In three instances, you note that Employment and Social Development Canada either “did not effectively assess” or “missed opportunities to monitor” expected outcomes of the program. Why do you think that is?

(1220) Karen Hogan :

It speaks to the recommendation around, in the design, really thinking about how to gather comparable and consistent information across the country, recognizing that everybody was starting in a slightly different place. How do you elevate it to talk consistently about it? I think it's about not having the data, and at times, it's about collecting some of the data but not consolidating it to talk about the global picture they have. I think there are two elements that contribute to not being able to demonstrate....

Stephanie Kusie :

Do you believe that ESDC currently has the tools to monitor these arrangements?

Karen Hogan :

Well, all of the agreements clearly call for the exchange of information. As mentioned earlier, an annual report is required, and funding can be delayed until that report is received. We definitely saw that happening. I think the focus needs to be on the content of what's in there so you can get some more consistent and comparable information from all the provinces in order to speak nationally about the program.

Stephanie Kusie :

Why do you think the government signed individual agreements with provinces and territories, knowing the areas it wanted to track, without receiving guarantees that it would receive that information from the provinces and territories? That's tied into my first round.

Karen Hogan :

I think all of the agreements talked about the need to exchange information, but that wasn't to the level of exactly what. I think some of the agreements recognized.... We had a conversation just earlier in another question, saying to provide information if able, recognizing that some provinces don't have a robust or mature system right now. How do you support them in getting that so you can get national information? There are a lot of parameters in place, but this is possibly an area that we see in many programs: forgetting to think about exactly what we need in order to show outcomes.

It's not just about metrics. It's about, really, the endgame. I think inclusivity and flexibility are great things. It's easy to measure the number of spaces, but it's hard to measure something that's a little less concrete. You have to think that through at the start.

Stephanie Kusie :

Thank you.

The Chair :

Thank you very much. We're going back to Mr. Osborne for five minutes, please.

Tom Osborne :

Thank you, Mr. Chair. I have a follow-up for the department. On the missed opportunity, as identified in the AG report, to monitor reporting effectively and to monitor the progress nationally, can you walk us through what, if any, steps you've put in place, either prior to the report being completed or since the report, to improve that?

Paul Thompson :

Absolutely. I would first point to the fact that, as noted, there was not an absence of data collection. We have quite a reliable set of data on space creation and very good indicators on affordability. Those were some of the initial objectives. I think what the AG has pointed out is that there's a need for much more granularity in meeting some of the more nuanced objectives of the program. We're fully committed to doing that. I mentioned that the legislation establishes proper reporting as a key feature. It's the top, if not one of the top, priorities of the deputy minister and minister working groups.

My minister, Minister Hajdu , meets regularly with her counterparts. I meet with the deputies, and there's a data working group. There's a lot of work on lifting all the boats to have a much better collective reporting system. I mentioned that, just in the last week, we've launched a new portal, which is a consolidated space to provide Canadians with information on the review. The Auditor General noted that there were two issues. One was collecting information, and the second was assembling it and making it available.

On that second issue, we are committed to assembling faster and posting in a much clearer fashion, through this portal we have, the information that's available. There are a few more limitations on what we can collect because that's a provincial capacity issue, but as I noted, we're working on that aspect as well.

(1225) Tom Osborne :

The report also indicated that the department “did not update its approaches to measuring results to collect information on progress toward some planned actions”. Have you addressed this? If not, what do you plan to do to update the approaches to measuring results?

Paul Thompson :

As I mentioned on that front in relation to the last question on indigenous investments, we wanted to maintain a balance between three existing programs on which communities depended. We wanted to keep going and providing supports through those programs. At the same time, we're trying to shift to a new delivery model co-developed with indigenous partners. This has taken us a little more time than we had hoped for, but that arises from our commitment to doing it in a co-developed way.

We have 60 distinctions-based partnership tables with indigenous organizations across the country to try to come up with a performance framework that meets the needs of those communities. It puts them at the centre of the delivery of the programs. We are very close. We have some final steps to get indigenous leadership's approval, but at the officials level, we've made very good progress on a performance framework that would be used by the distinctions-based partnership tables across the country.

Tom Osborne :

I want to reflect a little on a question that a colleague across the table asked regarding service folks and some of our national defence sites. I know that in Newfoundland and Labrador, in one of the initiatives we did, for example, a new hospital was announced. After I moved from education, I went into health. We announced a new hospital as part of that. That building is going to include an early learning and child care centre, through the program, that's focused on catering to the needs of health care professionals. It won't be nine to five. It reflects the actual work life of health care professionals.

I know that FPT meetings happen, but is there a way we can share best results from one jurisdiction to another jurisdiction so things like this may translate into helping at a national defence site or a hospital, if it's a new build, for example? We've adopted the policy that any new hospitals built have to contain, within the bricks and mortar, a space for early learning and child care that caters to health care professionals.

Paul Thompson :

That is a really important and rich question. There are a number of dimensions to it. I didn't get a chance to complete my earlier answer in reference to national defence. As you may know, there's a very significant investment—$100 million—to expand child care services within the Department of National Defence. We are collaborating with DND on that. I've had conversations with my counterpart. In fact, I invited her to present to the provinces, to your point, so DND could benefit from the wisdom of running child care centres that exist in the provinces and vice versa.

There is an exchange in rolling out different child care supports. Some of the same needs you were referring to in the Canadian Forces in terms of demand for child care outside of normal hours.... We see that in a whole bunch of other areas too, such as with major projects. I've seen companies that are interested in major projects really lean into doing child care planning. They can't attract a workforce unless there are child care supports. The idea of designing child care delivery to meet the needs of atypical schedules is critical.

I think it's recognized as an area that would benefit from even more sharing of best practices.

Tom Osborne :

It is available in the funding, at least, though maybe not with all provinces. I'm not privy to agreements with other provinces, but our province was able to access funding under that program, which will in turn help us attract health care professionals through recruiting, because we're offering the service they need.

Paul Thompson :

Indeed. It's not only enabled by the agreements; it's encouraged. That's the kind of thing we really enjoy seeing in action plans. What does each province plan to do to meet some of the atypical needs that might exist in rural, remote areas, as we referred to earlier?

(1230) The Chair :

Thank you very much, Mr. Osborne. That is our time. We will have a truncated last round with three members. We'll hear from the official opposition, the Bloc and then the government to close things out. I have just a quick comment on something that's come up and that you could look into. The day care or child care facility for National Defence here in Ottawa—my wife is in the forces—is not located at the DND HQ. One thing our personnel doesn't do is complain, so I'm going to complain on their behalf today.

The day care has to be located where the men and women who lace up their boots every morning to defend this country go to work. There's no point in putting it halfway across town when the men and women have to drive to Kanata to go to work every single day. I'll leave that with you, Mr. Thompson, to raise with the CDS or whoever your counterpart is on the military side. Location is key. I know that my colleague Ms. Goodridge would agree with that. On that note, Ms. Goodridge, you have the floor for five minutes, please.

Laila Goodridge :

Thank you. I think this is one of the big struggles we are facing. In the Ontario Auditor General's report, they highlight that 27% of the spaces that are created are not being filled. Mr. Thompson, do you know how many spaces across the country aren't being filled that have been created?

Paul Thompson :

I don't have perfect data on utilization rates. It would vary from province to province. There has been a discussion with Ontario on their utilization rates, since they were fairly well documented in the Ontario Auditor General report. They have commitments that will be part of the extension agreement, not only on space creation but also on the utilization commitment.

Laila Goodridge :

I think this is the part that really frustrates a lot of parents. We have thousands of parents, some of whom I've talked to, who are waiting on lists. They have no availability to any kind of flexible or affordable care—any kind of care. They take the first care that's available because they've been waiting on lists for so long. There's no “what works for their family”. They're literally taking the only thing they can get. Oftentimes, it's not what works for their family. To hear that there are spaces being created that aren't being filled is infuriating.

What things other than “we don't have the data” are you guys actually taking action on to make sure that spaces are being matched to the people who need them?

Paul Thompson :

I would say the action plans that are done with the province need a complementary workforce plan. One of the major constraints to space creation is the availability of early childhood educators. I mentioned that we've seen significant growth, at 30%. I don't think that is sufficient yet to meet the goals we have. Further growth of the early childhood educators base is being encouraged by the wage growth and wage grids that exist. That's a big way of attracting more people. I would say that one of the biggest barriers to utilization is ensuring that you have sufficient staff to run a child care facility.

Laila Goodridge :

I think it's also about making sure that the facility is being built in a place where the needs actually are. Has any kind of needs assessment been done on which communities have child care deserts? We know there are places that have child care deserts. I'll go on the record here and say that Cold Lake, Alberta, the home of 4 Wing, Canada's premier air base, is a desert when it comes to child care. We have families serving in our armed forces who cannot find care. I'm not bringing this up because I'm the member of Parliament for Fort McMurray—Cold Lake. I'm bringing this up because it is absolutely atrocious.

We do not have flexible child care. We do not have child care available outside of Monday to Friday, eight to five, in that community. How are we asking fighter pilots going on deployment all across...? This is just one example. There are hundreds of examples at bases all across this country. How are we not providing flexible care so that the people put in isolated postings, away from their families, away from their support structures, have access to the care they need?

Paul Thompson :

I noted the significant investments DND is making in collaborating to design a responsive—

Laila Goodridge :

Yes, they're making them, but they haven't been made, so families right now, today, are making impossible decisions. We have been three years into this, and they're only now maybe starting to think about this.

Paul Thompson :

To finish my answer, I would note that the current agreements encourage the creation of spaces that meet community needs. That's up to the provinces to decide in their action plans. They're encouraged to do that. We would welcome it in action plans if they were to respond to those needs. The last thing I would say is that I wouldn't interpret a low utilization rate to be a sign of no demand in a community. It's more often a case of insufficient staffing to keep a space open. It's constraints like this that are leading to a low utilization rate rather than the absence of demand in an area.

(1235) Laila Goodridge :

You don't have the data to tell you which ones are because there's low staffing and which ones are because there's no need. We also don't have any of this data. We're going off of StatsCan data. Your department doesn't collect any of it. It seems like there's a huge gap there. The fact is that there is no space. We know that some parents are on hundreds of wait-lists and they still can't get in. There is no flexible care. I know families that are choosing other child care forms simply because the only child care available in their community is not flexible enough for their needs so they can actually do their job.

That is a huge problem. We know that it costs more money to provide care to children who have different needs and special needs. What is being done to ensure that low-income and special needs kids actually get that care?

Paul Thompson :

That, too, would be an element to prioritize in action plans. Catherine, do you want to elaborate on how those needs are reflected in the agreements?

Catherine Adam :

Sure. Every year, with each agreement, we ask for an action plan from the provinces to demonstrate what they're going to allocate to space creation and what they're going to prioritize in terms of spaces in child care deserts. It's about the inclusion of low-income families and being able to look at where there are high-need areas and at socio-economic demographics to determine where they will want to incent, build and create spaces. Every province does that in the action plans they provide to us to demonstrate what they plan to do with the money for the year.

A really important piece that I would say I've heard from every province and territory is making sure they are able to meet the need. There is no doubt there are challenges. Rural areas can be a challenge for the creation of spaces. They're more expensive, quite often. It's also in large city centres where rent for a child care facility can be higher. There are always balances that provinces are looking at making. There are the challenges you've raised that are well acknowledged. I would say that all of my discussions with provinces and territories validate that they are looking at how they can improve this.

The Chair :

Ms. Goodridge, do you have a last comment?

Laila Goodridge :

It's good to hear that you guys acknowledge this, but it sounds like you aren't actually doing things to help the families that are struggling right now. You're putting a lot of blame on provinces when you guys created a system but didn't create the metrics to tell parents what was going on. It seems like a massive flaw to create a system without actually having any metrics for measurement. Can you commit that you'll do better in future agreements and on things where you're stepping into provincial jurisdiction?

Stephanie Kusie :

That's for the government—

The Chair :

Order. You can make a last comment and then I'll move on to our next—

Paul Thompson :

I think I've stated our commitment to do better on data reporting. I'll also note that we have some meaningful indicators already. There were 125,000 new spaces created as of November and very significant evidence on the affordability side. We fully accept the responsibility for bringing more granularity and more precision to some of the broader objectives of the program, absolutely.

[ Translation ]

The Chair :

Thank you very much, Mrs. Kusie. Mr. Lemire, you have the floor for two and a half minutes.

Sébastien Lemire :

Thank you, Mr. Chair. I would like to take this opportunity to tell you about a project under way in my region, Abitibi-Témiscamingue, specifically in Val-d'Or. CPE Abinodjic-Miguam, which means “children's home” in the Anishinabe language, was created nearly 25 years ago by the Val-d'Or Native Friendship Centre. This day care centre welcomes not only indigenous children, but also non-indigenous and immigrant children. It welcomes children of all nationalities, but the educators speak the Anishinabe language. They pass on this culture.

In fact, they organize activities according to the six seasons of the Anishinabe calendar, namely nipin , which is summer; takwagin , which is autumn; pidjipipon , which is pre-winter; pipon , which is winter; sigon , which is pre-spring; and minokamin , which is spring. This project is a perfect example of reconciliation and friendship between nations. Quebec finances this day care centre in an indigenous environment. In other places, funding comes from the federal programs you mentioned earlier. There's a risk of not knowing who to contact. Yet Quebec is taking action.

Why can't investments in indigenous child care centres be transferred to a single location in Quebec that has the capacity to be accountable and that is already working with first nations and Inuit people? Given the effectiveness of the project, why not transfer the money directly to Quebec? Have you ever thought about that?

(1240) Paul Thompson :

Thank you for the question. The program looks impressive. I don't know all the details about the funding of all the programs, but I can say that we work closely with community groups to determine their priorities. However, I could go a little deeper into the links between this project, existing programs and the 60 consultation tables I mentioned. It is with these consultation tables that we are currently developing the new framework for this program.

Sébastien Lemire :

As I told you, there is something that I find concerning. I see your interest, and I think your passion is beautiful. However, it creates confusion. Quebec's programs work. Couldn't the same logic apply? Instead of multiplying the number of consultation tables in communities, could we not trust the Quebec government, where a system linked to these people already works?

Paul Thompson :

With regard to programs for indigenous communities, there will always be a very important relationship between the federal government and those communities. In terms of obligations and relationships, we have signed agreements with self-governing first nations. [ English ] These are self-governing first nations and modern treaty holders. [ Translation ] I'm sorry, I don't know all the French terms. We will always maintain these very important relationships with our indigenous partners. As I mentioned, the three programs on which very important clients depend have been around for a long time.

It is then risky to cause disruptions, which would jeopardize the service offer. We have relationships with these partners, and the federal government has obligations to support indigenous communities.

Sébastien Lemire :

Thank you for your honesty.

The Chair :

Thank you very much, Mr. Lemire. [ English ] Ms. Yip, you have the floor for approximately five minutes, and you'll be the last member to pose questions.

Jean Yip :

Thank you. Ms. Hogan, what level of government is responsible for the location of child care spaces?

Karen Hogan :

The early learning and child care area is regulated by the provinces and territories.

Jean Yip :

Then they would be responsible for the actual locations.

Karen Hogan :

I don't audit the provinces and territories, but that would be my understanding, yes.

Jean Yip :

Did your audit identify any best practices among provinces or territories that could accelerate space creation?

Karen Hogan :

I just said that I don't audit the provinces and territories. I don't audit the provinces, but I do audit the territories. We're looking into lining up our early learning and child care audits for the territories so that we can speak to that. I unfortunately don't have any information about it. I don't know if the department does, but I couldn't really speak to that. I'm sorry.

Jean Yip :

That's okay. Mr. Thompson, do you have any comments on that?

Paul Thompson :

We're in constant dialogue with the provinces and territories on the challenges of creating and expanding child care. There's also a ministerial advisory council of child care experts, which informs us of some of the on-the-ground realities around the challenges of operating and expanding. We have multiple sources of information on some of the challenges. That's why there's been a range of program investments to try to deal with some of them, such as workforce issues, and I mentioned some of those measures.

There's been a need for infrastructure supports, and we've dealt with that through some dedicated investments. It is really through dialogue with the provinces that these barriers have been identified, and we've worked to try to create different solutions.

(1245) Jean Yip :

Is it that same task force or advisory council that's working on the harmonization of standards among the provinces and territories that you mentioned earlier?

Paul Thompson :

The advisory council I was referring to is the.... Did I have the name right?

Catherine Adam :

It's the national advisory council on early learning and child care.

Paul Thompson :

There we go. That's the proper name. I meet with them, but I forget what they're called. In fact, we're meeting again very soon. That is for advisory on the pan-Canadian system. More of the individual advice on space creation comes from the provinces and territories in terms of their own needs.

Jean Yip :

Ms. Hogan, several provincial and territorial governments reported to the department on limitations in their abilities to collect and report data related to diverse or vulnerable children and families in early learning and child care. We're exploring options to overcome these limitations. Why were there difficulties in collecting the data? How can the provinces and territories overcome these limitations?

Karen Hogan :

Again, that's a question I don't think I'm in a good position to answer. The reason we were trying to explore that and see what the federal government was gathering in that vein is that the act called for five guiding principles, and one of them was to look at inclusivity. We think if you want to have five principles, you should set yourself up to have information to report on outcomes and achievements or progress made towards those principles. I'm hopeful that we can try to provide some insights into the territories.

Because this was a provincially regulated program, I discussed the early childhood aspect with my provincial counterparts. It was in that dialogue that the Auditor General of Ontario took on her report. Another province had already done one, and two other provinces are going to complete some in the coming year. It was so we could, as auditors general, help support a dialogue that looked nationally.

Hopefully other provinces can provide insights into the provinces that are working on improving how they report data, how they gather data and how they interact with the federal government when it comes to this program.

Jean Yip :

My last question, to both of you, is about the risk identified regarding the financial sustainability of the program beyond 2026. Can you elaborate and perhaps provide some advice on that?

Karen Hogan :

I can start and then leave it to Deputy Minister Thompson. Provinces raised concerns about financial sustainability. If you look at the Auditor General of Ontario's report, it's clear that there are parties involved in paying for day care: there are families, there's the provincial government, there could be municipalities and then there's the federal government. When one of those elements may not be guaranteed in the future, that obviously calls into question the financial viability of the program, because the burden then falls on the remaining funding. It's a good question to think about.

How much money will be needed? How long will funding be needed? What will be some of the terms and conditions linked to that funding? This is a critical program, so it's important to talk about it going into the future.

Jean Yip :

Go ahead, Mr. Thompson.

Paul Thompson :

There's no doubt that there are some sustainability challenges ahead. That being said, I think the government has indicated its ongoing commitment. As Catherine noted earlier, there's a legislative commitment to maintaining this program and recent funding for new five-year agreements, so there's a commitment there. We need to work with provinces, though, to find a pathway to provide certainty for parents on the funding side: the fees that are paid by parents, the level of provincial support and the level of federal support. I'm really pleased that we have agreements signed to get us to a good place for continuing the program over the next five years.

The Chair :

Thank you. Thank you, witnesses, for your testimony and participation in relation to this study on the report of the Canada-wide early learning and child care system of the 2025 fall reports of the Auditor General of Canada. We'll be back here next Tuesday to return to professional services contracts. Thank you very much. Have a nice weekend. This meeting is adjourned.