ONTARIO ASSOCIATION OF CHILDREN'S AID SOCIETIES
ASSOCIATION OF EARLY CHILDHOOD EDUCATORS, ONTARIO
ASSOCIATION OF DAY CARE OPERATORS OF ONTARIO
CONTENTS
Monday 11 December 1995
Children's services
Ontario Association of Children's Aid Societies
Mary McConville, executive director
Bob Penny, Kawartha-Haliburton Children's Aid Society
Association of Early Childhood Educators, Ontario
Michael Goodmurphy, president
Robyn Gallimore, executive director
Association of Day Care Operators of Ontario
Peter Knoepfil, president
Judith Preston, executive director
STANDING COMMITTEE ON SOCIAL DEVELOPMENT
Chair / Président: Patten, Richard (Ottawa Centre / -Centre L)
Vice-Chair / Vice-Président: Gerretsen, John
(Kingston and The Islands / Kingston et Les Îles L)
*Agostino, Dominic (Hamilton East / -Est L)
*Ecker, Janet (Durham West / -Ouest PC)
Gerretsen, John (Kingston and The Islands / Kingston et Les Îles L)
*Gravelle, Michael (Port Arthur L)
*Johns, Helen (Huron PC)
Jordan, Leo (Lanark-Renfrew PC)
Laughren, Floyd (Nickel Belt ND)
Munro, Julia (Durham-York PC)
*Newman, Dan (Scarborough Centre / -Centre PC)
*Patten, Richard (Ottawa Centre / -Centre L)
*Pettit, Trevor (Hamilton Mountain PC)
Preston, Peter L. (Brant-Haldimand PC)
*Smith, Bruce (Middlesex PC)
Wildman, Bud (Algoma ND)
*In attendance / présents
Substitutions present / Membres remplaçants présents:
Beaubien, Marcel (Lambton PC) for Mr Jordan
Froese, Tom (St Catharines-Brock PC) for Mrs Munro
Pupatello, Sandra (Windsor-Sandwich L) for Mr Gerretsen
Silipo, Tony (Dovercourt ND) for Mr Laughren
Wood, Bob (London South / -Sud PC) for Mr Preston
Also taking part / Autres participants et participantes:
Marland, Margaret (Mississauga South / -Sud PC)
Clerk / Greffière: Mellor, Lynn
Staff / Personnel:
Gardner, Mr Bob, assistant director, Legislative Research Service
Glenn, Ted, research officer, Legislative Research Service
The committee met at 1534 in room 228.
SUBCOMMITTEE REPORT
The Chair (Mr Richard Patten): I call the committee to order. We have before us our agenda. This afternoon, the focus of the agenda is the standing order 125, the impact of the Conservative government funding cuts on children and children's services in the province of Ontario. Prior to receiving our witnesses, I would refer the committee members to the report of the subcommittee. Everyone has a copy before them. I would ask for a motion of acceptance.
Mrs Janet Ecker (Durham West): I move that we accept the subcommittee report.
The Chair: All in favour? Carried.
CHILDREN'S SERVICES
Consideration of the designated matter pursuant to standing order 125 relating to the impact of the Conservative government funding cuts on children and children's services in the province of Ontario.
The Chair: Before proceeding to our first witness, can I ask our assistant researcher to refer us to the documents he has also placed before us.
Mr Bob Gardner: There are two things from us. One document is background information on funding of children's services. This provides some information and a number of appendices of press clippings and material from the Ministry of Health and the Ministry of Education and Training. The second one is the document we just received this afternoon from the Ministry of Community and Social Services. Because we just got it this afternoon, we didn't have time to incorporate it in the other report. So the two things together give you information from all the three ministries.
You'll notice that the questions we asked of the ministries are at the front of the Comsoc brief. I don't want to take up any more of your time. If any of you have any questions or want further information, just talk to us as you will.
Mr Dominic Agostino (Hamilton East): I don't know why they gave that to you and we weren't able to get it as a background thing. Would it be possible from now on to get some information at least a day or two in advance so we get a chance to read it before we come to the meeting, or is it just going to be routinely put on our desks and we're expected to deal with it as we're reading?
Mr Gardner: We always try and get material to members in advance. The difficulty this time was the scheduling. The hearings were only scheduled fairly recently, and then getting the information from the ministries. Our principle is to get it to you in advance. It's not always possible.
Mr Tony Silipo (Dovercourt): Like other members of the committee I just started to glance through this report, and as you may imagine, I look at it with some interest, given some of the answers to the questions that are in here.
I just wonder whether in the process the committee has established -- as somebody subbing in for another of our members I'm not aware of this -- of looking at this matter under standing order 125, the committee has discussed at all the usefulness of having people from the ministry here to give members of the committee an opportunity to delve a little more into some of these questions.
The Chair: Yes, that was discussed in the subcommittee. Requests of that nature of course are in order. If you can bring that forward following this afternoon's proceedings, we can talk about it.
ONTARIO ASSOCIATION OF CHILDREN'S AID SOCIETIES
The Chair: I would now call our first witnesses, from the Ontario Association of Children's Aid Societies, to please come forward. You are our first witnesses to these hearings. I ask that you please introduce yourselves. I remind you that you have a full half-hour from your opening words, and any of the 30 minutes that you don't use will leave time for questions; if you eat up all the time with your statement, there is no time for questions. I'm sure you would welcome the opportunity and certainly the members would welcome the opportunity to ask you questions. Welcome, and please proceed.
Ms Mary McConville: Thank you, Mr Chairman, and now to the race; we've done this before.
My name is Mary McConville, executive director of the Ontario Association of Children's Aid Societies, and with me today is Mr Bob Penny, executive director of the Kawartha-Haliburton Children's Aid Society. I'd also like to apologize for not having our presentation to you in advance. We usually do when we appear before legislative committees, but we just didn't have sufficient notice.
Before I highlight my remarks and turn over to Mr Penny, I'd like to draw your attention to what's in this package. It may be confusing, given that it was prepared in such haste.
The first appendix at the back of our remarks is just a set of fact sheets on the children's aids and financial matters and caseload matters and implications of cuts.
This item, called appendix B, is from the Gove inquiry in British Columbia. That's all the recommendations that Judge Gove made with respect to the death of the child Matthew and the child protective services of that province.
Appendix C is a very interesting article from Alberta about the impact on the child welfare caseload following the cuts in social assistance last year.
Appendix D is a recent article from the New York Times about the impact of social assistance reform on child welfare services in the state of Wisconsin. Then there is an article out of our provincial journal which talks about the impact of economic change on the London community and some of the social services in that community, especially child welfare.
We'd like to thank you for inviting us to speak today about the impact of the funding cuts on children and on children's services in the province. I would like to begin by noting that we did appear before this committee in early 1994 to talk about children at risk, and it would be useful for new members of this committee to review the summary document of those hearings with respect to evaluating the importance of investing in the healthy development and protection of children at risk.
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Since the time we appeared before you last, only a year or so ago, the situation in Ontario has worsened for high-risk children and families. Community support services, including the mandatory protection services of the province, are facing major threats as a result of government budget cuts.
Many of you have read in the papers the story of Matthew, a young child who was failed by the children's services system in British Columbia. Judge Gove, who was commissioner of that inquiry, just delivered his report to the province a week or so ago. Matthew was a very young child who came to the attention of the Ministry of Social Services in that province many times during his short life of five years. There were at least 60 reports with respect to his safety. He was served by at least 21 different ministry social workers. He was taken to the doctor at least 75 times and his injuries documented, and was seen by 24 different physicians. The autopsy showed that he died of asphyxia when his mother put her hand over his mouth to try and stop him from screaming. But at his death he weighed only 36 pounds, and the autopsy demonstrated that he was covered in bruises, had rope burns to his body, had many internal fractures. He was a child who was tortured and deprived of food for some time before his death.
The Gove inquiry found serious inadequacies in the BC ministry's child protection system and in the provision of child protection services by the ministry's social workers. Judge Gove noted that: many social workers in that province were confused about their role and especially did not treat safety and the wellbeing of the child as paramount; two thirds of the social workers in that province do not have professional qualifications; the ministry's training program is only two weeks in length and most employees in the system are inadequately trained as a result. It was also found that supervisors didn't effectively supervise the social work staff who were carrying the cases. Further, social workers didn't get information from other service providers and professionals in the community who were also supporting this family at risk. Medical examinations of Matthew were seen as isolated interventions by the medical community.
The story of Matthew strikes a deep chord in the minds and hearts of everyone who's read about him and especially child protection workers in this province. In Ontario, budget cuts to children's services are placing the child welfare system at risk. Budget constraint and budget slashing have forced the children's aids of the province to lay off staff and to cut support programs for high-risk families and to delay response time to calls for help.
Cuts to other community support services also have a direct impact on children and families and an indirect impact on CAS services. The very programs that have been established to prevent abuse and neglect, to support families in their parenting role and to provide relief to families and children are being threatened or reduced. When families cannot get help from these agencies in the surrounding community, they turn to the CAS for support as a last resort.
It appears once again that it takes the death of a child to force government to review and focus on services offered by a local child welfare authority. In 1978, Kim Anne Popen died in Ontario, and in 1982 the Judicial Inquiry into the Care of Kim Anne Popen was published in the province of Ontario. This report included 87 recommendations directed to both the Ministry of Community and Social Services of the province, as well as the province's children's aid societies.
Much has changed in Ontario since 1978. The competency of staff, the accountability of agencies and the quality of child protection services have improved dramatically. Since the mid-1980s, child welfare in Ontario has served as a model of effective community-based child welfare service delivery on the North American continent. As a result of the Popen inquiry, a new Child and Family Services Act was proclaimed in 1985. A mandatory training system was put in place for CAS professional staff and foster parents, workloads became manageable and community child abuse committees were created. In addition, substantive monitoring of CAS services were instituted by the ministry. These gains that we have made have been undermined, however, in the 1990s by the recession, by the constraint in government spending and, very importantly I would suggest, a silo mentality in the delivery of public services in all of our communities.
Although child protection services in Ontario are far from perfect, and we continue to strive towards better service to the public, they are vastly improved over the days of Kim Anne and many provinces in Canada have one by one turned to Ontario for leadership, both in enlightened legislation and strong community-based services.
We know that poverty and the need for child protection services are strongly linked, and I would ask you to take the time to read, after today is finished, the article which is included in your package on welfare reform in the state of Wisconsin. I'm not meaning to suggest at all that welfare reform is not needed, for surely it is and we support that, but we are asking that the government be extremely careful, as we fight the deficit, that the agenda is not devoid of sound social policy.
There is ample evidence that a society's investment in the care of its young people will improve their life chances and save the state unnecessary expenditures on social ills down the road.
Children's aid societies in the province of Ontario will provide substitute care to 4% more children in 1995. We presently look after about 20,000 children a year in the province. We also have seen our family service caseload increase by 2%. To give you a sense of the financial implications of that, it costs approximately $1,200 a year to look after a family with children in their own home. It costs societies anywhere from $10,000 and up, frequently as much as $60,000 and $70,000 a year, to look after a child in care.
These service pressures are the result of a protracted recession and were evident prior to the 5% cuts to social assistance rates.
When government announced an additional 5% transfer payment cut in 1995, children's aid societies set about reviewing their budgets, programs and staffing to achieve the constraint. The provincial staff complement of CASs was reduced by 155 positions. In order to meet the constraint in 1996, as it rolls through, societies will have to cut agency staff by another 150 to 200 positions.
Programs designed to prevent children from coming into care, support families in caring for their children when they're in crisis and help young people become independent are being gutted by these budget reductions.
The Halton Children's Aid Society is in such dire circumstances that operating funding for the year ran out in October of 1995. The Halton children's aid has had to appeal to government to assist with cash flow for the remainder of the year and to identify long-term solutions, including the restructuring of services in Halton region. Many other societies have been slipping for the past four years and are struggling with growing indebtedness, growing caseloads and withdrawal of support from lending institutions. The government's funding cuts will reduce the 1996 approved budget for children's aids to 1991 levels.
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We are continuing to collect data, but we know from the anecdotal evidence of our societies that caseloads are continuing to increase.
We are clear that the solution to the problem the societies are facing certainly lies in part in the restructuring of our services in communities to ensure the most efficient use of public resources. But regardless of the shape of administration and service delivery, we know that effective child welfare services across the province require consistent standards of service supporting best clinical practice, manageable workloads for staff, trained staff, trained foster parents, commonly used assessment tools, access to the expert ancillary professional services in health and education, a range of family support services, a common provincial database and useful information analysis, effective community planning and involvement and integrated community services across education, health and social services.
It's our sincere hope that the funding crisis will force a re-examination of the importance of child protection and will create the opportunity to redesign our community services to do a more effective job for children.
I'll now turn to Mr Bob Penny, who will give you a more specific picture of the strain on a local children's aid society.
Mr Bob Penny: Thanks, Mary. Good afternoon, ladies and gentlemen. I am from Kawartha-Haliburton and for those of you who don't know, that's the lovely city of Peterborough and Victoria county and Haliburton county.
The child welfare system already, as you will be aware, under the tender ministrations of a previous regime and with greatest respect to Mr Silipo, has made drastic changes in the system. Given the makeup of child welfare budgets, the major impact of cuts in recent years has fallen heavily on salary and benefit costs and those are costs which, by comparison with other parts of the social services sector, are not high and the salaries and benefits costs are relatively low.
In order to try and preserve service, societies have attempted to focus their reductions on administrative costs. That has not been without its own difficulties. As you're aware, the cost of living, 1991 through 1995, has risen by some 11%. Within that, the cost of benefits alone has risen by something like 38% as an average cost per employee. Within that, however, we have attempted to reduce administrative costs and have been relatively successful in that by removing a number of management positions from children's aid societies. That has reached a point now, I believe, where we have removed too many of those supports to front-line service and we will now have difficulty maintaining effective operations.
In addition to that, the system is strangled by red tape. Our line staff spend approximately only 20% of their time in direct face-to-face contact with clients and that is because of the huge paper load they carry that simply has to be addressed if efficiencies in that regard are going to be improved.
Notwithstanding the reduction in administrative overhead, it has been necessary to impact the salaries and benefits of front-line staff. Our staff, for example, have had a 1.5% increase since 1991. That's exclusive of pay equity settlements which certainly were beyond our control or any other agency's control. But beyond that, we still had to reduce service through layoffs. In our case, we've eliminated an abuse treatment program that served a large number of sexually abused children in the community. We've closed the only two group homes that we had under our direct operation and we've reduced the supports to a foster care system that we are relying on to provide the bulk of residential care to those children who cannot remain in their own homes. In short, prior to the imposition of the current 5% constraint we had already reduced the service available to communities.
So what is going to happen now? Well, the previous reductions left us in a position where the removal of any part of our budget necessitated the reduction of service to the community. There was simply no way around it. Accordingly, in 1996 the Kawartha-Haliburton Children's Aid Society is having to reduce intake and therefore reduce our capacity to respond to the increased service demand which will inevitably result from the downsizing of other social service organizations in the community.
We've reduced our after-hours coverage such that the counties of Haliburton, Victoria and Peterborough -- and that's the largest CAS jurisdiction in southern Ontario. If you've driven through the territory, you will know it takes a long time, particularly at this time of year, to travel from Peterborough up to Haliburton, Minden or the northern parts of Peterborough county. But we have reduced our after-hours coverage in that area; from 11 o'clock at night until 9 o'clock in the morning, that total area will be covered by one person. We're desperately hoping there isn't more than one call coming at one time to that person, because we'll have great difficulty reaching them with any speed.
In addition to that, we're contemplating the further reduction of support to foster parents, again reducing support to that system we rely upon most heavily to provide residential care to kids, and we're about to eliminate three of our six supervisory positions, which now provide direct, case-by-case supervision of the cases that are in our system. So we're looking at reducing our supervisory capacity by 50%.
What are the implications of these actions? Well, with the above reductions, we begin to expose the agency and the government to liabilities associated with the inability to meet legally defined and mandated expectations. We can achieve the 5% reduction target, but having achieved it we will have reached a point where any further erosion of our funding must result in staff and service reductions which will clearly place the board and employees in a position of liability. In other words, we're sitting on the edge right now; any further reductions to our system push us over the edge. There's absolutely no question about that. At that point, it is highly unlikely that our board or any other board in the province that is in a similar position will be prepared to continue to serve.
Over the past two years, our liability insurance costs have risen some 53%. If we're pushed into a position where we are unable to meet our legally mandated obligations, it may well become impossible to get liability coverage at all, a fact which again will very quickly spell the demise of voluntary boards in Ontario.
The elimination of voluntary boards goes much further than simply losing the governance in particular organizations. Volunteers in the child welfare system outnumber the staff that are currently employed in that system. Our foster parents, which are another version of volunteers, also outnumber the staff. Both of those groups provide vital links to the community which I believe this government is striving to maintain and further develop, links that provide a wealth of input into the types of services that we want to see provided in the community and provide, I think, a very good feedback mechanism to the government, something which this government I do not believe would want to lose.
The Chair: Thank you very much, Mr Penny. We now move to questions. We'll begin with Mrs Pupatello.
Mrs Sandra Pupatello (Windsor-Sandwich): Thank you both for coming today. How much time do we have, Chair?
The Chair: We have 10 minutes left. So a couple of minutes each.
Mrs Pupatello: So we have all of the 10 minutes? Quickly, what would the quality of service be if all of the children's aids across Ontario were to give up their mandate to deliver the service and it were turned over to the provincial government in order to do that?
Ms McConville: If you look at the North American continent, you see many jurisdictions that choose to provide direct-operated child protective services through different levels of government, either a state level or provincial level or a county-based or municipal level.
If you look at the national picture in Canada, the vast majority of services are run by government. I have absolutely no hesitation in saying that many of those systems are an absolute disaster. They have been reviewed and reviewed. Newfoundland was reviewed a couple of years ago. The province of Alberta reviewed its child protective services a couple of years ago. BC has just completed a review. In almost each and every instance the conclusions are the same, and governments are divesting these responsibilities to community-based services.
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I would like to suggest that when the legislator and the funder and the policymaker is also the service provider, that body is accountable to nobody, and that's what has happened in child protective services that have been run directly by government.
Mrs Pupatello: Just quickly, when the minister was questioned about the cuts to children's aids in the House he suggested that in fact we may be fearmongering and that there are many, many savings in administration which can still be found throughout the children's aid societies. Do you agree with that?
Ms McConville: No, I do not. We're very supportive of the government's direction to restructure children's services specifically under the child and family services legislation. Quite frankly, we've been trying to convince government for several years now to develop a broader vision of restructuring, because we firmly believe that child protective services require not just a community-based response but significant attachment to a broad range of services, including health services, in order to be effective. So we'd like to see a much broader-based restructuring effort result from this funding crisis.
Through restructuring, yes, you can find more, I think, efficiencies. But if you're trying to restructure and redesign and find efficiencies solely within the present child welfare envelope, we don't have much further to go, because the societies have been cutting back on administration and programming and staffing for the last four years.
The Chair: Do you have a question, Tony?
Mr Silipo: I wanted to follow up on this point because I think Mr Penny has been clear both in his brief and in his comments about the inability of his children's aid society to meet legally defined and mandated expectations as a result of the cuts that are coming. Those are the words that I'm seeing here on the paper and that I think you quoted. I guess what I wanted to get from him, as well as from Ms McConville, was -- that's a pretty dramatic statement, and I think that there's a tendency among the government members to say that in fact we all, you in this case, are exaggerating to make a point.
I'd like you to comment on that, because I think when we're dealing with children in need, as we are in this case, as strongly as I think I would argue your case, I would want to be sure that we are talking, in effect, about societies coming to the brink, as I think you're saying that they are, and not being able to meet your legally mandated needs; and then beyond your own situation, I'd like Ms McConville perhaps to comment on how many other societies are either at that position or that you foresee will be in that position over the next year or two.
Mr Penny: Commenting from the standpoint of our society, one of the difficult things, I believe, for all of us is that we don't often know we're over the edge until there's a disaster. That's happened far too often. It's happened in British Columbia, and it's happened previously in Ontario. We sense we're at the brink based on what we see coming in the door and what we see of our current ability to supervise what comes in the door. Beyond that, I hate to say that it may take a specific example to demonstrate what I'm talking about, and I hope it doesn't come to that. But I truly believe we're there.
Ms McConville: With respect to the whole of the system, every single agency isn't experiencing the same level of stress. For example, I pointed out that we have a spectrum of stress ranging from Halton's situation, where they're virtually insolvent at this point, all the way through to societies that are just beginning to feel the pressure such that they don't feel that they're responding adequately to the caseload that they've had to assume.
We think that at this point in time, based on the data that we have, that eight to 10 agencies are experiencing serious distress, and we've got significant concerns about their ability to respond effectively. We are not certain how many more agencies in 1996 will be in severe stress, because we are not clear what their financial status is at this point. We are having ongoing debates about how the agencies are going to find their 5% in some instances and what the final allocation is going to be from the ministry.
So we're not entirely clear what 1996 holds, but we think that close to half of the agencies will be in severe stress once the full impact of the 5% cuts roll through and given the increased service demands, which is the other half of the picture for the CASs.
The Chair: Time for a final question.
Mrs Helen Johns (Huron): I'd like to thank you on behalf of this side of the House for coming today and for talking to us. I want first of all to say that I'm deeply concerned about the plight of children. I have two young children and that's why I ran, not wanting to see them in debt and not have opportunities for health care and education. I have to also say that I'm an accountant, so things come down to some dollars and cents for me.
I can only speak about things I know. My children's aid society has not been able to give foster parents a raise in any way for a number of years, which I believe is its decision on how it allocates the funds. At the same time, the director receives between $67,000 and $115,000 per year. He's had a raise of 4.5% a year. I have been able to obtain a salary level grid that says that people get 3.4% increases per year in administration, 3.9% increases per year in social work and 4.4% as managers and supervisors per year.
It seems to me that there's an overwhelming contradiction there that the foster parents receive nothing and the administration or the people who deal least with the child seem to be getting these huge raises in years when both the public and the private sectors have basically been taking cuts. This dichotomy is very difficult for me to handle. I know you've said basically that they're not all the same all the way along, but how do you as a global organization protect the utilization of funds and make sure it truly is going where we believe it should be, to the child?
Ms McConville: First of all, I don't know what agency you're talking about, and even if I did I would probably not be prepared to comment on those particular statistics because I don't know all of what's behind them, but there are a few facts I can share that I think put that kind of picture in a different perspective.
Number one, most of the sector is unionized and agencies have to negotiate and support collective agreements. So in some instances those raises would have reflected the legal responsibilities the societies have to support their agreement with their staff. Secondly, pay equity settlements, again which have been beyond the control of the societies, have largely been responsible in the last two to three years for the increases in compensation in child welfare as opposed to other kinds of negotiated settlements. That is something that's been beyond the control of the societies.
With respect to increases to foster parents, you're quite right. There hasn't been much in the way of increases over the last two or three years, but if you look at what's happened to compensation across the system, all the while there have been increases given to support collective agreements. In many instances those increases for staff have been paper increases. They've had to take days off in order to meet the budget requirements of the agency. The impact on compensation and benefits on the staff across the sector has been quite negative on the whole.
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Mr Penny: I'd like to respond, if I might, just in terms specifically of our organization. My salary is $80,670. The administrative staff and the bargaining unit staff have had no increase since 1993, and at that point they had a 1.5% increase. Prior to that, the last increase had been in 1991. Now, that is exclusive of pay equity. Pay equity is a jungle grown by you folks, not by the children's aid societies. So I won't even comment on that, but in terms of the impact, the moneys -- certainly I can speak for our organization -- are going into front-line service. I'd be pleased to show you that information if you would like to see it.
The Chair: Thank you kindly. Our time is up, and I want to thank you for joining us today and providing your verbal comments and information, as well as the background material, which members will have a chance to look at, and thank you very much for coming.
ASSOCIATION OF EARLY CHILDHOOD EDUCATORS, ONTARIO
The Chair: Our next witnesses are from the Association of Early Childhood Educators, Ontario. Let me welcome you and likewise remind you that the time you take of the half-hour in terms of presentation provides the remainder for questions. So you can play that as you would like. Welcome.
Mr Michael Goodmurphy: Thank you very much for inviting us here today. I'd just like to introduce myself. I'm the current president of the association, and with me we have Robyn Gallimore, who is our executive director. We'd like to provide some verbal comments and we also have a written submission which addresses the content of our presentation.
Why are we asking the youngest, most vulnerable members of our society to help finance our deficit? Children all over this province are feeling the impact of the recent cuts to child care, social services and welfare. The Association of Early Childhood Educators, Ontario is the largest child care organization in Canada, representing over 3,000 early childhood educators in Ontario. As a professional association it is part of our mandate to work towards quality child care and education on behalf of the children in Ontario. In the wake of recent government cutbacks, the AECEO is very concerned about the current state of child care and child welfare in this province.
The first area that we're going to address is outline how government spending cuts have affected and continue to affect children in Ontario. The first official statement issued by Premier Harris in July 1995 included a large number of fiscal cuts that are currently eroding the quality of life for children, parents and early childhood educators. The direct and indirect impact of the recent mini-budget in mid-November is still to be determined.
Secondly, I'd like to go over some disturbing statistics that touch the lives of many children in Ontario. The alarming numbers indicate that the children of our province are in a state of crisis. We simply cannot afford to put children in jeopardy any longer. We will pay for it later if we do not invest in our children now.
In the final part of my presentation, I'd like to outline some of the main reasons why we need high-quality, regulated child care in Ontario. There are many arguments in support of a regulated child care system, many of which are compatible with the aims and goals of our government's Common Sense Revolution. Then I'll finish my presentation with identifying some key recommendations that address the problems faced by government and the child care community.
In looking at the impact of government spending cuts, I'm going to limit my comments to a number of areas. One is the reduction of welfare benefits, cancellation of Jobs Ontario, funding cuts to boards of education, funding cuts to colleges and universities, wage subsidies for early childhood educators and cuts to the AECEO equivalency process. So there are comments I'd like to provide in relation to each of those areas regarding the impact of government spending cuts.
With regard to reduction of welfare benefits, this has had the greatest impact on children of all the recent spending cuts. A record number of children in Canada, a total of 1.5 million, are currently living below the poverty line. Since 1989 poverty has increased by 55% for children.
The implications of this change are manifold. Babies in poor families are 1.6 times more likely to die before the age of one than children from more privileged homes. Communities requiring food banks have increased 187% since 1989. Of the 23 countries surveyed Canada has the third-worst rate of teen suicide and the second-highest poverty level for couples with children. Cuts to welfare have put these vulnerable children at an even greater disadvantage. These numbers will continue to increase if we do not put a halt to the current direction of welfare reform in this province.
The cancellation of Jobs Ontario was another fatality of the July round of spending cuts. Municipalities already struggling to meet financial obligations are now expected to shoulder their portion of child care according to the 80%-20% cost-sharing formula. This change creates an additional expense for which most municipalities have not budgeted. Child care for parents struggling to upgrade skills and enter the workforce now hangs in a precarious balance. Rumours of further cuts to municipal funding could tip the scale and jeopardize child care even further in many municipalities.
Funding cuts to boards of education: Children are also the victims of the $32-million funding cuts for boards of education. The innovative early childhood education program, with pilots scheduled for September 1995, was one of the first casualties of the July round of spending cuts. The recent $400-million cut in the mini-budget now puts junior kindergarten programs at risk of being cut.
The removal of these options for preschool children will create, in our opinion, a two-tiered early childhood system. Parents who can afford it will continue to access quality regulated care for their children. Those who cannot afford it will be forced to choose informal care based primarily on lower costs rather than quality.
Funding cuts to colleges and universities: In July, $68 million was cut from funding to colleges and universities. The November mini-budget included further cuts of $400 million. These funding reductions will have a direct impact on education and training programs for early childhood educators. The quality of curriculum provided in the classroom is at risk. In particular, field placement in the lab schools as well as the community is also in jeopardy. We have already heard that the nursing program at Sheridan has been eliminated and there are rumours of further college program cuts.
Wage subsidy for early childhood educators: Between 1984 and 1991, the average wage of early childhood educators in Ontario fell by 4.5% in real terms. The wage enhancement grant recognized the value of early childhood educators by providing a wage subsidy to enhance their salaries. Withdrawal of this grant could decrease wages of early childhood educators by $8,000 per year, resulting in an average annual salary of $20,000.
Further cuts to salaries for already underpaid early childhood educators could result in the loss of qualified teachers from the field and the potential shutdown of child care centres. Parents will have less choice in child care, and children in child care centres will suffer from higher teacher turnover rates and a possible drop in the quality of programs.
The final point in this section on impacts is cuts to the AECEO equivalency process. The association has recently lost $32,000 in government funding that was being provided for equivalency evaluation services for foreign-trained early childhood educators. The vast majority of those using this service are in an underprivileged group -- immigrant women -- many of whom are struggling to immigrate themselves into the Ontario workforce. This cut in support will result in higher fees for equivalency applicants and in turn fewer applicants will be able to obtain equivalency and work as qualified early childhood educators.
A second area we'd like to address in the next part of the presentation is some of the statistics and facts related to what's happening in the areas of poverty, welfare and the child care system. If you look through some of those points, I think you'll find them fairly alarming and you may already be aware of a number of them.
Poverty: The first statement looks at the UN convention which singled out Canada for needing to take immediate steps to tackle the problem of child poverty. Further, since 1989, 300,000 more children in Canada have slipped into poverty. Some 60% of all single mothers in Canada live below the poverty line. The strong empirical link between poverty and child health and development indicates that even in the short run, tax savings of a benefit cut might prove just to be illusory in the medium to long run. That's based on some work out of McMaster University.
In the second area, welfare and some of the statistics there: One in three children in Metro Toronto are living on welfare. Over 400,000 children in Ontario are affected by the recent welfare cuts. Cuts mean that many single mothers will be forced back on the welfare rolls at a time when the government has cut welfare spending. Welfare benefits to single parents with on child in Ontario put them 35% below Statistics Canada low-income cutoffs. Generally, the victims of cuts are needy children.
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A few statistics about the child care system: Emergency funding from Metro council for $2.8 million to reinstate over 3,500 subsidized child care spaces is a one-time offer, and I know this has happened in other municipalities to continue the Jobs Ontario program on a limited basis.
Starting January 1, 1996, the spaces will be phased out over a six-month period through attrition. This will result in layoffs for 400 early childhood educators and the closure of 30 child care centres in Metro. A 20% on transfer payments to municipalities will probably mean that another 5,000 subsidies will disappear in Metro at a time when 20,000 parents are on the waiting list for assistance.
The final statistic: Funding for 27 new school-based child care centres has been cut.
Finally, in that section, thinking of the words of Lloyd Axworthy, "Child care plays a key role in supporting employment, particularly for lone parents."
Hopefully, the statistics that I've reported in those three key areas speak for themselves as to the importance and relevance of the impact.
Looking at why we need high-quality early childhood education programs, we've identified four different points under the headings of breaking the welfare cycle, training and education, preparation for school and prevention.
Breaking the welfare cycle: Child care subsidy can mean the difference between a gainfully employed citizen and someone who depends on the welfare system for support. In comparing the cost of 10 years of social assistance to 10 years of child care, the net government savings and welfare costs for a one-parent, one-child family is $91,000.
Training and education: Providing accessible, regulated quality early childhood education programs allows parents to continue their training and education. A workforce with greater levels of training and expertise means more permanent employment options and drops in welfare numbers. Higher levels of specialization and training in the workforce also create a more globally competitive economy with increased innovation, entrepreneurship, and hence, higher levels of employment.
Preparation for school: Early childhood education programs provide the foundation upon which all later educational success is constructed. As outlined in the Royal Commission on Learning report, quality early childhood care and education has been identified as one of the four engines of change that should drive education reform:
"Research findings and practice experience indicate that much learning takes place in the years before a child starts grade 1. We know that positive learning experiences help children to develop self confidence and positive attitudes to learning and equip them with a strong foundation for the development of learning skills."
Prevention: Quality early childhood education programs are the most practical strategy for the prevention of future problems for children in Ontario. Longitudinal research such as the Perry preschool project has found that children who receive quality early childhood care and education during their early years had significant higher levels of social, economic and emotional success by the age of 27. Compared with a control group, the adults from this study showed higher earnings by $2,000 per month; greater levels of home ownership; higher levels of high school graduation by 33%; lower incidence of arrests and convictions by 50%; lower incidence of dependence on social services by 50%.
The estimated cost savings based on this study: $7.16 on corrections costs for every $1 spent on the program.
To bring our presentation to an end and looking at some of the recommendations that we would like to bring as a professional association, we would like your committee to consider the creation of a quality child care system for Ontario and urge that you consider the following components:
Child care regulation: The Day Nurseries Act defines standards for ensuring the safety and wellbeing of children in regulated child care settings. We recommend that these current, minimum standards are maintained or upgraded for the protection of children and families.
Training and education for early childhood educators: Early childhood education training programs in Ontario have accepted standards of classroom and field preparation for early childhood educators. The AECEO recommends that the government ensure that funding cuts to colleges do not jeopardize the quality of training and education provided in the classroom and then through field placement.
The Association of Early Childhood Educators, Ontario: The mission of our association is to be the leader in promoting the professional development and recognition of early childhood educators on behalf of children in Ontario. We recommend that the government continue to support the creation of a self-regulating body for early childhood educators similar to the proposed College of Teachers.
Child care subsidies: There are significant costs attached to providing quality early childhood education programs. We recommend that the government continue to provide child care subsidies to ensure affordable and accessible care for all children in the province. We also recommend that wage subsidies for early childhood educators are maintained to ensure adequate remuneration and stability in the field.
Collaboration: Child care has gone through an extensive consultation process in the past. We recommend continued collaboration between the government and professionals in the field. We continue to support the creation of a ministry of the child to integrate health, education and social services for children in Ontario.
Finally, the Association of Early Childhood Educators, Ontario recognizes the need for change in the child care system. We believe that this change can be best effected by a process of consultation, communication and collaboration between government and key stakeholders. As one of the stakeholders, we look forward to working with you in the restructuring of the child care system in this province.
We thank you for the opportunity to be able to present this brief to you today.
Mr Silipo: I appreciate very much the amazing overview that this presentation has given us in touching the different areas as you have done. I'd like to just ask you perhaps to look forward a little bit and give us your sense about what you think the system of early childhood education will look like, say in five years' time if this government continues on the course of action that it has started upon.
Ms Robyn Gallimore: I hate to think --
Mrs Johns: Feel free to use speculation.
Mr Silipo: We're talking about people who work in the system who have certainly firsthand knowledge about what's going on in the system, the impact you've seen in terms of the cuts so far. I'm even giving the government the benefit of the doubt. I didn't even add into the question if there were going to be further cuts; I just simply said on the basis of the actions that the government has taken. If the government continues in this vein, what's the system going to look like five years from now?
Ms Gallimore: I'm afraid the system is going to be demolished entirely. We've heard a lot of rumours. We haven't had a lot of contact with the current government. They haven't been terribly interested in hearing what we had to say.
My concern is that even if any part of the rumours -- wage enhancement grants; I've heard talk about opening up the Day Nurseries Act. I'm concerned that the regulations we have in place that ensure the quality of child care will be demolished. I'm concerned that the early childhood educators who are working in the field now will no longer be able to support themselves working in the field if wage enhancement grants, for example, are withdrawn. It's a system where if we lose the municipal subsidies, which form a fair number of spaces in Ontario, the whole formal structure will just collapse into itself. I could speculate more. I find it quite frightening.
Mr Goodmurphy: One other thing I would just add, thinking of what was said, is that Ontario's had a credibility across Canada, as well as internationally, as being a province which had high standards and had credibility in terms of the way we approach child care. What I would worry about, if the cuts continue in the direction they have been, is that we would be much worse off as far as the provision of child care is concerned than many other areas internationally or within Canada, and that the respect we have had for what we've done in terms of standards and the quality of programs would be eroded to a point that I guess it would be, as I think you said, almost unrecognizable.
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Mrs Ecker: I'd like to thank you very much for coming today and on what was fairly short notice provide your views and input on this. I was very pleased to hear you support the need for reform in the system, and I certainly look forward to meeting with you, either before Christmas or after. In the early new year we're setting up a series of meetings to hear input from you in terms of how you believe we should change the system.
A two-part question: Given the fact that the cuts to municipal funding across the province only amount to 2% from their overall spending and the fact that many municipalities -- and again I can only speak for my home municipality -- have saved what in some cases results in millions of dollars through reductions in other areas and the social assistance reduction, I'm curious as to why you think the municipalities are going to rush out and wipe out child care when I think most of the municipal officials I've certainly talked to quite recognize, as we recognize, the need for child care support as an economic support, for one thing, for parents. My region, for example, is quite committed to continue to provide the same day care spaces next year as they're providing this year and don't see that as a problem. So I'm curious why you think that is going to happen.
The second question is that at a time when we are facing a lot of pressure on the government expenditures in terms of what we should do, how do we defend to other groups in society, for example, workers who might work with disabled children, people who work in hospitals or whatever, whose salaries have not been topped up to that extent by the taxpayers? How do we defend doing it for one sector and not for another sector when there are many private centres I've seen that aren't getting that kind of generous wage subsidy and still seem to be able to provide care at an affordable rate for parents, from what I've been told? It's kind of a long question, but anyway -- sorry.
Mr Goodmurphy: In terms of the first part of it, looking at the municipalities, based on some of the information that we had available, it's uncertain as to how all of the municipalities are going to make decisions around that. I know, thinking of my own area, that with Jobs Ontario they were able to find some money to continue until the end of June and beyond that they're not quite sure what they're going to do with finding any money. My understanding from talking with people at the local level is that many municipalities were faced with the same kind of situation, that they may like to provide it but would they have the money to actually find that 28% contribution for, say, Jobs Ontario or for other children who are applying for assistance, for subsidy. So in isolated areas, like in your area or in some other areas, it may happen, but not across the board.
With regard to the second question, I think one of the things we presented in here, and it affects all workers in early childhood education in Ontario, whether they be in for-profit or in non-profit centres, is that they have been underpaid over many years and the wage enhancement grant was a move towards bringing up the salaries to a more acceptable level. There has been more credibility to what early childhood educators do, to the foundation they provide for young children and the long-term benefits, and I think some of the figures and statistics that we provided need to be taken in terms of the long-term impact of what can happen.
So there do need to be some changes and I guess there needs to be a process by which we look at that area, but I think removing some of those enhancements for the early childhood area would in my mind be a backward step at this point in time. It would further erode the child care system, which has made some gains. It's given some more credibility to what early childhood educators actually contribute to the province.
The investment in children is something that our association feels very strongly about, and part of that investment is in what you pay the people who provide the quality service. So there is some differential that does need to be addressed and I think that's what your question is about.
I'm not quite sure at this point in time, and I would look forward to your invitation to be part of discussions in looking at how all of that can happen.
Mr Agostino: First of all, I just want to clarify the record here on what Ms Ecker said, that the cuts to municipalities were 44%, not 2%.
Mrs Ecker: Two per cent of overall municipal spending.
Mr Agostino: This government is not responsible for the property tax portion of it, so you don't roll that into your cuts. It's a nice myth that is being portrayed, and I sort of want to get it on the record: It's a 44% cut to municipal councils in transfer payments from the province of Ontario, not 2% in the overall budget, which makes it sound like it's a lot less painful for municipalities.
Mrs Ecker: Yes, it does.
Mr Agostino: It may sound good, but it's not true.
Mrs Ecker: Because that's what it is.
Mr Agostino: If I can just continue for a second, I think we talked about the economic impact that the cuts have. We're aware of the lost money that's generated in communities when day care is not available, the additional cost of social spending when day care's not available.
In your experiences, when these kinds of changes occur and when the lack of accessibility and affordable day care becomes an issue, which children are most affected and which type of families feel the most and are affected most negatively as a result of the type of changes and cuts that we're seeing?
Ms Gallimore: Children in poverty, children on welfare, children whose parents cannot afford to pay for the regulated care that is out there: nursery schools, early childhood education programs that are available to people who can pay the full fee. They're there, but we create a two-tier society by having children who cannot access those programs because they're not being provided at a fee where they can afford them.
Mr Agostino: We're aware of the impact that, again, it has on the business community, on the workforce, workplace, when these kinds of programs and reasonable funding is not available and reasonable subsidy is not available. Do you know the type of impact it may have, say, on the workforce as a whole or on businesses in this province when parents obviously can't get the affordable day care?
Ms Gallimore: Lack of access to quality care -- to care of any kind -- either forces a parent to look for informal, less expensive and not-as-good-quality care, unregulated care, the mom up the street who might provide something for you for cash under the table. But that is not going to stand these children in good stead if they don't have the access to the trained professionals and the regulated system that children of full-fee-paying parents do. So again we've got another two-tiered society, with kids who can afford it getting good, quality early childhood education and kids who can't getting who knows what. It may be okay, but there's no guarantee.
The Chair: Thank you very much for coming this afternoon, taking the time, sharing the information and providing the materials. I'm sure some of the members, if they wish, can pursue talking with you on a personal basis following the meeting.
ASSOCIATION OF DAY CARE OPERATORS OF ONTARIO
The Chair: Ladies and gentlemen, the next witnesses are representing the Association of Day Care Operators of Ontario.
Mr Peter Knoepfil: My name is Peter Knoepfil and I'm the president of the Association of Day Care Operators of Ontario, commonly known as ADCO, and with me this afternoon is Judith Preston, who is our executive director.
Just very briefly, ADCO has represented independent operators of licensed centres since 1974. We estimate that our sector currently constitutes about 500 operators, with a current licensed capacity of about 25,000 spaces.
ADCO believes the Harris government has made the right policy choice in its recent $6-billion spending cuts. It is painful to withdraw funding from many areas, but in our opinion the threat to social programs is greater in not acting now. If government does not get the present deficit under control, increased interest costs will continue to erode future funding that is available from program spending. The clear evidence of the growing cost of debt in Ontario is that interest payments on the debt for the current fiscal year exceed the entire Ontario government budget for 1975. Faced with a $9.3-billion deficit, spending cuts of $6 billion over three years is not an excessive reduction, in our opinion.
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To attain this scale of budget reduction, every area of program spending needs to be considered, obviously. Therefore, ADCO does not believe, as other child care groups do, that child care should be exempt from spending cuts. However, reductions must be made fairly. ADCO has important opinions on the priorities for future child care funding in Ontario.
Ontario government spending on child care during the past four years has risen from $350 million to $525 million, an increase of $175 million or 50%. In our opinion, a great deal of the increase was wasted: on the conversion program, on funding the startup of non-profit centres that were not required and on excessive capital projects. Given this background, it has become increasingly important to plan judiciously on reductions for the future. Such planning should aim to stabilize the child care system in Ontario.
Earlier this year, the government announced certain spending reductions for child care which we believe were reasonable decisions at the time.
The first was the cancellation of the child care conversion program, a program driven, in our opinion, by ideology. This program has cost the taxpayers of Ontario $52 million to date, yet has not created one new child care space or one new child care subsidy. Continuation of this program was politically indefensible, in our opinion.
The second spending reduction was the elimination of the program development fund, which was used to provide funding for the startup of new non-profit centres. It is ADCO's contention that the government should not be using public tax dollars to fund the startup costs for any sector of child care. We believe that such startup funding will be provided by the private sector, if the playing field is level, which at present it is not. In addition, the government could provide, as an alternative, a guarantee of low-cost bank loans for any licensed provider starting up if a detailed market survey showed the need for additional spaces in a given community.
The third reduction announced earlier this year was the conversion of 14,000 Jobs Ontario subsidy spaces from being 100% funded to being 80% funded. The implication of this was that municipalities would need to provide an additional 20% funding for the spaces to continue. When the decision was first announced in July, ADCO felt 80% support for the Jobs Ontario spaces was a reasonable level of commitment. Prior to the NDP's decision to fund these spaces 100%, an 80-20 split was standard, and continues to be standard for the other spaces. Alternatively, the government could have cancelled all support for these spaces, concurrent with the cancellation of the Jobs Ontario program itself. Since the decision, some municipalities have retained 100% of the spaces, being able to find their 20%, other municipalities have retained a portion of the spaces and still others have made the decision to phase them out.
The recent economic statement from Mr Eves exempted child care from direct funding cuts. However, the reductions in transfers to municipalities likely will cause significant reduction in fee subsidy spaces in some municipalities, including Metro Toronto. The main cause, of course, is a municipality's inability to fund its 20% share.
If we look at Metro Toronto specifically, the loss of the Jobs Ontario spaces will result in a phase-out of some 3,700 subsidized spaces in child care. There's also discussion at the municipal level that this reduction will be combined with a reduction of another 4,000 regular subsidized spaces in the upcoming fiscal year. If both of these changes occur -- and they might -- the overall impact will be a loss of some 7,700 spaces, or one third of all subsidized spaces in Metro Toronto.
One can appreciate that such a reduction in subsidized spaces will have a major negative impact on the entire licensed child care infrastructure in Metro. A significant number of centres probably will close. A number of parents requiring child care probably will leave the workforce for a poorer standard of living, many of whom will join an increasingly higher number requiring welfare assistance.
ADCO has suggested that Metro consider an increased user fee of 75 cents per day as a means of financing its 20% portion of the Jobs Ontario spaces. We have also written to Minister Tsubouchi asking that the Ontario government waive any clawback of user fees collected as a short-term measure to save some of these spaces. While ADCO fully supports this measure, some municipalities, specifically Metro, need additional help in order to retain the spaces. Judith?
Ms Judith Preston: Now our recommendations.
ADCO believes that in the future priority should be given to fee assistance for users as opposed to base funding for providers.
In the interim, we urge the government to equalize wage enhancement grants among all licensed providers and redistribute the funding package to ensure a more equitable use of available funds.
All wage enhancement grants should be phased out as soon as possible and the savings, less any direct spending reductions planned by the government for child care, should be redirected to enhancing fee assistance programs. Further, serious consideration should be given to providing at least some fee subsidies at little or no cost to municipalities in view of their tight fiscal situation in the next few years. For example, we recommend that the government consider moving to a 90-10 cost-sharing arrangement for at least a percentage of subsidized spaces. The savings to pay for additional fee assistance can come out of the wage enhancement program. This change could be made quickly and would save licensed spaces that otherwise will be lost forever in some municipalities.
ADCO believes the government should take steps to allow municipalities to recover increased costs through user fees without having the benefit clawed back.
The inequities that continue to exist in wage enhancements paid to the non-profit sector compared to the independent sector of child care providers cannot be defended. Staff in non-profit centres may receive more than $9,000 per annum compared to slightly over $3,000 per annum in the independent sector, yet both are equally qualified, work in the same licensed centre environment and do the same job. These subsidies are unfair to both staff and operators in the independent sector who must compete in the same communities. Also, new independent operators, and indeed all new operators, do not receive any wage enhancement grants. The playing field is not equal. The independent sector will not thrive without a level playing field. It is time for the government to end this discrimination.
ADCO recommends streamlining fee assistance programs. In Halton, a new fee assistance plan which would pay a standard set of fees to users within each municipality has been developed and will be implemented in 1996. This change will achieve significant savings in administration and it will be fair to all providers. It will also clearly establish fee assistance as a subsidy for the user, not the provider. It will allow providers to charge a top-up user fee in addition to what they receive from the municipality. It will encourage competition and, more importantly, parental choice in the child care market. This is one model which will result in cost savings and which has other advantages. It merits examination for more widespread use.
ADCO recommends that any voucher system, if implemented, must first be researched carefully to ensure that its features do not jeopardize the quality of the current child care system in Ontario.
ADCO prefers to see a streamlined fee assistance plan similar to the one in Halton developed province-wide, using the resources and expertise of the municipalities. However, we are not opposed in principle to other ideas of streamlining fee assistance, including the so-called voucher system. In fact, the term "voucher" should be viewed as simply a delivery mechanism for fee assistance. What is important are the features or operating criteria surrounding the concept. In the current debate about vouchers, ADCO is opposed to many of the features which were reported in the press. The dollar values are too low, which will result in parents choosing the least expensive alternative available rather than the best in their circumstances. Also, there is concern about potential abuse which might occur if vouchers are not properly redeemed. Redemption should be limited to licensed providers.
All parents with low incomes should qualify for fee assistance using eligibility criteria similar to those used in the present fee subsidy system.
Child care fees are expensive and will continue to be so if we want to retain quality in the system. Fee assistance therefore should not be limited to welfare recipients, but also to those with lower incomes. Otherwise, we again will find parents in need of child care either choosing inappropriate arrangements, choosing an arrangement that they cannot afford or, more seriously, dropping out of the labour market and becoming statistics within the welfare program.
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The cuts in direct funding of child care programs announced to date by the present government are not excessive, in our opinion. However, ADCO is very concerned about the funding of fee subsidies at the municipal level, given the sharp cuts in transfer payments to municipalities over the next two years. ADCO strongly urges the government to level the playing field of wage enhancement grants between the independent and non-profit sectors, and as soon as possible to phase out wage enhancement grants altogether. The savings from this program could be channelled into enhancing fee assistance. In the longer term, ADCO would like to see a streamlined, uniform fee assistance program developed for use across Ontario.
The Chair: First question. Margaret.
Mrs Margaret Marland (Mississauga South): I'll just get around to a microphone, since I'm here subbing.
Mr Silipo: You're always welcome here on this side, Margaret.
Mrs Marland: Actually, the last time I sat on a committee I sat in this location. But asking a question as a government member, I think the best example of what you're saying is an example in my own riding. I wondered if you would like to hear one minute and comment on what this example is.
I had a non-profit centre in my riding for six years, and in that six years, every year it had a tremendous deficit. At the end of six years, which was this year, their subsidy was over $600,000. I'm not talking about wage enhancement grants; I'm talking about deficit funding. That centre closed in bankruptcy this spring with a $78,000 amount owing to Revenue Canada. On the volunteer board of that non-profit centre, each individual member has now been sued by Revenue Canada or served notice by Revenue Canada to pay that $78,000 personally, the personal liability.
As someone who obviously for a long time has questioned the inequity -- I mean, the presenters before you were talking about how wonderful the wage enhancement grant is to the people who belong to their organization, but I never, ever heard them fight for the same grant for the people who are also early childhood educators who worked in the private centres.
I'm just wondering what your reaction is to the fact that there is a concrete example that even with government subsidy, over $500,000 for one centre, and it was a 60-child capacity centre, they ended up in a bankruptcy situation. Have you ever heard of such a situation in the non-profit centres?
Ms Preston: We've heard a lot of people talk about horror stories in the informal sector, but we've heard of a number of horror stories similar to what you're talking about in the non-profit sector. We feel the bottom line, I suppose, is that without the commitment that our operators have to the viable, fiscally responsible operation of the centre, sometimes it just is quite lacking and obviously resulting in deficits.
You're in Mississauga, but that's not the only place we've heard that sort of thing has happened. There was a similar one in Toronto a number of years ago and there have been a significant number over the last few years that have received moneys in what we term bailout funding, and it really is totally inappropriate.
Mrs Marland: Have you heard of a non-profit volunteer board being sued?
Ms Preston: No, that's the first one I've heard. I've heard of non-profit boards resigning en masse to get out from under situations they can see coming up and seeing the situation being untenable.
Mrs Pupatello: Thanks for coming today to speak with us. Will you tell me if you feel that your organization members will benefit financially from what this government is currently looking at doing in child care? Will your organizations likely do better financially as organizations?
Ms Preston: In terms of receiving government money, no.
Mrs Pupatello: No, in terms of overall.
Ms Preston: In terms of being able to develop their businesses, yes, because if the non-profit sector is not receiving $45 million to start up new centres, we see a very, very vital role in the independent sector as our members being able to develop centres on behalf of the people of Ontario, making the investment and hopefully being able to develop a business that would be viable.
Mrs Pupatello: Yet considering that 80% of the centres are currently non-profit and only 20% are for-profit, you're hoping that balance will change?
Ms Preston: In 1985, the split was 50-50. Due to government actions that were rather discriminatory over the last 10 years, the split has changed. The split has not changed so much from closure of --
Mrs Pupatello: Just to be specific, Judith, the conversion actually was after 1993 that you're speaking of.
Ms Preston: Well, starting in 1990 -- there were actions right from the beginning, but the wage enhancement or the direct operating grant was started in 1987 and some other actions were taken prior to that with the coalition government between the Liberals and the NDP. We could go into the historical discrimination against the independent centre if you want, but I personally would rather look to the future.
Mrs Pupatello: I just need to get my question in because I think the Chair is going to cut us both off.
The Chair: Right.
Mrs Pupatello: Can you tell me if your organization is in favour of changes to the Day Nurseries Act? Peter, would you mind?
Mr Knoepfil: I think it's an area that we're certainly prepared to look at.
Mrs Pupatello: The profession has already undertaken discussion in terms of changing or suggesting and recommending changes to the ratio of supervision for children, as well as those kinds of changes, the level of qualification for teachers. You are supporting that kind of move?
Mr Knoepfil: We made some recommendations based on ideas that were generated at our recent conference, yes, to the government.
Mrs Pupatello: Do you think the recommendation of changes to the ratio so that you have fewer supervisors for children and a lower quality of teacher for those children would impact on the quality of child care that might be provided through your centres?
Mr Knoepfil: We didn't make any recommendations regarding changes to qualified staff. I think the recommendations were made in the areas of ratios and age levels primarily. You know, when you consider that in junior kindergartens across this province we've got a ratio for four-year-olds, for example, of one to 20 to 25, versus one to eight for the same level in licensed centres, I think there's possibly some room to move a little bit in terms of looking at ratios.
Mrs Pupatello: Would the changes in the ratio actually help with the bottom line in your centres, those changes to the act which you're proposing?
Mr Knoepfil: What I think it might do is that it might help to alleviate some of the loss of wage enhancements if in fact those are lost. So it will --
Mrs Pupatello: And so you impact on your bottom line by those changes?
Mr Knoepfil: It will help those non-profits that are going to lose the most in wage enhancements.
Mrs Pupatello: For-profits would benefit by the changes you're proposing by improving your bottom line?
The Chair: Mrs Pupatello, that's about five questions. I'm sorry.
Mr Knoepfil: I really can't answer that because I don't know what that will do and I don't know what the ratio changes might be.
The Chair: Thank you. Mr Silipo.
Mr Silipo: Thank you, Mr Chair. The first of my five questions -- no, no. I really just have one question.
First of all, I was very interested in seeing in your summary, and I'm sure it didn't escape the government members, that you categorize the cuts in transfer payments to municipalities over the next two years as sharp cuts and not as minor nuisances, which I think is the way the government members have been trying to categorize them.
But I wanted to sort of come down to the basic point that I get out of your presentation, because we obviously have a fundamental difference of opinion, and I know we've had a chance to discuss this in the past, in terms of child care funding in the for-profit versus non-profit. But you do acknowledge and you do point out in your brief that the cuts in the Jobs Ontario spaces will cause significant hardship in the sense that a number of centres -- you used the Metro Toronto example -- will have to close, probably forever, "a significant number of centres," to use your words in here, and that even if there was agreement to do the increased user fee, that that would not save those centres. So the cuts, you're saying, are going to have a pretty significant effect at least in this area of the province, and likely in others.
But your solution, it seems to me -- and this is what I want to get at, because as I look at the brief and bring it down to what I think you're essentially saying, when you talk about levelling the playing field, what you're talking about essentially is lowering salaries of workers, because that's what the elimination of wage subsidies would, it seems to me, do. It would mean that it would bring what are already low wages of people in the sector down, albeit to a comparable level perhaps to what you're offering people who work in the for-profit centres. But that, it seems to me, is what you're suggesting is going to be the basis of the solution here, bringing low wages down even lower, and that's the way we're going to save the child care system in the province. Have I misunderstood you?
Ms Preston: Yes, you have. It's not the first time. We would prefer, Mr Silipo and other members, that you refer to our centres as "independent," not "for-profit." That is a term that has been used to be derogatory and we would much prefer the term "independent" or "private," if you don't mind.
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Mr Silipo: Mrs Marland used the same term, I would point out to you.
Mrs Marland: No, I said "private."
Mr Silipo: I thought you said "for-profit," but I'll check.
Ms Preston: We believe that without wage enhancements and with possibly an enhanced fee assistance program, using some of the money to enhance the fee assistance -- you know, quite frankly, money has been thrown at the child care system over the last four or five years in increasing amounts and yet we still result in centres, like Mrs Marland mentioned, with a $600,000 deficit. There is plenty of room in child care to run a good, quality program, to pay your staff very well and to have excellent care for your children and still balance the centre's budget without resorting to major handouts from the government. It is time that the non-profit centres learn to do that, and we're quite willing to help them learn how to do this.
We're not saying that staff salaries should go. We have made some valid suggestions to be able to handle maintaining salary levels. Very possibly, yes, some people might have to lose some of their income. This has happened in every other sector across the province, Mr Silipo, except in child care, where we've increased and increased. It is time that we even the playing field, that we become fiscally responsible, that we balance the books and that viable centres stay open and provide the service. If a centre is not viable, yes, indeed, maybe unfortunately, some of them will close, but if they're not financially viable, if they can't provide the service, maybe they need to bring in some management that can do it.
Mr Silipo: I would be actually quite interested in perhaps getting from you then some information in which you could show us what in fact, in your view, makes the significant difference between a good -- and I will use your term -- private centre, in the sense that one is being, as you describe it, well managed and not running into problems, and a comparable one in the not-for-profit sector because it seems to me that the essential defining difference at the end of the day is the amount of money that you pay people who work in the centres. Because I can't think of too many other variables, although I'm sure there are other variables, that significantly change the picture from a well-run non-profit centre to a well-run private centre.
Mr Knoepfil: If I could respond to that for a minute, I think the other key variable you haven't mentioned is management. A committed independent operator who is on the scene, working day in and day out, in their centre, as we and many others I know about are, provide substantial management expertise which helps to run the business the same as any other business. It seems to me that throwing dollars at staff doesn't necessarily guarantee higher quality.
What we're talking about in here is a market-driven system where you subsidize the user, not the provider. Let the user make the choices. Let the parents decide where they want to go. If centres can prove that they can offer higher quality than other centres, presumably then they can charge more and they can afford to pay their staff more. That's the way the system works in many, many other sectors of the economy that we have and that's what we're recommending here.
The Chair: Thank you very much for joining us today. We appreciate your comments. You might want to take the member up on his suggestion and provide him with further information.
Now, if I could remind the committee that in a 125 essentially it's a time allocation of a total of 12 hours. We had selected a certain number of witnesses. We're behind in our time, as you can see, by eight minutes, so we'll try and pick that up as we hear witnesses, by giving them each maybe 29 minutes or something of that nature. But I hope you'll bear with me. For those of you who are new members, it's not any attempt to cut off people, but it's to try and live within the time allocations that we have for each person and to be fair to each side in terms of a reasonable amount of time to ask your questions.
Mrs Marland: For that reason, Mr Chairman, I would like to thank the indulgence of the committee. I was asked to be here while some other members were trying to get here in the physical sense, due to the weather, and I thought it was kind of you to let me ask my question.
The Chair: No problem; always a pleasure.
Mr Gravelle, do you have a motion?
Mr Michael Gravelle (Port Arthur): Yes, Mr Chairman. At our subcommittee meeting last Wednesday, December 6, I think it was, we completed our list of original selections for coming to the committee. Three of those were selections from people who do reside outside Toronto and would need some travel. The subcommittee met and agreed that indeed, because of the nature of this issue, we did not want to simply include only those who were within driving distance. There was a certain agreement that we should allow people to make representations from outside. The whips subsequently spoke to their party members on the committee and agreed that, presuming that we kept the cost down, there was a sense that it was a good idea to give the opportunity to broaden the appeal. So I've got a motion here that I'd like to make, if I may. I move that any requests for travel expenses be forwarded to the subcommittee for its consideration and that approval of these expenses be limited to transportation at the most reasonable and affordable cost and that all requests must be considered prior to the appearance before the committee.
The Chair: Comments?
Mrs Ecker: Did you limit it to the witnesses who are appearing?
Mr Gravelle: Yes.
Mrs Ecker: You did? In the wording?
Mr Gravelle: That was the intention, obviously, to limit it to the witnesses. You're concerned about more than one being included?
Mrs Ecker: Yes.
Mr Gravelle: Yes, certainly. I mean, we discussed this too already. In each case, there would be only one witness per group, to limit the cost. That's not in here; I can certainly put it in.
The Chair: If we can take your suggestion and work that into an amendment, we'll show it back to you, in the interest of time. Okay. So that one would be carried. Motion carried. Thank you and we'll adjourn.
The committee adjourned at 1707.