Canada’s federal budget for 2021 included a $27 billion commitment to establish a $10-a-day childcare program within five years. Combined with additional funding, a total of $30 billion was committed in years one through five, with a projected annual cost of at least $9.2 billion in year five and later. The federal government then entered into negotiations with each province and territory (negotiating a unique asymmetrical agreement with Quebec, which had a program already) to jointly determine the funding and goals. These negotiations resulted in a “Canada-Wide Early Learning and Child Care Agreement” with each province and territory (which we refer to as “the Agreement” in this brief).

Cardus conducted its own costing estimate in 2021 prior to the release of the Agreements, concluding that the federal government had underestimated the cost and complexity of implementing a national childcare program. 1 1 A. Mrozek, P. J. Mitchell, and B. Dijkema, “Look Before You Leap: The Real Costs and Complexities of National Daycare” (Cardus, 2021), https://www.cardus.ca/research/family/reports/look-before-you-leap. Cardus is now studying the funds spent and goals achieved in each province and territory annually. We will issue provincial and territorial reports covering each year of the agreements as data become available.

The Agreement with Manitoba was signed on August 9, 2021. 2 2 Government of Canada, “Canada–Manitoba Canada-Wide Early Learning and Child Care Agreement—2021 to 2026,” August 2021, https://www.canada.ca/en/early-learning-child-care-agreement/agreements-provinces-territories/manitoba-canada-wide-2021.html.

This brief presents the results for years one and two for Manitoba (fiscal years 2021–22, and 2022–23 which is April 1, 2021 to March 31, 2022, and April 1, 2022 to March 31, 2023).

Manitoba took a unique approach to affordability measures, expanding the parent subsidy program that is based on household income. The province increased the subsidy threshold by 45 percent in year one, resulting in an additional 2,724 children receiving the subsidy by the end of year two. This increase fell short of the target of 4,800 children. Some providers reported holding thousands of dollars in unclaimed subsidies toward the end of 2022, citing poor communication to parents about the changes to the subsidy program. This illustrates some of the challenges in implementing the expansion of the subsidy. Despite these challenges, the province reached its parent-fee target of an average of $10 a day by March 2023.

Manitoba targeted the creation of 23,000 new spaces by year five (2025–26). The province provided capital grants in year two toward the creation of 1,874 new spaces. An additional 1,058 spaces received funding from a grant aimed at creating new spaces in underserved regions.

An initiative to create 1,450 shared spaces for children requiring part-time care proved to be successful. The province exceeded its target, funding 2,397 new part-time spots.

The Extended Hour Child Care Benefit, which was intended to create 1,700 non-standard-hours spaces over two years, was less successful. Just over $100,000 of the $16 million two-year allocation was spent to create 191 spaces, leading the province to place the initiative on hold.

The province also delayed a pilot project to provide free care for parents transitioning from Employment and Income Assistance into the workforce. Funding was reallocated elsewhere.

The plan to expand the Abecedarian program to four sites by the end of year two resulted in one site and three expressions of interest by the end of year two.

Manitoba intended to transition to an agency model for home childcares, but delayed the initiative.

The province successfully established a wage grid for childcare workers in July 2022 (year two) as a key aspect of the plan to increase quality. The province provided operators with a wage supplement and added provincial funds to cover those who worked with school-aged children that are ineligible for federal funding under the Agreement. Efforts to modernize the certification process and to develop a curriculum framework were incomplete at the end of year two.

Manitoba reallocated federal funds to create a trio of grants under the Quality Enhancement Grants. The grants focused on professional development, equipment upgrades, and recruitment and retention of staff.

The province reported spending about $4.5 million in administrative costs over the first two years, a fraction of the $32.6 million allocated for administration.

Manitoba achieved its target of an average of $10 a day by March 2023, while enhancing its subsidy system. The province also implemented a wage grid in year two. Along with these successes, the province struggled with a number of initiatives, falling behind on timelines or delaying projects altogether. Space creation continued to be a challenge at the end of year two. The province pivoted, by reallocating funds to create grants for operators not originally included in the Agreement action plan. The province and federal government amended the Agreement to increase the carryover amount from year two to year three, from 15 percent to 40 percent of funds. This amendment illustrates the challenges the province faced in actioning funds during the first two years.

Manitoba should be commended for publishing annual reports on the implementation of the Agreement, as not all provinces and territories voluntarily make data available.

Term: April 1, 2021 to March 31, 2026.

Table 1 displays the projected federal share of financial provisions for each year of the Agreement.

• Reduce fees to an average of 50 percent of the 2019 fees by the end of 2022, and to an average of $10 a day by the end of year two (2022–23), through a fee system based on household income.
• Increase the portion of fully certified Early Childhood Educators by 15 percentage points by year five (2025–26).
• Create 23,000 spaces in not-for-profit centres and homecares by year five (2025–26).

• Provincial childcare budget of $198.9 million in 2019–20. 3 3 Government of Canada, “Canada–Manitoba Canada-Wide Early Learning and Child Care Agreement—2021 to 2026,” Annex 2.
• Average parent fees of $20.70 per day as of March 2021. 4 4 Government of Manitoba, “2021/2022 Manitoba Annual Report: Canada–Manitoba, Canada-Wide Early Learning and Child Care Agreement—2021 to 2026,” 6, https://www.gov.mb.ca/education/childcare/resources/pubs/canada_wide_elcc_agreement_annual_report_2021_2022.pdf.
• 25,489 spaces for children aged 0–6 in 2019– 5 5 Government of Canada, “Canada–Manitoba Canada-Wide Early Learning and Child Care Agreement—2021 to 2026,” Annex 2.

The Canada-wide Agreements share a similar structure, focusing on four priorities: affordability for parents, increasing access through space creation, making childcare more inclusive, and improving the quality of care.

Manitoba provided an action plan for the first two years of the Agreement (2021–22 and 2022–23). The tables shown here summarize the commitments made, the year in which targets are to be achieved, and the federal funding allocated to the targets. Note that the action plan found in Annex 2 of the Agreement frequently combines funding totals for year one and year two for targets with multi-year completion timelines.

The tables also summarize the progress made toward the target and the funding spent on these efforts in years one and two. Unless otherwise noted, the results and spending shown are taken from the “2021/2022 Manitoba Annual Report: Canada-Manitoba, Canada-wide Early Learning and Child Care Agreement—2021 to 2026,” and the “Canada-Manitoba Canada-Wide Early Learning and Child Care Agreement 2021–2026 Annual Report for 2022–2023,” which the province made publicly available.

The province’s affordability strategy focused on leveraging the parent subsidy to reduce the amount that they pay for licensed childcare. As the subsidy is based on household income, the province raised the income threshold, with the goal of including 4,800 additional children in the program by the end of 2022. The province increased the subsidy threshold by 45 percent in year one (2021–22), for a total addition of 2,724 children by the end of year two compared to 2020 levels. The plan allocated $64.5 million toward the subsidy over the Agreement’s first two years, spending $52.5 million in year one and $317,420 in year two. Manitoba reported that take-up of the subsidy was lower than anticipated, reaching 57 percent of the utilization goal of the program.

The province allocated about $75.9 million toward a Parent Fee Supplement in year two, covering approximately 26,800 spaces. The aim of the supplement was to cover the difference between parent fees and operational costs. Recognizing that the change to the subsidy program would require additional time to process the subsidy applications, the province offered operators a six-month subsidy and a three-month parent-fee advance. Listed as a year-two initiative in the action plan, the province spent $3.3 million of the allocation in year one and $17.4 million in year two, as the Reduced Parent Fee Revenue Grant. The grant was initiated late in year two, resulting in only a portion of the spending being reported in year-two records.

Despite missing the target to reduce the average fee to 50 percent of 2019 levels by the end of 2022, Manitoba did reduce fees to an average of $10 per day by the end of year two, as per the target stated in the Agreement.

An additional $39 million allocated to financial assistance for parent fees, based on household income, was unspent, because the province determined that the $10-a-day target would be achieved by March 2023 without use of these funds. 6 6 The Government of Manitoba’s “Canada–Manitoba Canada-Wide Early Learning and Child Care Agreement 2021–2026 Annual Report for 2022–2023” states, “Manitoba reached its commitment to reducing parent fees to meet an average of $10 per day three years ahead of the target of 2026,” 5, https://www.gov.mb.ca/education/childcare/resources/pubs/canada_wide_elcc_agreement_annual_report_2022_2023.pdf. The introduction of the report states that the target in the action plan is March 2023 (p. 3). Annex 2 of the Agreement states that the target timeline is March 2023.

Accessibility targets for the first two years of the Agreement focused on extended-hours care, increasing spaces shared by part-time users, space creation in underserved communities, and accessible spaces for parents transitioning into the workforce.

The Extended Hour Child Care Benefit was offered to operators to create 1,700 extended-care spaces by the end of year two (2022–23). About $16 million was allocated for the two-year initiative, with the province spending $110,331 in year one, resulting in 191 extended-care spaces. Manitoba put the program on hold in year two, stating that the province would look to future opportunities to re-engage the program.

The province granted providers a shared-space per diem to create 1,036 part-time spaces in year one and 414 spaces in year two, for a total of 1,450 new part-time spots. Despite a slow start, the program proved popular, and the province exceeded its target, creating a total of 2,397 shared spaces by the end of year two. The province spent $243,000 in year one and $2,461,100 in year two.

Manitoba offered operators capital grants to create new spaces, focusing on regions that the province determined were underserved. Providers could receive up to $12,000 per space, with the goal of creating 5,890 spaces prior to year five (2025–26). These spaces are to be counted toward the total space-creation goal of 23,000 by the end of year five. About $70.6 million was allocated over the first two years of the program for this target. The province reported spending no funding in year one and over $99 million in year two. Surplus affordability funds were reallocated to support the initiative. The province reports that funding was allocated toward 27 new facilities, accounting for 1,874 spaces.

In addition to the action-plan targets, Manitoba created a $4.1 million operating fund for affordable and accessible spaces, by reallocating Agreement funding in combination with funds from a previous bilateral agreement. The purpose of the grant was to provide additional start-up and operational funding for new facilities. Operators were required to enroll children needing additional support, adhere to the wage grid, and offer parent-fee reductions. The province reported the addition of 1,058 new spaces under the initiative.

Finally, the province allocated funding for a pilot program covering the full cost of childcare for six months, for parents transitioning from Employment and Income Assistance into the workforce. The program was slated to begin in late 2022 with one hundred spaces and expand to three hundred spaces by the end of year two (2022–23). The province allocated just over $3 million for the first two years, with $1 million intended for 2022. The pilot program was put on hold, and funding was reallocated elsewhere under the Agreement.

The Abecedarian program is designed for children and their families in higher-need communities. The program focuses on language skills and provides services to children and their parents. The province had one centre using the Abecedarian approach when the Agreement was signed. The Agreement action plan targeted four sites by the end of year two (2022–23), serving up to 240 children and their parents. One centre was added to the program in year two, and three additional centres were identified through an expression of interest. The action plan allocated $1.4 million for the first two years, with the province spending $662,468.

The province partnered with Red River College Polytechnic to offer training for Abecedarian childcare centre staff and to complete data collection and program evaluation. The initiative was in addition to Agreement action-plan targets. The province reported spending $108,357.

Under the Agreement, $300,000 was allocated to the Ka Ni Kanichihk building expansion, to support quality and inclusion programming. The funding was carried over to the 2024–26 action plan due to delays in the expansion of the centre.

The action plan allocated $2 million for a one-time Diversity Programming Grant. Manitoba opted to fold the grant into a new Enhancing Accessible and Culturally Diverse Child Care Grant. The new grant was an addition to action-plan targets, and it was intended to help operators implement programs and adapt spaces for children requiring additional resources. The province spent $11.6 million to support 611 centres and 346 homecares.

The province offers professional development through the Manitoba Access Portal. Under the Agreement action plan, three modules were to be translated into French. By the end of year two, the province had contracted to translate modules, spending $300,000 of the $1.2 million allocation. 7 7 The Government of Manitoba’s “Canada–Manitoba Canada-Wide Early Learning and Child Care Agreement 2021–2026 Annual Report for 2022–2023” lists the allocation as $1,020,000. This is likely a misprint, as the Agreement lists the allocation as $1,200,000.

Attracting and retaining early childhood educators and staff has been a challenge across the country. To address this issue, the action plan included the implementation of a wage grid, followed by financial support for operators. The province allocated $33.3 million for the first two years of the action plan, implementing the grid in July of 2022 (year two), with no spending reported for year one. In year two, the province offered a Wage Grid Operating Supplement, targeting up to 6,753 childcare staff. Provincial funding was used to supplement wages for staff working with school-aged children who were ineligible for federal funding under the Agreement.

The province allocated $178,400 for the first two years of the Agreement to develop a curriculum framework, and an additional $178,400 for the modernization of the certification process for early childhood educators and staff. The procurement process for hiring a consultant was initiated in year one, but no funding was spent, and both targets remained incomplete by the end of year two.

Providers were offered a Business Improvement Grant to upgrade equipment and secure technology solutions. Manitoba allocated $3.5 million for 870 facilities, spending about $2.3 million on grants for 797 facilities in year one. One centre received a grant in year two that was funded under the administration allocation.

To assist homecare providers, the province planned to shift to an agency model. The agencies would license, monitor, and support home daycares. The province allocated $1.3 million to recruit four agencies and create 125 net new home daycare spaces by year two. No funding was spent, and the project was deferred.

Manitoba offered five post-secondary institutions $50,000 each toward developing or expanding Early Childhood Educator and Child Care Assistant training programs. The grants were distributed during year two. The province created three new grant opportunities for providers under the Quality Enhancement Grants. Operators could apply for the Quality Early Learning and Environments Grant for professional development and for facility and equipment upgrades. The Innovative Recruitment and Retention Grant was for recruiting, bonuses for long-serving employees, and professional development. The third grant was the Enhancing Accessible and Culturally Diverse Child Care Grant, which was noted in the Inclusivity section of this report. The grants were supported through reallocations from within the Agreement and funds from a separate bilateral agreement.

Manitoba allocated about $32.6 million for administration costs in the first two years of the program. The province reported spending $548,557 in year one and just over $4 million in year two on salaries, IT, and other administrative costs.

Child Care Regulation 62/86 was amended on the first day of year two (April 1, 2022) to accommodate the implementation of the wage grid for July 1, 2022.

The Agreement was amended in year two to increase the amount of unspent funding that could be carried over from year two (2022–23) to year three (2023–24), from 15 percent to 40 percent.

Prior to the Agreement, Manitoba had some of the lowest parent fees in the country outside of Quebec. The province faced a significant challenge in implementing the Agreement’s federally imposed affordability expectations through the existing provincial subsidy program. The Agreement allows the province to vary parent fees, with the goal of achieving a provincial average of $10 a day.

To accommodate the federal affordability expectations through the new funding allocation, the province raised the household-income threshold, to increase the number of children eligible for the benefit. The subsidy amount is geared to income, meaning that lower-income families receive a larger benefit from the subsidy. The roll-out of the changes to the subsidy proved to be difficult. In May 2022, providers complained that the province had failed to communicate the changes adequately to parents. 8 8 M. Abas, “Manitoba Child-Care Subsidies Slow to Flow under Weight of ‘Administrative Burdens,’” Winnipeg Free Press, May 5, 2022, https://www.winnipegfreepress.com/breakingnews/2022/05/05/manitoba-child-care-subsidies-slow-to-flow-under-weight-of-administrative-burdens. Providers perceived that the burden to communicate the changes fell to them by default. The province promised to improve the application process, but by late 2022, some daycares reported having thousands of dollars in unclaimed subsidy money. 9 9 T. Brock, “Hundreds of Thousands of Dollars Meant for Affordable Child Care Left Untouched: Coalition.” CTV News Winnipeg, November 30, 2022, https://winnipeg.ctvnews.ca/hundreds-of-thousands-of-dollars-meant-for-affordable-child-care-left-untouched-coalition-1.6176203. Parents were either unaware that they qualified for the subsidy or were unable to navigate the application system. 10 10 Brock, “Hundreds of Thousands of Dollars.”