Funding Guidelines for Canada-Wide Early Learning and Child Care System

In August 2024, the Ministry of Education introduced a new cost-based funding approach for Canada-Wide Early Learning and Child Care that will be effective Jan. 1, 2025.

Niagara Region is committed to supporting child care service providers through this change.

Relevant information to support child care operations is available here. If you have any specific questions, contact your reporting analyst

Funding details

• Allocation in lieu of surplus / profit

  Is there an opportunity for licensees to build reserves with the new funding formula?

  As part of the funding formula, licensees will receive an allocation in lieu of surplus / profit each year.

  Licensees may choose to allocate that funding toward profit or reserves each year in accordance with provincial guidelines on profit or reserve thresholds.

• Audits and financial statements

  Are the current organizational audited financial statements acceptable, or should there be a separate audit for each child care centre?

  The Ministry of Education has not yet provided direction on the requirements for audited financial statements.

  For the 2024 calendar year or fiscal years ending in 2024, use existing practices for the annual submission of audited financial statements.

  Niagara Region will provide further clarification on requirements for the 2025 funding year, for which audited financial statements would be due in 2026.

  Will the cost of audited financial statements continue to be reimbursed in 2024 / 2025?

  Yes, audited financial statements will be reimbursed in 2024 and will be considered an eligible expense within centre allocations for 2025.

• Closure limits

  What are the closure limits for licensed child care under the new Canada-Wide Early Learning and Child Care funding formula?

  The closure limits under the new funding formula remain the same. If a child care program is participating in the Canada-Wide Early Learning and Child Care system and charges fees to parents / guardians during a closure period, the closure may not exceed two consecutive weeks and not more than four weeks of closure within a calendar year. This guidance also applies to statutory holidays.

  If a licensee charges fees to parents / guardians for a statutory holiday closure, the statutory holiday would count towards the closure limits. If a program does not charge fees for a closure period, the days of closure do not need to be counted in the closure limits.

  The regulations under the Child Care and Early Years Act do not prohibit child care licensees from charging fees during scheduled closures, such as statutory holidays. As private businesses, each child care licensee sets their own fee policies.

• Cost eligibility

  Who determines which costs are eligible?

  Licensees must first assess if a cost is eligible based on the three eligibility principles (attributable, appropriate and reasonable) and maintain any documentation, rationale and records for support. Reporting analysts from Niagara Region may provide guidance to licensees during this process.
  
  Final decisions on cost eligibility will not be determined until reconciliation (year-end).

  Reporting analysts and Children's Services leadership will make consistent, transparent, evidence-informed decisions about cost eligibility.  
  
  Licensees will be able to dispute eligibility decisions through a formal dispute resolution process that is being developed.
  
  Ongoing and open communication between licensees and Niagara Region will be critical to minimizing cost recoveries and disputes around eligible costs.

  Will expenses be considered partially eligible if their features, quality, or amount are not determined to be reasonable?

  Yes. Where a cost is attributable and appropriate, but unreasonable, Niagara Region will adjust the total cost, included in the actual program costs, down to a reasonable amount. That is, remove the ineligible portion of the total cost.

  Are there specific costs right now that are deemed not eligible? Would administration office expenses be considered eligible?

  There is not a comprehensive list for eligible or ineligible costs. Some items and examples are highlighted in the 2025 guidelines for reference.

  Licensee should consider the three principles when determining if an item is eligible (attributable, appropriate, and reasonable). Licensees are encouraged to reach out to their reporting analysts for one-on-one support if they are uncertain about eligible costs.

  Do eligible costs include staff's wages above the ceiling?

  Yes, staff wages above the ceiling are an eligible cost.

  Are employees entitled to bonuses if they are not a controlling owner?

  Staff bonuses are considered an eligible expense, so long as they are reasonable.

  Bonuses for staff are at the discretion of the licensee.

  A reminder that bonuses for the controlling owner are excluded from eligible costs. We are seeking further clarity from the Ministry of Education around bonuses and will provide an update.

  Can administration costs, such as payroll, human resources, information technology and finance, be included in the operations portion for each centre?

  Generally, administration expenses are eligible expenses, within reason.

  In the 2025 reporting template, you will be asked to submit data based on the General Index of Financial Information, which includes several indices pertaining to administration, such as office expenses, accounting fees, management and administration fees, etc.

  What are third party mortgages?

  Principal and interest for third party mortgages are eligible costs under the program cost allocation, when the mortgage on facilities actively used to deliver child care are included in the base fee.

  Third party refers to trust companies, savings banks, savings and loan associations, banks, credit unions or any other entity that provides loans directly to the property owners.

  Mortgages not provided by arms-length lenders would not be an eligible cost.

  What are the implications for the review of ineligible expenses when a cost is required by a centre's board of directors?

  In the event that a cost is ineligible under the program cost allocation, a licensee may opt to invest their reserves or their allocation in lieu of profit.

  Niagara Region recommends that licensees work closely with their boards of directors to understand the implications of cost eligibility under the new funding formula.

  Licensees can reach out to their reporting analyst for support when they will be purchasing goods or services that they anticipate will be ineligible.

  Will Niagara Region provide an approved vendors list for purchasing?

  Unfortunately, Niagara Region will not provide an approved vendors list. Licensees will select vendors based on best judgment considering the three eligibility principles (attributable, appropriate and reasonable).

  Can operators continue to use their preferred vendors?

  Licensees must consider the eligibility of costs.

  Licensees should consider reasonable quality in assessing the eligibility of an expense. The intent of evaluating eligible costs is not to compromise high-quality learning environments.
  
  In addition to quality, licensees should consider the cost efficiencies of bulk-ordering.

  Are garbage removal expenses considered an eligible cost?

  Licensees should consider three principles when determining if a cost is eligible. Costs are eligible if they are attributable, appropriate and reasonable. For example, for licensees without a dumpster on the property, reasonable garbage removal costs would be an eligible cost.

  Licensees should reach out to their reporting analysts for one-on-one support if they aren't sure about eligible costs.

  Are taxes included in the data submission template?

  Income taxes are an ineligible expense. While income taxes are a legitimate obligation for licensees, they are not costs associated with providing child care.

• Cost-based allocations

  Can costs associated with one benchmark be used to cover operating costs under another benchmark? For example, if a centre has low rent or mortgage, can they use the savings toward operating expenses?

  Licensees have flexibility to use funds as needed on eligible costs. For example, if an operator has some accommodations funding available, they may apply that to staffing costs.
  
  The cost-based funding approach offers flexibility for licensees while also ensuring transparency and accountability within the system.
  
  Niagara Region will compare the funding provided to a licensee – through their cost-based funding allocation – against the licensee's actual cost-based funding for the calendar year and recover any funding not used for eligible costs.

  This comparison is for all eligible costs incurred by the eligible centre / agency, meaning not line-by-line.

  We pay high rent for a centre. How will this be accounted for in the new funding model so that we can continue to operate?

  Where costs are high for one category of expenses, such as rent and accommodations, operators may have lower costs in another category of expenses, such as operating costs.

  Licensees have flexibility through their cost-based funding allocation to cover their eligible expenses as required. Reconciliation will not occur line-by-line against specific expense categories.
  
  Some centres will also be eligible for legacy top-up in 2025 to support their legacy cost structures in the transition to cost-based funding.

  What should licensees be spending in certain areas for their programs, such as costs for staffing, food, equipment, etc.?

  Niagara will seek out opportunities to provide data to support licensees in making budgeting decisions. However, the cost-funding formula is intended to cover eligible costs of operating a child care centre.

  Budgets should be based on the costs of providing services. Where those costs are higher than the market averages or benchmarks, those costs may be subject to review.

  It is also important to note that the funding provided is reconciled by the total allocation and not individual business lines.

  Each centre is unique and should consider their specific costs and situation based on historical and geographic trends.

  Niagara Region will continue to hold budget meetings to support the budgeting process.

• Data and metrics

  Why is the accommodations benchmark for kindergarten age groups in public schools zero?

  Across Ontario, in some school boards, the cost of kindergarten age grouping rent is waved.

  Recognizing that in Niagara, most kindergarten age groupings pay rent to their school boards, licensees are required to cover their accommodation costs from within their benchmark allocation and, if applicable, their legacy top up.

  Will benchmarks change every year based on the changing operating environment?

  We do not have information on future benchmark adjustments at this time.

  In terms of service days, how do licensees account for holidays or other days when the centre is closed, but still has expenses?

  "Service day" is a 24-hour period that begins when the centre first accepts children into care or the end of the previous 24-hour period during which the licensee is enrolled and charges a base fee per the parent handbook, even if the centre or home is not open. For example, on a statutory holiday.
  
  Licensees may wish to review which days they charge families.

  Days where fees are charged during a closure period cannot exceed two consecutive weeks of closure and not more than four weeks of closure within a calendar year.

  Licensees will be expected to operate within the allocation provided.

  Will data that Niagara Region uses to evaluate eligibility or data used to create the funding formula be made available?

  Niagara Region will seek out opportunities to provide data to support licensees in making budgeting decisions where possible.

  The data used in determining the cost-based funding formula is not available to Niagara Region.

• Data submission

  How should licensees divide costs between centres?

  It is up to the licensee to determine how to best allocate eligible costs between different sites.

  How should costs and time in program be split when there are mixed age groupings?

  For the purposes of cost-based allocations, costs will be split between eligible and ineligible children using standard calculations.

  Program staffing and operating costs will be weighted based on operating spaces, program staff-to-child ratio and typical hours of service.

  Supervisor costs will be weighted based on operating spaces and staff-to-child ratio.

  Accommodation costs will be weighted based on licensed capacity and maximum group size.
  
  For the salary survey, where an educator works in a mixed-age program, time with eligible and ineligible children should be split based on the operating capacity of the program.

  For which years must data be submitted?

  Licensees will be required to submit service data (operating and licensed capacity, service days, and service hours by site and age group) for both 2023 and 2025.

  Detailed financial data is required for 2023 and a few select financial line items are required for 2025.

  The exception is if full and representative data is not available for 2023. In that case, licensees must reach out to their reporting analyst.

  Licensees are required to complete the salary survey for 2025.

  Where should full health benefits for employees be captured?

  Full health benefits for employees can be captured under 'Employee benefits' under the program staffing and supervisor(s) categories on the reporting template.

  When submitting 2025 data, should a licensee report on existing or projected licensed and operating capacity?

  When submitting 2025 data, the licensee should include projected licensed and operating capacity for 2025.

  How do you determine number of positions in the service data portion of the data submission if there are additional staff needed to meet ratio for a program that runs longer than a typical staff shift?

  When completing the number of positions field in the service data portion of the data submission, count the actual number of staff in program that day.

  For example, if two staff are needed to meet ratio at a given time, but a third staff is needed to cover the entire day, three staff should be recorded.

  How should licensees enter mortgage payments in the Operator Management System data submission #1 if they do not pay rent?

  Under 'Monthly Rent', you can enter your mortgage payment or your monthly rent as applicable. Enter $1.00 if you do not pay rent or have a mortgage.

  Are licensees required to submit square footage for the program or the entire building? How should square footage be broken down across age groupings?

  Square footage by centre can be reported for your entire child care centre (all programs, zero to 12 years old), rather than broken down by age.

  Programmers are updating the fields in Operator Management System to include one field instead of multiple age-based square footage fields. However, if you wish to submit your data ahead of the Operator Management System upgrade, enter your square footage for your entire centre, including common and admin areas, under the infant category and enter a 1 under the other age categories.

  For the purpose of analyzing square footage data, Niagara Region will split the total area based on licensed capacity.

  Some licensees experience changes in operating capacity throughout the year. For example, a centre may offer only before and after care during the school year and full day care during the summer months. How should this change in operating capacity be reflected when submitting data through the Operator Management System?

  Licensees who expect changes in operating capacity throughout the year should use projected budgets and estimates to complete their data submissions. If significant differences arise during the year, in-year adjustments may be needed.

  Where should licensees enter equipment expenses in the data submission? For example, classroom tables and chairs.

  Licensees should enter additional equipment into the supplies cell of the data submission template.

  How should licensees report on the time educators spend on tasks such as cleaning rooms and preparing lunches?

  Reporting should be based on the percent of time the staff member is in the program as indicated in the salary survey. Wage enhancements are only provided for time in the program.

  Do licensees need to include data for sites that were open in 2023 but have since closed?

  When entering data for submissions, do not include any sites that are not operating in 2025.

  If a licensee plans to open a new site in 2025 but does not yet have a license, does this site need to be included in the submission?

  Licensees should not include data for sites or expanded licensed capacity that will open in 2025. A member of Children's Services will connect with licensees at the time they are licensed to review the next steps and to calculate a growth top-up.

  Where should licensees input custodian salaries for data submissions?

  Licensees may input custodian salary into occupancy costs for the data submission.

  How would the formula work if a licensee plans to switch age groups during the day using their alternate capacity?

  If the licence allows using the same room for different age groups at different times of day, only one service day can apply per space, as the space is used in the same 24-hour period. To calculate the benchmark allocation, the age group listed as licensed capacity applies to fixed cost components.

  For variable cost components, either the age group listed as licensed capacity or as alternate capacity could be applied. While younger age groups have greater benchmarks, they also usually have fewer spaces, so higher benchmarks don't always mean a greater allocation.

  How are program vacancies handled as part of the new funding formula?

  When calculating expected base fee revenue offset, a 10 per cent vacancy rate is included to account for child turnover or room transition.

• Fee subsidy

  Under what circumstances will Niagara Region provide fee subsidies for child care centres that opt out of Canada-Wide Early Learning and Child Care?

  When a licensee opts out of Canada-Wide Early Learning and Child Care, all families currently receiving fee subsidies will continue to do so without disruption in their services or subsidies. Existing fee subsidy agreements may remain funded until the benefiting child ages out of the program or leaves the licensee.

  Children aged zero to five in families newly qualifying for fee subsidy must be placed in eligible centres / agencies participating in Canada-Wide Early Learning and Child Care. Children aged six to 12 in families newly qualifying for fee subsidy must be placed with licensees participating in Canada-Wide Early Learning and Child Care or licensees with programs that only service children aged six to 12.

  Will there be any reductions to fee subsidy parent contributions as part of the new fee reduction?

  To ensure an equitable fee reduction for families receiving child care fee subsidy, parental contribution for eligible children were reduced by 50 per cent in 2024. This was outlined in the 2024 Canada-Wide Early Learning and Child Care Guidelines and O.Reg 138/15. The Ministry of Education will provide information about future fee subsidy contributions in the coming months.

  How has eligibility for fee subsidy changed?

  As of Jan. 1, 2025, new fee subsidy families can no longer be enrolled in centres / agencies that serve children aged zero to five if the centre / agency is not enrolled in Canada-Wide Early Learning and Child Care System.

  In addition to meeting the eligibility requirements for fee subsidy in this section, new families looking to receive fee subsidy must also have children enrolled in one of the following programs:

  • Canada-Wide Early Learning and Child Care System-enrolled centre / agency (fee subsidy available for children aged zero to 12)
  • A centre / agency exclusively serving children aged six to 12
  • Camps and children's recreation programs
  • Before and after school program offered directly by school boards
  • Before and after school programs operated by third party programs
  • Unlicensed child care for Ontario works participants

  Funding for existing fee subsidy agreements may continue until the benefiting child ages out of the program or leaves the centre / agency.

• Financial autonomy and program quality

  Will the cost-based funding approach limit licensees' ability to manage finances without too much oversight?

  Eligible centres and agencies will still have control over their operations. They'll manage their own contracts with landlords and suppliers. One exception is wages. Wages for eligible program staff and supervisors must follow wage enhancements under Ontario's Child Care Workforce Strategy.

  As cost-based funding is heavily subsidized by taxpayers, the government must ensure that funding is used for its intended purpose. Cost-based funding uses a principle-based definition of eligible costs. This approach ensures licensees get the right amount of funding and the flexibility to cover the true cost of providing child care in Ontario.

  With this principle-based definition, Niagara Region and licensees can adapt to different situations without too many rules or oversight. This approach supports licensee participation in the Canada-Wide Early Learning and Child Care program while keeping control over costs and ensuring public funds are used fairly.

  By focusing on the core principles, attributable, appropriate and reasonable, it's easier to understand which costs are eligible and apply these principles consistently. Licensees can avoid year-end recoveries by not using Canada-Wide Early Learning and Child Care funding for ineligible costs. If they are unsure of eligibility, they can seek guidance from their reporting analyst before incurring the cost.

  Will this new funding approach limit the ability of licensees to invest in high-quality child care?

  Since program cost allocations give a 'global' amount of funding, licensees have control over their operations. They can decide how to spend on eligible costs to deliver high-quality child care while meeting their regulatory obligations.

• Funding for six to 12 year olds

  What funding is available for six to 12 year old age groups?

  General Operating Grant, Wage Enhancement Grant, and Canada-Wide Early Learning and Child Care wage enhancements will continue in 2025 for six to 12 year old programs.

• Growth top-up

  Is there a growth top-up template available for licensees?

  There is not a growth top-up template at this time. The data elements for the growth top-up are the same as the benchmark allocation. They will be collected during the expansion application process.

  The growth top-up is not linked to the legacy top-up.

• Mixed age groups

  How are costs funded for eligible children (zero to five) in mixed age groups or a school-age room under the Canada-Wide Early Learning and Child Care system?

  In general, Cost-Based Funding provides support through benchmarks. This is based on the age group of spaces, not the age of the enrolled children. There are no benchmarks for "ineligible age group" spaces (such as primary / junior school-age), even if eligible children are placed there in mixed-age groups. In these cases, a legacy top-up may be applied to cover "legacy cost structures" for legacy centres.

  The 2025 Canada-Wide Early Learning and Child Care Cost-Based Funding guideline will clarify that if mixed age groups are used where eligible children are ineligible age group spaces, the operating scaling factor may include these parameters, but only for eligible children in such spaces at legacy centres. Ineligible children may be in eligible spaces, but cost-based funding guidelines specify that funding is based on the actual costs incurred for eligible children and spaces.

  If a space is shared by both eligible children (ages zero to five or turning six before June 30) and ineligible children (ages six to 12), costs must be split. A reasonable method should be used to separate eligible costs, which are related to child care included in the base fee, from ineligible costs. New or expanding centres / agencies can use the tools provided by the ministry (such as the Canada-Wide Early Learning and Child Care cost-based child care funding estimator) to determine funding specific to the age groups on their licences under the cost-based funding approach.

• Profit and surplus

  Why doesn't the new funding approach provide a surplus of at least three months of expenses to ensure continuity during a crisis?

  The cost-based funding approach ensures that licensees don't face losses when caring for eligible children. This provides stability and predictability to help with operational planning.

  If licensees need to cover unexpected costs above program allocations, and those costs are not covered by another public source or insurance, they can contact Niagara Region to discuss. Licensees may also use amounts in lieu of profit / surplus to build reserves.

  If borrowing is needed for an emergency, financing costs may be eligible under cost-based funding.

• Rates and fees

  Will the $22 per day be starting January 2025?

  Yes, pending the regulatory amendments and approvals.

  When will $10 a day child care fees start?

  To support the transition to $10 per day average fees by the end of 2025-26, families with children in programs enrolled in the Canada-Wide Early Learning and Child Care system would see child care base fees capped at a maximum of $22 per day effective Jan. 1, 2025.

  There is currently no direction on future fee reductions.

  If we currently have a fee below $22 per day, can it be increased to $22 per day?

  No, as of Jan. 1, 2025, fees below $22 per day cannot be increased to $22 per day.

  Families with children in programs enrolled in the Canada-Wide Early Learning and Child Care system would see child care base fees capped at $22 per day effective Jan. 1, 2025.

  This means that, starting Jan. 1, 2025, the base fee would be the lesser of $22 per day OR the reduced base fee charged to parents on Dec. 31, 2024 (which would typically equal the frozen daily base fee multiplied by (100 per cent - 52.75 per cent = 47.25 per cent), to a minimum of $12 per day).

  This is pending regulatory amendments and approvals.

  Will correspondence for parents about the Jan. 1, 2025 fee reduction be supported by Niagara Region or should we be sharing this information with them?

  Correspondence with parents will occur between the licensee and the parents.

  Niagara Region will not be providing a standard communication about the fee reduction.

  Should licensees delivering before and after care reduce fees so that total parent fees are less than $22 per day? For example, if charging $12 for before care and $12 for after care, should fees be reduced to $11 before and $11 after? Would the $22 base fee step-down relate to core service hours (half-day, full-day use) and extended optional care hours?

  The Ministry of Education has consulted on the regulations necessary to achieve the additional fee reduction of $22 per day. The Ministry is reviewing submissions and will provide more details on the fee reduction in the coming months.

  Are late fees considered revenue?

  Expected base fee revenue is based on total revenue, including late fees. Niagara Region will reconcile based on the total collected revenue at the end of the year.

• Reconciliation

  When will the reconciliation process be completed?

  Reconciliation will occur in early 2026 for the 2025 calendar year. Finalized timelines and processes for reconciliation will be shared with the sector when available.

  Are we expecting only one reconciliation of total funding per centre or will other allocations, such as Wage Enhancement Grant or workforce compensation, also be reconciled for each centre?

  Niagara Region has not yet received Ministry of Education guidelines on reporting requirements for the new cost-based funding or for funding for six to 12 year olds.

  Once available, Niagara Region will be able to provide clarity on the reporting requirements for licensees.

  Are licensees required to keep two sets of financials: one for zero to five years and one for six to 12 years?

  Each licensee will need to work with their finance staff to determine the best way to manage and track their financials.

  As part of the calculations that are used to determine funding allocations, standard methods are used to split costs between eligible and ineligible age groupings.

• Salary survey

  On the salary survey, how should General Operating Grant be calculated if a flat-rate or lump-sum is provided?

  It must be converted to an hourly wage for the salary survey.

  You can use an average month of 21.5 days long and eight hours per day (depending on how long your staff typically works) to divide out by hour.

  When completing data submissions, how should licensees report staff that may need to work across eligible and non-eligible age groupings for short periods of time, such as a few weeks a year?

  Licensees will need to make an estimate for the majority of the year, which will be reconciled to actual costs at year-end.

  How should a supervisor's time in program be split when there are mixed age groupings?

  Where a supervisor works in a mixed-age program, time with eligible and ineligible children should be split based on the operating capacity of the program.

  How should administrative roles', such as centre director and operations assistant, time in program be split between eligible and ineligible groupings?

  Administrative roles' time with eligible and ineligible children should be split based on the operating capacity of the centre.

• Wages

  Has eligibility for the annual $1 per hour increases under the Child Care Workforce Strategy changed for workforce compensation for 2025?

  The position eligibility requirements for the annual (up to) $1 per hour increases under the Child Care Workforce Strategy have not changed for 2025. To be eligible to receive annual wage increases, staff must be a registered early childhood educator employed by an eligible licensee, be in one of the positions stated in the guidelines and must also be receiving a Wage Enhancement Grant.

  However, centre / agency eligibility has changed in the 2025 guidelines. For 2025, the following centres / agencies are eligible for workforce compensation:

  • Canada-Wide Early Learning and Child Care System-enrolled centres / agencies. These centres / agencies will automatically receive workforce compensation funding for eligible positions serving children aged zero to five through benchmark allocations under cost-based funding.
  • Centres / agencies only serving children aged six to 12

  Any centre / agency receiving workforce compensation funding must meet funding requirements, including Canada-Wide Early Learning and Child Care System-enrolled centres / agencies receiving benchmark allocations under cost-based funding.

  Eligible centres / agencies must apply and receive Wage Enhancement Grant for eligible positions serving children aged six to 12 to receive workforce compensation funding.

  Will minimum wage offset funding still be available in 2025 to eligible agencies?

  Yes, minimum wage offset funding will continue for centres / agencies as long as they meet the eligibility requirements.

  Specifically, they must be centres / agencies participating in Canada-Wide Early Learning and Child Care System and serving children aged six to 12, or centres / agencies only serving children aged six to 12.

  Minimum wage offset funding will no longer be available for centres / agencies participating in Canada-Wide Early Learning and Child Care System for staff serving children aged zero to five. Salaries for these staff are built into their benchmark allocations under cost-based funding.

  Why is minimum wage offset being held at 2023 levels?

  The minimum wage offset was established when the Canada-Wide Early Learning and Child Care was introduced to offset the impact of minimum wage increases during the transition. With cost-based funding now in place, salaries for staff working with children aged zero to five are covered as an eligible expense.

  For 2025, to continue to support affordability for families with children aged six to 12, despite fees not being frozen for that group, the minimum wage offset is being held at 2023 levels.

  What is the order of operations to apply wage and compensation enhancements?

  The order of operations is the following:

  1. Base wage (including minimum wage obligations or any employer-based wage improvements such as obligations from collective agreements)
  2. General operating funding used to support wage improvements (other than Wage Enhancement Grant and workforce compensation)
  3. Wage Enhancement Grant (up to $2 per hour, up to a maximum wage of $32.81 per hour)
  4. Workforce compensation annual wage increases of up to $1 per hour, compounded year-over-year, up to the wage eligibility ceiling for the calendar year
  5. Workforce compensation incremental amount to reach the wage floor for the calendar year, if applicable
• Wage Enhancement Grant

  How should licensees track and report on the Wage Enhancement Grant?

  Licensees are still required to pay the Wage Enhancement Grant per hour, per staff. Niagara Region will provide further guidance once it's available from the Ministry. Licensees are encouraged to maintain the current process until further instructions are provided.

  What are the hourly wage maximums that apply for the 2025 Wage Enhancement Grant and Home Child Care Enhancement Grant?

  Wage Enhancement Grant's wage cap for 2025 is $32.81 per hour. The Home Child Care Enhancement Grant's cap is $328.10 for the full day (10 hours at $32.81 per hour) and $196.86 for partial day (six hours at $32.81 per hour).

  Can licensees increase the base wage and use the Canada-Wide Early Learning and Child Care funding allocation to cover the entire wage for eligible staff, rather than considering wage enhancements and the General Operating Grant?

  For 2025, licensees must maintain staff base wages, including the 2024 General Operating Grant contributions, when paying staff.

  Under Canada-Wide Early Learning and Child Care cost-based funding, the Wage Enhancement Grant / Home Child Care Enhancement Grant funding for staff providing services to children aged zero to five has been reinvested into cost-based funding allocations. These enhancements are included in the program staffing and supervisor benchmarks for centres, and the home child care visitor benchmark for home agencies. In this case, the concept of a separate allocation for the Wage Enhancement Grant / Home Child Care Enhancement Grant no longer applies.

  Are all licensees receiving provincial funding required to provide workforce compensation funding and Wage Enhancement Grant to their staff?

  Not all licensees receiving provincial funding need to provide workforce compensation and Wage Enhancement Grant / High Child Care Expense Grant to their staff.

  For centres / agencies enrolled in Canada-Wide Early Learning and Child Care and also serving children aged six to 12 or centres / agencies exclusively serving children aged six to 12, Wage Enhancement Grant / High Child Care Expense Grant is application-based. If centres / agencies apply for and receive Wage Enhancement Grant, workforce compensation funding must also be paid in respect of eligible positions.

  For Canada-Wide Early Learning and Child Care-enrolled centres / agencies, there is no longer any application for eligible staff serving children aged zero to five. Wage Enhancement Grant / High Child Care Expense Grant and workforce compensation funding is now built directly into benchmark allocations under cost-based funding.

  Licensees must pay eligible staff accordingly and meet requirements set out in the guidelines.

  Should staff continue to receive Wage Enhancement Grant and workforce compensation funding for sick days, professional development days and vacation days?

  If a registered early childhood educator is eligible for the Wage Enhancement Grant and workforce compensation funding, they will continue to receive workforce compensation when taking vacation, sick days or part of a professional development day.

• Wages and General Operating Grant

  Historically, minimum wage had to be covered outside of Regionally-provided funding, before applying for wage enhancements. Is this still a requirement?

  In 2025, full program staffing costs can be covered using the cost-based funding allocation. Staff wages must continue to be set at the provincial minimum wage before applying for wage enhancements.
  
  Increases to minimum wage will need to be addressed using the cost-based funding allocation.

  Is General Operating Grant counted in expected base fee revenues, to reduce allocation?

  General Operating Grant is imbedded as part of funding formula, not subtracted from the allocation. 
  
  Licensees will need to meet minimum salary requirements, but have flexibility to use funding on eligible costs as needed.

  If licensees must include General Operating Grant with the base wage, will that make some staff ineligible for the workforce compensation?  Is additional funding provided to cover the cost of maintaining staff wages at 2024 rates?

  By including General Operating Grant in base wages, it is possible that some staff will not qualify for additional wage enhancements in 2025.

  However, wage increases for affected employees will be held constant until affected employees become eligible for additional increases through wage enhancements.

  Wages provided to staff must not be below their 2024 hourly rate, including any workforce and general operating funding. The cost of maintaining wages at 2024 rates should be fully captured in the centre's program cost allocation. 

  If the funding is streamlined into one lump sum, why must licensees do administration work to track Wage Enhancement Grant / General Operating Grant / Workforce and other funding?

  We anticipate opportunities to find efficiencies as we move forward over the next year. We are committed to working with child care operators to ensure smooth transition and minimize administrative burdens.

  Will licensees need to account for wage enhancement payments to staff separately for those working in programs for ages zero to five and those in six to 12? If so, how do we account for staff who bridge both programs and / or multiple sites?

  Licensees will need to account for the amount of time staff work in eligible versus ineligible age groupings. This information will be reported through the new salary survey in the Operator Management System.

  Was previous funding given by Niagara Region intended to provide the same salary for registered early childhood educators across the board? Some centres are still losing staff to larger centres who are paying higher wages.

  While operators must pay staff according to the wage enhancement rules at a minimum, such as annual increase and wage floor, there is no requirement that wages are capped at the same rate across the sector.

  Wages are an eligible cost and centres may choose to invest in wages as appropriate.

  Registered early childhood educator experience is not taken into consideration in workforce compensation. Experienced educators are not seeing wage increases as their wages are likely those above the wage ceilings.

  Licensees have flexibility to allocate funding for eligible costs as needed.

  To account for experience within your pay grid, there is an option to budget for increases to staff wages within your cost-based allocation.

  The cost-based model needs centres with a large proportion of registered early childhood educators to direct their allocation toward wages, relative to centres with higher proportions of educators.

  The new funding formula requires that operators manage their expenses within their allocation while maintaining or improving the quality of their program.

  During cost reviews and cost eligibility assessments, Niagara Region will work with operators to find efficiencies that do not compromise the quality of their program.

  Will wages for staff who are above the ceiling be frozen if the organization does not have other sources of revenue to cover the cost?

  There is no cap on educator wages.

  Licensees must work within their allocation to ensure that educators are being paid in accordance with guidelines for Wage Enhancement and Workforce Compensation. Licensees are able to increase base wages within reason, if their budget permits.
  
  In calculating 2025 educator wages, licensees must include General Operating Grant and any wage improvements in the base wage when considering eligibility for Wage Enhancement Grant and Workforce Compensation.

  In the event that 2024 wages were higher than rates calculated for 2025, 2024 wages should be used.

  Is there a workforce compensation calculator available for 2025?

  Niagara Region is developing a workforce compensation calculator and will make it available in the coming weeks.

  The salary survey in the Operator Management System can be used to calculate wages using the updated order of operations.

  If licensees have questions about the workforce compensation calculator or other funding-related questions, who should they contact?

  If licensees have any funding related questions, they are encouraged to contact their reporting analyst for support.

Funded by contributions from the Province of Ontario and the Government of Canada under the Canada-Wide Early Learning and Child Care Agreement.