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The Conservative government is being forced to rethink its plan to persuade employers to set up childcare spaces in the workplace because not enough companies are interested in getting into the daycare business.
The government replaced the Liberals' $5-billion national daycare strategy with a $1,200 allowance for each child under six and a plan to create 125,000 new spaces by allocating $250-million a year in tax credits to employers.
However, sources said businesses have been reluctant to sign up for the Conservative plan because the cost of setting up and running daycares is judged prohibitive. The Ontario government estimates it costs $10,000 to create each new daycare space and another $7,500 per head per year in running costs.
Instead, an advisory committee to Human Resources Minister Diane Finley is likely to recommend the government offer tax credits and grants to existing daycare centres if they create new spaces.
The provinces, which have played a lead role on the daycare file until now, are likely to be frozen out of any new funding since a renewed provincial role would be an embarrassment for the government. Ms. Finley upset her provincial counterparts in May when she insisted the plan would go ahead, despite provincial protests that previous attempts to interest business in creating daycare spaces had failed.
The Conservative plan was aimed at complementing the existing provincial systems, particularly by providing spaces in rural areas not catered to by existing daycare facilities.
The advisory committee report, due in the next few weeks, is likely to recommend a face-saving hybrid system that will enable the government to deny it is funding a reborn national daycare strategy.
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A spokeswoman for Ms. Finley said the minister is awaiting the committee's report and that the proposal is going forward as planned. "We have received some interest [from companies]," she said.
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- reprinted from the National Post