Executive summary
On April 1, 2025, just two months after announcing the changes in January 2025, the Government of Alberta implemented substantive changes to its child care funding approach. In addition to revised affordability payments for service providers, the province introduced changes to parent fees with significant implications for child care affordability, particularly for lower-income families. This included shifting from variable parent fees averaging $15 per day to flat-rate fees of $15 per day for all parents, the elimination of the child care subsidy program and the introduction of optional supplemental fees that child care providers may charge on top of the $15 per day flat-rate. These changes effectively mean that all Alberta parents now pay a minimum of $326.25 per month for full-time care per child (equivalent to $15 per day), with no subsidy available to reduce parent-paid fees for lower-income families for whom this rate may be unaffordable.
This report, prepared by The Muttart Foundation in partnership with the Association of Early Childhood Educators of Alberta and the Alberta Early Learning and Care Leaders’ Caucus, presents the findings of research exploring the impacts of Alberta’s April 1, 2025 affordability funding changes on lower-income families and their access to regulated child care. Conducted between March and May 2025, this research provides a snapshot of how service providers and families responded to the changes in the period when the new funding approaches were taking effect. Data for this report includes 23 interviews with senior staff from organizations delivering centre-based or family child care, representing 33 child care centres and four family day home agencies, and 20 interviews with lower-income families accessing child care. In addition to the interview data, secondary data analysis was conducted using national data on children’s child care participation, including by family income, to further explore child care affordability for lower-income families after the funding changes.
Across 25 of the 33 child care centres who participated in this research, all lower-income families’ parentpaid fees increased as a result of the funding changes. At 18 of the 33 centres, some or all lower-income families saw their fees increase by $326.25 per child – the full flat-rate monthly fee amount introduced on April 1, 2025. The average monthly fee increase for families was just under $245 for infant care, $195 for toddler care, $140 for care for preschoolers and $290 for care for kindergarten-aged children. Findings from the parent interviews yielded similar conclusions: a majority of families (18 of 20) reported increases in their parent-paid fees. On average, the monthly parent-paid fee increase was $227 for families with one child in care and $478 for families with more than one child in care.
That lower-income families at the majority of centres had their fees increase is due to the fact that most of the centres charged fees that were below or close to the median fees for centre-based care across the province – a reflection of their mandates and the communities they served. Under the previous funding approach, families paid variable fees depending on the monthly fee charged by their service provider. As a result, families receiving a full subsidy and enrolled with providers charging lower parent fees had parent-paid fees that were significantly less than the provincial average fee of $15 per day in 2024 (in some cases, parents paid nothing in child care fees).
Data from the Canadian Survey on Early Learning and Child Care indicate that almost 115,000 children 0 to 5 years of age in Alberta accessed licensed child care in 2023. Based on child care participation rates by family income, we estimate that approximately 30,000 or more children living in families with pre-tax incomes of less than $80,000 would have been eligible for a full child care subsidy in 2025. All of these families lost these subsidies under the new affordability funding approaches which took effect on April 1, with the majority likely required to pay higher parent-paid fees.
Child care fees are considered affordable when they account for less than 10 percent of a family’s after-tax income. Using this measure, the new flat-rate parent-paid fee of $326.25 per month for full-time child care, with an additional $100 per month supplemental fee for nutrition, makes regulated child care in Alberta unaffordable for both single and two-parent families with one child in care with pre-tax household incomes of less than $50,000. Both single-parent and two-parent families with two children in regulated child care are now required to earn greater than $100,000 per year for child care to be considered affordable. Under the new affordability funding approach, regulated child care in Alberta is effectively unaffordable for all lowerincome families with two or more children.
While Alberta’s new flat-rate child care fee makes child care costs the same for parents across the province (notwithstanding supplemental fees which can vary across providers and obscure the real cost of child care), it does so at the expense of equitable access for those with lower incomes. The revised affordability approaches the Government of Alberta implemented effective April 1 have made regulated child care unaffordable for those families with the lowest household incomes, increasing the risk that families will be forced to withdraw from regulated care and undermining parents’ (especially mothers’) participation in the labour force. When children from lower-income families are excluded from regulated child care they also lose access to specialized services and supports that positively impact their learning and development. Regulated child care often serves as an access point to crucial early intervention services for children from vulnerable or marginalized families.
Alberta has made significant gains in affordability under the Canada-Wide agreement over the past four years. However, the most recent funding changes have compromised equity for Alberta’s lowest income families, many of whom experienced significant fee increases and now face unaffordable child care fees. Alberta’s decision to eliminate the child care subsidy program sets it apart from most other provinces, which continue to provide targeted child care subsidies to ensure equitable access to child care for lowerincome families. Further, other Canadian jurisdictions demonstrate that it is possible to implement flat fees alongside subsidy programs to ensure that child care fees remain affordable for lower-income families. To address the above inequities, it is critical that the Alberta government move quickly to bring its child care funding approach into alignment with its stated priority to make child care affordable for those families with the lowest incomes, while upholding its broader commitments under the Canada-Wide agreement. To do this, the province is advised to implement a revised child care subsidy, provide early learning and child care stakeholders with significant advanced notice of funding changes, collect and publicly report on children from lower-income families’ participation in regulated child care, publicly report on supplemental fees, and review grant funding for service providers.