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A performance audit released by the Auditor General of Canada on October 21, 2025 has concluded that Employment and Social Development Canada (ESDC) fulfilled its responsibilities in relation to the first three years of the Canada-Wide Early Learning and Child Care program but says “the department did not sufficiently assess whether federal funding met objectives to support diverse and vulnerable and families or met objectives to support Indigenous early learning and child care.”
The Auditor General’s report also says “the department’s reporting to the public about the programs’ results and outcomes was not timely or complete.”
Spending of federal funds
The Auditor General found that from March 2021 to March 2024 the provincial and territorial governments had spent $12 of the $15 billion transferred to them as per the provisions of the negotiated Early Learning and Child Care funding agreements. Indigenous partners spent $1.9 billion on initiatives, which was nearly all of the $2 billion available through various federal programs and initiatives.
According to the Auditor General’s report, the majority of funding, $6.44 billion over 3 years, was used to improve the affordability of early learning and child care. As of March 2024 the average fee paid across Canada for full-time child care was approximately $16.50 per day, with five provinces and three territories achieving the $10/day objective ahead of March 2026.
The Auditor General says some provincial and territorial governments raised “concerns about the financial sustainability of the program beyond 2026, given inflationary pressures and various challenges facing the sector.”
Falling short of expansion targets and quality improvements
Three years after CWELCC was launched, the program was less than half-way to reaching the set target of 250,000 new spaces by March 2026. As of March 2024 the program had created 94,736 new spaces outside of Quebec, plus 17,429 new spaces in Quebec.
While the Auditor General found that some quality improvements have been made, including putting in place wage grids in some provinces and territories, she noted that ESDC did not assess whether there was an increase in the number of educators who fully met certification requirements.
Gaps in data and reporting
The Auditor General found that the challenges in tracking workforce developments, as well as other indicators such as inclusion and flexibility, are due to gaps in data collection, monitoring and reporting. Her report found that ESDC could not report on progress on initiatives for Indigenous early learning and child care, such as facility renovations or repairs.
Also, ESDC has not been able to assemble comparable information across provinces and territories, making it difficult to track regulated child care spaces in a consistent way. For example, one province included in its report on space creation new spaces for school age children even though they fell outside the scope of the CWELCC targets.
Child Care Now Executive Director Morna Ballantyne, welcomed the Auditor General’s recommendation that ESDC report more often to the public on how the program is progressing, and echoed the call for better systems of data collection and analysis.
“Our organization has been frustrated by the lack of publicly available data on all aspects of the Canada-Wide Early Learning and Child Care program,” she said. “It is especially important that a publicly-funded system like CWELCC is monitored and evaluated so that gaps in access, inclusion, availability and quality can be identified and corrected,” she said.
In response to the Auditor General report, Minister for Jobs and Families, Honourable Patty Hajdu, said she “recognizes the importance of the OAG’s findings and is actively working to implement its recommendations to strengthen and improve the system.” The Minister agreed that “more work is needed to improve reporting practices. We are working with provincial, territorial and Indigenous partners to provide Canadians with clear and accurate information on the progress being made to build a stronger system, reduce costs and empower families across the country.”