Finding child care as a new Canadian - MoneySense

Taking care of the kids

New immigrants to Canada soon discover that child care is not only hard to find, but hard to afford. Here are tips

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When Namat Riham and her husband Wael fled Damascus in 2012, she never imagined she’d end up sitting in the basement of her Mississauga, Ont. apartment complex taking classes to learn English.

The Riham family came to Canada in October 2016 in an effort to give their two-year-old daughter and seven-year-old son a better life, but without good paying jobs the family couldn’t afford daycare let alone save for a home. To help with job prospects, the couple focused on learning English. These days they split their time between learning a new language and taking care of the family. In the morning Namat takes English classes, while her husband watches their toddler, and in the afternoon and early evening, they switch.

While some of the obstacles Namat and Wael face are specific to new immigrants in Canada, the dilemma of finding affordable quality child care seems to be a universal problem across the nation.

A 2015 report, released by the Canadian Centre for Policy Alternatives, shows that the median monthly cost for an infant in full-time care in the Greater Toronto Area is just under $1,750. Not surprisingly, the report found that the highest fees for child care are in Ontario, while Quebec has the lowest.

One reason for the high cost is a lack of space. There are only enough licensed daycare spots to accommodate about 20% of the children under age four, according to estimates from the Ontario Ministry of Education. Nationally, the number rises only slightly to 22%, or about 1.9 million daycare spots for children under the age of four.

Parents who are fortunate enough to find a daycare spot can end up paying up to $25,000 per year for each child in care. It’s an extraordinary sum with a big financial impact. To put the cost in perspective, one year of daycare will end up costing some families more than what they’ll pay for a year of university tuition, even when compared to costlier disciplines, such as law, engineering, pharmacy or veterinary medicine. “What’s worse is that parents typically don’t have 18 years to save up for the tuition costs,” explains Don Giesbrecht, CEO of the Canadian Child Care Federation. “There’s no RESP for child care.” As a result, child care costs become a financial blow that hits fast and hard, particularly for families struggling to put down roots.

Relocate for more affordable options?

One option is to move to a province with cheaper daycare. “Most places in Canada have pretty outrageous child care fees,” says Giesbrecht, “but there are pockets with more reasonable pricing models.”

If you want standardized and regulated fees, consider moving to Manitoba or Prince Edward Island. In Canada, these are the only two provinces with regulated child care fees. “That means the province regulates what child care programs can charge families,” says Giesbrecht. “But this only applies to the core child care fee and doesn’t factor in hot lunch programs, music class, field trips and other extra daily costs.”

Another option is to move to Quebec. You’ll probably need to learn French to find a decent paying job, but you’d also get access to Quebec’s universal child care system. Since 1997, when the subsidized child care program was introduced, the most a family has paid for child care is $7.55 per day. A new sliding scale has pushed the max to $20 a day, but this is still less than half the $45 to $90 a day most Toronto, Vancouver and other large urban-dwelling families pay for child care.

READ: The cost of child care by province »

Good news as government pledges funding for more spaces

Still, there’s hope. In early June 2017, the Federal Liberal government, in partnership with the provinces, announced it will spend $7.5 billion over 11 years to help provinces and territories to hopefully create up to 40,000 child care spaces across Canada.

However, this new plan probably won’t help most middle-income families, including new immigrants with decent jobs that can pay the bills. The primary aim of this new initiative is to help low-income families, single parents and under-served communities or families with children that have disabilities. But there are tactics to help take the sting out of expensive daycare costs.

Strategies for keeping costs down

Plan for the expense. The best strategy for keeping child care costs manageable is to plan early, says Janet Gray, an Ottawa-based Money Coach and certified financial planner. “Start with a spending plan that lists all your monthly costs, like rent, food and transportation costs. Then add in possible future costs, such as child care or a home purchase, as part of your savings plan.” These accumulated will help minimize the impact on your day-to-day budget by the time you’re ready to send your child to full-time care.

Apply for grants. If you already have children then your first step is to apply for a federal government grant known as the Canada Child Benefit (CCB). This tax-free monthly payment is given to all eligible families living in Canada to help them with the cost of raising children under age 18. There is an additional grant for children that qualify for the disability credit.

Look for subsidies. Next, talk to your local resource centre about how to apply for the municipal child care subsidies. In most major cities, even middle-class families are eligible for subsidy, explains Martha Friendly, founder and executive director of the Child Care Resource and Research Unit (CRRU), a Toronto-based think tank. That’s because child-care subsidies are means-tested, says Shannon Hyatt, manager of Children’s Services for the city of Windsor. Each province has different criteria, limits and care options: for instance, a family with two kids under three and earning a combined annual income of $80,000 would receive a subsidy of $112 per month in Alberta. The same family in Ontario could get up to $580 per month.

Just remember, however, that the burden of proof is on you. When you apply for a subsidy you’ll be required to submit tax returns, income statements, rental receipts or mortgage statements. Even without a Notice of Assessment—an official income tax record from the Canada Revenue Agency—you may still be eligible. To be sure, talk to someone in your city’s Children’s Services department.

Consider sharing or co-caring groups. For some parents, where lack of space is the biggest problem, a good solution is to find other families that are willing to share a full-time daycare spot. By splitting the week among families, each child gets a day or two in care and the costs are kept to a minimum for each family.

Another option is to find a co-caring group, says Gray. “Many communities will come together and develop caring groups.” Families will agree to care for the group of kids for one day a week and this frees up the other parents on those days they are not tasked with child care.

Pay for private care. For many families, the biggest hurdle is the cost of care, particularly when there’s more than one child that needs full-time daycare. For instance, if you lived in Ontario and needed a licensed daycare spot for your 12-month-old, you’d probably need to pay about $90 per day—or $1,800 a month. Add in a toddler and you’ll need to fork out another $1,000 to $1,500, depending on the facility. With costs creeping up to nearly $2,000 or more for just one child, it may actually be financially better to hire a nanny. A nanny will typically set you back about $2,000 per month, not including cost of extra-curricular classes, gas for transportation and food costs or live-in accommodation, if required. While this is still a big chunk out of your monthly budget, it can be cost-effective when you have more than two children that require care.

Stay home to watch the kids. For many new immigrants the only solution to the high cost of child care is for one parent to stay home. This often means becoming more proactive with your finances, explains Gray. “To make a single-income family budget work, make a spending plan so that your expenses are within your family’s earnings.”

How to find good care

To find good quality child care spaces, you’ll need to conduct your own research. Start with the city’s website and the province’s Ministry of Education website (search for Child Care Services).  Both should provide a list of licensed centres in your neighbourhood. For informal, unlicensed daycares check community centre bulletin boards or talk to other parents or community leaders.

Once you have a few daycare options, do a quick internet search before scheduling an in-person visit of the site. If your first impressions are good, then tally up all the costs—don’t forget food, extra-curricular, uniforms or early or late pick-up costs—and see which option fits your needs and budget. While all of this sounds like a lot of work, it’s worth it knowing you can build your career and take care of your family in a safe, affordable environment.

THE COMPLETE GUIDE FOR NEW CANADIANS:

1. Overview
2. Get job experience
3. Build a credit score fast
4. Property buying tips
5. Pay less tax
6. Invest wisely
7. Insurance to buy
8. Finding childcare
9. Avoid scams
10. Free resources
11. Getting started checklist

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