The Association of Canadian Early Learning Programs (ACE), a lobby organization that acts as the mouthpiece for-profit child care operators, has released a new proposal that would undermine child care affordability and weaken the long-term viability of Canada’s $10-a-day child care system.
In a March 2026 press release, ACE argued that $10-a-day child care is simply too expensive. Without publishing any supporting evidence, the organization claimed that a fully funded national system would require $40 billion annually in federal spending; a figure it emphasized as approaching the size of the defence budget. On that basis, ACE has proposed increasing child care fee caps so operators can cover the real costs of care directly from families rather than through public funding.
Beyond ACE’s farcical framing that positions child care is less worthy of sustained public investment than military spending, there are some significant holes in ACE’s claims.
ACE cannot justify its $40 billion claim
ACE provides no explanation of how it arrived at its $40 billion estimate. Neither its press release nor its website offers a costing model, assumptions, or breakdown of expenditures. Given that this figure is more than four times current annual federal spending on early learning and child care, the absence of transparency is suspicious.
Without evidence, it is impossible to determine how much of this projected spending would actually support educator wages, quality improvement, and expansion of licensed spaces, and how much would instead be captured as profit by for-profit operators.
That distinction matters. A substantial body of evidence shows that for-profit child care providers tend to pay lower wages and, on average, deliver lower-quality care than public and non-profit providers because revenue is diverted into profit rather than reinvested into the program.
ACE’s own language reinforces this concern. Its call for increased operational funding “without excessive red tape” is coded language that demands public money with less accountability, creating greater opportunities for public funding to be converted into private gain rather than better wages, stronger staffing levels, or improved quality of care.
Child care is an economic investment
ACE’s argument also rests on a false premise that public spending on child care is merely a fiscal burden.
Yet research consistently shows the opposite. Child care is one of the clearest examples of social spending that generates long-term economic returns. Recent work by economists Michael Baker, Jonathan Gruber, and Kevin Milligan on Quebec’s $5-a-day child care program found that it produced a permanent increase in mothers’ employment, especially among women without university degrees. The earnings of mothers’ who used child care rose significantly because affordable child care allowed them to continue working, rather than losing skills, seniority, and career opportunities while caring for young children.
Those employment gains generated new tax revenues substantial enough to offset most, and in some estimates all, of the program’s costs.
The conclusion from these findings is straightforward: “Universal child care can pay for itself!”.
Raising fees will not build a universal system
Finally, ACE’s proposed solution to raise fee caps so families shoulder more of the costs is not a solution at all. It would deepen exclusion.
Affordable child care is most critical for low-income families, who already face greater barriers to access. In 2023, only 41 percent of children from low-income families were enrolled in formal or informal child care, compared with 60 percent of children from higher-income families. Higher fees would widen that gap.
This concern is especially acute in Alberta, where income-tested subsidies have been eliminated in favour of a flat-rate approach. When fees rise, affordability falls most sharply for the families with the least financial flexibility.
It might seem fair to require middle and higher-income families to pay higher fees in this context, but this sets $10-per-day child care up for failure. When only low-income families fully benefit from a program, the program appears as a form of charity for the most marginalized, rather than designed as a social right for all citizens. The result is there is less buy-in from middle and higher income households who are less likely to defend the program when a government attempts to claw back funding or dismantle it completely.
What governments should do instead
The solution must be increased sustained federal and provincial investment to create a truly universal system.
Unfortunately, Prime Minister Mark Carney’s spring economic update did not provide new funding to expand child care spaces, despite Canada being more than 80,000 spaces short of its original target of creating 250,000 new spaces by 2026. Nor did it provide dedicated funding for a workforce strategy to recruit and retain qualified early childhood educators; one of the main reasons expansion continues to lag behind demand.
As federal funding stagnates and inflation rises, provinces may be tempted to increase parent fees. That would move Canada further away from universality.
The better path is the opposite: governments should strengthen, and not retreat from the promise of $10-a-day child care. That means sustained federal and provincial investment in operational funding, public and non-profit expansion, and workforce recruitment and retention.
Advocates such as Child Care Now have been clear: a genuinely universal child care system must be both affordable and accessible. Properly funded, it improves the lives of women and children, reduces inequality, and strengthens the economy. The real question is not whether Canada can afford universal child care. It is whether governments are willing to treat care as essential public infrastructure rather than a market commodity.
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