(Bloomberg) — ABC Learning Centres Ltd., the world’s biggest publicly traded owner of child-care centers, cut its profit forecast for 2008 because a rise in the Australian dollar reduced the value of sales abroad….
ABC in August posted an 88 percent gain in second-half net income to A$81.5 million for the six months ended June 30. The company, which gets about 45 percent of sales overseas, spent more than $700 million last year buying child-care centers in the U.S., Australia, New Zealand and the U.K. to tap rising demand for daycare services….
A TOP executive at childcare giant ABC Learning Centres established a private staff-recruitment business that later won exclusive contracts with the stockmarket-listed company.
The executive was listed as the business’s sole director when the contracts are understood to have been won, although documents filed later said another businessman had actually been in charge.
Brisbane-based ABC maintains the organisation is separate but it marks the latest case involving outside companies that do not appear on ABC’s accounts….
ABC Acquisitions’ sole director is Donald Jones, who like ABC Learning, has said the outfit is an independent operation. Mr Jones is also executive director of 123 Busy Beavers, which recently started trading in Canada.
Company documents show 123 Careers, which Mr Jones now solely owns, was created in April 2005 – the director was listed as Jillian Reynolds, ABC’s chief operating officer.
On March 23, 2006, Ms Reynolds was recorded as signing company documents again naming herself as director.
But in mid-2006, Mr Jones signed documents saying he had actually been the sole director since April 2005 and shareholder since December 2005.
The timing is important because it is believed that in February 2006 ABC sent a memo to casual centre staff saying 123 Careers (under its previous name Childcare Services Recruitment) had won a contract beginning in April that year.
Staff who wanted “to continue working” as a relief worker had to transfer employment to 123 Careers.
ABC chief executive officer Eddy Groves confirmed an exclusive arrangement, could not verify the contract’s exact months, but said 123 Careers was not a related party….
He said Ms Reynolds – who has not responded to interview requests – had been “proactive” in setting up the company, only later seeking ABC approval.
“We said that wouldn’t work because she would be a related party transaction, so she let that go and transferred it to Don (Jones),” Mr Groves said.
ABC also said it did not want to run a recruitment business because it was focused on childcare, he said.
Asked about the directorship and shareholding changes recorded in mid-2006, he said: “They were slack on the paperwork.”…
Mr Groves said Mr Jones was running the operation “from the get-go”.
Mr Jones, meanwhile, would not be interviewed, but wrote that 123 companies were private businesses.
Professor Natalie Gallery of Queensland University of Technology’s School of Accountancy said, generally speaking, any transactions with key executives in 2006 should appear as a related-party transaction.
The 123 Careers 2006 return shows a $1.3 million loss in fiscal 2006 off revenues of $25.5 million.
Including a $27.3 million intangible “right of children supply” asset, it had a shortfall in net assets of $1.3 million.
The auditor signed off the accounts stating: “The entity’s ability to continue operations and meet its debts as and when they fall due is dependent on financial support pledged by the sole director Donald Vivian Jones”.
SUSAN Elson thought the childcare meeting with Australians in Canada had odd moments.
“They did not have business cards. They did not have brochures. They did not have anything,” recalls Elson, who has been involved in accrediting child care in Canada.
The June meeting in a small Edmonton conference room was just one precursor to the start of Canadian operations in recent weeks for Australian-backed childcare group 123 Busy Beavers Learning Centres.
It was a quiet beginning to a firestorm about Busy Beavers’ links to Brisbane-based ABC Learning Centres.
Now ABC – whose rapid expansion to over 2200 centres in Australia, NZ, the US and the UK has raised questions – has denied moving on Canada.
Stockmarket-listed ABC also maintains Busy Beavers and other 123 companies are separate, independent entities. That means ABC has no control over operational decisions, and the businesses themselves do not appear on ABC’s accounts.
That hasn’t convinced some Canadian politicians or media, who published views that ABC was behind the push.
The Canadian reception has been hostile, with headlines blaring multinational “big box” child care is set to arrive. Organisations such as the Canadian Union of Public Employees are sounding concerns about quality at profit-run child care.
Elson, an exponent of non-profit community care, is another who is sceptical of ABC’s distancing itself from Busy Beavers.
“I’m not an idiot, it becomes clear,” she says.
ABC, which last week blamed the strong Australian dollar for a profit downgrade, already had Canadian links.
The parents of Eddy Groves, who co-founded ABC with wife Le Neve, were Canadians and he retains Canadian citizenship.
Asked in 2005 by The Toronto Star about setting up in Canada, Groves said: “What a great excuse to go back to that beautiful country.”
He downplays any move now.
“They (Canadian media) think they’ve joined the dots,” he says. “People over there have tried to emphasise their cause of not-for-profit by using me as a whipping boy to try and get their point up.”
But, as revealed in The Courier-Mail last month, ABC in August set up a company called ABC Canadian Holdings.
“We contemplated (a move) but we chose not to do it . . . we thought we should concentrate on the US,” Groves says.
The corporate origins of Busy Beavers – whose mascot is a Canadian shirt-wearing beaver – stretch back only weeks earlier to incorporation in Vancouver on July 17.
The sole director was Graeme Wilkie. Busy Beavers later also listed Don Jones as executive director.
Both men, along with Paul Graham, are directors and sole shareholders of Busy Beavers Investments Pty Ltd.
Busy Beavers Investments’ address in Brisbane’s industrial suburb of Murarrie is the same as some ABC facilities. It was also once ABC’s registered office.
Gold Coast-based Jones declined to be interviewed. But in an email he wrote Canadian media speculation was mostly “inaccurate, biased . . . instigated by vested interests”.
Jones says he has checked child care opportunities globally over a decade and sees a shortage.
“We see opportunities in Canada as it appears to be on par with Australia 15 years ago in many aspects.
“We see an opportunity to provide the families of Canada choice, improved safety and educational standard.”
Jones maintained Busy Beavers had “no links” to ABC.
Before Canada, Jones’s ABC ties were already known.
Citigroup analysts last year pointed out he was a director of ABC Acquisitions, which co-ordinates Australian centre developers and sellers for ABC Learning.
While then based at the same address as ABC Learning headquarters, Acquisitions was designated a separate entity. It listed two shareholders – Mr Jones and a Heather Jones.
Citigroup said they believed the “arm’s-length arrangement” with Acquisitions was to enable a child care licence “to be categorised as an asset” on ABC Learning’s balance sheet.
But ABC Learning, whose accounts Groves describes as transparent but which have raised eyebrows from some watchers, rejected that claim.
The relationship strengthened on February 14 this year when ABC Learning provided a mortgage-secured and registered $50 million loan to Acquisitions.
Groves says this was provided (and was not the first such deal) because ABC Learning needs many centres built but developers require funding.
“They (developers) go and get individual funding from banks and then they need equity to support that funding, so that’s the money that we help them get through with,” he says.
It is among assets in ABC’s balance sheet, he says.
Acquisitions in July changed its name to 123 Global to “reflect the truly global nature” of operations with clients including Canada’s Busy Beavers.
The Busy Beavers move sparked several theories.
One is Busy Beavers was working for ABC – rejected by both parties – to get centres cheaper as ABC’s presence would boost prices.
Another is Busy Beavers hopes to get a foothold and later sell to ABC. A third is Busy Beavers just sees an opportunity.
Some question whether Jones’s move with Busy Beavers would imperil lucrative Australian ABC ties.
Groves rejects this. “He’s not competing with us,” Groves says.
The ties between organisations extends to Busy Beavers’ national operations manager Marnie Testa, who left a similar role at ABC last year.
Canada’s Elson says Testa was among two Australians and an American she met at that first June meeting at 5pm.
“They were very familiar with (US and Australian) accreditation processes,” she says.
Elson says they were initially introduced as from Texas-based Adroit Investments, which has been making overtures about buying Canadian child care facilities.
Elson, who readily admits she might be judgmental against for-profit operators, says they “gave very short, abbreviated answers” about issues involving quality care and stockholders.
A second meeting in September was just with Testa, who Elson says elaborated on the upcoming Busy Beavers website.
Elson says she had an inkling by then of an ABC link and so asked how many children were at Australia’s ABC centres.
The response was “very brief”, Elson claims.
“(When) we asked for elaboration it was dismissed.”
Child care company ABC Learning Centres Ltd has downgraded its earnings guidance for the full year, surprising investors who sent its shares down by almost five per cent.
ABC says its earnings per share (EPS) is now expected to grow by 15 per cent or more this financial year, down from an earlier forecast of growth of more than 20 per cent.
The downgrade comes as a strong Australian dollar exchange rate impacts earnings from its offshore business reporting in US dollars, pound sterling and NZ dollars.
It added that accounting treatment of other items could also impact earnings.
“Owing to the above factors, management believes that EPS growth will be 15 per cent or greater for the 2007/08 financial year,” it said.
ABC shares fell 28 cents, or 4.87 per cent, to $5.47….
“ABC confirms that its operations in Australia, New Zealand, the United States and United Kingdom are all trading to expectations in constant currency terms for the 2007/08 financial year,” it said.
ABC also said it was continuing with its program of non-material acquisitions of childcare centres.
In the meantime, the value of its 17.99 per cent investment in toy company Funtastic Ltd was declining as the share price fell.
“At 30 June … this resulted in a gain of $7 million with Funtastic’s share price at $1.85,” ABC said.
“Subsequent share price fluctuations below $1.85 will have an impact on earnings.”
ABC in August reported a net profit of $143.10 million for 2006/07, up 76 per cent on the previous year….
Legislation from the NDP will attempt to block foreign-owned big-box day care from setting up in Canada, and will push for a nation-wide framework to regulate federal funding for the industry.
The private member’s bill will be debated in the House of Commons today.
The opposition parties have united in support of Bill C-303, the Early Learning and Child Care Act, which sets out terms for “accessible, universal and high-quality early-learning and child-care programs and services.” However, the Conservatives have vowed not to pass it into law.
The legislation would also regulate how federal funds are transferred to provinces or groups in support of child care, and protect private, for-profit day-care centres from foreign takeover, according to its supporters.
It comes as the debate over so-called big-box day care heats up amid attempts by a massive Australian child-care provider to bring its business model to Canada…
Chow told CTV’s Canada AM that research in Australia has shown the $2.2-billion company charges higher user fees and provides lower quality of services.
“Our research shows that initially, the prices for the parents are low, and then after a while, once they have the domination of the certain area, then the fees goes up,” Chow said.
She said the bill to be debated today would establish a national legislative framwork “for a universally-available, high-quality, affordable child care system across Canada.”
Such a system, she said, would allow working families to continue to work, could help free single mothers from a cycle of poverty and address child poverty by ensuring they eat quality meals, something that could also stimulate learning.
“So it’s time that Canada have a national child-care legislation so that we can embed and enshrine the legislation into the House of Commons as a law just like the Canada Health Act,” Chow said.
Support for 123
Kathy Graham, of the Association of Daycare Operators of Ontario, said the debate over large-scale day-care operations is not black and white.
Even the term “big-box day care,” she told Canada AM, has been used as a scare tactic.
“I think that’s been a phrase that has been coined to scare families, to scare Canadians, when in fact 123 Busy Beavers, if we’re going to dwell on them, are actually purchasing private entrepreneur centres that are, in general, 60-space day cares, 64-space day cares, 24-space day cares,” she said.
“If we want to talk about Wal-Mart, this is by no means a comparison.”
Bill C-303, she said, seems designed to “get rid of the private entrepreneur who has gone out and created programs,” and could eventually mean less flexibility and accessibility for parents, especially in rural and remote areas where private day care has filled the gap,” Graham said.
“We all need to be partners in this, and excluding parent options and decreasing accessibility is clearly not something that we should be wanting to do in this country,” she added.
CHILD-CARE centres in six NSW country towns and one in Sydney – once linked to the corporate giant ABC Learning Centres – will close next Friday, resulting in the loss of hundreds of child-care places.
Most of the centres are the only one in town, with parents having no other immediate child-care options.
Parents and staff were given less than a month’s notice of the closures, leaving many shocked and angry. But the company that now operates them says the centres are not viable.
The closures affect the towns of Harden…. and Prairiewood, in south-west Sydney.
All the centres are owned by …Queensland-based company Child Care Providers, which bought the licences from ABC Learning about 18 months ago. In at least three cases, ABC still owns the premises.
“Seven centres being closed at the one time is out of the ordinary,” said John Tansey, executive director of children’s services at the NSW Department of Community Services.
The chief executive officer of Child Care Providers, Viryan Collins-Rubie, is a business partner and old friend of Eddy Groves, the chief executive of ABC Learning.
They are owners, with Mr Groves’s sister, Patricia, and another man, of a company called Deane and Davis Fine Jewellers.
A spokesman for ABC Learning said Mr Groves had known Ms Collins-Rubie for many years and they had planned a business venture together in the past that had not worked out.
Asked if there was an arrangement for Child Care Providers to buy unprofitable rural centres from ABC in order to close them down, and deflect odium away from ABC, the spokesman said: “The only financial arrangement existing between ABC and Child Care Providers is as landlord/tenant.”
He said ABC had in the past been forced to close centres because of a lack of demand….
The Greens MP John Kaye, who has been contacted by concerned community leaders, said: “The dealings between the mysterious Child Care Providers Pty Ltd and ABC Learning need to be fully examined. This is not just another corporate high finance deal. It directly affects the future of many vulnerable young people.”
When called about the closures, the general manager of Child Care Providers, Rebecca Gunn, at first said she had “no comment” and hung up.
In a later response to an email, Ms Gunn said the centres were not viable due to low occupancy, rising costs and difficulty in obtaining qualified staff.
“It has left us with no choice but to make this unfortunate decision.We apologise for the inconvenience and stress that this decision has caused the families and staff at our centres.”
At the time the centres were bought from ABC, the company had believed they provided a good business opportunity, she said.
Ms Gunn said Ms Collins-Rubie was an employee, …. of Child Care Providers, which operates 39 centres. The sole director, according to company documents, is Stanislaus Kevin Smith, who is not known in the child-care industry.
Secrecy surrounding the closures has frustrated local councils and business people interested in possibly taking over the licences….
“I asked for the name of a human being I could deal with about the building but they were not prepared to divulge that and indicated there would be all sorts of difficulties in trying to rent [it].”
ABC said it did not own the Coolamon premises, despite “town rumours”.
Ms Miller said the $36,000 rent ABC charged for the Harden premises was “huge” for the town, being about the equivalent of rent charged for a major industrial site….
Anna Madden said people understood the centre was a business that needed to make a profit but “we need information from the company so we can try to start again.”
Friday, Nov. 16, 2007
7:00 – 9:30 pm
SFU Harbour Centre, 515 W. Hastings Street, Vancouver
BC child care is in crisis:
Fees are sky high
Early childhood educators are leaving in droves
Wait lists are years long
Government is responsible for this crisis. They dismissed parents’ concerns, ignored research, and squandered resources.
Now they are using the crisis as an excuse to lay out the welcome mat for foreign-based corporations that are trying to buy up community-based child care across the province.
But, using public money to attract multinational corporations whose goal is to make profits for their shareholders is NOT the solution for child care in BC.
On Nov. 16, join the Coalition of Child Care Advocates of BC to say NO to corporate child care and YES to community-owned child care in BC.
Learn how community controlled child care is our best defense against foreign take over.
Work with us for real child care solutions that put public resources into children, families and communities – not into the pockets of multinationals and their shareholders who don’t care about BC kids.
VANCOUVER /CNW Telbec/ – With the Campbell Liberals refusing to stop the spread of big box child care across British Columbia, parents and child care activists are looking for action.
Australian multinational child care corporation ABC Learning is seeking to expand into Canada by purchasing child care centres, starting in British Columbia, Ontario and Alberta.
CUPE President Paul Moist and NDP child care critic Olivia Chow will hold a news conference calling on the federal and provincial governments to stop moving down this dangerous path and support a national not-for-profit child care program.
Bill C-303, the NDP’s Early Learning and Child Care Act, would provide significant protection against this foreign takeover by ensuring that federal child care investments support only high quality, affordable, not-for-profit child care in Canada. The bill goes to third reading on November 20th.
Despite concerns about a foreign corporation attempting to buy community child care providers across British Columbia, so far there has been no news of such purchasing offers from local child care providers in Prince Rupert.
It was announced recently by the Coalition of Child Care Advocates of B.C. that ABC Learning Centres of Australia and their corporate partner 123-Global have been making purchasing offers across B.C., as well as in Alberta and Ontario. Coalition representative Rita Chudnovsky said that buyout letters began going to community-based for-profit child care providers in B.C. just two weeks before the B.C. government announced a $12.5 million capital fund to create new child care spaces, available to for-profit operations.
“B.C. child care is not for sale and taxpayers should not be subsidizing the buy-out of community-based child care centres or the profits of a foreign-based multinational corporation,” said Chudnovsky. “Public money should be used to expand non-profit quality child care centres, not see B.C. child care turned into a foreign-owned, big-box warehouse business.”
As of last week, none of the Prince Rupert child care facilities contacted by The Daily News had received letters regarding the possibility of being purchased, while some were not even aware of the issue. The general consensus among local child care providers was one of concern about the possibility of a foreign-based corporation possibly headed into Prince Rupert.
“The timing of the announcement seems ironic with our community starting to discuss child care within our schools,” said Tina Last, who operates a family daycare service in Prince Rupert. “I don’t really know if I need to be alarmed, or if this is just something that happens in bigger communities. I worry that if a community does go in the direction of having daycares in every school, whether that will open the door more to companies like that who could bid to open centres in schools.”
The majority of child care centres in Prince Rupert are non-profit providers….
“It’s not very likely that somebody would be looking at Prince Rupert, unless they were going to just start up a new one,” said Judy Riddell of Berry Patch Child Care Resource and Referral Centre. “The thing is they can apply for the capital grants now due to a change the provincial government has made.”
Riddell said that whether a new private for-profit child care centre would be a positive or negative thing for Prince Rupert depends on a person’s view of free enterprise, but said looking after children is such an important job that whoever is responsible, they need to be doing a good job. ….
“Our understanding is letters have gone out to child care providers in a number of communities in the province, not just the Lower Mainland,” said Chudnovsky. “We’re still very concerned about it. The threat posed by foreign multinationals has not gone away, and we don’t have any assurance from the provincial government that they are equally concerned or doing anything to make sure child care stays in the community’s hands.”
The Coalition of Child Care Advocates believes the government needs to first recognize the concern about the issue, and assure families that this is not their vision or plan for child care. The coalition also wants the province to assure taxpayers that public money will not facilitate a take-over of B.C.-owned providers, or subsidize profits resulting from the sale of those centres to a foreign-based corporation. Lastly, Chudnovsky says the coalition would like to see the government acknowledge the long-standing crisis in child care is a result of their own “lack of good policy and lack of adequate funding.”
“We’re continuing to raise the issue in communities, and communities continue to recognize it as an issue because British Columbians deserve a response.”
INCREASING payments to parents to cover the expense of child care will only drive up costs and do nothing to improve the quality of care children receive, a new book says.
While boosting the child-care rebate will give parents immediate relief from climbing fees, the book by a team of academics says it will not help the other big problem – accessibility.
“The work in Australia and internationally is that the emphasis needs to be on quality not just cost,” a Sydney University economist and one of the book’s authors, Elizabeth Hill, said.
Labor stole the Coalition’s thunder on child-care policy early in the campaign by announcing it would increase the child-care rebate …. But Dr Hill said although increases in the child-care rebate would be welcomed in the short term, they would only compound problems of accessibility and affordability in the future.
“It’s effectively a subsidy for industry and for parents. My concern is that what’s good in the short term is negative in the long term. It does nothing to improve the quality of the service because there’s still tight supply,” she said.
Sydney University will release the book today.
The authors argue that Australia’s child-care system has been developed as a prop for the labour market rather than with children’s development and educational needs in mind.
Because of this, the authors argue, Australia lags much of the developed world in providing universal, high-quality care for children who are not yet old enough to attend school.
They also criticise the dominance of private child-care providers, such as ABC Learning.
I used to work in a business that created and sold things. The catch-all word “widget” fits well, so we’ll use that. We sold widgets. Some of the widgets we sold were bigger than others, some were definitely more fun to sell, … but at least we made money from them – and the focus, after all, was to make a profit.
When my son decided he wanted to sponsor a child in a developing nation …The focus after all, shouldn’t be to make a profit….
If there is one issue, however, where societies need to step off the profit-powered money wheel, it is child care. Australian Eddy Groves has specifically tapped into countries with government daycare subsidies, and his cost-cutting measures have led to ongoing political and legal battles regarding substandard care and employee treatment.
He has figured out how to wring every last nickel out of the management and care of little Australian ankle-biters. He has turned children into widgets, and can now tally his profits from his yacht.
Eddy has announced plans to come to Canada. The opposition parties in this country are fighting to get Bill C-303 passed to maintain quality care for our children. The Conservatives will probably show up for Fast Eddy’s first ribbon cutting. Not their kids going in there.
Have you ever shopped at one of those cavernous warehouse places that promise “we pass the savings on to you”? Have you pushed down box-crowded aisles, picked through busted up packaging, scoured best-before dates to avoid hazardous conditions?
Should any child, even if he’s not yours, be subjected to similar conditions? When the profit margins are narrow, those seeking profit will scrape for every dime. Profit margins on decent, licensed child care are already non-existent. Workers are paid poorly, government standards are blessedly high, and parents are already squeezed in the middle. For someone to come in and start skimming money from the process means only one thing: the kids will suffer.
Let me be perfectly clear: I do not subscribe to the sterile thinking of some who embrace an ideology about children that includes the words “you had ’em, you raise ’em.”
… in a resource-rich society like ours there is no reason all children can’t have a decent shot at success.
And forget basking in the warmth of knowing that your own kids are okay. They are going to go out in the world and form relationships with kids who perhaps weren’t raised with the same strengths. Yep, the offspring of someone who didn’t get to dip into the horn of plenty may be calling you Grandpa or Grandma.
Where is the moral outrage that we have become a community that would rather incarcerate a 16-year-old than teach a 3-year-old? How backassed has our thinking become?
Some kids need daycare; some kids need after-school care; some kids don’t require either outside of the home. Regardless of the composition, every one of those children needs a safe, educational experience.
DEBATES OF THE LEGISLATIVE ASSEMBLY
Morning Sitting
Volume 24, Number 1
CHILD CARE
C. Trevena: I rise today to talk about child care and the threat of commodification and commercialization it faces. It’s widely recognized that a child’s formative years are from birth until the age of seven, and we as a society recognize youngsters as children until they’re 12. Yet as a society, we don’t start taking societal responsibility for children until they’re five, entering kindergarten, or six, when they’re going into grade 1 — in other words, when they’re at school and, most often, at public school.
The system steps in to provide education, guidance and structure, and this is publicly funded. It’s publicly funded because we as a society recognize the importance of education and that all children should have access to education. What’s so surprising is that our society does not place the same value on younger children.
Up until the age of five or six, parents who want to go to work or parents who want their children to socialize and to learn, have to simply hunt for child care. The search is painful and worrying, the waiting lists are long, and availability is scarce. This puts families under a huge amount of stress.
I’ve talked to numerous parents who simply cannot go back to work because they can’t find child care. It has been recognized as a problem by B.C.’s chambers of commerce and by the Union of British Columbia Municipalities. It’s recognized by communities and definitely by families. B.C. needs child care — affordable, accessible, community-based and publicly funded.
We need to deal with the problem of space, quite simply, by ensuring that trained child care workers get adequate pay, not the survival salaries they receive now. Only then will centres be able to retain staff. Only then will centres not see a drain of skilled staff to the school system or to other fields.
Sadly, the answers that seem to be provided at the moment centre on bricks and mortar, on capital spending instead of running costs. What doesn’t seem to be understood by a government which prides itself on its business nous is that capital investment is worthless without operating costs, without running costs and without staff. More worryingly in this business-minded scenario is that public funds — taxpayers’ dollars — are now approved to go to private providers.
I said at the start of my statement that I wanted to talk about the commercialization of child care. The decision for taxpayers’ money going to private daycares makes it very attractive for people to start treating child care like a business rather than as part of the social fabric. Sadly, because of the lack of government commitment to child care there is still a sense among some people that child care is not part of our social fabric, although there is a huge social need for it, so that spectre of commercialization looms.
It isn’t a nightmare scenario, Madam Speaker. It is real. People who run child care centres across the province have received letters from Adroit Investments LLC. “Re: Purchase of your child care centre.” I quote from the letter: “We represent a large financial/child care group purchasing child care centres across Canada and looking for centres in British Columbia.”
One child care operator said that when she followed up with Adroit, the response was immediate. The purchase of her centre would take just three weeks.
Adroit Investments lists 123 Global on its correspondence, and 123 Global is a partner with corporate child care operators in the United States, Britain, Japan and China. It’s linked closely to ABC Learning Centres in Australia, a multi-million-dollar business operation. ABC Learning Centres is in fact the world’s largest publicly traded child care provider. I hope I am not alone in thinking that juxtaposing “publicly traded” and “child care provider” seems an oxymoron.
In Australia, where one in four child care spaces is run by ABC, the company has assets worth more than $4 billion Australian and made a profit on child care of $143 million. Under the present B.C. Liberal government’s announcement of public funds going to private operators, taxpayers’ money could go to these big-box stores, these big-box child care conglomerates. Big-box child care, which is already making a huge profit, will also get child care subsidy money for those families who need subsidy.
[1040]
ABC recently said that it doesn’t plan to enter the Canadian market. However, 123 Global has a Canadian website set up, 123 Busy Beavers. Under the section “Find your centre,” the message is that they will be coming soon. So far they haven’t bought any centres in B.C., but they have bought in Alberta.
Lessons can be learned from where big-box, commercialized child care is operating. Australia, which effectively pioneered the commercialization of child care, is a case in point. Firstly, the big boxes have shareholders, and they’re running child care for a profit. Profit-seeking in the child care field usually means two things: increased fees and cost-cutting in the care of children.
In Australia child care costs have increased at double the rate of increases in household income since public funding for for-profit centres started. By 2006 the cost of child care was rising faster than almost any other good or service.
Big-box child care doesn’t mean a solution to the shortage of spaces. On the whole, they’re not in rural
[ Page 9043 ]
areas, they’re not in low-income neighbourhoods, and it’s hard to find a space for an infant who has special needs. A recent survey in Australia found the country still short 100,000 places.
Perhaps most telling about the commercialization of child care is that in a recent survey in Australia 21 percent of corporate-chain workers said they wouldn’t send their children to the centre where they worked because of quality concerns. They’re worried about the impact of cost-cutting on the health and safety of their children. In Australia, as in B.C., the staff aren’t benefiting. The wages are still low.
A lot of it comes down to the fact that there are shareholders to satisfy and profits to be made. In Australia the government will argue, like here, that they’re spending on child care, but much of that money in Australia is going to the big-box operators. At least 40 percent of the revenue earned by Australia’s largest child care company comes from government subsidies.
People may say: “That’s Australia; this is Canada.” But this B.C. Liberal government is opening doors to the system. It is accepting that private operators can get public dollars. It’s not standing up to say that the move of big-box child care into our province will not help deal with the crisis in spaces, will not help staff earn a living wage and, most importantly, will not provide our children with the start that they need if they’re going to thrive through life.
[ Page 9043 ] ….
R. Cantelon:…. I think the community-based solutions are the best way to go……
C. Trevena: I agree with some of what the member opposite was saying. Non-profit child care is a very, very good way forward for many families. I think
[ Page 9044 ]
group child care is a very good way forward for many families.
I think the member opposite missed an important statement by the Minister of State for Childcare a few weeks ago, where the minister of state said that $12 million of capital funding was going to be made available to private operators, not non-profit. Non-profit is a very good way forward for child care, but these were going to go to private operators.
The member also seemed to miss my statement that we are getting approaches by large operators, big-box child care providers, here in B.C. Letters have gone out to child care providers across B.C. I know that in my own constituency child care providers have received these letters asking if their child care is for sale.
The door is open with $12 million, some of which can go to private operators. The door is open for the commercialization of child care, which — it seems the member opposite agrees with me — is not the way forward. The way forward is for small operators, for family operators and for group child care. I’m very pleased to hear that. I hope the member will also talk to his minister of state about this and encourage her to go that way.
He also mentions that there are grants for training and for wages for staff, which is very useful, but the staff don’t need just grants for training. They need money for wages. Many staff get trained. Many people get trained and can get a job very easily if they wish, but they would have to be earning $14 an hour and can’t afford to.
I’d also like to bring to the member’s attention the number of child care centres that have closed because they can’t find the staff. This is why I say that we have a real child care crisis in this province.
Here in Victoria alone, Beacon Gardens has closed a toddler program because they couldn’t get staff. A second program that was going to be opened also closed because they couldn’t get staff. Blanshard Community Centre closed their preschool and after-school programs because they couldn’t get staff. Harvard Daycare closed because they couldn’t get staff.
[1050]
In fact — and I think it’s just outside the member’s constituency; it’s in the member for Cowichan-Ladysmith’s constituency — the Ladysmith Children’s Centre closed in August because they couldn’t staff. There is now no group child care in Ladysmith.
The Comox Valley and Beaufort children’s centres are threatened with closure because they can’t get staff. On the mainland we’ve got the Cariboo Centre closing because they can’t get staff.
There is a crisis in child care. There is the fact that we have many centres that need staff. We have many parents that want to have child care. At every centre I have visited, I ask: “What’s your waiting list like?” Most of them laugh at me. They say, “Of course we’ve got a waiting list,” and they’ll bring out a thick folder of names of families who are desperate to get child care. You talk to those families who want to get child care, and they’re desperate. They just need space.
Child care is not a commodity. Child care is a necessity for our society.
Parents with children in daycare are worried about the world’s largest for-profit daycare company’s moves to take over child-care centres in Alberta.
Vivian Turner, manager of the Garneau/University Child Care Centre in Edmonton, received a vague letter from Adroit Investments in North Carolina that reads, “We might have an interest in purchasing your child-care centre.”
The letter did not identify the potential buyer but Turner learned Adroit is linked to 123 Busy Beavers Learning Centres, owned and operated by ABC Learning Centres of Australia.
The publicly traded conglomerate owns 2,500 daycares in several countries. The company earned about $33 million in the last six months of 2005.
In September, 123 Busy Beavers registered in Alberta.
“If the bottom line is money (then) probably staff aren’t going to be paid as well,” said parent Linda Laidlaw. “I’m just always suspicious about a big-box approach.”
In a national survey of daycare workers in Australia by that country’s National Association of Community Based Children’s Services, the standards at ABC Learning Centres fell far below those of non-profit centres.
“They don’t have enough time to form individual relationships with the children and they can’t provide good equipment and toys to provide stimulating programs for the children,” Barbara Romeril, the group’s national secretary, told CBC News in a phone interview from Northcote, Australia.
CBC-TV reporter Lyle Cott reached an ABC spokesperson by phone for reaction this week and was asked to send questions by e-mail, but they went unanswered.
The letters offering to buy child-care centres in Alberta include disclosure agreements, so it’s unclear how many have agreed to sell to ABC.
Canadians have nothing to fear about the quality of day care if an Australia-based corporate giant moves into the field here, says a spokeswoman for the company’s American arm.
Child-care advocates in Alberta, Ontario and British Columbia have expressed concerns that ABC and its affiliates are purchasing Canadian day-care centres, building an administrative structure reminiscent of McDonald’s or Wal-Mart into an industry that is generally run by owner-operators.
So far, the rapidly expanding company, which owns a total of 2,238 centres in four countries and reported profits of $164 million in the last fiscal year, has been secretive and has required those who are selling their centres to sign non-disclosure contracts. But day-care advocates believe that about 30 Alberta centres, including nine in Edmonton, are in the process of being sold to ABC’s new Canadian arm, 123 Busy Beavers Learning Centres.
Last year, ABC acquired the Learning Care Group in the United States, which owns 1,100 day-care centres in 39 states.
Amy Popp, spokeswoman for the Learning Care Group, said she is not acquainted with the Canadian situation, but she said the corporate structure in the U.S. does not affect the quality of care children receive. …
The company has a centralized purchasing and educational department that develops curriculum according to national U.S. standards, as well as local managers who oversee four to eight centres. The education department also provides training to company child-care workers….
Susan Harney, who owns a day-care centre in Langley, B.C., talked to a representative of ABC after receiving a letter offering to purchase her facility. She has no intention of selling, but started the correspondence to get a better idea of ABC’s plans. She said she was told that the company wants to reach a “critical mass” in a community and then continue to purchase more centres.
Harney said corporate day care threatens the parents’ ability to advocate for their children because the local director loses the ability to make even the smallest decisions, such as the length of naptime.
“Any kind of arm’s-length operation is not going to be encouraging and that will be a loss for kids,” she said.
Bub Hub Community Forum, an Australian chatroom for parents of preschoolers, had mixed assessments of ABC, from one mom who “can’t speak highly enough of the level of care” to a woman who talked about cleaners being removed, reduced menu budget and a lack of modern equipment.
EDMONTON – A multinational chain that some day-care advocates warn will bring a big-box concept to Alberta child care has started shopping for day-care centres in the province.
It isn’t known exactly how many operators are selling their facilities, but day-care operators say they have heard nine centres in Edmonton and even more in Calgary are being sold to 123 Busy Beavers Learning Centres, which is affiliated with the Australian-based day-care giant ABC Learning Centres.
ABC has expanded in six years from 43 to 2,238 day-care franchises in Australia, the United States, the United Kingdom and New Zealand. It calls itself the world’s largest publicly listed operator of child-care facilities……
In Edmonton, officials with the Garneau/University Child Care Centre received a letter from Adroit Investments LLC of North Carolina informing them that “we might have an interest in purchasing your child-care centre.” ….
“We represent a financial group buying child-care centres in Alberta. We have been contacting and purchasing child-care centres in Alberta since January of this year.
“If we have spoken over the phone over the past six months, please take this time to really think about what you want out of your business.”
Meanwhile, a Calgary jobs website has listed postings for child-care workers on behalf of 123 Busy Beavers. Calls to a toll-free number on the Busy Beavers website were not returned.
Mark Davis, a representative of Adroit in Charlotte, N.C., wouldn’t say who his company represents.
But an e-mail from Adroit to a B.C. child-care centre refers to websites for 123 Busy Beavers and for ABC’s parent company, 123-Global.
The message also contained an Australian fax number.
Vivian Turner, director of the Garneau centre, said the not-for-profit facility is not for sale.
Turner said at least five of 20 day-care directors at a recent meeting of the Child and Family Resource Association received letters similar to the one she got.
Talk at the meeting was that at least nine centres in Edmonton have been purchased, Turner said.
She said operators are concerned about the possibility of growing concentration of ownership in child care and what it could mean in the future for fees and wages.
“As a monopoly, who determines the direction that child care is going to go? Twenty years down the line, will they provide excellence in care?”
She also noted that a mass purchase of day-care centres would not create any more child-care spaces in Alberta, which has a shortage of quality day-care centres and workers.
Bill Moore-Kilgannon of Public Interest Alberta said corporate child care would be a big change for the province.
Although 65 per cent of Alberta day-care centres are privately owned, owners tend to live in the communities where they operate, Moore Kilgannon said.
“These are not people who live in the community — they are in it for the money,” he said. “This represents a real transition.”
ABC’s annual report shows that its profits were up by 76 per cent to $164 million Cdn in 2006-2007.
The corporation’s website promises high-quality child care that enhances lifelong learning.
“We love that our spirit of fun runs as deep as our spirit of competition,” the website says.
But according to Forbes magazine, ABC founder Edmund Groves, one of the wealthiest people in Australia, has been accused in the Australian House of Representatives of getting rich through government subsidies. Groves has also been accused of understaffing ABC centres and providing inadequate food.
Jody Korchinski, spokeswoman for Alberta Children’s Services, said foreign and chain ownership are not concerns of the government.
“We look past who is in the boardroom and look at whether they are meeting our standards,” Korchinski said.
When a new owner takes over a day-care centre, they must provide a service plan and a criminal record check.
If they provide better than the minimum standards, they can apply for accreditation under a provincial program that informs parents it is a high-quality centre, she said. …
Child care advocates are mobilizing across Canada to fight big-box daycare saying they fear the arrival of “Fast Eddy” Groves’ company will raise fees and lower quality in this country.
“Our biggest concern is that foreign owned big-box child care is going to drive a stake through any notion of a national child-care system,” said Paul Moist, the national president of the Canadian Union of Public Employees (CUPE), which represents some 7,000 Canadian child-care workers.
“We intend to make child care an election issue.”
Moist said the union will tap into a $5 million anti-privatization war chest to fund the fight and lobby government to keep public daycare subsidies away from for-profit child care.
Groves, … has grown fabulously wealthy as his Australia-based ABC Learning Centres experienced a meteoric rise during the past decade to become the largest daycare operator in the world.
But critics fear Canada is about to experience the kind of dramatic change that happened in Australia’s child-care industry when Groves began to acquire centres there – higher fees for parents, rising public subsidies, questionable quality and a switch to more for-profit daycare at the expense of community- based centres.
The central complaint against the 41-year-old entrepreneur – that he milks government child care subsidy programs for personal profit – is also the source of his financial success.
ABC Learning Centres has aggressively expanded into jurisdictions where governments provide generous payouts to offset child care costs. Tens of millions of those public dollars have contributed to ABC profits, which rose 150 per cent last year alone to more than $70 million.
From Australia to New Zealand, the U.K. to the U.S., the formula has made Groves one of Australia’s richest people, wealthier even than Hollywood star Nicole Kidman.
A spokesperson for ABC denies the company has any plans to expand to Canada “in the near future.” …
But the Star found evidence that Groves is already here. Corporate records and interviews show that companies related to the ABC empire are setting up in Ontario, Alberta and B.C. The company fronting the expansion is 123 Busy Beavers.
Government support of daycares differs from province to province. In Ontario, the government provides subsidies to some parents, depending on need. The subsidy can be used at private or non-profit centres.
…. In Australia, before Groves came on the scene in 1988, a little more than one- quarter of that country’s 4,500 daycares were for-profit. That ratio has flipped in Australia, with almost three quarters of the daycares now private, for-profit centres. ABC is the largest chain.
Tricia Edgar, a spokesperson with the Ontario Ministry of Children and Youth Services, says big-box child care is not welcome here and that the province will not provide capital funding for companies such as ABC. But, she said, the province has no legal authority to keep ABC from setting up here.
In British Columbia, where more than half of child care is already private, a Texas-based company representing 123 Busy Beavers started making buyout offers to daycare operators in mid-September.
That’s around the same time the provincial government announced a $12.5 million capital fund to create new child-care spaces and invited, for the first time, for-profit operators to apply for the money.
Rita Chudnovsky, a member of the B.C. Coalition of Child Care Advocates, says ABC has a history of increasing fees and reducing quality wherever it has gone. And yet, the B.C. government is luring them here with public money, she says.
“We think (the province) put out the welcome mat for corporate child care,” she said. “The move to provide capital funds is a fundamental shift because it says public funds will go into privately owned assets. When we move to foreign- owned, for-profit operations interested in increasing profits it takes child care in British Columbia in a very different direction.”
B.C. government officials did not return requests for an interview.
In Alberta, the province with the greatest growth rate in Canada, about 65 per cent of the province’s daycare facilities are owned privately, and 35 per cent are non-profit.
Bill Moore-Kilgannon, executive director of Public Interest Alberta, says his group is “deeply concerned.”
“We’ve heard they’ve purchased 20 centres in Calgary and 10 in Edmonton,” he says.
In Australia, parent fees at daycares have risen 123 per cent while household income has only increased by 62 per cent, according to an Australian task force report.
To help compensate for those rising fees, government spending on child care subsides have skyrocketed.
Australian news reports say about 40 per cent of ABC’s revenue comes from government subsidies.
At the same time, some observers say quality child care has fallen.
A 2006 report by the Australian Institute, a national think tank, reported that 18 per cent of the 77 ABC workers surveyed said they wouldn’t send their children to the centre where they worked because of quality concerns including food, cleanliness, equipment and staff. That compares to 4 per cent of workers in community-based, non-profit operations.
The study also predicted that ABC would expand into Canada and Asia.
“Plans to introduce a comparable government subsidy scheme for child car in Canada make it the more likely destination,” the report says.
Lynne Wannan, convenor of Australia’s National Association of Community Based Services, toured Canada in 2005 warning Canadians against adopting an ABC- style approach to child care.
“Plastic grass, distant management, little parental input and millions of taxpayers’ dollars that could have led to real improvements in the quality of child care going into shareholder pockets,” is what Canadians can expect from big-box corporate ownership, Wannan says.
The Groves daycare empire has grown with remarkable speed in the past few years.
Recent purchasing raids into the U.S. and U.K. have made Groves’s kiddie care empire the largest in the world with some 2,400 daycares in its stable and a ticker tape value of more than $2.5 billion.
Corporate records show three ABC-related companies – ABC Acquisitions, 123 Global and 123 Busy Beavers – share a director named Donald Jones.
ABC Acquisitions and 123 Global, two companies that scout out international growth opportunities for ABC, share the same Brisbane address where Groves’s ABC Learning Centres was also headquartered until recently.
A report by Citigroup analysts last year reported a close corporate lineage between Groves’s ABC Learning and Jones’s ABC Acquisitions.
It says the acquisitions arm finds daycares appropriate for international expansion and then sells the properties to ABC.
“We believe the purpose of the ‘arm’s length’ arrangement is to enable the (daycare) licence to be categorized as an asset in (ABC’s) balance sheet,” the report concludes. “Once a decision is made to proceed on a centre, (ABC) are committed to acquiring the centre.”
The report also says ABC’s development team is looking to expand into Canada. …
In August, Groves and several other ABC executives incorporated a company called ABC Canadian Holdings in Brisbane, which lists ABC Learning Centres as the sole shareholder.
A Groves spokesperson said ABC Canadian Holdings “is a dormant company with no assets and no trading.”
Big-box day care could be the next trend in B.C., according to a Vancouver-based child-care advocacy group.
The Coalition of Child Care Advocates of B.C. released information last week that a foreign-based company was trying to buy up small day-care centres across the province.
“We are deeply concerned that community-based child-care providers throughout B.C. are being bought out by a foreign multinational corporation,” said Rita Chudnovsky, spokesperson for the coalition. …..
Sue McIntosh, manager of the Child Care Resource and Referral program, said she hasn’t heard of any of the 40-plus Greater Trail or Castlegar centres she supports being approached about a buyout.
“I am hugely concerned,” she said. “The quality of child care is going to go right down the drain. How can you make a profit on our children – our future?”
Family day cares are classified as for-profit, but they don’t make any money, she said.
“Big-box day care is going to put profits first.”
In Rossland, Leslie Paul is the chair of the Golden Bear Children’s Centre. She isn’t aware of staff at the centre being approached.
“But I have certainly heard about the issue,” she said.
Part of the push for big centres to move to B.C. is because the provincial government recently announced it was reinstating its major capital funding program for new child-care spaces to be developed and the criteria for who can apply has become much broader, Paul said.
Chudnovsky said the buyout offers started in mid-September, just two weeks before the provincial government announced the new $12.5 million capital funding, which is available to groups running for-profit programs. The new major capital funding has a Nov. 30 deadline for applications.
One Lower Mainland child-care provider said she received a buyout offer mid-October from Adroit Investments, a firm that lists 123-Global on all its correspondence.
“The buyout of my child-care centre could be completed in as little as three weeks I was told,” said Susan Harney. “Adroit Investments sent me purchase information forms and a non-disclosure agreement by email immediately after I was in contact with them, it was rather shocking,” she said.
Big, for-profit centres would have no connection to the community and no local accountability, she added.
Paul said she heard that nurses at the Kootenay Boundary Regional Hospital have been contacted by email.
“They were asked if there was a day-care centre at the hospital, would they use it.”
It is not clear if the query came from a large corporate group.
ABC Learning Centres Ltd., was founded in 1988 by Eddy Groves and is listed on the Australian Stock Exchange as a highly-profitable company that recorded net profits, after tax, of $52.3 million on total revenues of $293 million in 2005.
Child-care activities are calling on both the federal and provincial governments to provide more publicly-funded, non-profit quality child-care spaces, “Not some gigantic child-care warehouse operation,” Chudnovsky said.
But the real dilemma is that parents need choice, Paul said.
“At Golden Bear we are getting at least one call a day from parents wanting to get on our infant-toddler wait lists. Some parents who are still pregnant are applying.” ….
Paul is from the U.S. and is familiar with corporate child care, but didn’t have her children until she moved to Canada and so never used them.
“I know in the States there are lots of workplace and corporate child care centres,” she said. “Employers want to keep their workers happy and productive but it’s a hard situation in B.C. I wish parents could have choices and I would hate to see what we have now destroyed.”
ABC – Re: “Aussie day-care company eyes Calgary,” Oct. 24.
Kathy Graham of the Association of Day Care Operators of Ontario is completely off the mark in her comments defending ABC Learning Centres.
Graham says, “Whenever we have competition, that creates more choice — it increases the quality overall.” Sadly, this just isn’t how it works when it comes to ABC. Two points from the experience in Australia:
It was reported in the Australian newspaper The Age that in 2006, ABC took legal action against the state of Victoria to stop authorities from asking for details and documents relating to a series of alleged breaches in care standards within their centres.
This year in New South Wales, for-profit representatives on a government panel studying child-care quality swayed the government against recommendations to improve staff-child ratios. It seems to me this behaviour does not increase quality in any way.
The City of Greater Sudbury must consider restricting the spread of “big-box” private day-care centres in the community, say advocates of publicly funded, non-profit care.
The city needs a bylaw “addressing the multinational corporations making inroads into communities in southern Ontario and have already started approaching Greater Sudbury chid-care operations,” said Tracy Saarikoski, executive director of the non-profit Teddy Bear Day Care in Garson.
City Coun. Janet Gasparini brought the concern to council after learning in the past week that the largest day-care corporation in the world has made inquiries about possible opportunities in Greater Sudbury and other cities in Ontario, Alberta and British Columbia.
Private day-care centre operators in these provinces reportedly have been receiving letters from a company working for Australia-based entrepreneur Edmund “Fast Eddy” Groves. Groves heads ABC Learning Centres, a controversial private child-care corporation of about 2,400 day-care centres in several countries….
An association representing hundreds of private day-care centres in Ontario has indicated it doesn’t object to the incursion of the Groves empire into the province, suggesting such competition will be good for the system.
But advocates for most non-profit day-care operations hold a different view. They refer to research and reports from Australia concluding there is a lower level of care at the big-box day-care operations in that country, even though they have received tens of millions of dollars in public subsidies.
Such large-scale corporate operations provide “child care that is characterized by high fees, inaccessibility and of poor quality,” said Saarikoski, who also is a regional representative of the Ontario Coalition for Better Child Care.
Greater Sudbury and other communities should follow Toronto’s lead and prohibit further expansion of private day-care services, she said.
“I look forward to the day that all municipalities grandparent existing commercial child care and will only expand the public and non-profit sectors, as Toronto did,” she said in a letter to The Sudbury Star.
Saarikoski said she was heartened to see a motion introduced at Wednesday’s city council meeting by Ward 11 Coun. Gasparini.
Gasparini’s motion raises concerns over “child-care services operated by large, multinational corporations” that may not provide the same quality of care as publicly funded, non-profit organizations. Those concerns are shared by non-profit day-care advocates, as well as a city council advisory committee, the Children First Roundtable, Gasparini notes.
“Research indicates that non-profit programs where parents are involved in decision-making offer the best-quality child-care services,” her motion states.
The motion, to be put to a vote at the Nov. 14 council meeting, calls for city staff to investigate the concerns over large-scale, for-profit day care and to present a report to council. The report should include recommendations for council to consider with regard to dealing with large corporate day-care companies should they attempt to establish operations in the city, the motion states….
The legislation “would limit expansion to the non-profit sector only, stopping big-box corporate child care in its tracks,” Saarikoski said….
Meanwhile, an Ontario government official has said that while the province can’t outlaw big-box day-care operations, it would not provide capital funding for such facilities.
Ms. Olivia Chow (Trinity—Spadina, NDP):
Mr. Speaker….One would think that Canada would be investing in early childhood education and yet that is not what I see. …
…. there is a large turnover in child care workers. The quality of early learning and child care is not improving. Here in Canada we are at the bottom of the heap. We have the lowest dollar amount of investment in all of the OECD countries. It is a shame that we are at the bottom of the heap.
Not only is that a problem but there is a very huge multinational corporation involved in child care, called ABC Learning Centres, from Australia. It is organized and owned by a person nicknamed Fast Eddie.
The corporation has seen an opportune moment. It has a different name in Canada, 1,2,3 Busy Beaver, or something like that. That corporation is beginning to take over a lot of the child care operations in Canada. It is trying to buy them up. We are beginning to see big box child care in Canada. Why is that a problem? In Australia, for example, since the big box child care operation has come onto the scene, non-profit child care centres, mom and pop operations are being taken over by the company ABC Learning Centres. As a result, the wages and quality of service have gone down.
In Canada we need to invest in early childhood education from the funding from taxes. We need to have a legislative framework in the form of Bill C-303 to say that the kind of services we are developing in Canada have to be non-profit. The 10 years of corporate tax cuts represent at least $60 billion. Each year we are losing $13 billion that could be invested in early childhood education.
