CHILDCARE giant ABC Learning Centres has set up a Canadian company despite claiming it has no immediate plans to expand there.
ABC Canadian Holdings was established this August and its directors include ABC Learning co-founder Eddy Groves, owner of basketball’s Brisbane Bullets.
The giant childcare company – which has more than 2200 centres in Australia, New Zealand, the UK and US – is Canadian Holdings’ sole shareholder.
“It is a dormant company with no assets and no trading,” ABC’s spokesman said yesterday.
He declined to comment on why it was created. But he repeated comments in The Courier-Mail yesterday – ABC had no plans for operations outside its current four countries “in the near future”.
The revelations come as Canadian organisations protest against a private childcare push linked to Australians.
The Canadian Union of Public Employees said it would be “fighting the
sell-off of childcare and the expansion of privatisation of childcare
services”.
The Toronto Star had reported ABC was eyeing Canada via Ontario-based 123 Busy Beavers Learning Centres. But ABC has said 123 companies were separate businesses. 123 Busy Beavers lists Don Jones and Graeme Wilkie as executives.
They share the same names as directors of privately owned and Brisbane-based Busy Beavers Investments.
That business’s Murarrie address is the same as some ABC Childcare Centres. It also was ABC’s former registered office.
Mr Jones is also a director of 123 Global companies. 123 Global says it
provides “state-of-the-art childcare facilities” with ABC and Busy Beavers being key clients.
ABC and 123 Busy Beavers share other links.
Its national operations manager is Marnie Testa, who is understood to have worked for ABC until last year….
A large, international child care corporation appears to be behind an attempt to introduce big-box style facilities to Calgary’s day-care industry. …
At least one large provider in Calgary is believed to have sold some or all of its facilities, effective Nov. 1, to a company called 123 Busy Beavers Learning Centres, according to several sources.
Other local operators said they have been approached, but declined to comment further.
Busy Beavers has been linked by at least two media outlets to Australian-based ABC Learning Centres, which owns 2,200 centres in Australia, New Zealand, the United Kingdom and the United States and is the largest child care provider in its home country. …
On Tuesday, ABC officials in Australia denied they had ambitions to expand into Canada, according to the Brisbane Courier-Mail.
ABC is now second-largest child care provider in the United States, according to a profile compiled by not-for-profit child care advocates in Australia and Ontario, and distributed here by the Edmonton-based Public Interest Alberta.
“What we have seen in the past is when these larger corporations come in to a community, they will often buy up enough to allow them control of the market,” said Bill Kilgannon of Public Interest. “Once they have control, they will wield influence on child care policy.”
When ABC started operating in Australia, about 70 per cent of child care centres were non-profit. Now, more than 70 per cent are commercially operated, according to Public Interest.
Phone calls to Busy Beavers requesting an interview were not returned, but when asked if the company was moving into Edmonton and Calgary, the call taker on the company’s information line said, “I know Calgary, for sure.” ….
A report released in 2006 by the Australian Institute, a think-tank, concluded there were “a number of systemic barriers to provision of high-quality care at ABC Learning Centres.”
It said the centres’ food budgets were low and cooks poorly paid, leading to poorer quality food for children than provided by non-profit centres. …
In Alberta, accredited private operators are able to access a subsidy for staff wages worth up to $4.14 per hour.
About 65 per cent of the province’s day-care facilities are owned privately, and 35 per cent are non-profit.
“Our role is to ensure any new owner coming in meets the standards,” said Jody Korchinski, spokeswoman for Alberta Children’s Services.
In Ontario, where 78 per cent of the industry is run by non-profit organizations, the government appears to be less receptive to commercialization of day-care facilities.
“Our focus is on quality, not quantity,” said Tricia Edgar, spokeswoman for Ontario’s Ministry of Children and Youth Services.
Big box child care could be coming to BC if an Australian company gets its way. 123 Global has been approaching community based programs across the province.
Child care programs in Alberta and Ontario have also been contacted despite concerns from child care advocates who say they don’t want to see BC’s daycares turned into foreign-owned, big box warehouses.
123 Global has received flack from several countries for monopolizing child care and providing minimal services to cut costs.
Susan Harney owns a daycare herself, and says despite a shortage of facilities, this isn’t the answer. She says we need to solve the crisis of not enough affordable spaces for families but bringing in this kind of “warehouse child care” is not the answer.
But for parents desperate to find a place for their kids, at a price they can afford, a new option might just be what they’re looking for.
The Toronto Star
Letters — re: ‘Big-box’ daycare coming to Canada
Two years ago, an Australian child-care expert came to Canada to warn us about big-box centres, based on that country’s experience with corporate child care. Australia’s situation is characterized by parents paying high fees of $500 per week, poor access if you live outside of big cities or have children with additional needs, and constant pressure by corporate child-care providers to lower standards. Is this what we want for Canada’s children?
We do have a remedy on the horizon in Bill C-303: the Early Learning and Child Care Act. This legislation, which is slated for third reading this fall, would only permit the non-profit sector to expand – stopping big-box corporate child care in its tracks.
If this legislation doesn’t pass, we will be stuck with child care that is characterized by high fees, inaccessibility and poor quality. And shareholders will be making huge profits from our tax dollars.
Elizabeth Ablett, Executive Director, Ontario Coalition for Better Child Care, Toronto
—–
Your important article on big-box daycare quotes a spokesperson for Ontario’s Ministry of Children and Youth Services as saying there will be no capital grants for for-profit centres. Unfortunately, this completely misses the point. The main issue is not capital grants, but operating and parent fee subsidies for child-care spaces.
The business of ABC Learning Centres is not early childhood learning; it is subsidy harvesting. This multinational corporation is after the steady stream of profit that comes from the difference between the cost of offering low- quality services and the amount of the ongoing government subsidy.
If the Ontario government hopes to prevent Big Box child care from taking over the province’s child care system, it must end operating subsidies to commercial child-care services, with grandparenting for existing owner-delivered services.
Barbara Cameron, Associate Professor, School of Social Sciences, York University, Toronto
—–
If big chains get a larger foothold in our city, we will inevitably be pressed to lower quality standards and reduce the already low salaries and benefits for child-care staff. Recent revelations about inferior care in the predominantly for-profit nursing-home sector in Ontario should serve as a wake- up call when it comes to child care.
In Toronto, we have grandparented existing commercial child care and will only expand in the public and non-profit sectors. The province should require all municipalities to do the same. However, the policy must be supported by new funding to encourage development of non-profit child care.
Janet Davis, Councillor, Beaches-East York, Toronto
—–
It is a well-known fact that staff costs represent 80 to 85 per cent of running a child-care centre. The other 15 to 20 per cent is used for food, supplies, rent and equipment. So where can the profit be made? It can only occur if operators drive down wages or drive up fees.
The Ontario government can change the law to prohibit future licensing of commercial child-care operations. Legislative change takes time, but for now, the government can place a moratorium on issuing new licences.
Sue Colley, Toronto
—–
It is common business knowledge that everything has a price, yet it is shocking to know that our children are now for sale. Daycare in Ontario is going private, and who is going to benefit? It certainly won’t be the children, if the goal is profit over care and quality. Big-box stores are great for everything from clothing to lumber, yet children must not be part of this philosophy.
Vancouver – The British Columbia Government and Service Employees’ Union (BCGEU/NUPGE) has expressed concern that an Australian-based multinational company is trying to corner the market on child care in the province with an offer to buy for-profit child care centres.
Last week the Coalition of Child Care Advocates of B.C. (CCCABC) released information showing that 123-Global is making offers to private operators across the province.
The company is a Canadian subsidiary of A.B.C. Learning Centres, an Australian-based firm that has bought up and now operates child care centres in Australia, U.S., Britain, Hong Kong, Indonesia and other countries. The parent firm earned profits of $123 million Cdn ($143 million Australian) last year and, in the space of one year, purchased 1,100 child care centres in the U.S. It does not currently operate any centres in British Columbia.
Serious questions
“This raises a number of questions. Where is the provincial government headed with its child care policies and are they in conversations with private corporations that would encourage this expansion?” the BCGEU asks.
“The government has pledged ongoing support for families and child care advocates have long argued that public, non-profit child care is the best guarantee for quality, and have urged the provincial government to expand this system.”
Controversial big-box child-care could be a reality in B.C. if an Australian company has its way.
Child-care advocates are sounding the alarm since learning an investment firm called Adroit Investments LLC has contacted local child-care operators in a bid to buy them out.
The Coalition of Child Care Advocates of B.C. traced the company back to 123-Global and A.B.C. Learning Centres, a private Australian child-care corporation that’s gotten flak in several countries for monopolizing child-care and providing minimal services to cut costs.
Rita Chudnovsky, the coalition’s spokesperson, says that the company has now set its sights on B.C.
“This is not the kind of child care we need,” she said. “Everywhere [A.B.C.] has gone, it’s raised parent fees and left communities with specific needs underserved. They only care about the bottom-line. Our children shouldn’t be used to generate profits.”
Chudnovsky says child-care operators began receiving takeover bids in mid-September, just before the provincial government announced it would begin to subsidize private child-care providers.
“We have trouble believing this is a coincidence,” she said. “We’re still waiting for the government to respond.”
Meanwhile, some child-care providers approached by Adroit wonder if they will be able to compete.
“We’ve known about them for years,” said Susan Harney, operator of Country Grove Children’s Centre in Langley. “They build up what they call critical mass and put other programs out of business.”
Harney has already rejected Adroit’s advances and wants others to do the same. “Our child-care system is not for sale,” she said. “The focus needs to be on providing good service, not making a profit.”
A phone call to 123-Global was not returned by press time.
CHILDCARE giant ABC Learning Centres yesterday distanced itself from Canadian media reports that it was eyeing expansion in that country.
This came as it emerged a series of international businesses linked to ABC, which caters for children aged from infants to schoolgoers, have been established….
The businesses, registered this year, were 123 Global Holdings with different organisations named for regions including Australasia, China, Europe, North America and Japan.
The Toronto Star reported ABC was eyeing Canada through a business it named as Ontario-based 123 Busy Beavers Learning Centres.
Letters were sent out in September asking daycare operators if they wanted to sell, The Star reported. The letter read: “We represent a large financial/childcare group purchasing childcare centres across Ontario”.
But ABC yesterday said the 123 companies were separate businesses.
“ABC Learning has no plans for operations in any country in the near future outside of Australia, New Zealand, the US and UK,” a spokesman said….
It describes ABC as a “key client” in Australia, as were two ABC subsidiaries in the UK and US….
Citigroup analysts last year pointed out Mr Jones was a director of ABC Acquisitions, which co-ordinates centre developers and sellers for ABC Learning Centres.
While then based at the same address as ABC Learning Centres, it was designated a separate entity to the ABC group and listed only two shareholders – Mr Jones and a Heather Jones….
VANCOUVER – The BC government should act quickly to block any provincial funding that might subsidize a foreign-based corporation attempting to buy up community-based child care providers across BC, says the Coalition of Child Care Advocates of BC.
The call comes after the Coalition released information Friday showing that a foreign-based multinational corporation is sending letters offering to purchase private child care centres across BC. Since then the Toronto Star newspaper has reported that child care centre owners in Ontario and Alberta are also being approached to sell their operations.
“BC 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,” says Coalition spokesperson Rita Chudnovsky. “Public money should be used to expand non-profit quality child care centres, not see BC child care turned into a foreign-owned, big-box warehouse business.”
Chudnovsky said the provincial government needs to move quickly to ensure that BC community-based child care centres are not swallowed up by ABC Learning Centres of Australia, whose corporate partner 123-Global is making the purchase offers.
Coalition chair Susan Harney, who owns a child care centre, said government has no time to waste if it wants to preserve community-based child care. She contacted 123-Global last week and learned that a buyout of her centre could be completed in as little as three weeks.
“The provincial government needs to be clear right now that it will not let public money facilitate the takeover of BC-owned child care centres or subsidize profits resulting from the sale of those centres to a foreign-based corporation,” Harney said. “This is happening right now and the government has to take action or we will lose any local accountability for child care in this province.”
The buyout move could impact over 24,000 children in BC who attend privately-owned child care centres – about half the centre-based child care spaces in the whole province, Harney said.
The Coalition is also deeply concerned about the track record of ABC Learning Centres and 123-Global, which describes itself as a “growth engine” for ABC and a partner to corporate child care operations in the United States, Britain, Japan and China, says Coalition board member Mab Oloman.
“ABC Learning Centres in Australia has garnered a lot of media coverage over child care quality issues but one thing is clear – they make enormous profits,” Oloman said. “BC taxpayers and parents need to tell the provincial government we don’t want to subsidize the profits of any multinational child care corporation.”
Two weeks ago, we issued an Action Alert about BC’s decision to make major child care capital funding available to private companies. We predicted that this change in public policy could make BC attractive to multinational large child care chains.
Since that time – our worst fears have been confirmed. The Coalition of Child Care Advocates of BC has learned that a foreign-based corporation is trying to take over community-based BC child care providers.
At a Media Conference on Friday, Oct. 19 we released information showing that 123-Global is offering to buy private child care operations across the province, and proposing a short, three week, timeline to complete a deal.
The offers come from Adroit Investments LLC, a firm which lists 123-Global on all its correspondence. 123-Global is an investment firm that is described as a “growth engine” for and partner of A.B.C. Learning Centres, an Australian-based multinational child care corporation with corporate child care operations in the United States, Britain, Japan and China.
We have posted correspondence and documents from Adroit Investments about the purchase process on our website. The Centre Information that operators must complete to get the process started paints a clear and alarming picture. While potential sellers are asked about their building, their licensed capacity, their current fees and wait lists, there is not one question about the community served, the staff who work in the program or about children with extra support needs.
That’s because foreign warehouse style child care operations care about property and profits – not about people. Their primary objective is to generate profits for their international shareholders.
We cannot help but wonder if there is a connection between this unprecedented buy out offer and the government’s decision to provide capital funds to for-profit child care in BC.
The Coalition of Child Care Advocates of BC strongly believes that taxpayers should not subsidize shareholder profits. We believe that multinational companies should not get government handouts while they buy out community-based child care. Selling off our child care to foreign ownership is not the solution to BC’s child care crisis.
The solution is publicly funded, high quality community owned and controlled child care – not gigantic child care warehouse operations.
That is why the Coalition of Child Care Advocates of BC calls on the BC government to
assure families that BC child care will meet community not shareholder needs
assure taxpayers that public funds will go to BC children not profits.
Make your voices heard. Say NO to foreign control of community-based child care in BC.
Tell the government that BC child care is NOT FOR SALE!
Join us on Friday, Nov. 16, 7pm at SFU Harbour Centre in Vancouver, to speak out against the corporate child care take over and speak up for real solutions.
Stay tuned to this website for information and actions.
The largest daycare corporation in the world – often criticized for cutting care to raise profits – is bringing its controversial form of big-box privatized child care to Canada.
Nicknamed “Fast Eddy,” Australian-based entrepreneur Edmund Groves, who holds Canadian citizenship, is behind a move to purchase daycares in Ontario, Alberta and B.C.
Form letters, written by Texas businessmen fronting the Canadian expansion, have been arriving in the mailboxes of dozens of private daycare operators asking if they want to be evaluated with a view to selling.
It’s all part of a rapid global expansion by Groves’ ABC Learning Centres, which last year added about 1,000 U.S. centres to its empire.
“We represent a large financial/child care group purchasing child care centres across Ontario,” the letter reads. “Are you ready to see what your business is worth in today’s market? The process is simple and all information is confidential … If the centre meets our criteria we will make you an offer.”
Groves … has seen his company grow from a single centre in 1988 to a $2.2 billion (all figures in Canadian dollars) kiddie care kingdom operating 2,400 daycares on three continents. …
The Ontario day care market is a big target. There are 4,400 licensed daycares, with about one-quarter of them for-profit centres. The letters from the Texans say only for-profit daycares are of interest.
Groves’ meteoric rise has drawn criticism from numerous corners.
The Sydney Morning Herald published a story about Groves with the headline: “Cradle Snatcher.” Last year, Labour MP Michael Danby attacked Groves in federal parliament, saying the daycare king has become rich by “milking government (child care) subsidies.”
In a 2006 report by the Australian Institute, a respected Australian think- tank, researchers said poor food quality and cost-cutting have compromised quality even as ABC has amassed a fortune from public child care subsidies given to parents.
The report was based on a survey of employees at daycares across Australia. The report singled out ABC, saying that despite an estimated $172 million in government subsidies, the daycare giant fell short in most areas of quality care when compared to community based, non-profit centres.
The report said the chain did not always serve nutritious food (one staffer interviewed called the food “atrocious”); did not always provide enough quality toys and equipment (toys often have to be purchased from an ABC-owned company); and hired only the minimum number of staff required by law. It notes daycare teachers “are required to do all the cleaning themselves as well as care for the children.”
The Star tried to interview Groves for this story but a spokesman declined. However, Groves recently told Forbes Asia that criticism of him was unfounded. His corporate website says ABC has “made high quality early childhood education programs available to all families. It’s our love for all children that has ensured our tireless commitment to providing them with the best possible start.”
Daycare leaders in Ontario are worried that Groves’ approach will harm an already beleaguered daycare system. A recent Star investigation showed lax Ontario government regulation; a shortage of public money for child care spaces; and a growing illegal daycare industry.
Ontario’s Ministry of Children and Youth Services isn’t rolling out the red carpet for big corporate daycare.
“We’re not in favour of commercialized, big box child care,” said ministry spokesperson Tricia Edgar.
“We don’t have a mechanism outlawing them. But no capital grants will be provided to for-profit centres. We favour accessible, affordable, quality child care.”…
On the other side of the debate, experts say ABC could lead to the “Wal- Martization” of daycare in Canada, cause more for-profit centres to be opened at the expense of non-profits, and may kill any hope for a publicly funded non- profit system.
“This puts us in another realm ” says Martha Friendly, a child care researcher in Toronto. “I don’t believe anyone here has ever thought of child care as a huge, money-making corporate system that removes it from the community and parent level.”
Andrea Calver, spokesperson for the Ontario Coalition For Better Child Care, agrees….
Groves, a Canadian expatriate, is one of Australia’s richest people… with a personal fortune of nearly $259 million.
The ABC chain generated operating profits of more than $70 million last year alone, up 149.9 per cent over the previous year.
In a few short years ABC has become one of the biggest child care providers in the U.S. and the U.K. in addition to Australia and New Zealand. Between 2004 and 2006, his centres have grown from about 23,000 child care spots to more than 112,000.
Canadian expansion plans are moving quickly, and quietly. Over the past four months, 123 Busy Beavers Learning Centres Inc., based in Oakville, have registered in Ontario, Alberta and B.C. The Canadian firm is a partner of 123 Global, an Australian firm that describes itself as ABC’s “growth engine.”
Letters asking daycare operators if they want to sell went out in September to centres ….
The approach comes from Adroit Investments, a U.S. mergers and acquisitions firm contracted by 123 Busy Beavers. Leslie Wulf, the Texas-based Adroit manager who signed the letters, referred the Star’s questions to 123 Busy Beavers executive Graeme Wilkie in Oakville. Wilkie did not respond to a request for an interview.
VANCOUVER – The Coalition of Child Care Advocates of BC warned today that a foreign-based corporation is trying to buy up community-based British Columbia child care providers right across the province.
And the Coalition is asking if a BC government decision to for the first time provide capital funds to for-profit child care businesses is connected to the foreign takeover.
Coalition representative Rita Chudnovsky says information released today by the Coalition shows that 123-Global is sending offers to buy private operators across the province, with a timeline of as short as three weeks to complete the deal.
123-Global is an investment firm that is described as a “growth engine” for and partner of A.B.C. Learning Centres, an Australian-based multinational child care corporation. 123-Global is also a partner of corporate child care operations in the United States, Britain, Japan and China, she said.
The buyout move could impact over 24,000 children in BC who are attending for-profit child care facilities – about half the child care spaces in the whole province, Chudnovsky said.
“We are deeply concerned that community-based child care providers throughout BC are being bought out by a foreign multinational corporation,” Chudnovsky said. “What we need in BC are more publicly-funded non-profit quality child care centres, not some gigantic child care warehouse operation.”
Chudnovsky says the buyout offers started in mid-September, just two weeks before the BC government announced a $12.5 million capital fund to create new child care spaces that will be available to for-profit operations.
“We want to know if there is a connection between an unprecedented buyout offer to all BC private child care operators and the government offering to subsidize for-profit child care operators,” Chudnovsky said. “We do not believe for-profit companies should have their revenue subsidized by taxpayers and we certainly do not want highly profitable multinational corporations getting government handouts while they takeover community-based childcare.”
Lower Mainland child care operator Susan Harney said she received a buyout offer this week from Adroit Investments LLC, a firm which 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,” Harney said. “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.”
Harney, a Coalition member, said she is worried that small, independent community-based child care centres could be taken over by a foreign company that has profits as its primary concern.
“I operate a child care centre because I love kids and enjoy taking care of them,” Harney said. “I am concerned that a company based in Australia that reports record profits every year wants to become the dominant child care provider in BC and one that will have no connection to our community and no local accountability.”
