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.
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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.
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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.
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.
