Creation of childcare spaces still obscure
Cariboo Press -- Business Examiner Okanagan
25 Apr 2007

We have a new budget and the childcare issue, according to the Federal government, has been taken care of. The government will set aside $250 million to create new childcare spaces, giving the appearance that Prime Minister Harper and his government have carried through with their promise to help the "working family" by creating childcare spaces.

So how does it work?

According to the Child Care Advocacy Association of Canada the $250 million annual budget replaces previously committed and dedicated Federal funds for childcare services of $1.2 billion; resulting in a net loss of $950 million.

Details of how the money that is going into the plan was going to be used was held back, even from the industry groups that were supposed to be using the money.

This lead to harsh criticism. "The Stephen Harper government has shown a complete lack of commitment to universal child care with this budget," says BCGEU president George Heyman.

Information on the new childcare spaces was released with the 2007 Federal budget, but it was sketchy. A search of the Universal Child Care Federal government website gives vague answers with few details on how small, medium and large businesses are to create these spaces.

Kim Chernenkoff, manager of Daycare Connection in Kelowna describes the Federal budget as being about as clear as mud on the issue. "I've search the Internet for information and it's just not there," says an exasperated Chernenkoff. "I heard that MP Ron Cannan was speaking in town and I went out to talk to him on March 31st about this matter. He really didn't have much information either. He told me that the $250 million would be divided by province per capita and the provinces will then decide how to spend the money, either through childcare spaces or post secondary education. So now we find out the money isn't just for childcare spaces."

In a letter to The Business Examiner Cannan has revealed more details. The funding will be used to assist firms to set up day care spaces via tax credits for up to 25% of set up costs.

There are restrictions. The new spaces can not cost more than$10,000 each to set up and the business receiving the tax credit can not be in the business of providing day care for a profit.

This excludes existing daycares from expanding their operations or benefitting from the tax incentives.

The tax break can be used for depreciable equipment costs such as the building, furniture, computer or AV equipment and playgrounds, but not property or motor vehicles.

Nor can the money be used for salaries, supplies or other ongoing expenses. The tax benefits came into play as of March 19 and is eligible for the 2007/ 2008 taxation year.

Cannan also notes another $1.3 billion will be provided for daycare and education, but since the money will flow into directly into the province's general revenue the Federal government will have no control over how it is actually used.

In mid-April the Childcare Action Team from Kelowna is headed down to Penticton to the Ramada Inn to meet with Linda Reid, Minister for Children and Family Development to find out how the province intends to use the money.