Auditor General Report: Canada-wide Early Learning and Child Care System
Photo by Arthur Tseng
In October 2025, the Office of the Auditor General of Canada published a report on the initial implementation of the Canada-wide Early Learning and Child Care system.
The report has been added to the CRRU Research, policy & practice Online Document Catalogue and a summary is available here.
The summary of the report notes:
Overall, Employment and Social Development Canada supported provincial, territorial, and Indigenous initiatives to improve early learning and child care in Canada. Most regulated early learning and child care spaces had become more affordable since 2021 in part because of federal funding.
We found that as of March 2024, provincial and territorial governments reduced the average out‑of‑pocket fees for regulated child care spaces that received federal funding to approximately $16.50 per day across Canada. The target is to reach an average of $10 per day by March 2026. As of March 2024, 5 provinces and 3 territories had already met this target.
The department’s 5‑year targets included not only lowering daily fees but also increasing the available number of regulated early learning and child care spaces by 250,000. However, over 3 years, we found that a little more than 112,000 new spaces had been created.
Not only are fewer spaces being created than anticipated, but those spaces may also not be equitably accessible to diverse or vulnerable families. The department did not collect sufficient information to analyze whether the implementation of provincial and territorial plans would provide equitable access, despite that objective having been set out in funding agreements.
The department also lacked information to provide timely or comprehensive reports. For instance, it could not report on progress on initiatives for Indigenous early learning and child care, such as facility renovations or repairs. The department also had difficulty evaluating the performance of provincial and territorial governments, as it did not have comparable information. These gaps in data need to be addressed for the department to better understand whether the system is both financially sustainable and meeting the needs of families in Canada.
The report highlighted three key findings:
According to Statistics Canada, there were more than 2.2 million children aged 5 years and under in Canada in 2021. As of early 2022, a little more than half of these children were in some form of child care, at an average cost of $31 per day for full‑time care.
In the 3 fiscal years ending March 31, 2024, provincial and territorial governments spent $12 billion of the $15 billion in federal funding provided through funding agreements for early learning and child care initiatives. Indigenous partners spent $1.9 billion on initiatives, which was nearly all of the $2 billion available through various federal programs and initiatives.
Employment and Social Development Canada was more than 4 years behind on reporting to the public about the results of the Canada‑wide program through national progress reports. Recent legislation added requirements for the Minister of Jobs and Families, who is supported by the department, to prepare annual reports on progress.
In a review of the report, childcarenow.ca commented:
A performance audit released by the Auditor General of Canada on October 21, 2025 has concluded that Employment and Social Development Canada (ESDC) fulfilled its responsibilities in relation to the first three years of the Canada-Wide Early Learning and Child Care program but says “the department did not sufficiently assess whether federal funding met objectives to support diverse and vulnerable and families or met objectives to support Indigenous early learning and child care.”
The Auditor General’s report also says “the department’s reporting to the public about the programs’ results and outcomes was not timely or complete.”
The reports highlighted recommendations were as follows:
Employment and Social Development Canada should work with Indigenous partners to complete the implementation of the performance measurement plan to support timely and comprehensive reporting on outcomes for Indigenous early learning and child care as part of the Canada‑wide system.
Employment and Social Development Canada should work with provincial and territorial governments to obtain comparable performance information to accurately compile results and effectively assess outcomes of the Canada‑wide early learning and child care system.
Employment and Social Development Canada should report annually to the Canadian public about federal investments made in respect of the Canada‑wide early learning and child care system and the progress being made toward objectives.