The City of Toronto has hit a “bottleneck” for the child care spots it subsidizes, officials say, with increasing affordability driving up demand faster than new spaces can be built and brought online.
Annual budget documents show the city handed out 7,700 fewer child care subsidies than it had planned to in 2025, even as the wait-list for subsidies hit just over 16,000 children.
Toronto’s children’s services division administers child care subsidies on behalf of the provincial government, which sets the rules for the program. The subsidies are in addition to Canada’s national child care program, which has rates of $22 a day.
Depending on income, subsidies can take the cost below $22 a day, $12 a day or to zero.
“When you make something affordable, demand increases,” Shanley McNamee, general manager of children’s services in Toronto, told Global News.
“Hence, that’s what happened here in Toronto and across the province. As child care is more affordable, the demand increases. We have families waiting for fee subsidies, we have fee subsidies available, but the biggest constraint is spaces.”
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McNamee said Toronto has plans to bring more physical child care locations online and has advocated to the provincial government for more support. The city currently has 82,340 child care spaces in total.
A recent Ontario auditor general report found the number of children receiving the fee subsidy across the province was dropping, something attributed to growing competition for places.
“As parent fees for (Canada-Wide Early Learning and Child Care) have decreased and demand from families has increased, it has become more difficult for all families, including those who are eligible for the fee subsidy, to enroll in the program,” the report found.
Essentially, higher demand from everyone has made it harder to secure spaces. If kids who are eligible for the subsidy can’t find a place, then they can’t receive it and fewer subsidies are handed out.
A spokesperson for the education minister said the province would work with cities on the plan, adding that they are given flexibility on how to prioritize parts of the subsidy program.
“Our government is continually working with our municipal partners to ensure fee subsidies and special needs supports are delivered fairly and effectively, so children and families receive the help they need,” they wrote in a statement.
“To that end, we have increased funding for Every Child Belongs year over year, and will continue working with our partners so families can benefit from high-quality, affordable, and accessible child care.”
On the ground in Toronto, McNamee said staff were coming up against the lack of spaces. The city had planned to offer 30,700 subsidies for child care last year, but only managed to offer 23,000.
The city said the wait-list for a child care subsidy space is 16,020.
“The bottleneck is very real at the moment. I think that incrementally over the next 12 months, we’re going to see that change,” McNamee said.
“Growth takes time. Often a year or two or three years to catch up. So, at this point, the demand is greater than the number of spaces available.”
McNamee said there were “thousands” of new spaces in development, adding she was asking the province to offer more flexibility in the subsidy and capital plans for new child care.
Despite offering fewer subsidies this year, Toronto’s total child care funding is not under threat and will continue at the projected rates, both the city and province confirmed.
“The thing that we’re still waiting for in (children’s services) is the capital infusion coming from the other orders of government,” Toronto budget chief Shelley Carrol emphasized during a recent meeting.
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