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Operating Funding Model

Last updated on June 13, 2025

The Operating Funding Model is the most recent funding model being tested under the $10 a Day ChildCareBC program.

This funding model is designed to create a consistent and reliable framework for child care providers, with standardized fees and services while recognizing and accounting for diversity within B.C.’s child care sector. At its core, it is intended to provide stable, fair and equitable funding for providers while making quality care affordable for families.

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About the Operating Funding Model

The Operating Funding Model was developed as a scalable funding model that distributes public funding equitably, effectively, and reliably. 

It was launched in winter 2023 with a small group of sites already in the $10 a Day ChildCareBC program. Since then, the province has continued to evolve and refine the model, informed by feedback from the participating sites, sector input, and program reviews.

The model is intended to create fair and equitable funding for child care providers by standardizing child care fees and services. This means providing a stable, predictable and transparent level of funding to participating providers, while also recognizing and accounting for diversity within B.C.’s child care sector.

The Operating Funding Model reinforces child care centres as community assets and keeps public investments focused on accessibility rather than profit. The model places reasonable limits on excess revenue for centres so that child care remains driven by the needs of families.

Funding for child care providers

Under the Operating Funding Model, funding is calculated based on several different factors, including the centre’s licence and program type(s), operational spaces, weeks in operation and operating hours/days. Funding amounts are informed by the costs reported by licensed child care providers in B.C. through the annual Provider Profile Survey and data collected from existing $10 a Day ChildCareBC program participants and Aboriginal Head Start child care providers.

Funding is delivered across five funding categories. Each funding category includes money for specific uses:

  • Human resources
  • Programming
  • Administration
  • Operations
  • Facility costs

The funding is divided into categories so the ministry can see how sites are spending money. This provides important information to understand where funding, or the model itself, may need to be adjusted. The model includes flexibility for providers to move funds between categories. To support ongoing learning and improvement of the model there are some instances where an explanation and ministry approval is required to transfer funds between categories.

 

Cost eligibility

Funding amounts are associated with the centre’s licence type(s), operational spaces, weeks in operation and operating hours/days. Funding amounts are informed by the costs reported by B.C. child care providers in the annual Provider Profile Survey, data collected from existing $10 a Day ChildCareBC program participants and Aboriginal Head Start child care providers.

Instructional Human Resources Funding Envelope

  • Covers the cost of eligible human resources for the delivery of child care services
    • Wages and paid time off (based on median wages in the province), statutory and extended benefits (based on 18% of funding provided for wages and paid time off)
    • 15 hours of professional development and $250 for professional development expenses per eligible full-time employee
    • Base funding is provided to exceed staffing requirements outlined in the Child Care Licensing Regulation to support staff coverage for breaks during the day and paid time off (e.g. vacation and sick days)
  • Ineligible costs include staff gifts. Also excludes employees who provide administrative, janitorial or similar services, which are provided for under other funding envelopes

Programming Funding Envelope

  • Eligible costs associated with delivering early childhood programing that includes:
    • Food for snacks, supplies, small equipment, activities, cultural and inclusion programming materials and health and safety supplies
  • Ineligible costs include:
    • Proprietary programming fees and materials, licensing, training, certification, and salary premium costs

Administrative Funding Envelope

  • Covers the cost of non-instructional human resources and administrative costs not directly associated with delivery of child care services, based on learnings from the Provider Profile Survey.
  • Eligible administrative costs include:
    • Wages for employees working at the child care centre that are not directly proving child care services
    • Professional dues, licensing fees, legal expenses (pre-approved by the province, related to business operations), liability Insurance, communications and marketing
    • Mileage (funded at approved rate) for business related travel for the operations of the business, such as grocery shopping for food covered. Costs for transporting children are supported under the Transportation Programming Allowance
    • Office supplies or other overhead costs such as accounting expenses, bank charges, recruitment expenses, financial reporting/accounting/audit expenses
  • Ineligible administrative costs include:
    • Bad Debts (e.g. unpaid Parent Fees), private loans (except for eligible mortgages funded under the facility funding envelope and car loans funded under the Transportation Programming Allowance), capital asset amortization/depreciation costs, business related meals/entertainment, fundraising costs, vehicle rental

Operational Funding Envelope

  • Covers costs associated with operating and maintaining the child care centre, excluding rent, lease or mortgage costs
  • Eligible operational costs include:
    • Monthly or annual maintenance and minor repairs
    • Property insurance, third party janitorial services, utilities, garbage removal and upkeep
    • Office furniture and equipment such as laptops, tablets, cell phones used for the operation of the business, desks, chairs, tables, etc.
  • Ineligible operational costs include:
    • Equipment purchases (capital assets)

Facility Funding Envelope

  • Covers eligible costs associated with the rental, lease or mortgage costs (only in the case of Indigenous governing entities or not-for-profit) paid to a third party at arm’s length for the child care centre, provided on a cost pass through basis up to a maximum eligible amount as determined by the province.
    • Indigenous governing entities are exempt from the requirement that Rent/Lease agreements be with a third-party at arm’s length
  • Eligible facility costs include:
    • Rental or lease costs at third party at arm’s length
    • Mortgage costs (principal and interest) only if the participant is a not-for-profit or an Indigenous governing entity
    • Strata Fees, property taxes
  • Ineligible facility costs include:
    • GST on rent/lease costs.
    • Mortgage payments if the participant is a corporation, partnership or sole proprietor

Participating in Operating Funding Model testing

Where possible, providers are transitioned to the Operating Funding Model – as funding agreements for existing $10-a-day centres are renewed and as new providers join the $10 a Day ChildCareBC program – to reflect the most current funding approach. This helps maintain consistency for participating providers and the Province’s goal of expanding access to quality, affordable and inclusive child care for all families.

Providers must operate under the funding model indicated by their funding agreement to participate in the $10-a-day program. In B.C., most child care providers are independent business owners. Providers set their own program policies and determine their business model and budgets, including whether to participate in ChildCareBC funding programs.

Participating providers can voluntarily choose to leave the $10-a-day program by providing notice according to their funding agreement. While the ministry recognizes that the program may not be a fit for all child care providers, to date, there has only been one provider who has withdrawn from the $10 a Day ChildCareBC program.

If a provider opts out of the program, their clients (families) also return to their provider’s existing business model. Families seeking $10-a-day child care can find participating centres and supports through local Child Care Resource and Referral Centres and the $10 a Day ChildCareBC web page.

Wage grid and benefits

Early childhood educators are vital to providing care, connection and guidance to children. The Operating Funding Model wage grid for early childhood educators and other members of the child care workforce represents a floor, not a ceiling, and is a crucial step towards addressing compensation pressures in the child care sector. Through testing the Operating Funding model, the Province is continuing to learn and gather feedback on how compensation can be supported for the sector.

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Wage grid

The wage grid establishes minimum pay rates for specific child care roles in $10 a Day ChildCareBC Operating Funding Model centres. The funding providers receive is higher than these base wages, and there is an additional top-up amount to further support supervisory and leadership roles. This flexibility allows providers to offer higher wages to recognize staff with long service, specialized certifications (Infant Toddler or Special Needs Educator certification) and other key responsibilities.

Facilities in the Operating Funding Model are not eligible for the Early Childhood Educator Wage Enhancement. This is because funding through the model should enable providers to pay their child care staff wages that are similar to current wages that are inclusive of the wage enhancement.

 

Benefits, paid time off and professional development

As part of the broader Operating Funding Model compensation package, there is additional funding for benefits, paid time off and professional development. Providers are funded to enable their child care staff to take paid time off for illness and vacation and to attend professional development to enhance their knowledge and skills and engage in ongoing learning.  

The 18% benefits rate funded by the Province covers all required employee deductions, such as Canada Pension Plan and Employment Insurance. The benefit rate also funds the employer’s WorkSafe premium and provides funding for additional benefits. Child care facilities may use this additional funding for extended benefits (such as extended health, dental, retirement savings plans) according to the needs of their staff.

Staffing levels

Staffing under the Operating Funding Model is informed by, but not limited to, the requirements of the Child Care Licensing Regulation. Additional funding is layered onto the base requirements to support factors like staff breaks and time off. The total amount available varies based on each provider’s circumstance, such as hours of operation, weeks open per year, type of child care program(s) provided and number of child care spaces.

This approach allows providers to be flexible in their staffing practices, giving them discretion in structuring their teams, compensating staff and tailoring their staffing model to best support their operations while maintaining standards of care.

Reporting

Operating Funding Model providers are required to regularly report to the ministry and to complete the annual Provider Profile Survey. Information reported by participating providers helps the ministry understand trends in licensed child care in B.C. and assists with the model’s policy and program development.

Financial oversight

$10 a Day ChildCareBC centres, regardless of which model they are funded through, are subject to annual financial reviews. Providers must submit annual financial statements for the ministry’s review to ensure that their funding is adequate, and any remaining funds do not exceed the allowable surplus amounts.

Additionally, funding recipients may be audited by the Verification and Audit Unit. The team looks for administrative errors and overpayments and reviews for compliance with program policies, requirements and obligations. Questions about the audit process can be directed to the Verification Audit Unit team.

Previous funding models

During the first phase of the $10 a Day ChildCareBC program, the initial group of providers were funded under the Revenue Replacement model. After gathering feedback and data in this initial phase, the ministry introduced a second model called the Eligible Expenses model.

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Revenue replacement model (2018-2025)

The Revenue Replacement model was always intended to shift over time, based on learnings from the initial sites. As of spring 2025, all $10-a-day programs previously funded under the Revenue Replacement model have transitioned to updated funding models. In many cases, these providers received a budget increase to help them through the transition. Some providers who were previously receiving funding for expenses that are now considered ineligible for public funding may have seen a drop in their funding levels.

 

Eligible expenses model (2021-current)

The Eligible Expenses model was introduced in 2021 when the province expanded access to the $10-a-day program. Under the Eligible Expenses model, providers are funded for eligible operational costs.

This model was intended to help identify specific costs that the ministry would fund, as well as those that were not eligible for provincial funding. Certain expenses, such as elective programming for extra-curricular activities or borrowing and lending costs for privately held assets, were deemed ineligible under this model.