Financial Subsidies and Funding for Child Care

Work and Family Provisions in Canadian Collective Agreements

<< Workplace Child Care Facilities | Table of Contents | Joint Committies for Child Care >>

B. Financial Subsidies and Funding for Child Care

Providing subsidies and funding for child care is one method of helping employees defray the cost of child care services, which can be a serious barrier to accessibility. According to Statistics Canada data extracted from the 1997 census, child care expenses represent, on average, 4.5% of household expenditures¹. The actual cost of child care usually varies between $90 and $125 per week per child. In some cases, the costs can be as low as $25 (i.e. in Quebec’s $5/day system) or as high as $267 per week per child². Providing child care subsidies helps employers retain the services of skilled workers who might not otherwise remain in the labour force, while having the added advantage of being less onerous in financial and administrative terms than the establishment of a day care centre. Some employees may also prefer to have the option of selecting how and where child care will be provided for their children. Financial subsidies may therefore give them more flexibility in addressing their individual needs and preferences.

Provisions included in collective agreements generally cover two different circumstances: general child care subsidies and reimbursements for child care expenses incurred under special circumstances, such as training and overtime work.

General subsidies for child care

Some agreements provide for the creation of child care funds. These funds can usually be used for a variety of purposes, including the establishment and operation of child care centres. But they can also be used to provide subsidies to employees or directly to service providers.

The highly publicized agreements negotiated by the CAW and the big three automakers include a substantial child care assistance program. It provides employees with a subsidy to cover part of their child care expenses for dependent children. An innovative aspect of this clause is that an amount of money is set aside to negotiate an extension of hours with community child care providers to accommodate shift workers.

The Daimler-Chrysler agreement provides as follows:

(00881)

The parties agreed that arrangements may be made to finance the program by using available funds from the Special Contingency fund up to 6 cents ($0.06) per straight time hour worked during the term of the Agreement.

The parties further agreed that the specific child care related uses of such funds will be mutually agreed upon by the Company and the Union.

To address these needs, the company will:

Provide a subsidy of $10,00 per full day of childcare for dependent children, age 0 through 5, that is:
- Licensed under the Day Nurseries Act
- Registered as a non-profit or co-operative
For half day care, the company will provide a subsidy of $5.00 per day
The benefit will apply equally to all licensed, non-profit childcare centres and services, including in-home care and the CAW Windsor Centre.
The benefits will be capped at annual maximum of $2,000.00 per year, per eligible child.
In no circumstance would the company pay more than 50%
The National Union will work with existing licensed non-profit childcare centres and the services in an effort to extend their service to CAW members, such as for extended hours to cover shift work. (This does not include any bricks and mortars or new construction.) During the life of this Agreement, up to $150,000 can be used from the Child Care Fund for this purpose.

Very similar provisions appear in the agreements negotiated by the CAW with General Motors and Ford.

In the Canada Post and CUPW agreement, a Letter of Understanding between the parties provides for a child care fund, in conjunction with PSAC, to provide child care facilities or subsidies for all employees represented by both unions. Pursuant to this agreement, Canada Post contributes at least $800,000 (and up to $1,200,000) annually to this fund. The provisions read as follows.

(08902)

The Corporation and the Union recognize the need for good quality affordable child care services for all employees. Consequently, the Corporation agrees to contribute to a child care fund and the Union agrees to administer this fund in accordance with the following provisions.
The fund is used exclusively for the following purposes:
1. establish and support information programs dealing with child care;
2. conduct analyses and research to assess child care needs and the methods used to meet these needs;
3. establish or assist in establishing child care facilities and oversee their operation;
4. pay subsidies for child care services;
5. reach agreements with child care facilities or other institutions to provide or facilitate child care;
6. hire staff or reimburse the salary of bargaining unit employees on union leave for the above-mentioned purposes.
In principle, only those employees in the bargaining unit and their children may benefit from admission in a child care facility and be eligible for a subsidy. However, insofar as other places remain available, they are offered by preference to other employees of the Corporation and their children. However, the fund shall not assume the costs of these services.
The trust fund that is already established to receive the monies from the Corporation shall be maintained. Withdrawals or cheques drawn on this account shall require the signature of two (2) persons specifically designated for this purpose by the Union. This requirement shall be reproduced in the banking arrangement documents between the financial institution and the Union.
The Corporation shall deposit in the trust fund the amount of two hundred thousand dollars ($200,000) within fifteen (15) days after each quarter-end.
Subject to paragraph 7 below, the Corporation shall also deposit in the trust fund, within fifteen (15) days after the Corporation’s Annual Report is tabled in the House of Commons, an amount equal to three tenths (3/10) of one percent (1%) of the Income from Postal Operations value described in the Annual Report.
The sum of the amounts deposited in the fund under paragraphs 5 and 6 shall not exceed one million two hundred thousand dollars ($1,200,000) in any fiscal year.
At no time shall the fund balance exceed two million dollars ($2,000,000). Should a quarterly payment or an annual payment cause the fund to exceed two million dollars ($2,000,000) then that payment shall be reduced such that the payment plus the fund balance prior to the payment shall not exceed two million dollars ($2,000,000). If within sixty (60) days subsequent to the date of the reduced payment, the fund balance is reduced as a result of normal disbursements consistent with the mandate of the fund then all, or a portion, of the funds withheld shall be paid such that the fund balance is reinstated to a maximum of two million dollars ($2,000,000). After sixty (60) days, the amount of the funds withheld shall no longer be available.
All interest income shall accrue to the fund.
The Union shall maintain financial records of monies received by and monies disbursed from the fund. The Union shall ensure that arrangements are made to have all financial records and transactions audited by a firm of chartered accountants. The Corporation shall be authorized to question the specifics of an expenditure and the Union shall ensure that all disbursements from the fund conform to the purpose described in paragraph 2 above, failing which all obligations under this appendix shall terminate.
Within thirty (30) days of the end of the fund accounting year, the Union shall provide the Corporation with a financial statement certifying that all expenditures made from the fund were in accordance with the purpose of the fund and used exclusively for such purpose.

Canada Post’s agreement with PSAC provides for an additional payment into the trust fund, based on 10% of the amount paid in the CUPW agreement.

(04056)

By copy of this letter to the Canadian Union of Postal Workers, this is to advise that the Corporation agrees to the following conditions to facilitate one Child Care Committee mandated to provide the same child care facilities or subsidies for CPC employees represented by UPCE/PSAC and CUPW:

The Corporation shall pay into the trust fund an additional amount of one tenth (1/10) of the monies payable to the trust fund pursuant to the Corporation’s agreement with CUPW on the Child Care Fund. Payment will start upon written confirmation that the CUPW have agreed to the inclusion of UPCE/PSAC in the Child Care Fund. Effective the signing of the collective agreement and when CPC is in receipt of the written confirmation, these monies shall be paid to the Fund within fifteen (15) days after each quarter-end.
For further clarity, the Corporation agrees that the amount of monies paid into the Fund on behalf of PSAC shall be 10% of the formula identified in paragraphs 5, 6 and 7 of the Appendix on the Child Care Fund of the CPC and CUPW collective agreement.
The Corporation agrees to pay into the Child Care Fund Two Hundred Thousand ($200,000.00) Dollars as a one-time start-up amount fifteen (15) days after the conditions stated in paragraph 1 above have been satisfied by the PSAC/UPCE.
The Corporation further agrees to increase the maximum of the Fund balance as set out in paragraph 8 of the Appendix on the Child Care Fund of the CPC/CUPW collective agreement by ten (10%) percent.

The actual use of these funds is determined after a survey of the needs of bargaining unit members and discussions at the local level.

Reimbursement of child care expenses under specific circumstances

Other agreements will provide for reimbursement of child care expenses incurred while on training in distant geographic locations, or outside normal working hours.

(06755)

Where an employee is requested or required by the Corporation to attend:
1. Corporation-endorsed education, training and career development activities, or
2. Corporation-sponsored activities
which are not included in the normal duties of the employee’s job, and are outside their headquarters or geographic location, such that the employee incurs additional child care expenses, the employee shall be reimbursed for the additional child care expense up to fifty dollars ($50.00) per day upon production of receipt.
Where an employee, who is not on leave of absence, attends a course approved by the Corporation outside the employee’s normal scheduled work day, such that the employee incurs additional child care expenses, the employee shall be reimbursed for the additional child care expense up to twenty-five dollars ($25.00) per day upon production of a receipt. This reimbursement shall not exceed 15 days per calendar year.
Reimbursement in (a) or (b) shall only apply where no one else at the employee’s home can provide the child care.

(03108)

Where an employee is on travel status to attend a course required by the Employer and the employee incurs additional child care expenses, the employee shall be reimbursed for the additional child care expense up to $75.00 per day upon production of a receipt.

Where an employee, who is not on leave of absence, attends a course approved by the Employer outside the employee’s normal scheduled work day such that the employee incurs additional child care expenses, the employee shall be reimbursed for the additional child care expense up to $50.00 per day upon production of a receipt. This reimbursement shall not exceed 15 days per calendar year.

In other cases, a subsidy is provided to cover child care expenses incurred by an employee while performing overtime work.

(04129)

Where the Employer requires an employee to work overtime or be away from their personal residence overnight and as a result the employee incurs additional child care expenses, they will be entitled to reimbursement of child care expenses up to $25 per day upon production of a receipt to a maximum of 15 days per calendar year. The Parties agree to review individual circumstances which exceed the annual calendar year maximum with respect to the application of this clause.

The following provision is interesting given the fact that there is no set limit to the amount that can be claimed by the employee.

(06287)

Where an employee is required to perform unscheduled overtime work of an emergency nature and as a direct result incurs legitimate out-of-pocket expenses arising out of the care of the employee's dependents, the Society will reimburse the employee for such expenses provided they are reasonable and the employee obtains supervisory approval, in writing if required, within two (2) working days following the date on which the expenses were incurred.

<< Workplace Child Care Facilities | Table of Contents | Joint Committies for Child Care >>

¹ Spending Patterns in Canada, Statistics Canada Catalogue no. 62-202-XIB (1997). resume
² Based on a survey of workplace child care centres by the Labour Program, HRDC (as yet unpublished). resume