Workers at five Toronto child care centres operated by the non-profit Ideal Child Services Group (ICSG) were locked out on October 6, 2026, after the employer and CUPE Local 2484 failed to reach a new collective agreement. Centres at Baycrest, BonAdventure, Children Are People, Pineway, and Tumpane have been closed, leaving hundreds of families scrambling.
Union members report that comparable CUPE-represented workers at similar Toronto centres earn $10 to $15 per hour more than ICSG staff. Bargaining remains at a standstill. The workers say they would rather be in their classrooms. The families say they would rather have child care. And operators across Ontario watching this situation are quietly asking the same question: could our cost-based funding allocation handle it?
The short answer, for most operators with no legacy top-up, is: probably not without a gap. Here is the math.
What the Workers Are Actually Asking For
The current WEG wage floor is $25.86 per hour. The union's stated position is that comparable CUPE workers elsewhere in Toronto earn $10 to $15 per hour more — placing the demand range at approximately $35.86 to $40.86 per hour. That is not a 5% or 10% adjustment. It is a 39% to 58% increase from the current floor.
To be clear: the allocation cannot change because the union demands it. A collective agreement does not revise a CBFA. The A1 Program Staffing benchmark within the allocation is a useful reference — it reflects what the Ministry expects a typical centre to spend on staffing, based on Ministry-published local wage rates. But what governs funding is the Program Cost Allocation. Operators reconcile total eligible costs to the PCA, not to the staffing benchmark specifically. If a wage increase pushes your total eligible operating costs above the PCA, the excess is not funded — and the PCA does not increase because a collective agreement was signed. The only mechanisms to revise it are an OIOF update on a go-forward basis, or a reconciliation recovery through the SFR process. Under the go-forward rule now in effect at Toronto Children's Services, an OIOF update applies only from the date it is processed, not retroactively.
What the Allocation Actually Is
To model this concretely, consider a Toronto CWELCC centre with no legacy top-up, operating at 261 service days per year, with 20 infant, 15 toddler, and 24 preschool spaces. For this profile, the platform generates the following cost-based funding allocation:
- Adjusted Benchmark: $1,751,756.44
- + Growth Top-Up: $0.00 (no new spaces)
- + Rolling Top-Up: $0.00
- = Program Cost Allocation (PCA): $1,751,756.44 — this is the maximum eligible cost claim
- + Profit/Surplus Allocation: $141,761.12
- − Fee Revenue Offset: ($321,839.10)
- = Total Cost-Based Funding (CBFA): $1,571,678.46
This is the number. It does not move because wages are rising. It does not adjust mid-year because a labour dispute is unfolding. Per service day, that allocation is $1,571,678.46 ÷ 261 = $6,021.76. That figure matters for closure modelling below.
Staffing Cost at Current Wages vs. the Union's Demand
Using $25.86/hr, 1,820 annual hours per full-time staff, and 17.5% employer benefits, staffing costs for this centre look like this at minimum and typical headcount:
At the current WEG floor ($25.86/hr):
- 12 staff (minimum): wages $564,782 + benefits $98,837 = total $663,619 — 42.2% of CBFA / 37.9% of PCA
- 15 staff: wages $705,978 + benefits $123,546 = total $829,524 — 52.8% of CBFA / 47.4% of PCA
At the low end of the union demand ($35.86/hr, +$10.00/hr):
- 12 staff: wages $783,182 + benefits $137,057 = total $920,239 — 58.6% of CBFA / 52.5% of PCA
- 15 staff: wages $978,978 + benefits $171,321 = total $1,150,299 — 73.2% of CBFA / 65.7% of PCA
At the high end of the union demand ($40.86/hr, +$15.00/hr):
- 12 staff: wages $892,382 + benefits $156,167 = total $1,048,549 — 66.7% of CBFA / 59.9% of PCA
- 15 staff: wages $1,115,478 + benefits $195,209 = total $1,310,687 — 83.4% of CBFA / 74.8% of PCA
At the high end of the demand range with 15 staff, staffing alone consumes 83.4% of the total CBFA — before occupancy, administration, supplies, insurance, or any other operating cost. And the CBFA does not change. The gap between what the benchmark funds and what a signed collective agreement would require is the operator's problem to solve.
This is not a hypothetical risk for a different kind of centre. It is the financial structure of a standard Toronto non-profit with no legacy top-up operating at normal capacity. The ICSG situation is what it looks like when that structure collides with a wage negotiation.
What a Closure Adds on Top
A labour dispute that results in a closure adds a second financial hit on top of the wage negotiation. Under cost-based funding, closed days are days with no service, no fee revenue, and no funded allocation. Using the per-day allocation of $6,021.76 and the $22/day fee cap across 59 spaces:
2-week closure (10 service days):
- Allocation lost: $60,218
- Parent fee revenue lost: 59 spaces × $22 × 10 days = $12,980
- Total financial exposure: approximately $73,198
4-week closure (20 service days):
- Allocation lost: $120,435
- Parent fee revenue lost: 59 spaces × $22 × 20 days = $25,960
- Total financial exposure: approximately $146,395
These figures assume the closure is the only problem. In a labour dispute, it is not. Fixed costs continue to run during a closure: rent, insurance, administration, and any staff costs for roles outside the bargaining unit. The centre incurs costs with no corresponding revenue, and the allocation that would normally fund those costs is not flowing. For a centre that entered the dispute with no cash reserves and a tight allocation, this combination can move quickly from stressful to existential.
One-Time Emergency Funding: What Centres in This Situation Should Know
Ontario's CWELCC framework includes a One-Time Emergency Funding provision for centres experiencing extraordinary financial circumstances. If your centre is currently facing a labour dispute, a closure, or an unanticipated cost event that your allocation cannot absorb, this is the mechanism to engage. Applications typically require documentation of the financial impact, a description of the circumstances, and evidence that the cost event falls outside the normal operating parameters your CBFA was calculated to fund.
Submitting early matters. The review process takes time, and the go-forward rule means every week without resolution is a week of allocation that is not flowing. If you are in a dispute now, the time to apply is now — not after the situation is resolved.
The Question Every Operator Should Be Able to Answer
The ICSG situation is a visible version of a pressure that exists at many Ontario centres. ECE wages have been a persistent advocacy issue precisely because the cost-based funding model has not kept benchmark rates in step with what operators actually need to pay to recruit and retain qualified staff. The $25.86 wage floor is a floor, not a market wage in a city like Toronto — and the union's demand is being made against a backdrop where comparable workers in the same city already earn substantially more.
The allocation does not change because that gap exists. What changes is how much of the gap falls on the operator. The question is whether your CBFA, as currently structured, can fund a wage increase without creating a structural deficit — and whether you have modelled what a closure period would cost you before one happens.
ChildcareFundingIQ works with operators to model staffing costs against CBFA allocations, test wage and headcount scenarios, and identify where a collective agreement or workforce change creates a funding gap. If you want to understand how your allocation holds up under various staffing assumptions — or if you are navigating a labour dispute and need to understand your financial exposure — reach out now.
Book a Consultation →Source: Farrah Merali, 'Workers at 5 child care centres in Toronto locked out as both sides fail to reach deal,' CBC News, October 8, 2026.