The Ontario government brought in a new funding model for children’s aid societies in April. Both of Ontario’s Catholic child welfare agencies — Catholic Children’s Aid Societies in Toronto and Hamilton — lose under the new rules.
In Hamilton the CCAS has laid off 10 people, reducing its work force to 175. The Toronto agency has just completed its second round of voluntary buy-outs in two years and executive director Mary McConville predicts her organization will continue to shrink over the next three years.
“We have just completed a planning process, a fairly intensive one,” McConville said.
The Toronto agency spent $108 million dealing with 7,606 referrals in the year ending March 31. Three years from now it will be allocated $94.6 million.
Hamilton’s CCAS was allocated $26.7 million over the same time frame and spent all but $81,000 (surpluses must be returned to the Ministry of Children and Youth Services). The two-percent yearly reductions will equal more than half a million dollars each year subtracted from Hamilton’s budget, reducing the money available to $25 million in 2016.
To reduce the impact, the ministry is limiting funding reductions to two per cent annually over the next five years.
This is the third funding formula child welfare agencies have faced since the first provincewide formula was introduced in 1999. The province has capped its spending on children’s aid societies at $1.4 billion and warned that deficits will no longer be tolerated.
McConville faults the new formula for ignoring historical funding requirements of individual agencies and bearing little relation to actual caseloads.
“It really is just a mathematical formula for spitting out an allocation,” she said. “It is not intended to respond to child welfare demand.”
The ministry now allows the societies a base amount for infrastructure, technology and travel, then adds two more blocks of funding — one based on socioeconomic factors and the other based on measures of child welfare demand from number of investigations completed to the average number of children in care. Socioeconomic factors are supposed to predict future demand.
“All of this remains to be seen,” said McConville.
“The new funding model moves away from funding allocations based on historical expenditures to funding based on transparent, objective measures of need for child welfare services,” wrote an issues co-ordinator with the ministry in an e-mail.
Children’s aid societies don’t run deficits because they’re sloppy, said Hamilton CCAS spokesperson David Shea. They’re mandated by legislation to respond immediately to every case.
“We have a child who needs to come into care or we have a family who needs protection, there’s no wait. We have to do it,” Shea said.
Add to that the rising cost of delivering any service. The Hamilton CCAS’s unions opened up their contracts last year and agreed to a two-year wage freeze. That means next year workers will demand some kind of increase, Shea said.
“There are hard increases we have no control over,” he said.
As the new funding formula came in, the province wiped out the accumulated debt of all the children’s aid societies at a cost of $33.4 million. It also added $35 million to take care of budget pressures in the 2012-13 fiscal year.
“Next year, if there’s any debt they come in and investigate,” said Shea.
“It’s a fairly dramatic change for the whole system,” said McConville.
The changing fiscal landscape is accelerating plans to change how the agencies process cases and deliver services. In Hamilton the CCAS hopes to reduce its use of outside group homes by increasing the number of foster homes. They’re working hard with the diocese to encourage Catholic couples to become foster parents.
“The cost of raising a child in a foster home... is substantially less than going to a group home system or a paid (private agency) foster home,” said Shea.
McConville is not betting on a sudden surge in the numbers of foster parents generally. But the reality of two-income households and the cost of living in Toronto makes it unlikely the numbers will change dramatically.
Toronto is counting on extended family to keep kids out of institutional settings.
“We’re investing in doing outreach, intensive outreach for extended family and kin willing to care for children ... as an alternative to placing children in families they don’t know,” McConville said.
Neither society knows whether plans to line their spending up with their funding will work.
“Next year we have to live very tight, very frugally to make sure we don’t have to do the same in the next two years,” said Shea.
“It’s not possible for us to balance this year. We can’t. The deficit is too big,” said McConville.
She’s aiming for a balanced budget over the next three years.