Toronto-area parents out thousands after daycare goes bankrupt amid COVID-19 closures

When the coronavirus pandemic first closed Ontario schools and daycare centres, Robin Mandel-Buchalter wasn’t very concerned about securing refunds from her daughter’s daycare.

The Toronto mom was told that First Foundations Children’s Academy (FFCA) — which had three locations across the Greater Toronto Area — would offer daily video call sessions in lieu of in-person classes. She understood teachers still needed to be paid for their time.

Mandel-Buchalter said she paid roughly $4,500 in summer 2019 for daycare in March, April, May and half of June 2020.

However, on April 10, Ontario Premier Doug Ford and his government ordered child-care centres to stop collecting payments from parents while facilities remained closed due to the coronavirus pandemic.

“COVID-19 has imposed significant financial pressure on working parents,” Education Minister Stephen Lecce said in a statement. “We need to support our parents who may be facing reduced income or layoffs during the COVID-19 outbreak.”

At this point, Mandel-Buchalter and several other parents told Global News they asked FFCA director Alisa Daly to provide refunds they believed they were entitled to under the provincial emergency order, but Daly did not comply.

On April 30, Daly issued a new statement to all the families of FFCA. In it, she announced FFCA had declared bankruptcy.

“Due to FFCA’s financial condition, exacerbated by the COVID-19 pandemic, the private corporations that owned and operated FFCA have declared bankruptcy,” read the statement.

“This means that effective immediately, FFCA will permanently terminate all three licenses under the Ministry of Education. In addition, we will not have the funds to return prepaid 2019-20 tuitions. The Ministry of Education is aware of this situation.”

The statement also says FFCA will reopen in September 2020 as a “newly created not-for-profit school” affiliated with Beth Sholom Synagogue under the name Beth Sholom’s First Foundations Community Preschool.

Overseen by an “independent board of directors,” Daly will remain on as the executive director, says the statement, and parents will still be required to pay tuition.

Weeks of unanswered questions

It all started on March 31, when Ontario’s government extended closures of all public schools, private schools and child-care centres “until at least May 1st.”

In response, on April 3, Daly issued a letter to all parents in which she cancelled virtual programming and laid off all FFCA staff “temporarily.” She also announced that the daycare “does not have the cash to pay refunds.”

This shocked Mandel-Buchalter and several other parents who spoke with Global News, all of whom were dismayed that they would not be receiving refunds for care not provided due to coronavirus-related closures.

In the letter, obtained by Global News, Daly admitted the daycare was struggling financially prior to the COVID-19 outbreak. She said opening two new FFCA locations — one in Cedarvale in November 2016 and another in Armour Heights in July 2018 — proved to be “too fast” for the organization to sustain.

“I subsequently learned from our new finance director that we had grown too fast, funded too many renovations, had too much program development and that Armour Heights had more challenges than we expected despite very strong support from our partner synagogue, Adath Israel,” Daly said in the letter.

“I also learned that in the spring of 2020, we would run out of money.”

With help from a “broader group of advisers,” Daly said in the letter the daycare had previously decided to convert FFCA into a non-profit organization — but then the COVID-19 outbreak hit.

“While this may serve as little comfort, I can tell you that, if necessary, and if FFCA has to permanently close, I will personally borrow money to return to each family what I can,” read the letter.

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“As the leader of this organization, I hold myself accountable.”

Global News spoke to Daly, and she said parents like Mandel-Buchalter are in the “vast minority and don’t represent how (the community) feels.”

“FFCA was a growing Jewish preschool, with a progressive educational program and diverse staff of dedicated professionals. Unfortunately, like many small businesses, it grew too fast and simply could not withstand the impacts of COVID-19,” Daly said in the email to Global News.

Daly says she “deeply regrets” not being able to offer parents refunds on prepaid tuition but is “humbled” by the support of school families and the community.

“While I deeply regret that we cannot refund prepaid tuition, I am humbled by the incredible support of so many school families and my community, and look forward to continuing FFCA’s mission as a new not-for-profit school affiliated with Beth Sholom Synagogue, a cornerstone of Toronto’s Jewish community,” Daly said.

“How is the new school able to get licensed with her tainted name on the record? How can the ministry trust her with another licence?” she said.

Mandel-Buchalter’s daughter moves on to junior kindergarten in the fall, so she will no longer attend FFCA, but she’s worried about the same thing happening to other families.

“It’s not impacting our financial situation, but there are other families where parents (have been) laid off. They could really have benefited from the refund. This is not a remedy,” she said.

Michael Budd, another FFCA parent, says he is also missing roughly $5,075 for the care not provided during the COVID-19 outbreak — assuming the daycare remains closed until June 11, which was slated to be the last day of the FFCA school year.

Due to extenuating circumstances, he has been his family’s sole provider for the last four years, and he says this has certainly had an “impact.”

Not getting a refund has caused him “many sleepless nights.”

“I don’t understand how the ministry can now allow another business to operate … with her as the executive director,” Budd said.

Steve, whose name has been changed to protect his privacy, has a two-year-old who attends FFCA. He’s most upset that this situation has cast the daycare in a negative light because his child loves going there.

“We’re not asking for anyone’s sympathy. This is about receiving the service we paid for,” he told Global News.

He says he’s missing roughly $8,000 because, in addition to tuition for April to June 2020, he paid a $500 deposit for summer camp and a $1,500 deposit for next year.

Daly has offered to put the deposits towards next year, but Steve says he’s also been asked to submit two more deposits worth $1,500 each on July 1 and Aug. 1 to hold his child’s spot for the 2020-21 school year.

Steve and his wife aren’t sure they’re comfortable doing so due to their past experience with FFCA.

“We are happy that Beth Sholom will have a daycare but are reconsidering sending (our child) to FFCA because (Daly) has been given a prominent leadership role,” Steve said.

No recourse at this time

Unfortunately, the province’s emergency order does not include any information about what happens if a child-care centre declares bankruptcy.

When asked about the investigation into FFCA, the Ministry of Education declined to discuss whether it received a complaint about FFCA or whether it is conducting an investigation.

In an email to Global News, a spokesperson reiterated the details of the emergency order.

“Effective April 9, all child-care providers are prohibited from charging fees to parents where care is not being provided and are also prohibited from penalizing parents,” read the email.

“If fees have been paid in advance by parents, child-care providers should reimburse parents for any fees paid for the period of time from April 9 and beyond.”

The ministry investigates complaints received from the public about licensed child-care centres, home child-care providers overseen by licensed agencies and unlicensed child-care providers who may be in violation of this emergency order, the spokesperson said.

Parents can report complains to the Ministry of Education by calling 1-877-510-5333 or emailing [email protected]

Budd feels “unsupported” by the provincial government and the Ministry of Education.

“The province has failed to support parents adequately,” he said. “Nobody asked for this, I get that, but you have to be there to support people. When you put in a policy that (others) have circumvented, what are you doing to do to support (those who have been wronged)?”

That parents are out thousands of dollars with no recourse is a “slap in the face,” said Budd.

“We’re complying with every order… I go out once a week to get groceries. I’m working 12 hours a day for my employer to support (others) and there’s nothing I can do. Nobody seems to care to step up.”

Questions about COVID-19? Here are some things you need to know:

Health officials caution against all international travel. Returning travellers are legally obligated to self-isolate for 14 days, beginning March 26, in case they develop symptoms and to prevent spreading the virus to others. Some provinces and territories have also implemented additional recommendations or enforcement measures to ensure those returning to the area self-isolate.

Symptoms can include fever, cough and difficulty breathing — very similar to a cold or flu. Some people can develop a more severe illness. People most at risk of this include older adults and people with severe chronic medical conditions like heart, lung or kidney disease. If you develop symptoms, contact public health authorities.

To prevent the virus from spreading, experts recommend frequent handwashing and coughing into your sleeve. They also recommend minimizing contact with others, staying home as much as possible and maintaining a distance of two metres from other people if you go out.

For full COVID-19 coverage from Global News, click here.

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