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Introduction

Growth by Design, Child Care Now’s federally funded Innovation Project, is examining and promoting innovative strategies to support the sustainable expansion of public and not-for-profit Early Learning and Child Care (ELCC) in Canada. As part of this work, seven provincial and territorial case studies have been undertaken—in Newfoundland and Labrador, Prince Edward Island, Nova Scotia, Ontario, Manitoba, British Columbia, and Nunavut. Each case study aims to identify promising approaches to ELCC expansion and to explore policies and practices that enhance equitable access for families.

The case studies focus primarily on the expansion of public and not-for-profit Early Learning and Child Care (ELCC) services. While the central emphasis is on expansion—both physical and operational—it also encompasses the broader policy and programmatic environment that enables or constrains growth. This includes examination of key systemic supports such as workforce recruitment and retention strategies, funding formulas, governance structures, and measures aimed at ensuring equitable access to high-quality child care for underserved populations.

The case study activities include:

• A review of government websites and documents, policy frameworks, and public reports related to ELCC
• Compilation and analysis of relevant data from successive editions of Early Childhood Education and Care in Canada
• Key informant interviews and meetings with provincial government officials, provincial child care associations, ELCC administrators and other key stakeholders
• Focus groups with child care operators and frontline staff to gather perspectives on workforce, funding, and service delivery challenges;
• Site visits to a range of early learning and child care programs, providing insights into local implementation, infrastructure, and experiences with expansion.¹

Due to the size and complexity of ELCC in Ontario, case study visits, interviews and focus groups were conducted during separate visits to Ottawa, Toronto and Waterloo.

This document provides an overview of the ELCC landscape in Ontario—including details on regulated child care spaces and public funding prior to the implementation of the Canada-Wide Early Learning and Child Care (CWELCC) system. It outlines Ontario’s key commitments under the CWELCC funding agreement relevant to expansion, summarizes site visits and stakeholder engagement activities undertaken in the province, and highlights key themes and findings. 

The context for ELCC in Ontario

Ontario is Canada’s most populous province. According to the 2021 Canadian Census,² it  had a population of over 14.2 million, which represented a 5.8% increase from 2016.  By October 2025, provincial estimates from Statistics Canada placed the population at over 16 million. Ontario’s population is concentrated in major cities, with 90 per cent of Ontario’s population living in a metropolitan area in 2021. 

In 2024 there were over 2 million children aged 0 to 12 years old in Ontario, with 408,000 aged 0 to 2 years, 433,800 aged 3 to 5 years, and over 1.1 million children aged 6 to 12 years. The labour force participation rate of mothers with children reached 82.3 per cent for children aged 6 to 12 years, and over 78 per cent for children under 6 years old.³ 

Organizational structure

Ontario is the only province in Canada where municipalities (Service System Managers (SSMs)) have a mandated responsibility in the delivery of social services, including licensed child care. The provincial government retains legislative, regulatory, and fiscal authority, while municipalities are mandated to administer child care and early years services at the local level.

The province’s responsibilities include:

• Establishing legislation and regulatory standards under the Child Care and Early Years Act
• Licensing and monitoring licensed centres and home child care agencies for compliance
• Setting funding formulas and policy directives
• Allocating federal and provincial funding, including CWELCC transfers to SSMs
• Establishing provincial expansion targets
• Approving capital funding allocations

Key policy and system design functions include:

• Pedagogical frameworks 
• Fee reduction policy under CWELCC
• Cost-based funding formula design
• Directed Growth planning parameters
• Workforce strategy development and wage enhancements

Service System Managers (SSMs)

Responsibility for service system planning, including the distribution of funds, is held by the 47 Service System Managers (SSMs) across the province: 

• 37 Consolidated Municipal Service Managers (CMSMs) in Southern Ontario and 
• 10 District Social Services Administration Boards (DSSABs) in Northern Ontario. 

CMSMs are designated municipal governments (either upper-tier or single-tier) and are responsible for planning, funding and administering social services, including child care and early years services. Their authority is delegated under the Municipal Act. DSSABs are designated under the District Social Services Administration Board Act (DSSAB Act), with each DSSAB governed by a board consisting of a mix of municipal representatives and individuals in the territories without municipal organization.⁴

Service Systems Managers are responsible to:

• Allocate provincial and federal funding to child care licensees and before and after school programs,
• Manage and administer parent fee subsidies,
• Distribute wage enhancement, Special Needs Resourcing (to support inclusion of children with special needs in licensed child care and before and after school programs),
• Develop service plans, and
• Ensure the provision of French language child care and child and family programs and services where there is an identified need

SSMs may also directly operate child care centres and home child care agencies. In 2025, 30 out of 47  service system managers (Consolidated Municipal Service Managers (CMSMs) and District Social Services Administration Boards (DSSABs) directly delivered some licensed child care. Combined, SSMs across the province operated a total of 11,820 child care spaces. Over half (6,257) the spaces were for infants, toddlers and preschool age children.⁵

School boards

School boards have played an important role in the development of licensed child care in Ontario for several decades, primarily by providing space for child care programs within elementary schools. This role has been shaped by provincial policy, changing funding arrangements, and local partnerships with municipalities and community-based operators.

The expansion of part-day junior and senior kindergarten throughout the mid-20^th century significantly increased the demand for before- and after-school care. In response, many school boards began making classroom and ancillary space available to community child care operators, particularly not-for-profit organizations, to provide school-age programs and, in some cases, full-day care for younger children.

For many years, provincial capital programs prioritized the development of child care space in schools, recognizing the efficiency of using publicly owned facilities. Under both pre-CWELCC initiatives and more recent federal-provincial agreements, school boards have been encouraged to identify opportunities to incorporate child care into new schools and major school additions.

This “schools first” approach has made school boards one of the most important sources of publicly owned infrastructure for expansion.

School boards play several roles in Ontario’s child care system:

• Providers of space – leasing classrooms and purpose-built facilities to operators
• Direct operators – some boards run licensed child care and before and after school (extended-day) programs
• Planning partners – working with municipalities to identify opportunities for expansion
• Employers – offering wages and benefits in unionized settings that often exceed those available in community-based settings, setting benchmarks for the early childhood sector

Recent history of ELCC in Ontario

Integration of child care into the Ministry of Education

In 2010, responsibility for licensed child care began to be transferred from the Ministry of Children and Youth Services to the Early Learning Division of the Ministry of Education. Full responsibility was transferred on January 1, 2012.

Introduction of full-day kindergarten for four- and five-year olds 

In 2010, Ontario began implementing full-day kindergarten for 4- and 5-year olds, over a four-year period. Prior to this, kindergarten was offered as a half-day program. Ontario was the first jurisdiction to provide full school day kindergarten to all 4-year olds. The full-day program follows a regular school-day, and school boards were encouraged to offer extended day programs before and after school child care, initially. 

Kindergarten classrooms are staffed by a qualified primary teacher and a Registered Early Childhood Educator (RECE), referred to as Designated Early Childhood Educator (DECE) when working in a kindergarten.

Legislative changes

In 2014 the province overhauled the child care legislation by introducing the Child Care Modernization Act. This transitional legislation repealed the Day Nurseries Act and replaced it with the Child Care and Early Years Act 2014. 

Under the new Act, child care was recognized as part of education policy, enforcement powers were strengthened, home child care was reformed and a new pedagogical framework was introduced, How Does Learning Happen? Ontario’s Pedagogy for the Early Years, 2014.  

Key changes of the Child Care and Early Years Act 2014 included strengthening the authority and enforcement tools held by the Ontario government, including financial penalties and stricter compliance for those violating the Act. It also increased the number of children that a licensed home child care provider can care for from five to six.  

Introduction of wage enhancements 

In 2015 Ontario introduced the Provincial Wage Enhancement grant – a new program to increase the wages of eligible early childhood educators working in licensed child care.⁶ The grant was intended to help close the gap between RECEs working in licensed child care and DECEs working in the school system. The enhancement provided a $1/hour increase for RECEs, as well as program staff, supervisors, private home day care visitors, and $10 a day for home child care providers. To be eligible for the wage enhancement, educators had to be earning less than $26.27 per hour.⁷ In 2016, the wage enhancement was increased to $2/hour, and the grant for home child care providers was increased to $20/day.

Changing role of school boards

Since 2017, school boards have had a statutory responsibility to ensure the provision of before and after school programming for children aged 4-12 years, where there is sufficient demand and the program is viable.

Boards may operate programs directly or enter into agreements with third party operators to deliver programs. Some before and after school programs (Extended Day programs) operated by school boards are licensed under the CCEYA, while others are not licensed, but regulated under the Education Act and must meet provincial standards. When third-party operators provide before and after school care, they must be licensed under the CCEYA.

While school boards primarily deliver Extended Day programs, they may also directly operate licensed child care programs for children below school age in limited circumstances. However, this is less common than partnerships with third party operators to provide full-day child care in school buildings or on school property.

In addition, school boards:

• consult with local service system managers to identify sites and space for early years capital investments in schools
• are responsible for facility management of their properties, including oversight of school-based capital construction projects, and negotiating leases with child care operators.

Childcare Access and Relief from Expenses (CARE) tax credit

In 2019, the province introduced the Ontario Childcare Access and Relief from Expenses (CARE) tax credit,⁸ an income-tested credit which refunds a percentage of eligible child care expenses. The credit may be used for both regulated and unregulated care. Depending on household income, families may receive up to 75% of their eligible child care expenses to a maximum of $6,000/year for children under the age of seven and $3,750 for children between the ages of seven and 16. It is in addition to the federal Child Care Expense Deduction. 

The Canada-Ontario Canada-Wide Early Learning and Child Care (CWELCC) Agreement

Ontario signed the Canada–Ontario Canada-Wide Early Learning and Child Care (CWELCC) Agreement with the federal government on March 27, 2022. Under the initial five-year agreement, Ontario was allocated $10.2 billion in federal funding over five years,  with annual transfers increasing from $1.1 billion in 2021–2022 to$2.9 billion in 2025-2026.. 

Ontario’s CWELCC Action Plan focused on five broad priorities: affordability, access, inclusion, workforce and quality, and implementation supports. The agreement committed the province to reducing average parent fees for children under six by 50% by the end of 2022 and reaching an average of $10/day child care by 2025–26. Ontario adopted a phased implementation approach, using an opt-in model for operators and working through municipal Service System Managers (SSMs) to administer funding and oversee implementation.

A major focus of the plan was expansion of licensed child care spaces, particularly in underserved communities and through school-based expansion. Ontario committed to create 86,000 new licensed spaces by March 2026, maintaining or increasing the proportion of spaces in the not-for-profit sector, which accounted for approximately 70% of licensed spaces for children 0–5 at the time the agreement was signed. Municipalities were required to develop local expansion and inclusion plans to guide the allocation of new spaces. The province also emphasized stronger integration between child care and the education system, building on Ontario’s existing investments in Full-Day Kindergarten and school-based child care.

The action plan also included commitments to strengthen the workforce through wage floor increases, recruitment and retention initiatives, professional learning supports, and qualification upgrade programs for RECEs. Ontario committed to increasing the wage floor to $18/hour for RECEs and $20/hour for supervisors, alongside the development of a broader workforce strategy. Additional priorities included improving access to inclusive child care for children with disabilities, Indigenous, Francophone, northern, rural, and underserved communities, and expanding culturally relevant and flexible care options.

In December 2025, a one-year extension agreement was signed, extending the deadline to March 2027. 

Key provincial policy initiatives under CWELCC

Ontario has implemented several policy and funding mechanisms intended to support its commitments under CWELCC. These include fee reductions, Directed Growth Strategies, a new cost-based funding formula, capital and start up funding programs, and some workforce measures. 

Reduced Fees 

Provinces and territories adopted different approaches to reducing parent fees under CWELCC. Ontario maintained a market-fee approach, reducing licensed child care fees by 25% in April 2022 and by a further 37% in December 2022. By that point, fees had been reduced to an average of approximately $23 per day, representing a 50% reduction from 2020 levels. As of January 2025, parent fees were capped at $22 per day, with the provincial average estimated at approximately $19 per day.

Unlike several other jurisdictions, Ontario has not yet announced a plan to reduce fees to the $10-a-day target originally anticipated for 2025 under CWELCC.

Low-income families remain eligible for fee subsidies. However, reduced parent fees have changed eligibility patterns, and many families no longer qualify for subsidies. At the same time, access remains constrained by limited space availability, particularly in high-demand communities.

Cost-Based Funding Formula

From April 2022 to December 2024, operators participating in CWELCC received replacement funding based largely on pre-CWELCC market fees. In August 2024, Ontario announced the transition to a new cost-based funding model,⁹ implemented in January 2025.

Under the cost-based model, funding is based on eligible program costs rather than previous parent fee levels. Key elements of the model include:

• funding for eligible operating costs, based on “benchmark” average costs for the region 
• Approximately 8% in lieu of profit or surplus 
• recognition of parent fee revenue within the funding calculation 
• reconciliation of funding allocations against actual expenditures 

Centres operating prior to 2025 may also receive “legacy funding” where actual costs exceed benchmark allocations. This is particularly important for centres with higher staffing, occupancy, or rental costs than those reflected in provincial benchmarks.

When the cost-based funding formula was introduced, Ontario ended the previous streams that non-CWELCC programs serving 0-6 year olds received, including parent fee subsidies for these programs, once children already enrolled had aged out of the program.

Directed Growth Strategies

As part of the Canada-Ontario CWELCC Agreement, Service System Managers are responsible to develop Directed Growth Strategies that identify the region’s priority populations and locations, and include plans for where and how spaces will be created to meet the needs of these populations. 

SSMs are required to develop and implement Directed Growth Strategies in order to receive their allocated funding under CWELCC. 

Start-Up Grants

Start-Up funding is allocated to Service System Managers in support of their expansion plans, which must be developed in accordance with provincial policies. Funding is distributed proportionately based on Directed Growth Plans. The maximum amount awarded under the Start-Up Grants is $350,000 for every 20 spaces created for children 0-4 years. Home child care licensees are eligible to receive up to $1,200 per CWELCC space created, up to a maximum of $7,200 per provider. In order to receive Start-Up Grants the licensee must participate in the CWELCC program for at least seven years after opening the new child care spaces, and other conditions may be required by the SSM. The funds cannot be used to purchase land or buildings.

The Canada-Ontario Early Learning and Child Care Infrastructure Fund 

The federal Early Learning and Child Care (ELCC) Infrastructure Fund¹⁰ allocated $625 million over four years to be distributed to provinces and territories. Ontario received approximately $135 million which was distributed to Service System Managers in 2025.  With this funding SSMs are required to create new, licensed spaces in line with their Directed Growth Strategies. 

In order to be eligible for the ELCC Infrastructure Fund operators must be: 

• not-for-profit licensees or those operated directed by a CMSM/DSSAB, 
• centre-based facilities, 
• community-based, and 
• approved 

The maximum amount of funding per licensee is at the discretion of the SSM.

Operators must also continue operating  the facility and continue to participate in CWELCC for at least 7 years after opening the new child care spaces. The funding awarded to centres must be spent by December 31, 2026. Unlike some other capital grant programs in other provinces and territories, the funds can be used toward the purchase of land or buildings.

As of December 2025, the province reported that 41,000 new spaces had been created.¹¹ 

Capital funding for child care in schools through Ontario Builds

Ontario has continued to position schools as a primary site for child care expansion through its broader school capital strategy, now branded as Ontario Builds. Under Ontario’s capital programs, school boards may include child care facilities as part of applications for new schools, school additions, and major redevelopment projects. These child care components are funded through the Ministry of Education’s capital program, provided they are supported by the local SSM and align with local child care service plans.

Ontario’s 2021 Canada–Ontario CWELCC Agreement indicated that the province intended to support the creation of 30,000 licensed child care spaces in schools as part of its strategy to meet space expansion targets.

Under recent Ontario Builds announcements, capital funding to develop or expand child care spaces in existing schools ended. However, capital investments in new schools and school expansions continue to include licensed child care space where appropriate. For example, the province’s 2025 and 2026 school capital announcements explicitly referenced the creation of additional child care spaces alongside new student spaces. In April 2026, Ontario announced $1.6 billion for school construction and expansions, including more than 1,900 new licensed child care spaces.¹²

Workforce initiatives

In 2022, Ontario introduced a wage floor of $18/hour for RECE program staff, which was increased to $23.86/hour effective January 2024 and to $24.86/hour for supervisors and home child care home visitors. By 2026, the wage floor for RECEs had increased to $25.86 and to $26.86/hour for supervisors and home visitors. 

Expansion of spaces 2019 to 2025 for children 0-12¹³

Ontario has experienced substantial growth in licensed centre-based child care capacity for children aged 0–5 as well as school-age children whose spaces are not eligible for CWELCC funding. As shown in Figure 1, the province added almost 86,000 licensed centre-based spaces between 2019 (the CWELCC baseline year) and 2025.

Ontario has experienced substantial growth in licensed centre-based child care capacity for children aged 0–5 as well as school-age children whose spaces are not eligible for CWELCC funding. As shown in Figure 1, the province added almost 86,000 licensed centre-based spaces between 2019 (the CWELCC baseline year) and 2025.

Figure 2 shows growth in licensed family child care in Ontario since 2019. The number of spaces increased by 2,693 between 2019 and 2025. More importantly, the number has nearly doubled since 2021, when there was a steep decrease in the number of spaces due to COVID 19. This growth represents an increased share of the total number of licensed spaces, from 2.7% to 4.1% during this period. 

As Figure 3 shows, when looking at all centre spaces for children 0-12, there was a greater increase in not-for-profit spaces (61,822), compared to for-profit spaces (24,437).

However, as Figures 4¹⁴ and 5 show, the picture is quite different when looking at full-day centre spaces.  There was an increase of 30,355 new licensed full-day spaces between 2021 and 2025. Over 12,290 (approximately 40%) of these new spaces were in the public and not-for-profit sector, while the remaining 18,000 (almost 60%) were in the for-profit sector.

Findings from the case study meetings

The Ontario case study was undertaken in three parts, with separate visits to Ottawa, Toronto and Waterloo between September and December 2025. The research team

• met with senior provincial and municipal officials responsible for licensed child care,
• met with school board officials; 
• conducted interviews and focus groups with regional and provincial child care organizations, advocacy groups and not-for-profit operators
• conducted site visits to not-for-profit centres that had recently expanded and/or amalgamated with other organizations

Key informant interviews and meetings were held with representatives of the following:

• Ministry of Education, Early Years and Child Care Division 
• City of Toronto Children’s Services 
• Toronto District School Board 
• Ottawa Children’s Services 
• Ottawa Carleton District School Board 
• Andrew Fleck Children’s Services
• Waterloo Region District School Board 
• Waterloo Catholic District School Board
• Region of Waterloo Child Care and Early Learning
• Ontario Federation of Indigenous Friendship Centres
• Association francophone à l’éducation des services a l’enfance de Ontario
• Association of Early Childhood Educators Ontario

Focus groups were held with:

• Ottawa Child Care Association 
• Le Regroupement 
• Ontario Home Child Care Association 
• Ontario Coalition for Better Child Care 
• B2C2 
• Quality Early Learning Network 
• Early Years Coalition Waterloo Region 

Site visits to and discussions were held with the directors/administrators of

• Bright Starts Co-operative Early Learning Centre (Waterloo)
• Gaʼnigǫhi:yo Child Care and Family Centre (Waterloo)
• Emmanuel Sandhills – Baden (Waterloo)

Consultation was held with

• Children’s Services Sector Leads at Ontario Municipal Social Services Association (OMSSA) meeting

The sections that follow provide brief organizational profiles and identify cross-cutting issues identified by type of organization. The organizations and public entities are grouped into three categories: local government, school districts, and key provincial ELCC organizations and not-for-profit operators. 

Local government

The Ontario case study included consultation meetings with officials from the City of Ottawa, the City of Toronto, the Region of Waterloo, and with members of the Children’s Services Sector Leads group convened by OMSSA. Together, these discussions provided insight into how municipalities are implementing CWELCC, the opportunities created by the program, and the key barriers affecting expansion of not-for-profit and public child care.

City of Toronto

The City of Toronto oversees Ontario’s largest municipal child care system, with 1,060 operators, 39 directly operated centres, and the province’s largest municipally operated home child care agency. Approximately 88% of operators participate in CWELCC. 

Strategic planning and approach to expansion

The Children’s Services Service Plan 2025-2030¹⁵ indicates that the total annual funding to Toronto’s early years sector in 2025 was approximately $2 billion: 49% federal funding, 26% provincial funding, 5% municipal contributions and 20% family contributions. 

The province’s March 2025 budget allocated $19.9 million in capital to the City of Toronto to expand licensed child care.¹⁶ As part of this expansion initiative the City issued an expression of interest for each new facility, and invited stable and experienced operators to operate new centres. 

Toronto has a long history of integrating child care into broader city planning, under Section 37 of the Planning Act. Through close collaboration with the Planning Department, the City secures child care space in new developments and, in many cases, acquires ownership of the child care portion of those facilities. In 2016, the City formalized the obligations on the part of the developer in the Child Care Development Guide. Conditions include a 99 year lease (or three consecutive 25 year leases and one 24 year lease) to a not-for-profit operator, rent-free, and covering the cost of utilities and maintenance. 

The City also uses its own capital budget and development charges to support expansion.¹⁷

Under the Schools-First policy, the province distributes funding directly to School Boards each year and the City supports and collaborates with the school boards so their applications for capital funding align with the City’s growth plan.  

A number of initiatives and collaborations across the City prioritize the expansion of licensed child care to meet currently underserved groups of children and families. For example:

• The City of Toronto’s Planning Department is interested in working with the City’s Housing Now project to prioritize building child care where new communities are being built.  
• The City indicated it would like to work closely with Indigenous and Black-led organizations to develop and expand Indigenous and Black-led child care centres that will meet local needs of these communities. 
• The City is advocating for increased funding to improve access and support for special needs children.

Officials emphasized that the cost-based funding model has improved stability and reduced tensions in the sector. Fee reductions were described as “life-saving” for many families. Toronto’s service planning focuses strongly on equity, including efforts to expand Indigenous-led and Black-led services.

The most significant barrier identified was time. Even once land, financing, and approvals are in place, construction of a new child care facility typically takes three to four years. Other challenges include a long waitlist for fee subsidies, growing demand for school-age care, and limited supports for children with additional needs.

City of Ottawa

The City of Ottawa plays a significant role as both Service System Manager (SSM) and direct operator of child care services. In addition to managing fee subsidies, operating funding, and inclusion supports, the City directly operates 10 child care centres, with a total of 394 licensed child care spaces. The municipal centres primarily serve children with higher support needs and families requiring subsidized care. Ottawa also oversees EarlyON Child and Family Centres and uses neighbourhood-level data to target services and expansion to communities with the greatest need. 

Strategic planning and approach to expansion

The City’s Child Care and Early Years Service System Plan 2025-2029¹⁸ indicates that the sector is meeting approximately 76 per cent of the demand for affordable child care spaces, with the greatest shortages affecting the infant age group, as well as in Indigenous-led and French-language child care. 

The Plan also indicates that the 2025 Children’s Services budget of $473.3 million is a 31 per cent increase over 2024, driven by an increase in cost-based funding and local priorities funding. It shows that cost-based funding contributes to 79% of the Children’s Services budget.

The City of Ottawa also:

• manages a child care registry and waitlist which provides an online, centralized application to help parents find and register for licensed child care in Ottawa.
• receives Special Needs Resource funding from the province to help support the inclusion of children with special needs in licensed child care programs. These services are delivered by Andrew Fleck Children’s Services, through their Children’s Inclusion Support Services (CISS).  
• partners with six Indigenous organizations to deliver an Indigenous Early Years Circle (IEYC), which is a collaborative multi-organizational group that works together to “provide holistic, culturally relevant, and culturally safe programs and services to Indigenous families with children aged 0 to 12 years.
• facilitates a Child Care and Early Years System Planning Advisory Group, whose mandate is to provide advice and guidance on the “planning and management of a high quality, affordable, accessible and inclusive child care and early years system”.

Ottawa officials reported that CWELCC has substantially improved affordability, with approximately 26,000 families benefiting from lower fees, and that 94% of licensed operators have joined the program. They also noted that the City has benefitted from the province’s “schools first” capital strategy, which provides 100% capital funding for new child care space in schools.

At the same time, Ottawa identified several barriers to expansion, including access to land, lengthy municipal decision-making processes, and the significant time and capacity required to move projects forward. While there is strong interest among operators in expanding, implementation is often delayed by operational and administrative challenges.

Region of Waterloo

The Region of Waterloo has adopted a strategic and equity-focused approach to expansion. While the Region no longer directly operates child care centres, it continues to operate its home child care agency. It plays an active planning and coordinating role, with dedicated teams responsible for partnerships, funding, inclusion, and integrated policy.

As part of CWELCC funding, the province of Ontario allocated the Region of Waterloo over 4,100 spaces, to be created between 2022 and 2026. 

Waterloo has used CWELCC as an opportunity to shift the balance of provision toward the not-for-profit sector. Prior to CWELCC, approximately one-third of spaces were for-profit; by 2025, the share of not-for-profit spaces serving younger children had increased significantly. The Region reported that in 2025, 81 per cent of 0 to 4 year olds spaces under CWELCC are not-for-profit. The Region identified 13 priority neighbourhoods for expansion based on low access and high concentrations of low-income families.

The Region’s Access and Inclusion Plan 2024 sets out the Region’s vision for expanding access, especially for low-income families, Black, racialized and underserved families, Indigenous families and families with special needs.

Along with other initiatives, the Access and Inclusion Plan: 

• identified 13 priority areas for growth based on low access to child care and where there is a high proportion of low-income households. The Region established RFP processes for operators to locate suitable properties in those areas
• launched an Access Pilot to support families in receipt of child care subsidy to access quality child care. Thirty services participate in the pilot, and are required to allocate a minimum of 30 per cent of their spaces to families in receipt of fee subsidy.
• established a system navigator position to assist families trying to access child care
• set a plan to undertake consultation with Indigenous community partners to create Indigenous-led licensed child care.
• established a pilot for Home Child Care to incentivize providers to deliver more flexible, overnight and evening care.

The Region has also developed:

• modular child care centres owned by the Region and placed on school property 
• a crisis response initiative providing spaces for children in urgent need.

OMSSA Children’s Services Sector Leads Consultation

The consultation with Children’s Services Sector Leads confirmed that CWELCC has significantly expanded the role of municipalities. Service System Managers are now responsible not only for administering funding, but also for managing growth, monitoring financial compliance, and navigating increasingly complex relationships with operators, councils, and the province. 

Participants identified several systemic challenges, including inadequate capital funding, tight implementation timelines, limited guidance from the province, and the inability to use funding to incentivize quality improvements. Data limitations and the lack of policy solutions for northern and rural communities were also raised.

At the same time, participants emphasized that reduced parent fees have had a transformative impact for families and that municipalities play an essential role in maintaining equitable access for children and families with greater support needs.

Cross-cutting issues identified by local government

Three main themes emerged across consultations with municipal and regional officials.

Increased financial and political responsibilities

In the consultation with Children’s Services System Leads (CSSLs) at OMSSA, as well as in other interviews and focus groups, municipal managers talked about how CWELCC has changed their role as service system managers. 

Under CWELCC, the role of SSMs has shifted to increased political and financial roles. For example, service system managers indicated that there is a need for political acuity, with roles requiring a ‘tremendous amount of engagement with public officials’. SSMs must now engage more frequently with municipal council meetings to explain policy changes, fee structures and funding limitations. 

Children’s Services Directors described heightened financial risk and stricter reporting requirements, such as reviewing and managing budgets, undertaking cost reviews and ensuring financial responsibilities around the guidelines are met. Several noted that their departments required new financial expertise to manage these responsibilities effectively. 

As a result, there has been a shift away from the traditional municipal role. Before CWELCC, staff were focused on supporting quality child care through professional development and training opportunities with operators. Service system managers explained that prior to CWELCC they could use some of the flexibility in funding to support quality, but now have to focus more on recruitment and retention of ECEs.

Relationships with operators

The shift to service system managers taking on more financial responsibilities has also impacted the relationship that SSMs have with operators. Before they were able to support them to improve quality, whereas now they are supporting them with financial compliance. One Children’s Service Director did comment there are some benefits and opportunities with this new financial surveillance. For example, it gives SSMs new perspectives into costs, which can allow SSMs to have quality-related conversations with centres about how they can change their budget to better support quality programming. Others, though, commented that there is now little incentive to put funding into quality.

Expansion planning and directed growth

Under CWELCC, municipalities have also taken on more responsibility for planning the expansion of licensed child care. The concept of directed growth is central to municipal service planning, an approach that guides municipalities on where new centres should be located based on need. SSMs now have a greater role in approving funding applications and determining who and where services will be located. Although SSMs hold more responsibility for planning, Children’s Services Directors also talked about the challenges of doing so when they have limited input into the province’s planning process. In addition, when demand for spaces far exceeds available funding, municipalities receive little provincial guidance on prioritizing families or communities.

Thus, while municipalities have taken on greater responsibility for planning services under CWELCC and directed growth plans, there is still a need for provinces and municipalities to take on greater leadership and to ensure centres and spaces are located where they are needed. Operators emphasized that although municipalities approve expansion, the operational burden of identifying and securing suitable sites, developing architectural and building plans, obtaining building permits and approvals from relevant health authorities, and negotiating complex legal and financial agreements with land and building owners remains largely with the operators. This distribution of responsibilities means that, despite enhanced municipal planning authority, financial and operational risk remains concentrated at the operator level.

School Boards

School Boards in three locations were consulted as part of the case study visits. While the provincial Early Years and Child Care Act 2014 prevents school boards from directly funding child care, school boards receive funding through SSMs and are mandated to partner with third-party operators to deliver before- and after-school programs where there is sufficient demand. In 2025, twelve (of 76) school boards (in 262 schools) directly delivered licensed child care, an increase from eight school boards (in 203 schools) in 2022.

Toronto District School Board 

Service profile 

The Toronto District School Board (TDSB) has an Early Years team led by a Manager with three early years coordinators, and administrative support. In addition, the Extended Day Program has a manager, three coordinators and three office administrators. 

The board does not directly operate any licensed child care for children below school age, however the TDSB supports more than 200 programs in schools that are delivered by third-party operators. The Toronto District School Board (TDSB) and City of Toronto collaborate closely to deliver programs in schools, with 40 per cent of licensed child care located in schools.

Additionally, the Board supports over 300 Before and After School programs: 220 third party licensed programs, 70 recreation programs, and 23 unlicensed Extended Day Programs operated by the TDSB for children in kindergarten to grade 6 and delivered by TDSB staff. In partnership with third party operators, the Board developed 900 Before and After School Child Care spaces in 2024-25.  

DECEs working in Extended Day Programs can choose to work core shifts, morning only, or after school only. The School Board’s HR department is responsible for 

• keeping lists of supply staff
• professional development for DECEs, particularly on pedagogical approaches for older children.

Approach to expansion

The expansion of child care programs in schools is part of the City’s growth strategy and aligns with the province’s Schools-First policy. There have been five new schools built in the last two years and the Early Years team is involved with the design of the child care space. School Boards used to have first right of refusal for the delivery of before and after school programs in schools, but now partner with third-party operators to expand. As noted in the previous section, the City has service agreements with third-party operators and are required to sign off on third-party service agreements. 

The board indicated its priority areas include:

• Strengthening and expanding Extended Day Programs through third-party operators
• Developing stronger partnerships with third-party operators in schools 
• Strengthening support for children transitioning to kindergarten 
• Collecting more data to study the impact of EarlyON in schools
• Creating networking opportunities for learning among school boards in Ontario

Ottawa Carlton District School Board

Service profile

The Ottawa-Carleton District School Board (OCDSB) is involved with both contracting and direct delivery of Extended Day Programs in all Board-operated schools. 

Extended Day Programs for kindergarten age children are delivered in 98 schools – 68 are operated by the Board, and 30 are operated by third-party operators.

The programs are financed through a mix of parent fees and provincial funds received through the SSM. The OCDSB receives funding for 10,000 spaces, and 5,000 of these are run by the School Board. 

The Board has over 800 employees supporting the delivery of the Extended Day Program. 

While third party operators operate most of the licensed programs for children 0 – 4, the OCDSB does directly operate two centres with a total of 96 spaces.

Approach to expansion

The Board is actively expanding Extended Day Programs through:

• Accessing capital for new school builds through the provincial capital program for new schools
• Pursuing opportunities to directly deliver licensed child care in schools
• Advocating to government that School Boards should be able to directly fund licensed child care
• Partnerships with third-party operators

The barriers to expansion that were identified by OCDSB staff include not being able to directly fund licensed child care, lack of access to capital funding for retrofit, insufficient funding for Educational Assistants.

Waterloo Region District School Board and Waterloo District Catholic School Board 

Service Profile

The Waterloo District School Board (WRDSB) and the Waterloo District Catholic School Board (WCDSB) are both involved with direct delivery of licensed child care in the region. 

When Ontario signed onto CWELCC, the School Board licensed 75 programs (7,900 licensed spaces) providing before and after school care programs so that families with CWELCC-eligible children would benefit from the fee reductions. As of December 2025 the Board employed 330 Designated Early Childhood Educators (DECEs) for 165 Extended Day classrooms. The Ontario Ministry of Education funds one RECE position for FDK, and parent fees cover the cost of a second RECE in order to have coverage throughout the day for the Extended Day Program. This is structured so that one RECE works a shift from 6:45-2:15 and the second from 10:45-6:15. WRDSB hires approximately 150 new DECEs each school year. 

In addition to the 330 DECEs employed by the WRDSB, they also employ: 

• 150 Educational Assistant positions
• 10 supervisors
• two schedulers
• one staffing supervisor
• one secretary to support parents
• third-party liaison to navigate the relationships between school principals and third-party operators
• and funding support for positions in HR and accounting.

Additionally, the Board’s Planning Department also is involved with applying for capital funding from the Ministry of Education to build new child care facilities. 

Staff at WRDSB identified a number of benefits to directly delivering Extended Day Programs:

• The positions are full-time with benefits, staff are unionized, and there are three shift options. 
• Staff have access to resources, HR support, and general administration support. 
• Children have access to shared resources, which is especially beneficial to children with additional needs, who are able to have seamless care plans throughout the day.

The Board leads professional development with DECEs working with older children in Grade 3 to Grade 6, in order to ensure they have adequate training and resources to support children up to aged 12 years. 

In addition to the 75 before and after school programs the WRDSB operates directly, WRDSB also partners with 24 centres who deliver programs for 0 to 4 year olds in schools, 17 of which also provide before and after school care.  

Third-party operators that lease space from WRDSB pay an operating fee that covers the cost of cleaning, utilities, supplies and snow removal. It is a flat rate set per square foot, based on the overall costs at elementary schools.  

The Waterloo Catholic District School Board (WCDSB) started directly delivering licensed Extended Day Programs in 2023. In 2025 it delivered Extended Day Programs at 41 Catholic schools across the Board.

Approach to expansion

The WRDSB expanded their scope of responsibility in 2010 with the rollout of Full Day Kindergarten. At the time, the school board worked with the Region of Waterloo to identify areas that did not have access to before and after school care. There are now before and after school programs in every public elementary school.

Prior to the implementation of CWELCC, the WRDSB noted that a number of operators stopped delivering before and after school care because the RECEs working in these programs would move to toddler or preschool programs because they did not want to work the traditional split shifts of before and after school care. In response to these closures the WRDSB decided to take over the programs. Most of the programs were YMCA centres. Many of the former YMCA staff stayed with the 0 to 4 year old programs. 

One reason the WRDSB is in a good position to continue expanding is because the Board has licensed every kindergarten room so that where there is demand in a school they are able to increase the number of spaces. 

The board is currently partnering with the Region of Waterloo to expand child care through modular buildings. The Board is purchasing land and the Region will own the building, which it will then lease back to the operator. The Board is not charging the Region to lease the land, but will charge for costs such as snow removal and other land maintenance. It is expected that the Region will have a 30-year lease with the operator. 

Cross-cutting issues identified by school boards

Each school board consulted for the case study have diverse service profiles and scopes of delivery. They each have different approaches partnering with SSMs and third-party operators, yet they also share some experiences and challenges to child care delivery and expansion, as summarized below. 

Relationships with third-party operators

The school boards that were consulted during the site visits outlined different ways of delivering child care and managing relationships with third-party child care operators. Staff at all the school boards that were consulted indicated that managing and improving relationships with third-party operators is one of their priorities. The OCDSB and WRDSB both indicated that third-party operators are delivering services on their behalf and so support the third-party operators’ staff to be treated as Board staff. They indicated that relationships varied from school to school and were influenced by the different approaches of individual principals.

Access to capital and start-up funding 

The School Boards consulted all identified a lack of access to capital and start-up funding as a barrier to expansion. Without assurance that operating grants will remain stable, Boards said they are hesitant to commit to new builds. School Boards are also cautious to expand because they are unsure whether new spaces will be eligible for legacy funding to sustain higher wages for staff. 

School Boards indicated there should be a dedicated capital funding stream for school boards wanting to create new child care centres or spaces at existing schools. An additional constraint is that, under provincial legislation, they are not permitted to directly fund child care programs, limiting their role in expansion.

Lack of support for inclusion

As with the SSMs and not-for-profit operators (discussed in the next section), School Board staff indicated there are not sufficient funds for additional support services. Education Assistants are employed by the Board 7 hours per day to work in the classroom, but there are no funds for employing an additional EA to cover the Extended Day Programs. 

The OCDSB also indicated that additional funding for caring for children with special needs is required.

Guidance on delivery of licensed child care

School Boards also talked about the need for more networking opportunities among school boards across Ontario. The WRDSB also noted that although school boards are mandated to provide child care for school age children where there is demand, there is limited guidance on what this can and should like, and the processes required to achieve this.

Lastly, the School Boards identified the need to align policies around health and outdoor spaces, which are currently the responsibility of various departments at the provincial and municipal levels. This creates challenges for School Boards and other operators to navigate approval processes for building, renovating and licensing new indoor and outdoor spaces.

Child care organizations and operators

Child care organizations and not-for-profit operators from the three case study visits identified various ways that CWELCC impacted their roles, responsibilities and relationships with stakeholders, including SSMs and School Boards. A mix of small and large multi-site not-for-profit operators, and key provincial child care organizations were consulted. 

Ontario Coalition for Better Child Care (OCBCC)

The Ontario Coalition for Better Child Care (OCBCC) is the province’s advocacy organization. The Coalition is the province’s primary membership association representing not-for-profit operators across the province, and advocating for better wages and conditions for educators, and universal access for families. Its policy is anchored in the Roadmap to Universal Child Care.¹⁹ Members of the Coalition range from single sites to multi-site operators. 

Association of Early Childhood Educators Ontario (AECEO)

The Association of Early Childhood Educators of Ontario (AECEO) is a membership based organization representing ECEs across the province. Their mission is to “build a strong collective voice for early childhood educators”.²⁰ The AECEO advocates on behalf of all ECEs for respect, recognition and appropriate wages and working conditions. Unlike the College of ECEs, which is a mandatory membership for ECEs, joining the AECEO is voluntary. 

Ontario Federation of Indigenous Friendship Centres (OFIFC)

The Ontario Federation of Indigenous Friendship Centres (OFIFC) is a flagship organization for 31 friendship centres across the province. Seven of the 31 centres deliver licensed child care. To be a member of OFIFC, a friendship centre must be located in an urban centre with a minimum population of 500 urban Indigenous people. The OFIFC is advocating to change provincial legislation so that it can be an administrator of friendship centres, similar to the role that SSMs have with licensed operators. The OFIFC has strong relationships with OCBCC and AECEO. They also meet with municipalities regularly and have an MOU with OMSSA to facilitate knowledge exchange to inform development of their own centres.

Building Blocks for Child Care (B2C2) 

Building Blocks for Child Care (B2C2) is a charitable corporation with a mission to ‘expand and preserve accessible, affordable, high quality not-for-profit and public early learning and child care’. It provides consulting services, resources, and practical tools to assist not-for-profit child care organizations, boards of directors, and municipalities with planning, governance, financial management, and capital development. It helps build their capacity to build new spaces, and renovate existing spaces with a goal to increase the availability of not-for-profit and public spaces across Ontario.  

Home Child Care Association of Ontario

The Home Child Care Association of Ontario (HCCAO) represents licensed home child care agencies across the province. Established in 1989, the association provides leadership, advocacy, professional development, and networking opportunities for agencies that recruit, approve, and support home child care providers. HCCAO promotes the role of licensed home child care as a flexible and community-based form of regulated care that is particularly important for infants, siblings, rural communities, and families requiring non-standard hours of care. The association also works with government and sector partners to strengthen policy, funding, and quality supports for the licensed home child care sector.

Association francophone à l’éducation des services à l’enfance de l’Ontario (AFESEO)

AFESEO is the provincial organization representing Francophone early learning and child care services in Ontario. It works to strengthen access to high-quality French-language services and to ensure that the needs of Francophone children, families, and educators are reflected in provincial policy and funding decisions. AFESEO also plays an important role in identifying challenges specific to the Francophone sector, including workforce shortages, limited access to French-language training, and the need for expansion in communities where Francophone families have a right to services in French.

The Quality Early Learning Network (QELN)

The Quality Early Learning Network (QELN) is a membership-based network of 18 large, multi-site not-for-profit child care organizations in southern Ontario. It provides a forum for senior leaders to collaborate on policy, operational, and workforce issues affecting the sector. The network advocates for a high-quality, publicly funded early learning and child care system and plays an active role in provincial policy discussions related to CWELCC, funding, workforce development, and expansion. Their vision is for a “comprehensive, integrated, high quality system of services for children and families delivered by the public sector, school boards and not-for-profit community agencies.”²¹

Not-for-profit operators: experiences with CWELCC

Relationships with province, SSMs and school boards

Not-for-profit operators across all three locations identified a number of ways that CWELCC is reshaping their relationships with SSMs, School Boards and the province. While some of the challenges noted below predate CWELCC, stakeholders emphasized that certain structural features of the new funding system have amplified existing pressures or introduced new constraints.

• Relationship with province: Operators indicated that the communication channels were often unclear between the province, SSMs and operators, making it difficult to know whether the operators were accountable to the province or the SSM, and who they should be receiving guidance from.
• Relationship with SSMs: Consistent with what the SSMs told us, operators also observed that the role of SSMs changed under CWELCC, from a primarily quality support role toward a primarily financial accountability role. Operators talked about how this impacts the relationship operators have with SSMs, where municipalities once worked primarily as quality partners, they are now more frequently engaged as financial overseers.
• Relationship with school boards: Some operators noted the challenges of leasing space in schools. The experience and perspectives of operators and school boards varied across the regions. For example, in some leasing arrangements, operators indicated that conflicts about shared space and resources limited their ability to expand the number of spaces in some school buildings. Some operators experienced differences between leasing from English- compared with French-language school boards, indicating they felt more like partners with Francophone schools, opposed to tenants in English-language schools.

Governance capacity and financial risk

Not-for-profit operators (including third-party operators) indicated that CWELCC has shifted their roles and responsibilities, requiring them to take on increased governance responsibilities and financial risk. Their capacity to take this on varied across operators, shaped by the size of the operator, existing assets and governance capacity (i.e. skills and time of board members). Parent-run boards of directors, common across the sector, often lack the skills, time or continuity required to manage the complex expansion process. Many not-for-profit operators identified governance capacity as a major barrier to  expansion. High turnover among parent boards – often annually – further undermines continuity and institutional knowledge.  

Challenges include:

• Applying for capital funding
• Securing land or buildings
• Negotiating leases
• Managing construction contracts
• Navigating regulatory approvals

Operators emphasized that although municipalities approve expansion, the operational burden of identifying and securing suitable sites, developing architectural and building plans, obtaining building permits and approvals from relevant health authorities, and negotiating complex legal and financial agreements with land and building owners remains largely with the operators. This distribution of responsibilities means that, despite enhanced municipal planning authority, financial and operational risk remains concentrated at the operator (not-for-profit / third-party) level.

Many larger not-for-profit operators, which have the capacity and expertise to expand described substantial financial risk with expansion. One example cited by multiple operators involved funding deadlines tied to fiscal year end. Operators may be required to pay contractors prior to construction being completed, in order to be compliant with funding requirements linked to financial year closings in order to meet reporting deadlines, leaving them exposed if projects are delayed or incomplete. As one multi-site director observed, few industries expect a single staff member to “find the location, build the location and find your people”. 

Access to capital

Although the federal ELCC Infrastructure Fund flowed to Ontario and was subsequently allocated to SSMs through Directed Growth Plans, stakeholders emphasized that available funding is limited relative to demand. Start-up grants support the purchase of equipment, and materials, but do not cover major building construction or land acquisition costs.

Compounded with the expectation for operators to take on financial risk, a consistent concern across interviews and focus groups with operators was insufficient access to capital funding. Uncertainty about long-term federal and provincial funding was frequently cited as a deterrent to expansion. Some operators indicated that the Ontario government is not contributing sufficient provincial funding to meet expansion goals, and overall it is “not supporting the success of the program”.  Specific barriers to access capital funding include:

• Start-Up grants: support the purchase of equipment, and materials, but do not cover major building construction or land acquisition costs.
• ELCC Infrastructure Fund: SSMs receive ELCC Infrastructure Funds via the province’s Directed Growth Plans, however operators emphasized that available funding is limited relative to demand. 
• Access to capital dependent on reserves and assets: Operators noted that expansion often depends on whether an organization has access to reserves, assets, or existing property. Where organizations lack capital reserves, they are reluctant or unable to assume the financial risk of bank loans or large mortgages.
• Cancellation of capital funding in existing schools: Several operators pointed to the cancellation of provincial capital funding for child care spaces in existing schools as a setback for expansion.

Allocation of funds through Directed Growth Plans

Operators shared different views about the guidelines and rules set out under the Directed Growth Plans, which are central to CWELCC expansion planning. Some reported that the strict application of geographic priorities prevented them from expanding, even when they had secured viable sites close to the designated areas.  

Other operators indicated that SSMs exercised some discretion where the operators could demonstrate that the new centre or expansion would still meet the priority regions or populations included in the Directed Growth Strategy.

Conversely, one operator explained that their application for a new location in a rural area was approved because it was in a priority area, yet a large number of children attending the centre commute from elsewhere, illustrating the complexity of aligning geographic planning with demand patterns and barriers to access for some  priority populations. 

Overall, operators indicated that the Directed Growth Plans are not achieving their intended outcome of expanding in priority areas and, in some cases, the Directed Growth Plans are being implemented in ways that prevent the expansion of new facilities and spaces where they are needed.

Cost-based funding formula

Public and not-for-profit operators said they are cautious to expand because it is still too early to tell whether the formula is working, because a full reconciliation of costs for the 2025 year has not been completed. Some identified the need to evaluate and strengthen the formula to address limitations in the funding formula.

Operators identified a number of benefits of the cost-based, and overall the formula is recognized as an improvement from the revenue-based formula, however they did note that some aspects of the formula are impacting their decisions to expand, as described below.

Regulations and guidelines impacting expansion

At the same time, operators noted non-financial factors that impacted their capacity to expand. This included

• Inconsistent zoning regulations across municipalities and authorities: Operators noted different health and safety regulations for schools and child care centres, meaning that a space approved for a kindergarten program may not be approved as a licensed child care space. Additionally, operators identified the complexity of navigating the various approvals required from provincial and municipal authorities as a barrier to expansion.
• Rigid funding rules to access Start-up and ELCC Infrastructure Funding: Operators indicated that some funding rules to access capital support were unnecessarily rigid. For example, one operator indicated that construction was delayed beyond their control, but they were still held to the deadline for spending the funds. This resulted in the operator having to return $20,000 because the funds were not spent in time. Another operator described a similar experience where renovation plans were delayed and they had to give back $200,000 that had been allocated from the municipality through the Directed Growth Plan.
• Short grant submission timelines: Operators also noted short proposal submission windows, following delayed provincial announcements, compressing planning time and increasing risk.

Quality constraints

A number of operators said they are hesitant to expand because they are unsure whether the funding formula will be sufficient to continue delivering high quality programs. These concerns centred on:

• Cross-subsidization across centres: multi-site operators indicated that under the new funding formula they are unable to cross-subsidize facilities, for example by using surplus in one centre to support smaller or higher-cost locations
• Legacy funding: the current funding formula recognizes the higher cost of higher wages at existing centres, but new centres or expanded spaces can only access benchmark funding levels, and therefore would not be able to sustain the costs that support high quality in new centres, such as more qualified educators and professional development. 
• Amalgamation of smaller centres: A couple of operators talked about the possibility of amalgamation among smaller centres for governance or to combine capital resources. They were uncertain how the funding formula would impact wage disparities if the centres amalgamated. 
• Supporting children with special needs: Operators expressed concern that the funding formula limits their ability to provide the resources needed to provide high quality child care for children and families with additional needs.

These constraints on quality were often explicitly connected to barriers for children from low-income families, other underserved families, and children with additional needs accessing and being supported in licensed child care programs.  

Access and Inclusion

Similarly, operators identified a number of ways that the funding formula, and other elements of CWELCC funding, impacts access and inclusion for children with disabilities, children living in low-income families, or from underserved populations. They are cautious to expand when they are unable to ensure equitable access and support the needs of all children. Limitations include:

Cost of Educational Assistants

The funding formula allows for an Educational Assistant for 7 hours per day, while children usually attend more than 7 hours per day. There is no line item in the formula that accounts for these costs, which means these types of costs are listed in the budget as ‘in lieu of surplus’, leading to a reduction in the 8% surplus that is included in the cost-based funding allocation. 

Inequities in absence allowances for children receiving fee subsidy

Operators explained the inequities in how absences are treated for children subsidized through CWELCC, compared with those who are funded through the provincial low-income subsidy program.Children who receive the low-income subsidy are only allowed to miss 24 days in a year, whereas families accessing reduced fee spaces through CWELCC have no limitations on the number of days they are absent. Although a necessity for many families to secure a space for when they do need it, operators explained the inequities in this approach, especially where middle and higher income families are more likely to be able to afford to pay for the space when they are not using it. 

Requirement for centres to operate at 90% capacity

Under CWELCC, facilities are required to operate at 90% capacity, meaning that Directors are expected to fill spots as soon as one becomes vacant. Children from low-income and other disadvantaged families often need more time to complete the necessary administrative process (i.e. immunization records, centre visit) to register their children, meaning they may lose the space to a family who is able to complete the registration process faster. 

Directed Growth Plans prioritize locations, not families

Directed Growth Plans guide SSMs in prioritizing new centre locations in areas of need. Often the spaces in these centres end up being filled by families who live outside the priority area, but who have better access to transport. This means children in the priority area miss out.

Staffing

With reduced parent fees driving up demand for licensed child care, staff shortages have increased. All stakeholders overwhelmingly agreed that staff shortages are driven by their low pay and working conditions, which is built into the funding formula. 

Not-for-profit operators reported that they lose RECEs to the school system where they are paid better. School boards recognized this challenge, as they explained they are able to recruit and retain staff more easily due to higher wages and better working conditions built into public service delivery.

Staffing challenges are exacerbated in: 

• School age child care programs where there are split shifts
• Francophone programs due to higher salaries in Quebec (especially in centres in Ottawa where Quebec is geographically proximate). A couple of Francophone operators talked about their need to look overseas to recruit educators, which has its own challenges to become certified by the College of ECEs. Without a plan to expand Francophone ELCC, operators worried about losing Francophone spaces to Anglophone programs. 

Financial viability of school-age child care

Both public (SSM and school board) and not-for-profit operators identified the impact of CWELCC funding on the viability of the before and after school sector. In addition to pre-existing staff recruitment challenges for school-age child care, CWELCC has created new challenges that are impacting its sustainability and growth. With school-age spaces excluded from CWELCC funding, operators now need to separate budgets which limits their ability to share staff and cross-subsidize other costs, such as materials and food. 

Families whose children age out of CWELCC funded care at age 6 must make difficult decisions about cost and affordability, which impacts demand for before and after school care in some locations. Some operators (including municipalities and school boards) indicated that the shift to remote working since Covid allowed older school age children to have supervision at home, and therefore reduced need for before and after school care. However, recent policy directives requiring employees to return to the workplace are driving increased demand for after school care, yet many operators are cautious to expand under the existing funding arrangements, or have already stopped providing before and after school care.

Views on direct municipal delivery of licensed child care 

Stakeholders held various views about whether or not municipalities should continue (or expand) direct delivery of licensed child care. Some stakeholders argued that municipalities should strengthen their role in direct public delivery, citing benefits such as:

• greater stability and control
• stronger accountability
• integration with broader municipal planning
• setting benchmarks for workforce compensation across the sector

Others raised concerns about potential conflicts of interest as it places SSMs as both service operators and system managers of licensed services within their jurisdiction.  One SSM indicated that they did not want to directly deliver services so they were not to be in direct competition with other operators in their region. Other government and non-government stakeholders pointed out that, under the Directed Growth Plans, and the Value-for-Money audit directed by the provincial government in 2024, there is no provincial support for direct public delivery.

The debate reflects broader tensions about governance, neutrality, and the future balance between public and not-for-profit service provision in Ontario.

The involvement of school boards demonstrates how public infrastructure can reduce barriers to expansion and support more stable, accessible, and community-based child care services.

Conclusion

Overall, Ontario has shown strong sector growth between 2019 and 2025, with a total increase of 88,622 licensed spaces in Ontario. Full-day,centre-based spaces for 0 to 5 years olds increased by 38,162, and before and after school age spaces increased by 47,767. Regulated family child care has also increased by 2,693 spaces for children 0-12 during the same period.

In 2025, 8.6 per cent of all licensed centre-based spaces in Ontario were publicly operated – by local government, a school board, Indigenous governing body or post secondary institution. This is the highest rate of public delivery across all jurisdictions.

However, much of Ontario’s growth in full-day spaces has occurred in the for-profit sector, and a large proportion (approximately 25%) of all licensed spaces in Ontario are outside of CWELCC. This is concerning for affordability for families, and also for access, inclusion and quality. 

Parent fees have been reduced substantially, thousands of new licensed spaces have been created, and municipalities have assumed a much stronger role in planning and managing the child care system. The introduction of a cost-based funding model, targeted capital and start-up funding, and directed growth strategies represent important steps toward a more coordinated and publicly managed approach to expansion.

The case study findings underscore the central role played by Service System Managers, school boards, and experienced not-for-profit operators in expanding licensed child care. Municipalities are increasingly using data and equity-focused planning tools to direct growth to underserved communities, while school boards continue to provide critical publicly owned infrastructure through school-based expansion. Large multi-site not-for-profit organizations have demonstrated considerable capacity to plan, develop, and operate new services when funding and partnerships are stable. Together, these public and not-for-profit actors form the backbone of Ontario’s expansion efforts.

At the same time, the research highlights a number of structural barriers that continue to constrain growth. Workforce shortages remain the most significant challenge across all regions and delivery models. Access to capital funding is insufficient relative to need, particularly for organizations without substantial reserves or assets. Expansion processes remain highly complex, requiring operators to secure sites, manage construction, and navigate multiple layers of approvals while assuming significant financial and governance risk. These challenges are especially acute for smaller not-for-profit organizations governed by volunteer boards.

The findings also point to important tensions within the current funding model. Although the new cost-based formula is widely viewed as an improvement over the previous revenue replacement approach, stakeholders expressed concern about whether benchmark funding levels will be sufficient to sustain high-quality services, particularly in new centres, in high-cost communities, and for programs serving children with additional support needs. The treatment of school-age care outside the CWELCC system further limits the ability of operators to offer integrated services and weakens the financial viability of before- and after-school programs.

A recurring theme across interviews was the gap between the province’s expansion targets and the practical realities of implementation. Municipalities are expected to meet ambitious targets but have limited influence over provincial planning decisions. Operators are expected to create new spaces but continue to shoulder much of the development and financial risk. School boards are well positioned to contribute to expansion but remain constrained by legislative and funding limitations. These disconnects reduce the effectiveness of an otherwise promising planning framework.

Ontario’s experience demonstrates that reducing parent fees, while transformative for families, is only one component of building a universal early learning and child care system. Sustained expansion requires robust public planning, adequate capital investment, a well-compensated workforce, and funding models that support inclusion and quality. It also requires deliberate policies to strengthen the capacity of public and not-for-profit organizations to expand.

Overall, the Ontario case study suggests that the province has established many of the building blocks needed to create a more equitable and publicly managed child care system. However, realizing this vision will require stronger provincial leadership in system planning, more stable and adequate funding, and policy reforms that reduce the risks borne by municipalities and not-for-profit operators. Without these changes, Ontario may struggle to meet its expansion goals and to ensure that the benefits of CWELCC are available to all children and families, particularly those in underserved communities.

Recommendations

Meeting CWELCC goals will require stronger provincial planning, adequate capital and operating funding, a comprehensive workforce strategy, and deliberate support for public and not-for-profit delivery. The following recommendations are intended to support the continued development of a publicly planned, managed and supported comprehensive ELCC system.

1. Strengthen provincial leadership in system planning

Ontario should move beyond allocating expansion targets to municipalities and develop a stronger provincial planning framework for ELCC expansion. This should include clearer criteria for identifying underserved communities, more transparent methods for allocating spaces, and stronger alignment between provincial targets, municipal service plans, school board capital planning, and Indigenous and Francophone service needs.

The current Directed Growth approach has increased the planning role of SSMs, but municipalities and operators report limited provincial guidance, uneven implementation, and insufficient clarity on how to prioritize families and communities when demand exceeds available spaces. 

2. Establish a dedicated capital program for public and not-for-profit expansion

Ontario should introduce a predictable, multi-year capital funding program specifically for public and not-for-profit child care expansion. The program should support land acquisition, construction, major renovations, modular development, and retrofits in existing schools and public buildings.

Start-up grants and current infrastructure funding are not sufficient for major capital development, and operators without reserves or assets are often unable to expand. A dedicated capital program would reduce reliance on operator borrowing and help shift expansion away from ad hoc, operator-driven development.

3. Restore and expand capital funding for child care in existing schools

Ontario should reintroduce capital funding for retrofits and additions to existing schools, not only new schools and major school expansions. School boards are one of Ontario’s most important sources of public infrastructure for child care, but their ability to expand is constrained by limited capital and start-up funding.

A renewed school-based capital stream should support both licensed full-day child care and before- and after-school programs, with priority for communities with low access, Indigenous and Francophone families, and areas of rapid population growth.

4. Reduce financial and development risk for not-for-profit operators

The province should develop mechanisms to reduce the financial risk currently placed on not-for-profit operators. This could include provincial or municipal project management supports, bridge financing, contingency funding for unforeseen construction costs, and more flexible timelines for spending capital allocations.

Many not-for-profit operators are expected to secure sites, manage construction, negotiate leases, and navigate approvals while also operating programs. This places too much risk on voluntary boards and individual executive directors and discourages expansion. 

5. Review and strengthen the cost-based funding formula

Ontario should undertake an early review of the 2025 cost-based funding formula, with direct input from SSMs, public operators, not-for-profit operators, school boards, home child care agencies, Francophone organizations, Indigenous organizations, and workforce representatives.

The review should examine whether benchmark funding is sufficient to support:

• high-quality staffing models; 
• fair wages, benefits, and pensions; 
• inclusion supports; 
• rent and occupancy costs; 
• professional development; 
• administrative capacity; 
• rural, northern, Francophone, and Indigenous-led services. 

The formula should also address the limitations created by centre-by-centre funding, particularly for multi-site not-for-profit operators that previously used internal flexibility to support smaller or higher-need programs.

6. Introduce a provincial wage grid, benefits, and pension strategy

Ontario should develop a comprehensive workforce compensation strategy that includes a province-wide wage grid for RECEs and other program staff, access to benefits and pensions, and mechanisms to reduce wage disparities across auspice and geography.

Current wage floors are an improvement, but they do not resolve recruitment and retention challenges or the gap between child care and school board employment. Workforce shortages remain the most significant barrier to expansion, and Ontario will not be able to meet its space targets without a stronger workforce strategy.

7. Create a stronger inclusion funding framework

Ontario should improve its Access and Inclusion Framework through dedicated funding sufficient to support children with disabilities and additional support needs throughout the full child care day.

This should include adequate funding for additional staff, longer coverage than the school-day model, training, specialized supports, and flexibility for centres serving higher proportions of children with complex needs. The current approach does not adequately reflect the costs of inclusion and can unintentionally penalize programs that prioritize families with greater needs.

8. Address inequities in subsidy and access rules

Ontario should review subsidy policies and access requirements to ensure they do not disadvantage low-income families. This should include removing all social criteria (such as requiring the parent to work and study criteria, reason for care, and other barriers), revisiting absence rules for subsidized families, the interaction between fee subsidies and CWELCC fee reductions, and the requirement for centres to maintain high occupancy rates.

Families with fewer resources may need more time to complete registration requirements or may have less flexibility to hold a space. Access policies should be aligned with equity goals, not only administrative efficiency.

9. Support the sustainability of school-age child care

Ontario should consult with the sector and other relevant stakeholders on developing a specific strategy for school-age child care. Excluding most school-age care from CWELCC has created affordability gaps for families and financial pressures for operators. It has also made it harder to sustain integrated services across age groups.

A provincial strategy should address fees, staffing, split shifts, inclusion supports, non-instructional days, summer care, and the relationship between licensed care, Extended Day Programs, and authorized recreation programs.

10. Strengthen the role of school boards as infrastructure partners and, where appropriate, public operators

Ontario should clarify and strengthen the role of school boards in ELCC expansion. This should include clearer provincial guidance on school board delivery, funding for start-up and retrofit costs, and support for partnerships with not-for-profit operators and municipalities.

School boards are well positioned to support expansion through public infrastructure, integrated services, and stable employment models. However, current legislative and funding restrictions limit their ability to act fully as system partners.

11. Support licensed home child care as part of expansion

Ontario should give greater policy attention to licensed home child care, particularly as a flexible option for infants, siblings, rural communities, and families requiring non-standard hours.

This should include improved compensation for providers, stronger agency funding, incentives for care during extended or irregular hours, support for children with additional needs, and recognition of the role agencies play in quality assurance and provider support.

12. Develop specific expansion strategies for Francophone and Indigenous-led child care

Ontario should develop distinct, funded strategies for Francophone and Indigenous-led child care expansion. These strategies should address workforce, governance, language rights, culturally grounded programming, and access in urban, rural, and northern communities.

Francophone stakeholders identified the risk of losing French-language spaces because of staffing shortages and lack of a provincial expansion plan. Indigenous organizations, particularly urban Indigenous organizations, identified governance and accountability gaps that are not adequately addressed through the current SSM structure.

13. Develop a targeted strategy for rural, northern and remote communities 

Ontario should develop a dedicated strategy to expand and sustain licensed child care in rural, northern and remote communities, recognizing that these regions face challenges that differ significantly from those in larger urban centres. A standardized provincial funding model based on urban assumptions may not be sufficient to support viable services in communities with small populations, limited infrastructure, and constrained labour markets. 

The strategy should include:

• enhanced operating funding to reflect higher per-space costs and lower economies of scale
• targeted workforce incentives, including housing supports, and tuition assistance
• capital funding for smaller-scale and modular projects
• support for licensed home child care and flexible service models
• transportation solutions where appropriate

14. Improve provincial communication, transparency, and consultation

The province should establish regular, transparent consultation mechanisms with SSMs, school boards, public and not-for-profit operators, Indigenous and Francophone organizations, and sector and workforce representatives.

Stakeholders repeatedly identified unclear communication, short timelines, and limited consultation as barriers to implementation. A standing advisory structure, with published timelines and clear decision-making processes, would improve transparency, trust and implementation capacity.

15. Build not-for-profit sector capacity

Ontario should fund capacity-building supports for not-for-profit operators, including governance training, capital development expertise, merger and amalgamation support, project management assistance, and technical resources for new and expanding operators.

Building not-for-profit capacity is essential if Ontario intends to maintain or increase the not-for-profit share of spaces.

16. Align regulations across ministries and approval bodies

Ontario should review and harmonize regulatory requirements affecting child care development, including zoning, building approvals, health requirements, outdoor space rules, school board policies, and licensing standards.

Operators and school boards identified inconsistent requirements across municipalities and provincial authorities as a significant barrier to expansion. A more coordinated approval pathway would reduce delays and make expansion more predictable.

1. Site visits, interviews and focus groups were undertaken in Ontario between September and December 2025. ↩︎
2. Statistics Canada, 2021. Focus on Geography Series, 2021 Census of Population. ↩︎
3. Beach et al. (2024) ECEC in Canada 2024, p23. ↩︎
4. Ontario Government, 2023. The Ontario municipal councillor’s guide, Chapter 5: Municipal organization [Accessed 18 February 2026] ↩︎
5. Canadian Centre for Policy Alternatives (2026) Childcare Licensing and Accessibility by Region (CLAR) database ↩︎
6. Ontario Government, 2015. ‘Ontario Increases Wages for Early Childhood Educators’. Available at: https://news.ontario.ca/en/release/31520/ontario-increases-wages-for-early-childhood-educators ↩︎
7. Eligibility is adjusted each year and pegged to the most common starting rate of DECEs.  ↩︎
8. Government of Ontario, 2025. Ontario Child Care Tax Credit (CARE). ↩︎
9. Ministry of Education (2025) Ontario Child Care and Early Years Funding Guidelines, https://efis.fma.csc.gov.on.ca/faab/Child%20Care/Guidelines/Ch.EN/Chapter1_EN.pdf  ↩︎
10. Ministry of Education, 2025. Ontario Child Care and Early Years Funding Guidelines for Consolidated Municipal Service Managers and District Social Services Administration Boards. ↩︎
11. Other data sources and breakdowns of where these spaces have been created is outlined further in the next section on Expansion. ↩︎
12. Ontario Government (2026) ‘Ontario Investing $1.6 billion to Build and Expand Schools Across Ontario’, https://news.ontario.ca/en/release/1007372/ontario-investing-16-billion-to-build-and-expand-schools-across-ontario ↩︎
13. Source of data in Figures 1-5: Friendly, M., Beach, J., Aruran, G., Cossette, A., Hu, L., Lillace, J., & Forer, B. (2026). Early childhood education and care in Canada 2024/2025. Childcare Resource and Research Unit. ↩︎
14. Comparable data for 2019 are not available for Figures 4 or 5 ↩︎
15. City of Toronto (2025) Toronto’s Early Years and Child Care Service Plan 2025-2030, https://www.toronto.ca/legdocs/mmis/2025/ec/bgrd/backgroundfile-256726.pdf   ↩︎
16. City of Toronto (2025) Canada-wide Early Learning and Child Care Expansion – Update. https://www.toronto.ca/legdocs/mmis/2025/ec/bgrd/backgroundfile-259387.pdf ↩︎
17. City of Toronto (2025) Toronto’s Early Years and Child Care Service Plan 2025-2030, https://www.toronto.ca/legdocs/mmis/2025/ec/bgrd/backgroundfile-256726.pdf   ↩︎
18. City of Ottawa (2025) Child Care and Early Years Service System Plan 2025 – 2029, https://documents.ottawa.ca/sites/default/files/CS-SystemPlan2025-2029_EN.pdf ↩︎
19. AECEO and OCBCC, 2025. Roadmap to universal childcare in Ontario. AECEO & OCBCC.  ↩︎
20. Association of Early Childhood Educators of Ontario, AECEO, 2025. About. [Accessed 18 February 2026] ↩︎
21. Quality Early Learning Network (2015). About Us. [Accessed 12 February 2026] ↩︎

Acknowledgements

The ideas, views and opinions in this publication belong to the authors. They may not reflect those of the Government of Canada. 

ISBN 978-1-997048-17-6