Child care service providers

General information

What is the cost-based funding formula and why is it being implemented? 
Initially, the CWELCC system used a “revenue replacement” funding approach to cover the cost of fee reductions for families. The Ministry of Education’s cost-based approach, set to take effect January 1, 2025, recognizes that the revenue replacement method did not reflect the actual costs of child care.

What is the next level of fee reduction taking effect on January 1, 2025?
Beginning January 1, 2025, base fees for all eligible children (children aged 0-5) in CWELCC-enrolled programs will be capped at $22.00/per day. This means that service providers may not charge a base fee of more than $22.00 per day for an eligible child. If the current base fee is already below $22.00, the rate cannot be increased.

Will CWELCC-enrolled Service Providers continue to receive funding from existing streams [i.e. General Operating (GO), Wage Enhancement Grant (WEG), Fee Reduction, etc.] after the implementation of the cost-based funding formula?
Starting in 2025, routine funding for eligible children (children aged 0-5) who are enrolled in programs participating in CWELCC will be integrated into the new cost-based funding model.
Providers who operate services for children aged 6 – 12 will continue to receive GO, WEG, and Fee subsidy funding for Children aged 6-12 as long as they are enrolled in CWELCC.

Can service providers opt-out of the CWELCC System?
Service providers can choose to opt-out of the CWELCC System at any time by providing at least 30 days’ notice to Children’s Services at the City of Ottawa, as well as to families and employees, of their decision to withdraw. Service providers should also recommend that families contact Children’s Services for guidance on finding a CWELCC placement, if needed.

As outlined in the 2022 Child Care Contribution Agreement, if a Service provider does provide notice to opt-out, they are still required to fulfill all the terms of the contribution agreement with respect to financial reporting for the funding received as of the date of the termination of the contribution agreement.

If considering opting-out of the CWELCC system, service providers should contact Children’s Services to ensure they have all the necessary information prior to making a final decision impacting their families. Service providers who are considering opting-out should refer to Section 4 of this document for information regarding impacts of the cost-based funding formula for service providers who are not enrolled in the CWELCC System. 

Funding allocation

Will service providers be required to submit financial documents to determine their funding allocation under the cost-based funding formula?
Service providers will be asked to submit financial documents to help calculate their preliminary funding allocation. The required documents could include 2023 audited financial statements evidence of 2025 fixed costs, and detailed general ledgers. Children’s Services will share more information on the required documents shortly.

Will the cost-based funding formula account for growth in CWELCC-enrolled programs that was not accounted for in current GO funding allocations?
Cost-based funding allocations are not impacted by historical GO funding allocations. In the cost-based model funds are allocated using benchmarks (the amount that is typically incurred for an eligible cost). It includes additional top-up funding for growth and for programs with higher costs, as well as amounts in lieu of profits or surplus.

Service providers will be required to provide information such as: 2023 audited financial statements, evidence of 2025 fixed costs, detailed general ledgers and their projections for 2025 of licensed spaces to support reported costs.

While the cost-based funding model includes the legacy top-up for service providers whose current cost structure exceeds their benchmark allocation, the total funding allocated under cost-based funding is independent of previous funding allocations proportional to the number of licensed spaces.

What are the eligible expenses under the new cost-based funding formula?
The Ministry has not provided a comprehensive list of eligible costs. Instead, the Ministry has provided the following principles to determine whether an expense is eligible:

• attributable to the provision of child care included in the base fee for eligible children;
• appropriate for the provision of child care for eligible children; and,
• reasonable in quality and amount incurred, having regard to all the relevant circumstances.

Eligible costs must be incurred within the calendar year for which the funding was allocated. For more information on the process used to assess eligible expenses, refer to Part 3: Accountability Framework, in the CWELCC Cost-Based Funding Guideline.

Are programs able to retain profit or maintain a surplus under the cost-based funding approach?  
In addition to covering eligible costs, the cost-based funding formula has built in an amount to recognize opportunity costs associated with CWELCC enrollment and the risk of running a business, or for licensees to reinvest in child care.

The calculation of an amount in lieu of profit/surplus also reflects the need for safeguards around public funding and profit margins, as required under the Canada-Ontario CWELCC agreement. When planning for the use of funding in lieu of profit/surplus (for example, for investment in major capital assets), licensees should consider that the Allocation in Lieu of Profit/Surplus is subject to re-calculation (and potential reconciliation) after year-end if the Actual Program Costs are less than the Program Cost Allocation. Similar to previous years, if Actual Program Costs are less than the total Program Cost Allocation for the calendar year, the excess funds would be subject to recovery.

Are service providers’ profits capped at the amount of the allocation in lieu of profit?
If the amount of funding provided for a calendar year exceeds the actual costs for that year, any excess funds will be recovered as part of the reconciliation process. Service providers are only eligible to keep the final amount of the allocation in lieu of profit/surplus determined based on their actual program costs for the year. 

Are CWELCC enrolled service providers still able to close for up to 4-weeks per year while charging fees to families? Will this result in changes to their funding?
If a service provider charges fees to parents/guardians during a closure period, a licensed child care program may not exceed two consecutive weeks of closure, and not more than four weeks (20 days) of closure within a calendar year. It has been further clarified that the four weeks (20 days) is inclusive of any closures for statutory holidays for which fees are charged.

As a result, any closure days for which parents are charged fees and that are within the allowable limits should be considered operating days and should be included in the benchmark allocation calculation. 

How does the cost-based funding formula account for the increase in costs related to the delivery of child care between 2023 and 2025? 
The Ministry has forecasted inflationary increases of 2.65% for 2024 and 2% for 2025, for a combined increase of 4.65%. This has been incorporated into the benchmark allocation calculation.

Can funding be moved between categories within the cost-based funding allocation?
Cost-based funding is considered a “global” allocation and not a line by line grant which gives service providers the flexibility to incur eligible costs as they need to, up to the total Program Cost Allocation. Service providers will need to reconcile the funding provided against their actual eligible costs for that site for that calendar year and any overpayments will be recovered. 

Workforce

In 2025, are service providers required to continue to pay WEG, and CWELCC Workforce Compensation funding to staff working with CWELCC-eligible children?
Yes, the March 2024 Memo from the Ministry of Education outlines the Ontario's Workforce Strategy and the increases to the workforce compensation funding,  wage floor and wage ceiling, that came into effect on January, 2024. This includes the incremental increases for 2025 and 2026. The Ministry has also recently shared the 2025 wage caps for WEG and the Home Child Care Enhancement Grant. These updated amounts for workforce compensation and WEG will be reflected in the 2025 funding guidelines.  

What is meant by “Controlling owners' compensation for labour” and how is it calculated?
To calculate an eligible centre’s/agency’s legacy top-up, controlling owner’s compensation for labour is accounted for as described in step 1e, under the calculation of legacy costs. In general, salaries, wages and benefits paid to owners for their labour are eligible expenses, like compensation for any other employee, and are not capped at a specific amount.

Where an owner of a child care centre or agency receives compensation in the form of a salary, wages and/or benefits (as noted on their T4 statement), the cost-based funding formula includes the controlling owner’s compensation for labour as an eligible expense which can only be claimed once per licensee. This includes licensees with more than one eligible centre/agency or licensees with more than one controlling owner.

Does the Workforce funding under the cost-based funding formula include the cost of supply staff (staffing agency)?
Service providers will be responsible for managing their cost-based funding allocation for salaries and benefits in line with their program needs and ensuring that costs incurred meet the definition of an eligible cost as outlined in the cost-based funding Guideline.

Non-CWELCC enrolled service providers or programs

What should service providers who are not enrolled in the CWELCC System expect regarding their existing funding from Children’s Services starting in 2025?
Service providers who are licensed for 0-5 age groups, and are not participating in CWELCC are not eligible to receive any routine child care funding (that is, general operating, fee subsidy, or wage enhancement grants). Funding for existing fee subsidy placements in programs not participating in CWELCC will continue until the child in receipt of a fee subsidy ages out of the program.  

Can service providers who are not enrolled in the CWELCC System apply to participate?
The Ministry of Education is funding a limited number of new school-based and home/centre community based child care spaces in Ottawa between 2023 and 2026. Children’s Services is responsible for planning, overseeing and managing licensed child care and early years programs and services in the City of Ottawa which includes managing and directing CWELCC funded growth at a local level.

Service providers were invited to express their interest in CWELCC-funded growth through a Request for Expression of Interest (REOI) process, which was open from May 4, 2023, to June 16, 2023. The REOI is now closed, and Children’s Services is not considering new applicants at this time. 

Licensed service providers can continue to participate in the Professional Learning Pilot and funded professional development days until further notice.

Please visit Children’s Services’ Canada-Wide Early Learning and Child Care directed growth strategy for more information.

Child Care and Early Years System Planning Advisory Group

The mandate of the Child Care and Early Years System Planning Advisory Group is to provide advice and guidance to the City of Ottawa on the planning and management of a high quality, affordable, accessible, and inclusive child care and early years system in Ottawa for all children and families.  For more information, please contact childrensservices@ottawa.ca.

Child Care Registry and Waitlist

The Child Care Registry and Waitlist is an online, centralized application used by parents to find and register for licensed child care in Ottawa. Parents can also apply for help to pay for their child care costs (fee subsidy). It is also used by child care providers to effectively manage their waitlists for both full fee and subsidized child care. Families can access the list of providers that have opted-in to the Canada-Wide Early Learning and Child Care (CWELCC) System through the Child Care Registry and Waitlist Application (CCRAW).

If you are a new licensed child care service provider in Ottawa and would like to add a profile of your child care agency to the Child Care Registry and Waitlist, please email childrensservices@ottawa.ca.

Planning and research

• Ottawa Neighbourhood Study: Provides data on strengths and challenges for each neighbourhood in Ottawa. Compare neighbourhoods on child care services, social services, food resources, determinants of health, and more.
• geoOttawa: Find out which child care facilities are in your neighbourhood. Search by address, intersection, street segment or by facility. Interact with this web-based software by zooming in and out, by adding additional layers of information or by printing a current view of the map.

Starting / opening a licensed child care centre

To find out how to set up a licensed child care program in Ontario, prospective child care service providers can visit the Ministry of Education website.

Start and operate a not-for-profit

For information about applicable laws, as well as grants and financial support available to not-for-profits, go to the Ontario government web site.

Individuals with special needs

The Ministry of Education, through the City of Ottawa, provides funding for programs including individuals with special needs. 

Providers are encouraged to work with Children’s Services to develop a plan to ensure eligible children who receive fee subsidy and children with special needs have access to child care programs between September 1, 2022, and January 1, 2025.  For more information,  email childrensservices@ottawa.ca.

Children's Inclusion Support Services provides supports, in English and in French, to licensed child care programs (nursery schools, child care centres and home child care agencies) that include children with special needs, between 6 weeks to 10 years of age, within the City of Ottawa. The services provided by CISS include: 

• Consultation support through various consultant roles 
• Enhanced staff support funding 
• Professional development opportunities 
• A newsletter for operators/parents/guardians  
• Toys, equipment, DVDs 
• Reference books 

Quick links and resources

Key information

• Child Care and Early Years Act, 2014
• Ministry of Education – Canada-Wide Early Learning and Child Care system Guidelines ADDENDUM TO Ontario Child Care and EarlyON Child and Family Centres Service Management and Funding guideline (2022) – released August 2022 [ 716 KB ]
• Canadian Child Care Federation

Plan ahead

Extreme weather can be especially dangerous for infants and young children. Child care service providers can plan ahead and check weather reports regularly for extreme weather conditions. Extreme weather may include:

• Wind chill factors
• Winter storm warnings
• Poor air quality
• Heat/humidex warnings

Assessing any risks when deciding whether children go outside to learn and/or play is important. Service providers should ensure children are dressed in weather-appropriate clothing. Changes to outdoor play, based on the weather conditions, should also be considered. 

Extreme heat and humidity

Extreme heat and humidity can be harmful. Infants and young children are at higher risk of heat-related illness, especially if there is limited or no access to a cooler indoor environment.

Certain groups are at higher risk of getting sick from heat including:

• Young children
• Pregnant people
• People with pre-existing health conditions
• People who work or exercise outdoors

It is important to think ahead and plan for ways to stay cool during hot weather.

The Ministry of Education’s Child Care Licensing Manual (January 2024), recommends that Service providers should prepare cooling activities when air conditioning is not available during hot weather. This could include a sprinkler during outdoor play time and taking steps to prevent children from overheating. If opening the windows, safety measures need to be in place to make sure that children cannot climb out the window or hurt themselves.

Resources for hot weather

• Environment Canada - provides local alerts and weather information
• Ottawa Public Health - information on how to protect yourself and help others during hot weather

If you need help during extreme heat and humidity:

• Call 8-1-1 Health Connect Ontario for non-emergency medical advice
• Call 9-1-1 for medical emergency assistance such as heat stroke

Cold weather

Exposure to cold temperatures can cause serious and sometimes life-threatening health effects. Extremely cold weather is dangerous to anyone. Children and infants, among others, are more vulnerable to extreme cold. Risks associated with cold temperatures include:

• Frostbite
• Hypothermia
• Slips and falls
• Death

The province's Child Care Licensing Manual (January 2024) requires child care centres to keep a temperature of at least 20 degrees Celsius indoors.

Resources for cold weather

• Environment Canada - provides local alerts and weather information.
• Refer to Ottawa Public Health - information on dressing for the cold and winter safety tips for babies and toddlers

If you need help during cold weather:

• Call 8-1-1 Health Connect Ontario for non-emergency medical advice
• Call 9-1-1 for medical emergency assistance such as hypothermia

Outdoor air pollution 

Car traffic, wildfires and other factors can affect the quality of the air we breathe. Infants and children are at higher risk to the health effects of outdoor air pollution. Air pollutants can be harmful if exposed to high levels, especially over long periods of time. It is important to be aware of where air pollution comes from and limit your exposure whenever possible.

Air pollution can cause short-term symptoms in people who are otherwise healthy, including:

• Tiredness
• Headache
• Dizziness
• Coughing and sneezing
• Wheezing or difficulty breathing
• More mucous in the nose or throat
• Dry or irritated eyes, nose, throat or skin

Service providers can check air quality by accessing the Air Quality Health Index (AQHI) for levels and forecast values throughout the day. For more information about the health effects of associated with air pollution, visit Ottawa Public Health.

Resources for air pollution

Ottawa Public Health provides information on:

• How to check the outdoor air quality
• How to protect yourself from outdoor air pollution

Learn more from Health Canada about minimizing the effects of air pollution.

If you have any questions about available funding programs, contact childrensservices@ottawa.ca.