How to Start a Daycare in Ontario

TABLE OF CONTENTS

1. Introduction
2. Basics To Getting Started
3. Regulations
4. Taxation
5. Financing  
6. Managing Your Operation
7. Associations
8. Next Steps 

1. INTRODUCTION

The child care industry primarily consists of businesses that provide daycare services for infants and children. Your daycare can be a home-based operation, or it can be a commercial centre that serves a particular area or community. You can offer several different types of services, and the choice of size, location and specific services will depend on you.

Some examples of daycare services include:

• Baby-sitting (self-employed caregivers)
• Services for older children (outside of school hours)
• Nanny service (live-in or out, work in home of employer)
• Day-care centres
• Early childhood education services
• Pre-kindergarten (except when part of elementary school system)
• Pre-school centres (except when part of elementary school system)

Caring for someone else's children involves a lot of responsibility and a serious commitment. When the children are in your custody, you are responsible for their safety and well-being.

2. BASICS TO GETTING STARTED

Before starting a business in Ontario, there are several issues to consider, such as regulations, financing, and taxation. Read our start-up guide to learn the basics.

Read online:
Business Start-Up Guide

3. REGULATIONS

Your business may need licences and permits from the federal, provincial, and municipal levels of government.

In addition to the information you will find in this guide, you can use BizPaL—an online search tool—to find licences and regulations that may affect your business. You can also contact the Business Info Line to speak to someone about starting your daycare.

Use online:
BizPaL

Contact the Business Info Line:
1-888-745-8888

Some common licences, permits and regulations that may apply to starting your daycare include:

• General Child Care Licensing Standards
  Child care centres and home care daycares in Ontario are licensed by the Ministry of Children and Youth Services. Caregivers with more than 5 children in their home must be licensed as a regulated home care provider and meet provincial health, safety and caregiver training standards including:
  • Caregivers must be over the age of 18
  • Caregivers for special needs children must have valid first aid certification.
  
  A home visitor will meet with home based care providers on a regular basis to conduct general inspections and provide support.
  
  Contact the Ministry of Children and Youth Services:
  1-888-789-4199
  
  Read online:
  Information for Child Care Professionals
  Child care licensing standards

• Children with Special Needs
  Additional licensing may be required if you want to care for children with a physical, visual or auditory disability, or if the child has a developmental, communication, behavioural or a chronic medical problem.
  
  Contact the Ministry of Children and Youth Services:
  1-888-789-4199
  Child care Programs for Children with Special Needs

• Toronto Operating Criteria – Children’s Services
  If you are operating a daycare centre in the Toronto area, you will have to make sure that your business meets the city’s standard for quality child care programs.
  
  Contact the City of Toronto:
  1-416-392-8586
  Children's Services -- Toronto Operating Criteria Ratings

Food Safety/Labelling

If you plan on preparing or serving food as part of the daycare services you provide, additional food safety regulations may apply:

• Your local health unit is the main contact for information on food safety. Local health authorities are responsible for carrying out food service inspections.
  
  Contact your local health authority to determine what requirements will apply to your daycare.
  
  The following link provides a list of contact information for local health authorities that perform inspections on restaurants and food businesses in Ontario.
  
  Read online:
  Local Public Health Contacts

• In addition to contacting your local health unit, if you will be producing or processing food products, you will need to follow the safety standards and labelling regulations from the Canadian Food Inspection Agency (CFIA) and the Ontario Ministry of Agriculture and Rural Affairs (OMAFRA).
  
  Contact CFIA:
  1-800-442-2342
  Regulated products and sectors
  
  Contact OMAFRA:
  1-877-424-1300
  Regulations for the food industry

Music License

When your business uses recorded music, you are responsible for obtaining the right licence(s) for that use. The Copyright Board of Canada works with individual copyright collective societies who provide music licensing. Contact the following two organizations for more information.

• Society of Composers, Authors and Music Publishers of Canada (SOCAN) Music Licence
  SOCAN is a not-for-profit organization that represents the performance rights of music creators and music publishers. They can help you learn about your obligations and obtaining the required license(s).
  
  Contact SOCAN:
  1-800-557-6226
  Society of Composers, Authors and Music Publishers of Canada
   
• Re:Sound Music Licensing Company
  Re:Sound is the Canadian not-for-profit organization that represents the performance rights of artists and record companies, and provides the legally required license(s) for businesses. You can get help determining what licence(s) will be required, what the licensing process will be and how much it will cost.
  
  Contact Re:Sound:
  1-877-309-5770
  Re:Sound

If you have legal questions, you can contact a lawyer who deals with business regulations. The Law Society of Upper Canada's Lawyer Referral Service may be able to assist you in finding a lawyer, based on your needs.

Contact the Law Society of Upper Canada:
1-800-268-8326
Law Society of Upper Canada's Lawyer Referral Service  

4. TAXATION

Depending on your location and the type of products or services being offered, federal, provincial and/or municipal business taxes may apply.

Read online:
Taxation Guide

If you sell goods and services in Ontario, you may need a business number to charge and remit the Harmonized Sales Tax (HST). Speak with the Canada Revenue Agency (CRA) for more information.

Contact CRA:
1-800-959-5525
Canada Revenue Agency – Business

5. FINANCING

There are many different ways to finance your business. Canada Business can help you find government financing that is available for starting a business.

Search online:
Find Government Grants, Loans and Financing 

Contact the Business Info Line:
1-888-745-8888

6. MANAGING YOUR OPERATION

The success of any business starts by setting goals and managing the ups and downs of daily operations. Here are some key factors to consider when starting a daycare:

Insurance

Having the correct business insurance can provide peace of mind. Contact an insurance agent to discuss your business insurance options, or to develop a plan that is right for your business.

You may also wish to contact your local chamber of commerce or industry association, as some organizations offer members lower rates on their business insurance.

The following list is included to remind you not to overlook the complex areas of business insurance. It is best, however, to discuss your specific requirements with your insurance agent.

Basic insurance:

• Fire insurance (extended coverage on buildings and contents)
• Liability insurance
• Burglary protection (theft coverage)
• Dishonesty insurance (covers thefts by employees)

Read online:
Insurance for your Small Business

Marketing/Advertising

Marketing can help you determine the value of your product or service and communicate that information to customers. Depending on your market and its size, you can consider using flyers, business cards, brochures, newspapers, radio, TV, the phone book or the Internet. Keep in mind, a satisfied customer or a positive referral is often the best form of advertising.

Read online:  
Developing a Marketing Plan 
Marketing and Sales

When preparing your marketing and/or advertising material, there are regulations to follow. When you promote a product or service, your customers need to have enough information to make informed choices.

You can get more information on advertising requirements from the Competition Bureau.

Contact the Competition Bureau:
1-800-348-5358
Misleading Advertising and Labelling

Setting the Right Price

Setting the right price is important in ensuring the success of your business. Here are a few questions you may want to consider:

• What is the current price for your range of services in the industry?
• What is your competition charging?
• What is the total cost of running your business?
• What is the minimum acceptable profit you need to generate from your business?

When determining your fees, make sure you include the cost of your labour, the overhead, and the expenses that will be incurred.

In the end, the right price for the service is the price that the consumer is willing to pay. Correct pricing decisions are often key to successful business management.

Read online:
Pricing

Professional Services

The use of business support services can be essential to the success of a small business. Professionals can provide knowledge and expertise or they can round out your management team to ensure your business is operating efficiently.

As an entrepreneur, there are several types of professional business services you can consult:

• Lawyers
• Real estate agents
• Insurance brokers
• Bookkeepers
• Accountants

Furnishings and Equipment

Your business will need equipment and furniture, and it’s important to decide what you need and how much you want to spend.

Some common ways to save money on furnishings and equipment are:

• Buying used equipment – Consider buying used equipment as a cost-saving measure. Sources of used equipment could be a day care centre that is closing or a second-hand equipment store. You should keep in mind the cost of maintenance and repair in the overall costs when buying used equipment.

• Leasing equipment – Another alternative is to lease equipment to help keep start-up costs down. If you choose to lease equipment remember to include interest in the overall cost.

7. ASSOCIATIONS

There are many associations that may be of interest to daycare centre owners. It is not necessary to join an association, but some of the advantages include:

• Promoting and exchanging marketing and promotional ideas among members
• Establishing and encouraging high standards of quality and professionalism

Examples of associations for daycare owners include:

• The Association of Early Childhood Educators Ontario (AECEO)
  Access training, publications, networking opportunities and support for international certification among early childhood workers (ECE) in Ontario from the AECEO.
  
  Contact AECEO:
  1-866-932-3236
  Association of Early Childhood Educators Ontario

• Association of Day Care Operators of Ontario
  You can find advocacy services and other resources to help you start and run a daycare centre in Ontario. Members can also access members-only insurance rates and events.
  
  Contact the Association of Day Care Operators of Ontario:
  1-800-567-7075
  Association of Day Care Operators of Ontario

• Home Child Care Association of Ontario
  If you are a home child care worker, you can find advocacy services, information resources and networking opportunities through this association.
  
  Contact the Home Child care Association of Ontario:
  1-416-233-1506
  Home Child care Association of Ontario

8. NEXT STEPS

For other information that relates to starting your own business, you can also read the following Canada Business guides:

• Business Planning
• Market Research and Statistics
• Starting Your Business
• Grants and Financing
• Taxation Guide
• Employment Regulations Guide: Hiring

Additional resources that may be of interest to daycare owners include:

• Ontario Coalition for Better Child care
• Child Care Resource and Research Unit
• Canadian Child care Federation
• Child Care Advocacy Association of Canada

You can also find books, magazines and other relevant print material at business service organizations in your community. To locate a Canada Business Ontario (CBO) community partner, contact us through the Business Info Line at 1-888-745-8888

Need more information?

Click: Canada Business
Call: The Business Info Line, a collaboration between ServiceOntario and Industry Canada, at 1-888-745-8888
Visit: Find a Community Partner Location near you

DISCLAIMERS

Information contained in this document is of a general nature only and is not intended to constitute advice for any specific situation. Users concerned about the reliability of the information should consult directly with the source, or seek legal counsel.

Some of the organizations listed above are not subject to the federal Official Languages Act or the French Language Services Act of Ontario. Their services may not be available in both official languages.