How to Start an Early Childhood Centre in Ontario

The following document was prepared by the Canada-Ontario Business Service Centre (COBSC), a single point of access to information on federal and provincial government programs, services and regulations. It is designed to provide an understanding of potential license, permit or registration requirements when considering the establishment of a Day Care Centre in Ontario.  Although many of your questions will be answered in this document, the list of resources given here is not exhaustive.

Need more information?

Click: Canada-Ontario Business Service Centre
Call: 1-800-567-2345
Visit: The Regional Access Program Location Index for a listing of offices in Ontario.

TABLE OF CONTENTS

1. Basics To Getting Started
2. Industry Overview
3. Regulations
4. Financing
5. Managing Your Operation
6. Associations
7. Resources and Web Sites of Interest

1. Basics to Getting Started

Starting a business can be a rewarding undertaking, but it comes with its challenges. Before starting a business in Ontario, it is wise to do your research. Ask yourself if you are truly suited for entrepreneurship and understand that significant effort may be required. You should thoroughly enjoy the field you are getting into and you must believe in your service; it may consume much of your time, especially in the start-up phase. There are several issues to consider such as regulations, financing, taxation, managing your business, advertising and much more.

For further information:
See the documents:
Checklists for Going Into Business
Business Start-Up Info-Guide
Employment Regulations Info-Guide

2. Industry Overview

According to Human Resources and Skills Development Canada, there are over 330,000 individuals, mainly women, who provide childcare for a living in Canada. Most caregivers are relatively young (45% are under 30 years of age) and are well educated (55% have completed post-secondary education).

Types of Operation
This industry is made up of establishments who primarily provide day-care services for infants or children. These organizations are either home based or as a commercially located day care centre. Organizations may care for older children when they are not in school and may also offer pre-kindergarten educational programs.

Examples of this kind of business include but are not limited to:

Home-based caregivers comprise the bulk of the childcare workforce, representing about 85% of all providers. The remaining 15% of the workforce provide care in early childhood centres and nursery schools, including school-aged care.

A child-care business can easily be started in your home with just a few weeks of planning and a modest amount of start-up cash. A commercially located centre takes a greater investment of time, energy and money. The size and type of business you choose will depend on your start-up resources and goals for the future. Many child-care providers are satisfied with a one-person operation in their home that generates a comfortable income while allowing them to do work they enjoy (and possibly even care for their own children). Others may start at home and eventually move to a commercial site as the business grows. Still others begin in commercial locations and are either content with one site or have plans to expand.

Specialty Operations

Aboriginal Head Start
Aboriginal Head Start provides comprehensive experiences for First Nations, Métis and Inuit children up to 6 years of age and their families, with primary emphasis on preschoolers, 3-5 years of age. The program is based on caring, creativity and pride following from the knowledge of their traditional community beliefs, within a holistic and safe environment.

For further information:
Please call: (613) 952-1220 or (416) 973-5778

Children with Special Needs
Additional assistance may be required if a child has a physical, visual or auditory disability, or if the child has developmental, communication, behavioural or a chronic medical problem.

For further information:
Please call: (416) 325-5666 or 1-888-789-4199
Visit the Web Site Child Care Programs for Children with Special Needs

Promoting Breastfeeding
Some mothers may want to benefit from childcare services while still providing their baby with breast milk. A specialized daycare may have private, quiet sitting rooms where mothers can breastfeed the child. Such a centre could also promote breastfeeding and pumping techniques or simply establish an open attitude that will ease mothers.

For further information:
visit the Web site:
INFACT Canada
http://www.infactcanada.ca

Whatever kind of early childhood centre you choose to operate, keep in mind that the basics of your work will be caring for someone else's children. This 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. What more, you'll play a key role in their overall development and may well be someone they'll remember their whole lives.

Planning Your Business

What is a Business Plan?
A business plan is a recognized management tool used by successful and/or prospective businesses of all sizes to document business objectives and to propose how these objectives will be attained within a specific period of time. It is a written document, which describes who you are, what you plan to achieve, where your business will be located, when you expect to get under way, and how you will overcome the risks involved and provide the returns anticipated.

Why Do I Need One?
A business plan will provide information of your proposed venture to lenders, investors, and suppliers to demonstrate how you plan to use their money, and to establish a basis for credibility of your project. This plan will serve as a guide to the various areas that you as a manager will be concerned with. As you work through this plan, adapt it to your own particular needs.

For further information:
see the document Business Plan Guide

Interactive Business Planner (IBP)
The IBP is a computer software program that uses the capabilities of the Internet to assist you in preparing a 3-year business plan for a new or existing business. The IBP will help you write your business plan, provide a format for writing your business plan, and take the information you enter and prepare financial projections for you.

For further information:
visit the Web site Interactive Business Planner

3. Regulations

Ministry of Children and Youth Services
In Ontario, all childcare centres as well as home care daycares are licensed by the Ministry of Children and Youth Services. The Day Nurseries Act states that a caregiver with more than 5 children in their home must be licensed as a regulated Home Care Provider with the Ministry. The Ministry conducts inspections once a year in order to keep your license in good standing. For specific information on licenses and requirements for your organization please contact the Ministry of Children and Youth Services.

For further information:
please call: (416) 325-5666
visit these Web sites:
Ministry of Children and Youth Services
http://www.children.gov.on.ca/CS/en/default.htm
Regional Offices
http://www.children.gov.on.ca/CS/en/regOffices/default.htm
Day Nurseries Act
http://www.e-laws.gov.on.ca/DBLaws/Statutes/English/90d02_e.htm

Municipal Regulations
Each municipal government has the authority to issue its own business licenses within its jurisdiction. Since there is no uniformity throughout Ontario regarding municipal licenses for businesses, you should consult with the appropriate local officials to determine whether your business will be affected by local regulations and licensing requirements. Businesses must also meet the zoning by-laws that control property uses in their municipalities.

For further information:
visit the Web site:
Association of Municipalities of Ontario
http://www.amo.on.ca//AM/Template.cfm?Section=Home
see the document Municipal Requirements to Start a Business

The Smoke-Free Ontario Act
As of May 31, 2006, the Ontario government is prohibiting smoking in all enclosed workplaces and enclosed public places. The legislation will also strengthen measures to ensure only those 19 years of age and older can buy cigarettes and will phase out the display of tobacco products, with a complete ban beginning May 31, 2008.

For further information:
please call 416-326-4846
visit the Web site:
Ministry of Health Promotion
http://www.mhp.gov.on.ca/english/health/smoke_free/legislation.asp
Smoke-Free Ontario Act
http://www.e-laws.gov.on.ca/DBLaws/Statutes/English/94t10_e.htm

Legal Issues
As there may be a number of legal issues involved in starting a Day Care, it can be very important to contact a lawyer or the Law Society of Upper Canada, which offers a Lawyer Referral Service.

For further information:
please call: (416) 947-3330 or 1-800-668-7380
visit the Web site:
Law Society of Upper Canada
http://www.lsuc.on.ca/index_en.html
see the document Legal Issues in Starting a Business

RELATED LEGISLATION:

Day Nurseries Act
http://www.e-laws.gov.on.ca/DBLaws/Statutes/English/90d02_e.htm

4. Financing

The Canada-Ontario Business Service Centre has created documents, which provide an overview of some of the main financing options for individuals starting and operating a business in Ontario, including programs offered or supported by the government

For further information:
please call: 1-800-567-2345
see the documents:
Financing for Starting a Business Info-Guide
Financing for Established Businesses Info-Guide

Canada Small Business Financing Program
Business Financing Program can assist new and existing small businesses with annual gross revenues not exceeding $5 million (excluding farming and charitable or religious enterprises) in obtaining term loans and capital leases of up to $250, 000 to help finance fixed asset needs.

For further information :
please call (613) 954-5540
visit the Web site:
Canada Small Business Financing Program
http://strategis.ic.gc.ca/epic/internet/incsbfp-pfpec.nsf/en/Home
see the document: Canada Small Business Financing (CSBF) Program

Sources of Financing
Sources of Financing is an Internet resource for locating traditional and alternative sources of small business financing. This site provides interactive access to objective information on appropriate forms of public and private sector sources of debt and equity financing:

For further information:
visit the Web site:
Sources of Financing
http://strategis.gc.ca/sources
see the document: Sources of Financing

Sources of Micro-Credit Financing
"Micro-credit" can be defined as small loans made to individuals to undertake self-employment or to start small businesses. This type of financing may be provided through a number of different sources including independent non-profit organizations, community economic development programs, commercial financial institutions, etc.

For further information:
please call 1-800-567-2345 or (416) 775-3456
visit the Web site:
Sources of Financing
http://strategis.gc.ca/sources
see the document: Sources of Micro-credit Financing

For Parents:

Ontario Child Care Supplement for Working Families
The Ontario Child Care Supplement (OCCS) for Working Families is a tax-free monthly payment to help with the costs of raising children under the age of seven. The program benefits low-to-middle income single or two-parent families, families with one stay-at-home parent, or families with one or both parents studying or in training. A family does not have to have a child in daycare to apply for the supplement.

For further information:
visit the website http://www.trd.fin.gov.on.ca/userfiles/HTML/cma_3_4809_1.html

5. Managing Your Operation

Dealing with Business Taxes
All businesses must be aware of the various taxes that may apply to their product or service. Depending on the type and location of products or services being offered, federal, provincial and/or municipal business taxes may apply.

For further information:
visit these Web sites:
Provincial Tax Forms and Publications
http://www.trd.fin.gov.on.ca/userfiles/HTML/cma_3_158_1.html
Small Business Tax Help
http://www.trd.fin.gov.on.ca/userfiles/HTML/cma_3_160_1.html
CRA Business Tax Web Page
http://www.cra-arc.gc.ca/tax/business/menu-e.html
see the document: Taxation Info-Guide

Income Tax Information
Business owners must be aware of the requirements of Income tax that may apply to their product or service. There are different tax implications for incorporated and non-incorporated businesses. For information specific to your organization you should consult an accountant or financial professional.

For further information:
please call: 1-800-959-5525
visit the Web site:
Ontario Income Tax
http://www.trd.fin.gov.on.ca/userfiles/HTML/cma_3_2447_1.html
Corporations Tax
http://www.trd.fin.gov.on.ca/userfiles/HTML/cma_3_2363_1.html
Canada Revenue Taxes Menu
http://www.cra-arc.gc.ca/tax/business/menu-e.html
see the document: Taxation Info-Guide

Below are links to publications that cover some of the general tax requirements for business owners in Ontario.

Ontario Small Business Guide
This booklet will guide you through various aspects of Retail Sales Tax, Corporations Tax and Employer Health Tax. This booklet also answers some of the frequently asked questions of small business owners regarding tax obligations.
http://www.trd.fin.gov.on.ca/userfiles/HTML/cma_3_24414_1.html

EHT Guide for Employers
Describes the main features of the EHT, including taxpayer rights and responsibilities under the Employer Health Tax Act
http://www.trd.fin.gov.on.ca/userfiles/HTML/cma_3_44509_1.html

For further information:
see the document Employer Health Tax - EHT

Retention/Destruction of Books & Records
Explains the retention period required for Ontario tax purposes, before books and records can be destroyed.
http://www.trd.fin.gov.on.ca/userfiles/HTML/cma_3_20001_1.html

Voluntary Disclosure
Explains what voluntary compliance is and the basic principles under which Ontario's tax system operates
http://www.trd.fin.gov.on.ca/userfiles/HTML/cma_3_19999_1.html

Using Your Home for Day Care
If you run a day care in your home, you may be able to deduct business expenses from the income you report on your income tax return. This pamphlet explains whether you can claim expenses, what expenses you can claim, your responsibilities as an employer, and the importance of keeping good records.
http://www.cra-arc.gc.ca/E/pub/tg/p134/p134-e.html#P58_665

For further information:
see the document:  Home-Based Business

Insurance
Upon deciding to establish a day care centre, you should obtain the expertise of an insurance agent regarding insurance coverage for your business. If you own, rather than lease your place of business, you will need insurance coverage for your property. Also, regardless of property ownership, you will require insurance protection for furniture, fixtures and equipment. Some of the other areas you should be concerned about are liability coverage against mishaps, damages or lawsuits resulting from business operations and business interruption 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 (depending on the type of business);
• burglary protection (theft coverage);
• dishonesty insurance (covers thefts by employees).

Marketing/Advertising
Word-of-mouth advertising and good public relations are often the best ways of promoting your business. Depending on your market and its size, also consider flyers, business cards, brochures, newspapers (especially for holiday promotions), radio, TV, the phone book and the Internet. Also bear in mind that a satisfied customer is good advertising. Referrals are also a valuable way of making customers aware of your products or services.

A Web site is also a good marketing tool. It should have details to describe the location (your address, telephone and fax numbers, and directions on how to get to your establishment), hours of operation, services offered, credentials and anything else you think may be of interest to potential customers. However, once you launch a Web site, you should update it on a regular basis.

Participating in community events is another way of advertising your business. You may also hold events that will promote your business. No matter how you choose to market your business, it is wise to track how your clients became aware of your establishment - this may help determine your future advertising strategies.

For more information:
see these documents:
Signs and Your Business
Plan Your Advertising Budget
Advertising Do's and Don'ts
Ways to Promote Your Product or Service
Marketing Plan Outline

The Marketing Basics section of the Online Small Business Workshop covers the basics from developing your customer profile to promoting your business.

For more information:
visit the Web site:
Online Small Business Workshop

Selecting Professional Services
The use of professional services is essential to the success of a small business. Professionals can provide knowledge and expertise in the areas where you may have little. They can round out your management team to ensure your business is operating efficiently.

For further information:
see the document Selecting Professional Services

As an entrepreneur, there are four main areas of professional services with which you may consult:

• lawyer (contact a lawyer about legal issues);
• insurance broker;
• accountant;
• banker (for tips and pointers on dealing with your bank, see the document Dealing With Your Banker & Other Lenders ).

Basic Bookkeeping
A good record keeping system should be simple to use, easy to understand, reliable, accurate, consistent and designed to provide information on a timely basis.

Note: All staff working with cash should be trained to recognize counterfeit currency.

The legal requirement concerning financial records specifies only that there be a permanent, accurate and complete record of your daily income and expenses. There are many types of record books and bookkeeping systems available. For example:

• double entry bookkeeping;
• commercial bookkeeping systems;
• one-write systems;
• computerized systems;
• single entry bookkeeping.

For further information:
see the document Basic Bookkeeping

Setting Up a Pay System
Pay administration is a management tool that enables you to control personnel cost, increase employee morale and reduce work force turnover.

For further information:
see the document Setting Up a Pay System

Setting the Right Price
Setting the right price is important in ensuring the success of your business. In the end, the right price for the service is the price that the consumer is willing to pay. Correct pricing decisions are key to successful business management.

For further information:
see the document Setting the Right Price

Employing people

What are the rules on working conditions in Ontario?
The Employment Standards Branch of the Ontario Ministry of Labour is responsible for the administration and enforcement of the Employment Standards Act, which provides for minimum terms and conditions of employment in most industries.

For further information:
please call (416) 326-7160 or 1-800-531-5551
visit these Web sites:
Employment Standards Claim
http://www.labour.gov.on.ca/english/es/claim/index.html
Employee Self Help Kit
http://www.labour.gov.on.ca/english/es/selfhelp/index.html
see the documents:
Employment Regulations Info-Guide
Employment and Training Assistance Programs Info-Guide
Are You an Employee or Self-Employed?

Related Legislation

Staff Training
Under the Day Nurseries Act in Ontario; there are very few regulations for childcare providers outlined in the Act. The only specifications are that the caregiver be older than 18. If they work with special needs children, they must have valid first aid certification.

For home based care providers the Day Nurseries Act requires that a home visitor meets with the care provider on regular basis to conduct general inspections and to provide support and resources. All home visitors have completed a post secondary program in child development studies and have at least two years experience with children who are the same age as the children who are in the home childcare.

For further information:
Please call: (416) 325-5666 or 1-800-387-5559
Visit these Web sites:
Ministry of Children and Youth Services
http://www.children.gov.on.ca/CS/en/default.htm
Regional Offices
http://www.children.gov.on.ca/CS/en/regOffices/default.htm
Day Nurseries Act
http://192.75.156.68/dblaws/statutes/english/90d02_e.htm
Child safety
http://www.communication.gc.ca/guides/children_enfants/03_e.html

Choosing Your Location
Choosing the right location for your business is important. A location will depend on the needs of your business, where your customers and competitors are, and such things as taxes, zoning restrictions, noise and the environment. For most businesses, an appropriate location is critical.

For further information:
see the document Store Location - "Little Things" Mean a Lot .

Furnishings and Equipment
There will be certain equipment and furniture you will need in your place of business which will allow you to perform your services. It is suggested to make a list of the required equipment and its cost to you. An important factor to consider, when choosing equipment, is the after-sales service and repair, and their affordability.

Leasing Equipment - An alternative is to lease equipment to help keep start-up costs down. To obtain financing for capital leasing for new or used equipment for the creation of your business, see the document Capital Leasing Pilot Project .

For further information:
see the document Business Plan for Small Service Firms

Start-Up Equipment for your establishment can include, but is not limited to:

• child-sized table and chairs;
• child-friendly dishes, cutlery and cups;
• toilet, potty seat or chair;
• comfortable mats, cots, or beds;
• cribs or playpens for infants/toddlers;
• selection of age appropriate toys, books, and games;
• adequate and accessible shelving and storage.

Cost Control
You must have procedures for controlling inventory and costs. Ask people in your industry for information about procedures for:

Purchasing - Most of the time, purchasing is done over the telephone, by fax or online. Often no contract is signed between the purchaser and the supplier; it is essential that you choose your supplier carefully.

Receiving - Check all deliveries against the Purchasing and Receiving Form, in three ways: quantity, price and quality. Make sure specifications are met. Careful recording will show short shipments, price variations and weight differences.

Budgeting and Projecting - Establish a cash budget and maintain cash flow projections on a continual basis.

Making a profit is the most important - some might say the only objective of a business. Profit measures success. It can be defined simply: revenues - expenses = profit. So, to increase profits you must raise revenues, lower expenses or both. To make improvements you must know what's really going on financially at all times.

For further information:
see the document Checklist for Profit Watching

Personal Information Protection and Electronic Documents Act
The Personal Information Protection and Electronic Documents (PIPED) Act sets out ground rules for how private sector organizations may collect use or disclose personal information in the course of commercial activities. As of January 1, 2002, the personal health information collected, used or disclosed by these organizations is also covered.

For further information:
please call 1-800-282-1376
visit the Web site:
A Guide for Businesses and Organizations
http://www.privcom.gc.ca/information/guide_e.asp
see the document Protection of Personal Information - Your Responsibilities

Personal Health Information Protection
As of November 1st 2004, the Personal Health Information Protection Act will govern the collection, use and disclosure of personal health information. The Act applies to all health information custodians operating within the province of Ontario and to individuals and organizations that receive personal health information from health information custodians.

For further information
please call (416) 326-3333 or 1-800-387-0073
visit these Web sites:
Information and Privacy Commissioner
http://www.ipc.on.ca/
The Health Protection Act
http://www.e-laws.gov.on.ca/DBLaws/Statutes/English/04p03_e.htm
A Guide to the Health Protection Act
http://www.ipc.on.ca/scripts/index_.asp?action=31&P_ID=15447&N_ID=1&PT_ID=11351&U_ID=0
Frequently Asked Questions: Health Information Protection Act
http://www.ipc.on.ca/scripts/index_.asp?action=31&P_ID=15371&N_ID=1&U_ID=0&LG_ID=1

6. Associations

Association of Early Childhood Educators Ontario (AECEO)
http://www.cfc-efc.ca/aeceo/index.html

Association of Day Care Operators of Ontario
http://www.adco-o.on.ca/

Home Child Care Association of Ontario
http://www.hccao.com/

Child Care Advocacy Association of Canada
http://www.childcareadvocacy.ca

7. Resources and Web Sites of Interest

Canada's Universal Child Care Plan- the official site for the national plan that provides choice, support and spaces for today's parents.
http://universalchildcare.ca/en/home.shtml

Ontario Coalition for Better Child Care
http://www.childcareontario.org/

Child and Family Canada
http://www.cfc-efc.ca

Childcare Resource and Research Unit
http://www.childcarecanada.org/

Canadian Child Care Federation
http://www.cccf-fcsge.ca/home_en.html

• Important Notices
• Business Guides Available at the COBSC
• Home-Based Business
• Co-operatives Info-Guide

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

Links Policy
Some of the hypertext links lead to non-federal government sites which are not subject to the Official Languages Act and the material is available in one language only.