Does a child care licence transfer when you buy a daycare in Manitoba?

Subsection 7(1) of Manitoba’s Community Child Care Standards Act says that, subject to subsection 7(2), which exempts some child care given in a person’s own home, no person shall provide or offer child care unless that person holds a valid licence to do so. Section 11 of the Community Child Care Standards Act then says a licence is not transferable by the person named in the licence to any other person. Put together, a seller cannot hand a buyer the licence as part of the sale. Under subsection 7(1) of the Act, a buyer who will run a child care centre needs a valid licence of their own before providing or offering child care there.

Who decides, and how to apply

Under section 9 of the Community Child Care Standards Act, all applications for licences and licence renewals must be made in writing to the provincial director, whom the Act defines as the Director of Child Care appointed under subsection 5(1). Under subsection 10(1) of the Act, the provincial director may issue or renew a licence if satisfied that the applicant and the applicable facility meet the requirements and standards set out in the regulations. Subsection 10(1) says “may”, and nothing in it gives a buyer a licence because the seller held one. The Manitoba Child Care Program’s Best Practices Licensing Manual for Early Learning and Child Care Centres says a child care co-ordinator is assigned to each child care centre and helps groups and individuals through the licensing process, so the centre’s co-ordinator is a place to start your questions.

What the application must include

Section 5 of the Child Care Regulation (Manitoba Regulation 62/86) lists what an application for a licence to provide or offer child care in a child care centre shall include. The list in section 5 of the Child Care Regulation covers, among other items, a report from the fire authority regarding compliance with the Manitoba Fire Code, a report from the health authority regarding compliance with standards for matters such as sanitation, ventilation and food handling, and evidence of compliance with appropriate zoning by-laws. If the applicant is an individual, section 5 of the Child Care Regulation also requires a child abuse registry check and a criminal record check, each dated within three months before the date of the person’s application, plus a criminal history disclosure statement and a consent to the disclosure of information, each in a form approved by the provincial director. If the applicant is a corporation or cooperative, section 5 of the Child Care Regulation requires a copy of its constitution and by-laws and of its latest annual return filed under The Corporations Act or The Cooperatives Act. Read section 5 itself for the full list.

Questions to put to the director

• Whether the licence would be issued to you before the sale closes, and how the director expects the change of operator to be handled.
• If the licence holder is a corporation and the deal is a share purchase, how the director treats the change of owners.
• What terms and conditions the provincial director might impose on a new licence under subsection 12(1) of the Community Child Care Standards Act.
• How a licence’s term fits your timeline. Under subsection 10(2) of the Community Child Care Standards Act, a licence may be issued for a term not exceeding one year and renewed for a term not exceeding three years for each renewal.

If a licence is refused

Under subsection 19(2) of the Community Child Care Standards Act, the provincial director may refuse to issue a licence if satisfied that a facility described in the application would not be operated and maintained in compliance with the requirements or standards prescribed in the Act or regulations, if satisfied that the applicant made a false statement in the application or in documents submitted in support of it, or if the director has reasonable grounds to believe that any person associated with the operation of the proposed facility is not suitable to provide child care. Under subsection 20(1) of the Act, an applicant whose licence is refused may appeal, and under subsection 20(6) of the Act the appeal is made by filing a written notice of appeal with the appeal board, which the Act defines as the Social Services Appeal Board. Because the licence is a separate decision from the sale, ask a lawyer whether and how closing should depend on it. For a wider view of what to check, see buying a daycare business in Canada.