Child care centre licence

In Ontario, the seller’s licence is not an asset a daycare buyer can purchase, because it cannot be transferred. What the deal needs depends on whether the legal entity running the centre changes, so ask early how licensing approval fits the closing timeline.

How Ontario handles it

Section 6(1) of Ontario’s Child Care and Early Years Act, 2014 says no person shall operate a premises where child care is provided except under the authority of a licence to operate a child care centre, subject to the exceptions in sections 6(3) and 6(4). Section 20(5) says a licence is not transferable. The Ministry of Education’s manual says that when the legal entity running the centre changes, a new licence is required, and the current licensee must give the ministry advance notice. The new entity applies as if it were an initial applicant. The manual also says that when an incorporated licensee sells some or all of its shares, a new licence is not required, because the legal entity does not change.

Other provinces

Alberta licenses facility-based programs under its Early Learning and Child Care Act. Check the rules in any other province where the centre operates.

What to ask

• Which entity holds the licence, and whether the deal changes it.
• How the ministry’s review fits the closing date.
• Whether enrolment in the fee-reduction program carries over; see CWELCC enrolment.

The daycare buyer checklist lists related checks.