How to buy a daycare in Prince Edward Island: licences, ownership rules and what transfers

Prince Edward Island regulates licensed child care through the Early Learning and Child Care Act and its Regulations. The licence is issued by the Early Learning and Child Care Board, and a refusal can be reviewed by a separate Appeal Board. Anyone working out how to buy a daycare in Prince Edward Island should know early that the licence belongs to the operator and does not simply pass with the business. This guide reads the Act as consolidated to May 29, 2026 and the Regulations as consolidated to December 30, 2023, so confirm nothing has changed since. Other provinces run their own regimes; the national daycare guide covers the common ground, and you can browse daycares for sale.

Who regulates a daycare in Prince Edward Island

Under the Act, no person may operate a centre unless that person holds a licence for that centre, subject to an exception for some small groups of children. The Act defines the Board as the Early Learning and Child Care Board continued under section 6. Subject to section 20, which lists grounds on which it may refuse, the Board may issue a licence if it is satisfied that the applicant has made the required application, supplied the prescribed documents and fee, and that the person, the premises and the services meet the Regulations. It may also place terms or conditions on the licence, so the licence you are buying into may not be a plain one.

Who may own and operate it

The Act defines an operator as a person that operates and owns a centre. The Act separately defines an administrator as an individual appointed by an operator to provide on-site supervision of the day-to-day activities of a centre, which includes an operator who carries out those duties. The Regulations contemplate a transferee or assignee that is an individual, a corporation, a partnership or a sole proprietorship. A corporation must be in good standing under the Canada Business Corporations Act, the Companies Act or the Extra-Provincial Corporations Registration Act, whichever it was incorporated or registered under, and its articles must permit it to carry on the business of operating a centre. A partnership or sole proprietorship must be registered under the Partnership Act, if applicable.

What transfers and what does not on a sale

Section 18 of the Act says an operator may not transfer or assign a licence to another person without the prior approval of the Board in accordance with the regulations. The licence also names the operator and the premises, and an operator of a licensed centre may not operate it anywhere other than the premises the licence specifies. Treat the licence, then, as something the Board must approve moving, not as an asset the purchase agreement delivers. The sections read for this guide do not address a sale of shares in an operating company, so ask the Board, and a lawyer, whether a change in who owns the operator needs its approval.

The Board’s approval before closing

Under section 6 of the Regulations, the operator and the transferee or assignee may jointly apply to the Board, in the form it requires, for approval. The application carries updated information on any of certain licence details the buyer intends to modify, or a written statement that it does not intend to; a criminal record check and vulnerable sector search for the buyer, if an individual, and for any associated person where those checks are missing or out of date; recent health and safety certificates or reports from a provincial authority; the buyer’s liability insurance certificate; corporate or partnership documents; and the fee. The Board may approve the transfer if it is satisfied of the listed requirements, which include that the buyer has sufficient plans, policies and procedures in place to operate the centre and that the premises continue to meet the requirements in Part 3 of the Regulations. It may refuse where it is not satisfied the requirements are met, where it has reasonable grounds to believe the buyer knowingly made a false statement, or where it believes the buyer or an associated person is not suitable to have contact with the children.

If the Board refuses, the operator or the transferee or assignee may ask the Appeal Board to review the refusal, and the Regulations state that its decision is final. The Regulations deem staff members, an individual operator, each individual partner of a partnership operator and, for a corporate operator, its shareholders and directors to be associated persons, so the buyer’s own people are assessed too. Ask your lawyer how the purchase agreement should deal with the Board’s approval before closing.

What to ask the seller for

• A copy of the current licence, showing the operator’s name, the premises, the expiry date and any terms or conditions the Board placed on it.
• Any order, probationary licence or suspension under the Act, and whether any is outstanding, since a probationary licence issued for non-compliance must also state the non-compliance and the measures the operator must take to remedy it.
• Health and safety certificates, permits and reports from provincial authorities, so you can see what the Regulations ask the transfer application to include.
• The seller’s own incorporation or registration documents and a list of the people who may count as associated persons of the centre under the Regulations.
• The liability insurance certificate for the centre, so you can compare it with the coverage you must hold when the Board considers your application.

Closing steps outside the licence

The Canada Revenue Agency notes that if the business being sold has employees, the seller must close its payroll account, and that a business number may need to be cancelled through the tax services office. Ask the seller to confirm how staff will be moved to the buyer’s own payroll. If you will borrow, the Canada Small Business Financing Program page says to ask your financial institution about the program when discussing a loan or line of credit. Whatever the lender needs, confirm first whether it will advance funds before the Board has approved the transfer.