How to Start a Home Daycare in Ontario

The two legal paths

Ontario's Child Care and Early Years Act sets up two ways to run child care from your home. Pick one before you do anything else, because the rules, the paperwork, and the earning ceiling are different.

Unlicensed home child care. You operate on your own, with no agency involved. The hard limits: no more than 5 children under 13 at any one time, and no more than 3 children younger than 2. Your own children under age 4 count toward the 5. There is no cap on the number of families, and having a second adult present does not raise the limit.

Licensed home child care. You contract with a home child care agency licensed by the Ministry of Education. Individuals are never licensed directly; the agency holds the licence and oversees you. The limits rise slightly: no more than 6 children under 13 at one time, still no more than 3 younger than 2, and your own children under 4 still count. In exchange you get agency support, monitoring visits, and access to fee subsidies for your families.

Step 1: Decide which path fits

Go unlicensed if you want the simplest start: no application process, no inspections, no agency agreement. You still have legal duties (Step 3 covers them), and many providers run full, stable businesses this way.

Go the agency route if you want the extra child space, the credibility of the licensed decal on your door, and families who need subsidies or reduced fees. Licensed care is also the only path that plugs into the Canada-wide early learning and child care system, which lowers fees for families with children under 6 and keeps demand high.

One warning that applies to both paths: exceeding the child limits can trigger an administrative penalty of $2,000 per child per day. The ministry publishes enforcement actions online, so a violation follows you.

Step 2: Qualify with an agency (licensed path only)

Start by finding licensed home child care agencies in your area. Municipalities and regions often run their own (examples include Grey County, Halton Region, and Renfrew County), and there are non-profit agencies across the province. Every agency must be licensed by the Ministry of Education, and requirements vary somewhat by agency, but expect all of the following:

• A clear criminal reference check including a vulnerable sector screen for you and every adult in the home
• Current Standard First Aid with Infant/Child CPR
• A home safety inspection (fire department inspection is commonly required)
• A smoke-free home
• Proof of home or liability insurance at the level the agency sets (one agency example: $2 million in liability coverage)
• A health assessment

Once accepted, a home child care visitor (usually a registered early childhood educator) visits your home regularly to monitor compliance, support your programming, and connect you with training. You will display the green licensed decal so parents can verify your status.

Step 3: Handle the legal duties (both paths)

Even unlicensed providers have obligations under the Act. The ones that trip people up:

1. Disclose that you are unlicensed. You must tell every parent, up front, that you do not hold a licence.
2. Never claim to be licensed. Using licence-related terms in ads, flyers, or social media posts when you are not licensed is an offence on its own.
3. Give receipts for every payment. Parents need them for tax purposes, and you are legally required to provide them.

Beyond the Act, set up the business properly:

1. Register your business name with the Ontario Business Registry if you operate under any name other than your own personal name. Our sole proprietorship and GST/HST guide walks through the full setup.
2. Get a CRA business number (free) and keep a separate bank account for the daycare. As a self-employed provider you will owe income tax and CPP on your net earnings, so set aside a portion of every payment.
3. Check your municipality's home-based business rules. Most Ontario cities allow home daycares but may have zoning or signage conditions worth confirming before you advertise.

Step 4: Get the home ready

Walk through your home the way a licensing inspector would, even if you are going unlicensed:

• Secure the hazards: outlet covers, stair gates, locked cabinets for cleaning products and medication, covered electrical panels
• Set up defined zones for play, meals, naps, and diaper changes, with enough floor space for the number of children you plan to take
• Check your outdoor space: fenced or directly supervised, with shade and no accessible standing water
• Post emergency numbers, your fire escape plan, and allergy/medical info where you can see it (not where visitors can)

Take first aid and CPR even if no agency requires it of you. Parents ask about it, and it is the single cheapest credibility signal you can buy.

Step 5: Write your policies and find families

Put every agreement in writing before the first day. A solid parent contract covers: hours and late pickup fees, daily or monthly rate and payment schedule, sick-child policy, statutory holidays and your vacation weeks, notice period for withdrawal, and what happens when you are ill. Verbal agreements are where daycare disputes start.

For finding families, licensed providers get enrollment help from their agency. Unlicensed providers rely on word of mouth, local parent Facebook groups, and community boards. Whatever channel you use, remember the advertising rule: describe exactly what you are. "Unlicensed home child care, 5 spaces, first aid certified" is honest and legal.

The numbers worth knowing

• Unlicensed: 5 children under 13 max, 3 under age 2 max, own children under 4 count
• Licensed via agency: 6 children under 13 max, 3 under age 2 max, own children under 4 count
• Penalty for exceeding limits: $2,000 per child per day
• Typical agency requirements: vulnerable sector check, Standard First Aid with Infant/Child CPR, home inspection, liability insurance

Sources: Child Care and Early Years Act, 2014 (ontario.ca), O. Reg. 137/15, administrative penalties, Types of child care (ontario.ca), Statistics Canada — home-based child care characteristics, 2021–2022, Halton Region — licensed home child care provider info, Grey County — become a licensed home child care provider.

Rules are current as of October 2026. Confirm agency-specific requirements with the agency you apply to, and check the Act links above before relying on any limit.