Our earlier CWELCC explainer covered the basics of Ontario’s part of the Canada-wide early learning and child care system. This update is for directors, owners and finance staff who want the 2026 picture: how base fees are set now, how cost-based funding works, what the federal–provincial extensions say about fees, and which records to keep.
The fee rule today: the lowest of three amounts
Since January 1, 2025, the base fee a CWELCC-enrolled licensee may charge for an eligible child is the lowest of these amounts (O. Reg. 137/15, s. 77.2 (2)):
- $22 per day;
- the base fee you charged on December 31, 2024, if you were enrolled on that day; or
- for programs that enrolled after that date, the amount for your service area and age group in the tables to s. 77.2.
In practice, a program that was above $22 on December 31, 2024 came down to $22. A program that was already below $22 keeps its December 31, 2024 fee and does not rise to $22. A program enrolling now looks up its local table amount, which is $22 or less. A different base fee is allowed only where the Minister has authorized the service system manager to agree to one with you (s. 77.2 (3)).
Ontario says the cap brought the provincial average to about $19 per day for eligible children.
Who is an “eligible child”?
O. Reg. 137/15 (s. 1) defines an eligible child as:
- any child until the last day of the month in which they turn six; and
- up to June 30 of a calendar year, a child who turns six between January 1 and June 30 of that year and is enrolled in a licensed infant, toddler, preschool, kindergarten or family age group, or in home child care.
Your billing system should apply these dates to each child automatically, so the fee changes at the right time.
Base fees vs. non-base fees
The cap applies to the base fee. That is any fee for child care, including anything the regulation requires you to provide and anything you require the parent to buy from you. The non-base fee is for optional items or services, such as transportation or field trips, and for charges when a parent doesn’t meet the agreement, such as late pick-up (s. 1).
The Child Care Centre Licensing Manual (Part 2) adds that mandatory one-time fees count toward the cap. Registration, deposit and administration fees are examples. The manual says to divide the one-time fee by the number of days you provide service in a year. Its example is a $500 fee over 250 service days. That adds $2 a day, so the daily fee could be no more than $20.
Your parent handbook must list your base fee, any non-base fees and whether you are enrolled in CWELCC (s. 45 (1) (a) (iii)).
How cost-based funding works
Since January 2025, Ontario has funded CWELCC programs through a cost-based funding approach run by service system managers. The ministry’s CWELCC Cost-Based Funding Guideline (Chapter 2, Division 2, updated July 2026) describes the formula. For each eligible centre or agency, it works like this:
- Program cost allocation: a benchmark allocation based on standardized cost metrics and adjusted for regional differences, plus any top-up for programs whose eligible costs are above the benchmark or that are adding spaces.
- Plus an allocation in lieu of profit/surplus: a 4.25% base rate on benchmark plus top-up, a 3.5% premium rate on the benchmark only, and a flat $6,000 per calendar year, prorated by month for programs that join part-way through.
- Minus the expected base fee revenue offset: the parent fees and fee subsidy revenue you’re expected to collect, adjusted for an allowed vacancy rate.
The guideline is clear that this is not a pure cost-reimbursement model. Payments during the year are advances. After year-end, your actual eligible costs and actual base fee revenue are reconciled against the allocation. The allocation is the most you can be funded for, and overpayments are recovered.
What the funding agreements say about fees
- In December 2025, Canada and Ontario extended their agreement by one year, to March 31, 2027. That included $695 million in federal funding for 2026 to keep eligible fees at an average of $19 per day until December 31, 2026.
- On September 29, 2026, the governments announced a four-year extension (March 31, 2027 to March 31, 2031), with nearly $12 billion in federal funding. Ontario committed to keep fees at $19 per day on average until June 30, 2027. The two governments said they will work over the next year on what comes after that.
Fees after mid-2027 have not been announced. Watch for updates from the ministry and your service system manager before you change any parent communications about future fees.
Records operators should keep
The regulation, the licensing manual and the funding guideline together point to these records:
- Your CWELCC service agreement, kept at the centre or agency (s. 77.1 (4)). You must follow its terms, including wage requirements (s. 77.1 (3)).
- Fee records for each child: base and non-base fees charged, any one-time fees and how they were spread across the year, and the eligible-child status and dates. An administrative penalty can apply for each child charged a base fee above the allowed amount, or not credited or refunded (s. 78, Table).
- Credits and refunds: if a higher base fee was prepaid, a credit or refund is owed. Any credit left when a child leaves must be refunded within 60 days (s. 77.2 (4)–(6)).
- Daily attendance: arrival and departure times or absences for each child (s. 72 (3)). Service system managers also use attendance for fee subsidy reporting.
- Year-end financial reporting: a standardized financial report for each eligible centre or agency, and an annual attestation signed by an officer confirming that the funding was used as intended.
- Supporting documents: the guideline asks licensees to keep receipts, quotes and details of circumstances. Each year, service system managers must select a 5% sample of funded centres and agencies for a third-party Direct Engagement to Report on Compliance.
- Disenrollment notices, if you ever leave CWELCC. You need at least 30 days’ notice to parents, employees and home child care providers (s. 77.3).
If you’re unsure whether a cost is eligible, the guideline encourages you to ask your service system manager before you incur it.
How KiddieTrac helps
KiddieTrac includes CWELCC billing, a free CWELCC fee calculator at /cwelcc-calculator, and workspaces for the OCCMS fee-subsidy Record of Attendance and the CWELCC monthly summary. These keep billing and attendance records together, which helps at reconciliation time. Your service agreement and your service system manager’s instructions still decide what you report.
Sources
- O. Reg. 137/15, ss. 1 (definitions), 45, 72, 77.1–77.3, 78
- Child Care Centre Licensing Manual, Part 2, Canada-Wide Early Learning and Child Care (CWELCC) System
- Canada-Ontario early learning and child care agreement (Ontario, updated September 25, 2026)
- Child care and early years funding guidelines (Ontario)
- Chapter 2, Division 2: CWELCC Cost-Based Funding Guideline (July 2026)
- Canada.ca, December 4, 2025, one-year extension
- Canada.ca, September 29, 2026, four-year extension