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Ministry of Education
Early Years and Child Care Division
315 Front Street West, 11th Floor
Toronto ON M5V 3A4
2025: EYCC05
TO: Consolidated Municipal Service Managers (CMSMs) and
District Social Services Administration Boards (DSSABs)
FROM: Holly Moran, Assistant Deputy Minister
Early Years and Child Care Division
DATE: November 10, 2025
SUBJECT: Ontario Child Care and Early Years Funding Guidelines and 2026 Allocations
Thank you for your ongoing partnership as we continue to invest and make strides in our work together to support affordable, accessible and high-quality child care for Ontario’s families.
I am writing to share the Ontario Child Care and Early Years Funding Guidelines (“the Guidelines”), updated to support municipal planning for 2026, along with additional updates, including:
Note: for support with questions on funding/service system planning, please find the Early Years Support Request form here (link).
CWELCC Agreement
Ontario has been working urgently to find a workable solution to adequately fund a renewed CWELCC system and is pleased to report that an agreement for a one-year extension has been reached with the federal government.
This one-year agreement will provide adequate funding to protect the gains made through the first five years of the CWELCC agreement, and to sustain parent fees at their current levels throughout 2026. The agreement will provide time for Ontario to work with Canada and provinces and territories on a national solution to sustain the CWELCC system for the longer-term.
Under this agreement:
Ontario remains committed to keeping CMSMs/DSSABs informed as discussions continue with federal partners on a longer-term agreement.
Early Learning and Child Care (ELCC) Agreement
I am pleased to also share that Ontario and Canada have renewed the ELCC Agreement for another five years. This renewal builds on the progress made through previous ELCC agreements and reaffirms our shared commitment to supporting high-quality, inclusive, and accessible early learning and child care programs across the province.
Guideline Updates for 2026
The updated Guidelines will also be made available on the ministry-hosted website (link) in the near term. Each chapter can be accessed individually, along with Questions and Answers documents.
For 2026, there are minor updates to reflect the current year (for example, references to the financial reporting cycle dates and annual wage enhancements levels). There have also been changes to improve clarity, address outstanding issues and to reflect updated funding guidance.
The following outlines the few key changes being introduced in the Guidelines:
o A new multiplier will be applicable to the provider compensation component in eligible agencies for new active homes created on or after January 1, 2026. This change provides a greater incentive to create new homes in response to sector and CMSM/DSSAB feedback.
o Adjustments to the calculation of the rolling top-up specifically for centres with no licensed capacity for eligible age groups (but enrolled in CWELCC/Cost-Based Funding) to provide clarity on the support for “mixed age groups”.
o CMSMs/DSSABs must have entered into service agreements by December 31, 2025 to commit their 2025 allocation, with all 2025 funds to be spent by December 31, 2026.
o For the 2026 allocation, CMSMs/DSSABs must enter into service agreements and fully spend the funding by December 31, 2026.
Other Cost-Based Funding Updates
As part of the program cost allocation for Cost-Based Funding in Chapter 2, Division 2 of the Guidelines, the ministry is communicating the following updates:
a) Home Child Care Agencies with Active Homes in Multiple CMSM/DSSAB Jurisdictions
As of 2025, when an eligible agency has active homes in multiple CMSM/DSSAB jurisdictions, the overseeing CMSM/DSSAB will receive an allocation to cover all the agency’s active homes, other than new active homes within other (“secondary”) CMSM/DSSAB jurisdictions after a “specified date” (for 2026 funding, this specified date is December 31, 2024).
b) Existing centre/agency’s rolling top-up
For eligible centres with no licensed capacity for eligible age groups, the rolling top-up should be calculated by multiplying the amount of the legacy or rolling top-up received in the previous calendar year by a factor specified by the ministry when it communicates the allocations for the calendar year. For 2026 funding, this factor is 1.02.
Standardized Financial Report and Cost Reviews
As part of the accountability framework for Cost-Based Funding, Chapter 2, Division 2 of the Guidelines outlines processes to gather information and review cost eligibility. To that end, Ontario is releasing guidance on the Standardized Financial Report and Cost Reviews as part of this package.
Also, in support of the Standardized Financial Report process, the ministry is making available two Excel-based reference files (attached).
Next Steps
To ensure alignment with these updates, Transfer Payment Agreements for 2026 will be shared with CMSMs/DSSABs soon. These amendments will reflect the latest changes outlined in this memo and updated guidelines.
The ministry sincerely appreciates your partnership as we work together to build a sustainable system that supports the needs of children and their families.
Sincerely,
Original signed by:
Holly Moran
Assistant Deputy Minister
Early Years and Child Care Division
cc: Karen Puhlmann, Director, Child Care Branch
Whitney Wilson, Director, Early Years Branch
Matthew DesRosiers, Director, Funding Branch
