Ministry of Education
Early Years and Child Care Division
315 Front Street West
Toronto ON M7A 0B8
2025: EYCC01
TO: Consolidated Municipal Service Managers (CMSMs) and
District Social Services Aministration Boards (DSSABs)
FROM: Holly Moran, Assistant Deputy Minister
Early Years and Child Care Division
DATE: March 31, 2025
SUBJECT: Updates to 2025 Ontario Child Care and Early Years Funding Guidelines
Thank you for your ongoing leadership and commitment as we continue to invest and make strides in our work together to deliver affordable, accessible, inclusive and high-quality child care to Ontario’s families.
Further to the memo communication of November 26, 2024, regarding the Ontario Child Care and Early Years Funding Guidelines (“the Guidelines”), I am writing with additional updates to support municipal planning for 2025 and beyond, including:
· Results of the Canada-wide Early Learning and Child Care (CWELCC) space target recalibration exercise;
· Information on the Early Learning and Child Care Infrastructure Fund;
· Updated 2025 Allocations;
· Updates to the Guidelines.
Note: for support with questions on funding/service system planning, please find the Early Years Support Request form here (link).
Details are provided here in the following sections.
Space Target Recalibration
The recalibration exercise has been completed to best position Ontario to achieve its space creation target of 86,000 net new CWELCC spaces by the end of 2026 and ensure support for more children and families. This was accomplished by providing all CMSMs/DSSABs with more achievable targets and moving related operating funding to areas where capacity to grow the CWELCC system is demonstrably more acute. The recalibration was based on information received from CMSMs/DSSABs in October 2024. As a result, 16 (out of 47) CMSMs/DSSABs will see increased space creation targets and 27 will see reduced space creation targets, with the remaining 4 CMSMs/DSSABs seeing no change, reflecting a relative on-the-ground capacity for growth.
The recalibration exercise resulted in adjusted auspice targets by CMSM/DSSAB to support Ontario in achieving the overall space creation target of 86,000 spaces while working towards the 70% (or higher) proportion of not-for-profit licensed child care spaces for children aged 0 to 5 by the end of the current CWELCC Agreement. Adjusted auspice targets by CMSM/DSSAB can be found under Appendix A. CMSMs/DSSABs should maintain or exceed their not-for-profit space targets, in alignment with the updated Chapter 2, Division 1 of the Guidelines.
For clarity, maximizing the likelihood of achieving the 86,000 space creation target requires some flexibility to adjust plans. As such, CMSMs/DSSABs will be allowed to shift spaces between setting and age groups, as long as their overall space creation targets are met, and their overall cost-based funding expenditures do not exceed their allocations. For example, CMSMs/DSSABs could shift spaces from community-based into school-based settings (which are typically less expensive than the community-based equivalent) to increase their financial flexibility, which could also allow CMSMs/DSSABs to accommodate younger age groups (which are typically more expensive than spaces for older age groups).
Three space allocation schedules by CMSM/DSSAB are being provided (Appendix A). These schedules reflect the space data (broken down by year, by setting, by auspice and age group distribution) used to make funding and space targets line-up, based on growth capacity information gathered from CMSMs/DSSABs.
· Schedule 1 – Revised CWELCC Space Targets by Setting;
· Schedule 2 – Revised Auspice Targets; and
· Schedule 3 – Assumed age-group distributions used for calculating the cost-based funding (to support CMSMs’/DSSABs’ financial planning).
Note that ‘Schedule 1 - Revised CWELCC Space Targets by Setting’ includes a revised target for 2024. Variances between actual space counts as of December 31, 2024, and the revised 2024 target – where one exists – will be carried forward to 2025 as follows:
· If the revised 2024 space target is greater than the actual CWELCC-enrolled space count as of December 31, 2024, then the difference should be added to the revised 2025 space target (meaning, the CMSM/DSSAB can create more spaces than its revised 2025 space target).
· If the revised 2024 space target is less than the actual CWELCC-enrolled space count as of December 31, 2024, then the difference should be subtracted from the revised 2025 space target (meaning, the CMSM/DSSAB can create less spaces than its revised 2025 space target).
Early Learning and Child Care Infrastructure Fund
In February 2025, Ontario and Canada finalized the 2024-2025 Early Learning and Child Care Infrastructure Fund Action Plan. Ontario is now providing CMSMs/DSSABs with guidance to begin implementation.
The ELCC Infrastructure Fund supports infrastructure projects with a goal of increasing inclusion in child care for underserved communities through the creation of new, licensed child care spaces. The ELCC Infrastructure Fund supports not-for-profit licensed child care centres in alignment with Ontario’s Access and Inclusion Framework and will complement the Start-up Grant program (please see the updated Chapter 5 of the Guidelines, which now includes information on ELCC Infrastructure Fund in part 2).
The ELCC Infrastructure Fund envelope of about $135.1 million for 2025 is being distributed to CMSMs/DSSABs as follows:
· Base Allocation: $70.5 million distributed equally across all CMSMs/DSSABs (a flat amount of $1,500,000 per CMSM/DSSAB).
· Proportional Allocation: $64.6 million distributed proportionally based on each CMSM’s/DSSAB’s share of the revised 2025 and 2026 community-based child care space targets.
In July 2025, CMSMs/DSSABs will be required to report to the ministry on the ELCC Infrastructure Fund funding. This report-back may be used to support ministry assessment of local progress and ability to commit funding by December 2025.
Updated 2025 Child Care Allocations
The 2025 Start-up Grants and Cost-Based Funding Allocations, which enable the creation and operation of new spaces, have been updated to ensure the funding is directed to the service areas aligning with recalibrated space targets. CWELCC administration funding allocations have also been updated accordingly. ELCC Infrastructure Fund Allocations are new for 2025.
Please find attached (see Appendix B), which includes:
· the revised 2025 Cost-Based Funding, Start-up Grants, and Administration Allocations, and
· the new 2025 ELCC Infrastructure Fund Allocations.
Guidelines Accessible Online
The updated Guidelines are now available on the Ministry-hosted website (link). Each chapter of the Guidelines can be accessed individually, along with other documents such as all the Questions and Answers related to Cost-Based Funding and the 2025 Funding Allocations Technical Paper. Going forward, the Guidelines section of the website will be updated to reflect the current versions of all chapters and supporting documents, and older versions will be added to the archive section as they are replaced. We hope this makes it easier to find up-to-date guidance from the Ministry.
The full Guidelines were provided to CMSMs/DSSABs in November 2024. Following that release – with the exception of Chapter 5 to accommodate the introduction of the ELCC Infrastructure Fund – there have been small changes and minor updates that have been incorporated into the chapters. Please see Appendix D for an outline of these changes.
Next Steps:
Transfer Payment Agreement Amendment
To ensure alignment with these updates, Transfer Payment Agreements for 2025 will be amended and shared with CMSMs/DSSABs. These amendments will reflect the latest changes outlined in this memo and updated guidelines. Since this is a recalibration, some CMSMs/DSSABs will see adjusted cash flows to align with their reduced allocations, resulting in cash flow impacts.
Additionally, the 2025 Transfer Payment Agreements noted that allocations for Cost-Based Funding, Administration, and EarlyON included funding from the Canada-Ontario Early Learning and Child Care (ELCC) Agreement. As such, allocations beyond March 31, 2025, were partially contingent on the extension of the ELCC Agreement.
We can now confirm that, with the ELCC Agreement extended, related funding for April to December 2025 will proceed as outlined in the Transfer Payment Agreements.
Amended agreements and the corresponding payments based on these updates are expected to follow in the coming months.
We want to reiterate our sincerest appreciation for your continued partnership as we work towards improving and strengthening child care and early years programs and services in Ontario.
Sincerely,
Original signed by:
Holly Moran
Assistant Deputy Minister
Early Years and Child Care Division
cc: Matthew DesRosiers, Director, Funding Branch
Whitney Wilson, Director, Early Years Branch
Karen Puhlmann, Director, Child Care Branch
