Alberta Childcare Operators: Running & Restructuring Daycares with CWELCC Changes
Exploring the possibility of restructuring your daycare to pivot from for-profit to non-profit with the implementation of the Canada-Wide Early Learning and Child Care (CWELCC) Agreement.
With the recent childcare changes implemented in Alberta under the CWELCC agreement, many daycare operators are left wondering what to do in terms of how they structure their business. Do they restructure from a for-profit to a non-profit model? And if they plan to one day sell their daycare operation, how does this affect their existing business model?
What Changed?
On April 1, 2025, Alberta moved to a new funding model under the CWELCC agreement. This means there is now a flat fee of $15 per day for all licensed childcare spaces in Alberta enrolled in the CWELCC program. This effectively replaces the prior combination of Affordability Grants and income-based childcare subsidies. Every eligible parent now pays this universal $15 per day fee for core childcare services, regardless of income.
The change affects all families accessing CWELCC-participating childcare centres.
The province has also introduced supplemental fees to cover services deemed “non-core” services. These may include costs for meals and snacks, field trips and outings, or extracurricular programs or enrichment activities. These supplementary fees must be communicated by centres to families. Centres must also get provincial approval through a formal fee increase request process.
The For-Profit Space Cap
A big component of the new rules also means that for-profits can no longer receive the Alberta Affordability grant.
Importantly, there is now a space cap on for-profit childcare spaces in Alberta – the last announced number is 15,500 non-profit spaces allowed. However, new for-profit child care programs licensed and open on or before September 30, 2025, in the high-waitlist communities will still be eligible to sign a 2025/2026 Affordability Grant once licensed. High-waitlist communities include Grande Prairie, Red Deer, Lethbridge, Fort McMurray and Canmore/Banff.
What Does This Mean for Alberta Childcare Operators?
This transition marks a significant shift in how childcare is funded in Alberta. The goal is provide affordable childcare while also ensuring that childcare centres can continue to offer quality programming and services. However, these new rules also place pressure on centres to operate within narrow cost parameters while maintaining quality and accessibility.
Alberta daycare owners who are operating as for-profit corporations may now be considering switching operations to a non-profit model. Those centers in the process of opening may also be reconsidering their planned business model. When it comes to non-profit vs for-profit, there are some important key items to note. For-profit structures allow private profit and greater control over finances, but fewer grant opportunities. Nonprofits require profits be reinvested, but there are significant funding opportunities. With this also comes stricter oversight.
Non-Profit vs For-Profit
For-Profit or Non-Profit both have different benefits. Here are the most notable things to remember about these differences:
For-Profit Structure:
- Owned by shareholders, profits can be distributed to owners
- Taxable entity; pays corporate taxes
- More flexibility in profit distribution, salary structures, and dividend payments
- Ability to sell business/assets for profit – more freedom in selling vs. Selling a non-profit business
- Less grants and subsidies available to receive
Non-Profit Structure:
- Operates for social, community or charitable purposes; profits be reinvested into the organization
- Tax exempt or taxed at preferential rates, pays NO income tax
- Eligible for numerous grants and funding opportunities
- Government by a board, no private ownership
- Restrictions on profit distribution (cannot distribute profits to members or directors)
- Two options to operate: Section 9 Companies (private nonprofit) vs. Society Nonprofit (giving up 100% control of operations – less desirable option)
Key points on operating a non-profit:
- Section 9 nonprofits are corporate entities with formal governance, and a minimum of 2 Directors. Non-profit shares can be sold.
- Societies are community-driven, easier to manage, but best for small or grassroots operations. If you are operating as a society, there is nothing to sell (no shares).
How to Start a Non-Profit Childcare Facility
If you are looking to open a new non-profit organization or now wanting to restructure your existing childcare operation, your first step would be to connect with a lawyer who will help you ensure that you’re setting up your private non-profit entity correctly. Lawyers will help with all necessary steps, including:
- Clarifying your purpose
- Forming a board
- Drafting documents
- Filing incorporation
- Receiving certification
- Setting up Records
- Registering with the CRA
- Continuation of compliance
Moving Forward
Alberta childcare operators have a few ways they can structure their business to retain affordability for families while also continuing to run their business without interruptions in safety, programming and staffing, and income. Operators and families are encouraged to review the new funding guidelines and reach out to their regional licensing office or sector associations for further clarification and support during this transition.
Thank you to Ray Lewchuk from Blue Chip Wealth Strategies for his insight on this topic. (Link: https://www.bluechipwealth.ca/)
Helpful Links:
- Daycare facilities: https://open.alberta.ca/publications/early-learning-child-care-whats-changing-daycare-facilities
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