The ONN Care Scorecard Wants Profit Out of Child Care. Here Is What That Actually Means for Your Centre.

The Ontario Nonprofit Network released its Care Economy report in May 2026 - a 53-page assessment of provincial care policy using an adapted version of an international Care Policy Scorecard. It received significant media attention. It will be cited in funding negotiations. And one of its principal recommendations is this:

"End privatization of all care services and make for-profit actors obsolete by redirecting public money allocated to for-profit providers back into the public sector."

If you operate a for-profit child care centre enrolled in CWELCC, that sentence is directed at you.

This post is not going to tell you the report is wrong about everything. Parts of it accurately describe real pressures in Ontario's care sector. But significant portions of its analysis - particularly the framing around for-profit child care - are built on ideological assumptions rather than evidence, and the policy recommendations it advocates could materially harm your centre's financial viability. You should understand the report on its own terms before it shapes the next multi-year CWELCC agreement.

What the Scorecard Actually Says About Child Care

The ONN scored Ontario's Early Childhood Care and Education policy - which encompasses CWELCC - at 52 per cent on their criteria, placing it at a Degree of Transformation of 3 out of 5, defined as transformative to a limited extent.

Their criticism is not that CWELCC is failing. They acknowledge that the program has lowered the cost of child care for families who access subsidized spaces. Their concern is that shortcomings in its implementation have resulted in long waitlists and high worker turnover.

Those are real problems. Ontario does have a child care workforce shortage. Waitlists in many municipalities remain long. But the report's proposed solution - removing for-profit operators from the funding system entirely - is not supported by the evidence it cites, and it would make both problems worse, not better.

The "Take Profit Out of Care" Argument and Where It Breaks Down

The report's most aggressive recommendation reads: end privatization of all care services and make for-profit actors obsolete by redirecting public money allocated to for-profit providers back into the public sector.

This argument rests on the assumption that profit extracted from child care directly reduces the quality or quantity of care delivered - that every dollar going to a for-profit operator's bottom line is a dollar that should have gone to wages or programming.

The April 2026 CWELCC Cost-Based Funding Guideline directly contradicts this framing. Under the current funding formula, the Allocation in Lieu of Profit and Surplus is a defined, built-in component of every centre's Cost-Based Funding Allocation - for-profit and non-profit alike. It is calculated as:

4.25 per cent of your total Program Cost Allocation (benchmark plus any top-ups), plus 3.5 per cent of your benchmark allocation specifically, plus a flat $6,000 per centre per year.

This is not a policy loophole. It is an explicit recognition by the Ministry of Education that child care operators - including commercial operators - face real business risk and opportunity cost in participating in CWELCC. The Ministry designed the formula to include a margin. The ONN's recommendation would eliminate that margin and, with it, your ability to operate viably.

The report cites research suggesting for-profit care yields worse care outcomes. What it does not cite is the mechanism for how that would apply to centres operating under a cost-based formula that controls eligible expenses, caps base fees, requires standardized financial reporting, and subjects a five per cent sample to independent third-party compliance review every year.

Under CWELCC's accountability framework, cost-based funding is not a blank cheque. Every dollar is traceable. Ineligible costs trigger recovery at reconciliation. There is very little structural space to extract profit in ways that damage program quality - the formula constrains that behaviour by design.

The Worker Turnover Argument: What It Actually Means for You

The ONN report is correct that worker turnover in Ontario child care is high. It identifies low wages and precarious employment as primary causes. It recommends that the province pay competitive wages to care workers to take meaningful steps towards reaching pay equity.

Here is the tension the report does not acknowledge: the current CWELCC formula already funds wages through the Wage Enhancement Grant (WEG) and Workforce Compensation Funding (WCF), and those workforce dollars are available to for-profit operators on the same terms as non-profits.

If you are not fully utilizing WEG and WCF allocations, you are leaving money on the table that the formula built specifically for staff compensation - and you are inadvertently contributing to the turnover problem the ONN is citing as justification for removing you from the system.

Program staffing benchmarks in the April 2026 Schedule A rates include mandatory employer contributions - CPP, EI, WSIB, Employer Health Tax - as well as provincial workforce funding. The formula was constructed to support competitive wages. Whether that potential is realized depends on how operators manage their eligible cost structure.

This is one of the most direct things you can do to respond to the ONN's workforce argument: use every dollar of workforce funding available to you, pay wages that make staff want to stay, and document it through your standardized financial reporting. That evidence matters when advocacy organizations make claims about for-profit pay practices.

The Growth Restriction You Are Already Living Under

The report advocates restricting for-profit operators from accessing expansion funding. That restriction is already largely in place.

Capital Start-up Grants for new child care spaces are directed to non-profit and municipal operators. CMSMs and DSSABs use Directed Growth Plans that give them significant discretion over which operators receive support for new space creation. Several major service managers, including Toronto Children's Services, have paused commercial operator expansion applications explicitly.

If you are a for-profit operator who has expanded your licensed capacity in the last two years, you have done so with private capital - not government support. The Growth Top-Up that applies to new licensed spaces under the current funding formula is available to you, but the infrastructure capital to create those spaces is not.

This is the existing policy reality that the ONN scorecard is advocating to entrench and accelerate. It is not a future risk. It is your present operating environment.

What the Report Gets Right - and Why It Still Points in the Wrong Direction

The ONN scorecard accurately identifies several pressures in Ontario's broader care economy:

Ontario's primary care system is strained. More than three million Ontarians lack a family doctor. This has nothing to do with child care operator ownership structure, but it is creating demand pressure on social services generally.

Non-market housing has decreased while homelessness has increased. This creates instability for families accessing child care - waitlists move faster in communities with housing stability.

Worker exploitation and wage theft are documented problems in care-adjacent sectors. In licensed child care specifically, the accountability framework under CWELCC significantly constrains these behaviours - the ONN's examples draw primarily from unregulated or gig-economy care work, not from licensed CWELCC-enrolled centres.

The report's failure is not in identifying these pressures. It is in treating for-profit ownership as the cause rather than one characteristic among many that correlates with service quality differences it has not adequately controlled for. A for-profit centre with a well-managed eligible cost structure, fully utilized workforce grants, and documented compliance is a different entity from the unregulated private care markets the report's evidence primarily describes.

What You Should Be Focused on for 2026

The ONN Care Scorecard will be used in advocacy. It will be cited in consultations about the next federal-provincial CWELCC agreement. The policy environment it reflects is one where for-profit operators face increasing scrutiny and decreasing political capital.

None of that changes your 2026 funding formula. Your Program Cost Allocation is calculated from your operating plan - your operating space-days, licensed spaces, service days, and CMSM geographic adjustment factor. It is not reduced because you are for-profit. Your Allocation in Lieu of Profit and Surplus is calculated the same way as any other enrolled operator.

What it does mean is that your documentation and compliance position matters more than ever.

Your eligible cost claims need to be defensible. Ineligible costs at reconciliation trigger recoveries and generate exactly the kind of narrative the ONN is building its case on. Keep receipts. Document circumstances. Ensure your standardized financial report reflects reality.

Your workforce investment needs to be visible. If you are paying competitive wages and utilizing WEG and WCF fully, make that clear in your reporting. The counterargument to claims that for-profit operators depress wages is your actual payroll data.

Your base fee compliance matters. The $22 per day cap applies to all programs except School Age. Fees above the cap are not just a regulatory issue - they are the first thing auditors look at.

Your eligible child ratio calculation determines how much of your supervisor benchmark you can claim. If you serve both eligible children ages zero to five and ineligible children ages six to twelve, that ratio needs to be calculated correctly and consistently with your operating space-days by age group and the applicable staff-to-child ratios under O. Reg. 137/15.

The political case for for-profit participation in CWELCC is not going to be won in a policy report. It will be demonstrated in the operating data of centres that deliver high-quality child care, maintain financial compliance, invest in their workforce, and build records that speak for themselves at reconciliation and cost review.

Source: Ontario Nonprofit Network, Ontario's Care Economy: An Assessment of Provincial Care Policy, May 2026. Ontario Ministry of Education, Chapter 2, Division 2: CWELCC Cost-Based Funding Guideline, April 2026.