Wellington County made headlines this week when its manager of finance confirmed the county is expected to return between $20 and $24 million in unused CWELCC child care funding to the province in 2026.
The reason is not a shortage of need. Child care demand in Guelph and Wellington County is real and growing. The reason is structural: the province allocates funding based on the assumption that every licensed space in the community is operational, fully enrolled, and running full-day, year-round child care. When the reality on the ground looks different, the gap between what is allocated and what can be spent gets returned to the province.
As Wellington County director of children's early years Ashley Vanderlaan explained, some centres are licensed for 64 spaces but enrolled for only 50. Before and after school programs receive smaller allocations than the funding model anticipates. And staffing shortages are preventing centres from activating every licensed space they hold.
"Right off the hop," the county's manager of finance said, "we are receiving significantly more funding than what we can possibly provide to the community."
This is not a Wellington County problem. It is an Ontario problem.
What This Means for Operators
The cost-based funding formula calculates your Program Cost Allocation based on your planned operating space-days and licensed space-days. Every space you hold a licence for but cannot staff or fill is a space the formula is accounting for in your allocation. But if your actual eligible costs come in below your Program Cost Allocation at reconciliation, that funding does not stay with your centre.
The Ministry's reconciliation process is clear: Actual Cost-Based Funding crystallizes at year-end based on actual eligible costs incurred, capped at the Program Cost Allocation. Unspent allocation is recovered. There is no carry-over.
The Wellington County situation illustrates this at a system level. But the same dynamic plays out at the individual centre level every year across Ontario. Operators who do not fully understand how their operating decisions connect to their funding position are routinely leaving money on the table or being caught off guard at reconciliation.
The Three Gaps Operators Need to Watch
The first gap is capacity utilization. If you are licensed for more spaces than you are currently operating, your Program Cost Allocation reflects those licensed spaces in the fixed cost components. But your variable cost components, including program staffing, are driven by operating space-days. If your operating spaces are significantly below your licensed capacity, your actual eligible costs may fall short of your allocation.
The second gap is program type. Before and after school programs generate materially different funding than full-day infant, toddler, or preschool programs. The benchmark rates differ by age group, and school-age programs run fewer service days with different staff-to-child ratios. Operators running mixed program types need to model each program's contribution to the overall allocation separately to understand where their funding is concentrated and where the risk lies.
The third gap is staffing. Wellington County was direct about this: the inability to hire and retain qualified staff is a primary reason licensed spaces go unused. Every vacant space that cannot be activated because of a staffing shortfall is a space your eligible costs will not reach. Understanding your WEG and WCF entitlements fully and deploying them strategically is one of the most direct ways to strengthen your ability to staff up and activate your licensed capacity.
What You Should Do Before Year-End
Run your 2026 allocation now, not in December. By the time year-end reconciliation arrives, it is too late to adjust your operating plan or incur additional eligible costs. Understanding your Program Cost Allocation, your expected eligible cost run rate, and the gap between them while you still have months left in the calendar year gives you time to act.
If you are operating below capacity due to staffing shortages, model what fully activating even a portion of your unused licensed spaces would do to your eligible cost structure. The staffing costs required to open those spaces are among your most significant eligible cost categories.
If you run before and after school programs alongside full-day programs, make sure your eligible child ratio and supervisor component calculations reflect your actual program mix. The funding formula weights these differently and an inaccurate calculation at the allocation stage can create a false sense of how much room you have.
Wellington County's $20 million return to the province is a system-level signal that the benchmark funding model and the operational reality of Ontario child care are not yet aligned. For individual operators, the lesson is the same one that drives everything we build at ChildcareFundingIQ: you cannot manage what you cannot see.
Understanding exactly where your centre stands against its Program Cost Allocation, in real time and in detail, is not a finance department task. It is an operational necessity.
Use ChildcareFundingIQ to model your 2026 allocation by program, validate your eligible cost position, and identify gaps before they become year-end recoveries.
Get Started Free →Source: Jessica Lovell, "Wellington County to return millions in unused child care funding to the province," Elora Fergus Today, June 12, 2026. Ontario Ministry of Education, "Chapter 2, Division 2: CWELCC Cost-Based Funding Guideline," April 2026.