Understanding Licensed vs. Unlicensed Options

Exploring child care options? This page breaks down the differences between licensed and unlicensed care to help you choose what feels right for your family.

A good first step in accessing child care is understanding the different options available and the regulations that apply to each one. Keeping an open mind as you explore can help you find care that truly fits your family’s needs.

Licensed vs unlicensed child care

Advantages and disadvantages of unlicensed child care

Advantages

• Flexibility: Home-based child care providers often have flexible hours and may offer extended hours or accommodate irregular schedules.
• Convenience: Home-based child care providers are often located in your neighbourhood, making them convenient and accessible.
• Personalized care: Children may receive more individual attention in smaller group settings.
• Comfort and familiarity: A child might feel more comfortable in home-based child care because the setting is familiar to them.
• Direct communication: Having a direct line of communication with your child care provider can make it easier to share updates and stay connected. It also helps build a positive, trusting relationship, which can support your child in feeling more comfortable and secure.
• Mixed age groups: Like licensed home-based child care, unlicensed child care allows for mixed age groups, fostering sibling interaction and a sense of community.

Disadvantages

• No provincial/territorial monitoring: There’s no formal supervision or provincial enforcement of licensing regulations.
• No replacement: Finding backup care can be difficult if the child care provider gets sick or is unable to care for your child for other reasons.
• Quality varies: Not all unlicensed child care providers offer the same quality of service since there’s no oversight mechanism in place.
• Health and safety risks: The child care provider may not adhere to the same safety and cleanliness standards as licensed programs.
• Limited resources: Without funding, unlicensed home-based child care providers may lack essential supplies, age-appropriate toys and educational materials, thereby limiting your child's developmental experiences.
• Insurance Protections: Licensed child care programs are generally required to carry liability insurance. In unlicensed home‑based settings, coverage can vary depending on the provider. If this is important to your family, you can ask providers about their insurance and what it includes.
• Fee Discrepancies and Good business Practice: Unlicensed child care providers set their own fees and policies, which can result in wide variations in cost, payment expectations and refund practices. Without regulatory oversight, there may be limited transparency around contracts, receipts or fee increases. Families may also encounter informal business practices, such as cash-only payments or unclear policies related to vacation days, closures or termination of care.

If you choose an unlicensed child care provider, having a written contract in place from the start can help create clarity and shared expectations. A contract supports open communication, reduces misunderstandings, and ensures both you and your provider are aligned on responsibilities. 

The contract should include details such as: rates and fees, payment schedule, hours of operation, services included, sick day/holiday/termination policies, names of people authorized to pick up the children, and any specific arrangements you and the child care provider have agreed on. 

Please note: As the parent or guardian it’s your responsibility to assess the quality and suitability of both licensed and unlicensed child care providers. It’s important to note that both unlicensed and licensed providers must adhere to the limits on the number of children they can care for, which are set by each province/territory.   

Updated May, 2026. If you see information that’s incorrect, please contact childcare@cfmws.com.