Ontario Daycare Market

Part
01
of five
Part
01

Daycare Financials

After an extensive search through industry-related websites, government databases, and regional news sources, financial details about operating a typical daycare facility in Ontario do not appear to be available in the public domain. However, the research team was able to gather valuable insights about the childcare space in both Ontario and Canada as a whole.

USEFUL FINDINGS

ONTARIO
  • According to the Ministry of Education in Ontario, there were 5,437 licensed child-care centers in Ontario as of March 31, 2018, with a total number of spaces of 427,032.
  • As per the above data, the average number spaces in each of these childcare centers were 427,032/5437 = 78.54 or approximately 79.
  • The median daily fees for one full day in these childcare centers were $66 for infants, $53 for toddlers, $47 for preschool, and $41 for kindergarten which averages to $1,552.50 for a month. [($66+$53+$47+$41)/4] = $51.75 for a day and (30X $51.75) = $1,552.50]
  • With approximately 79 spaces per center and average monthly earning per space being $1,552.50, the average yearly revenue earned by these centers can be estimated to be $1.47 million. [($1552.50*12*79) = 1,471,770]
CANADA
  • As per the statistics published by the Government of Canada, the annual revenue earned by a small and medium-sized Child Day-Care Service in Canada ranged between $30,000-$5,000,000 in 2017.
  • The exact average for the annual revenue earned by a small and medium-sized Child Day-Care Service in Canada, in 2017 was recorded at $153,600.
  • The average value for operating expenses incurred by a small and medium-sized Child Day-Care Service in Canada, in 2017 was recorded at $109,000.
  • The average net profit recorded by a small and medium-sized Child Day-Care Service in Canada in 2017 was recorded at $33,000 which is ($33,000/$153,600) = 21.48% of the average revenue earned.
  • According to a December 2018 report by IBIS World, the daycare market for Canada earned a revenue of $9 billion from 40,881 businesses, implying each business to have earned an average annual revenue of $220,151.17. [($9 billion/ 40,881) = $220,151.17]
INITIAL CAPITAL COST
  • Although the initial capital cost figures were not available specific to Canada or Ontario, the cost estimates for starting a home-based daycare business ranged from $10,000 to $50,000, while Daycare center franchise startups ranged from $59,000 to $3 million.


RESEARCH STRATEGY

While we found various insights into the childcare space in Ontario, child daycare services in Canada as a whole, and initial capital cost estimates for starting a home-based daycare business or similar franchises, we could not find the exact financial statistics around the operation of a typical daycare facility in Ontario, Canada.

We began our research by looking into the registration process for a daycare facility in Ontario, hoping to find some financial data like operating cost and initial capital cost. We focused on federal and provincial government portals. Our aim was to locate data presented on the average financial metrics or benchmarks that an entity may have to meet while going through these processes. Ontario's Ministry of education website had some data regarding the number of registered daycare facilities and average fees charged by them, which we used to calculate an estimate of the average revenue. Most of the other information was limited to the process of beginning one of these businesses and there were no specific financial figures mentioned which could have helped us present specific financial statistics for the operation of a typical daycare facility in the province of Ontario, Canada

We then looked into the top childcare companies in Ontario. In doing so, we intended to check the companies individually and look for any public financial data. We also hoped to take the top five companies and present their average estimated operating expenses, revenue, initial capital costs, and EBITDA. However, after looking through a lot of companies found from various industry-specific sources, it became evident that most of these providers are either not-for-profit or are privately held, so none of them disclosed any financial data. We also did not find any blogs or similar sources that ranked companies by their financials, so we relied on review-based rankings that generated a list of 10-20 companies in the childcare space in Ontario. We also checked for licensed daycare centers in Ontario from the Ontario Ministry of Education, though none of the companies we found provided any financial data. Therefore, we could not present any data based on these findings.

We also checked reputable news sources based in the region, as well as local associations and their publications. By looking through these sources, we hoped to find information on the existing daycare facilities in Ontario and the growth of specific companies or the overall market in the past few years. By growth, we were specifically looking for revenue over time.

Finally, we consulted resources that assist individuals in starting a business, such as a daycare company or facility. We hoped to, through these resources, find an example or approximated information on the proposed expense benchmarks or projected return benchmarks, in addition to things like operating expenses, revenue, initial capital cost, and EBITDA. While we were able to find some metrics on starting a daycare business, none of the information was specific to the Ontario region.
Part
02
of five
Part
02

Daycare SWOT

The daycare industry in Ontario, has been experiencing growth in the past years in terms of the number childcare centers. Through the federal government regulations and support, service providers have been providing high-quality services. However, some changes in legislation and the recent cancellation of the $50 million are posing a significant threat to the industry.

STRENGTHS

  • As of March 2018, the provincial government provided funding for 85 First Nations to support childcare programs on reserve. According to Ontario's 2018 Childcare annual report, the number of licensed childcare centers has increased by over 15%, while licensed spaces increased by about 73%. Spaces have also increased in number across all age groups.
  • EarlyON Child and Family Centers offer caregivers and infants to six- year old children with free drop-in programs. Their services include activities such as; sing-alongs, storytelling, games, and reading; professional advice in early childhood development; opportunity to interact with other families with young children; and information about other family services.
  • Ontario is the first province to sign a framework known as the Canada-Ontario Early Learning and Child Care Agreement. This agreement shows Ontario's efforts to promote affordability, accessibility, quality, inclusion, and flexibility of daycare services.
  • Under this framework, the federal government agreed to grant $439 million to Ontario from 2017 to 2020. During this period, $5 million is disbursed annually to finance innovative approaches that promote high-level training and learning opportunities for early years and childcare workers. Also, $40 million is provided annually to improve access to EarlyON Child and Family Centers. On the other hand, $100 is disbursed annually to support access to childcare.
  • The ministry of education in Ontario enforces and monitors employee qualification requirement in all the licensed childcare centers. According to the Child Care and Early Years Act 2014, the minimum qualifications for employees and supervisors at licensed childcare centers is that they should be members in good standing of the College of Early Childhood Educators. A director should also approve of them.
  • The staff to child ratio is as follows; 3 to 10 for infants, 1 to5 for toddlers, 1 to 8 for preschool, 1 to 13 for kindergarten, 1 to 15 for junior school age. The maximum number of children in the age group is as follows; 10 infants, 15 toddlers, 24 children in preschool, 26 in kindergarten, and 30 junior school age.
  • The Canada -Ontario Early Learning and Child Care Agreement supports children who are aged 0-12 years through fee subsidies and reduction of licensed childcare fees. The agreement also supports the children through easy access and increasing affordability. The agreement also promotes not-for-profit childcare centers.
  • Ontario supports the inclusion of children with special needs in licensed childcare settings through Special Needs Resourcing funding to First Nations and system managers.
  • An increasing number of childcare centers have been offering bilingual programs.

WEAKNESS

  • From 2008 to 2018, there has been a decrease in the number of licensed home childcare agencies by about 12%. The number of approved homes has also decreased by about 2%.
  • Licensed childcare centers are more expensive for younger children than for older children as the fee per infant is about $66, while school-going children pay about $21.
  • The daily fee at licensed childcare centers is higher than the fee charged at-home childcare agencies. For instance, the median fee charged at licensed childcare centers per infant is $66 per day, while home childcare agencies charge averagely $25 per infant daily.
  • A small number of licensed childcare centers offer services during non- standard hours.

OPPORTUNITIES

  • Ontario is planning to provide free full-day licensed childcare services from 2020. Those eligible are children aged 2.5-5years. This program will save parents about $17,000 per child. According to Ontario Premier Kathleen Wynne, the program will allow more parents to choose to go back to work and also make life more affordable.
  • The Ministry of Education in Ontario is proposing a new childcare plan that will support critical areas such as minimizing red tape and burden in administration, delivering of high-quality standard childcare services, and increase accessibility.

THREATS

  • In December 2018, the government of Ontario tabled legislation that would seek to increase the number of children cared for by home childcare providers at once. Although the Minister of Education describes this legislation as part of "making life easier for all families," experts argue that the proposed changes are dangerous.
  • It is argued that the new legislation on home childcare will hinder the provision of safe, enriching, and responsive childcare services.
  • In 2019, the government of Ontario canceled a sum of $50 million that supported care providers to absorb the costs of labor without passing it to parents. This move has, in turn, led to some centers increasing their fees. For instance, the center in Peel Region has raised added $72 per month for full-time care for infants.


Part
03
of five
Part
03

Daycare Competitors, Part 1

The top six daycare providers in the province of Ontario, Canada are St. Stephens Community House, Tropicana Community Services Organization of Scarborough, Mississauga Christian Academy & Daycare, Howie Carl Limited, Young Achievers Daycare Centre, and Educare Kindergarten & Daycare Centre. Complete details about each company are presented in the attached spreadsheet.

St. Stephens Community House

  • Created in 1919, St. Stephens Community House is part of the nonprofit institution industry. Five companies are part of it, and its mission is to empower the community while taking care of families. The company provides childcare for children from 6 weeks to 12 years old.

Tropicana Community Services Organization of Scarborough

  • Tropicana was founded in 1980; since then it has offered several services mostly for black and Caribbean children to provide empowerment and cultural significance. It is also composed of five companies, and they offer childcare for children from 3 months to 12 years old.

Mississauga Christian Academy & Daycare

  • The academy was founded in 1977 with an objective to prepare children for high school with a Christian perspective. Mississauga Christian Academy has a total of 60 employees in all its locations and offers childcare for children from age 4 to 13 years.

Howie Carl Limited

  • Howie Carl Limited is based in Guelph, ON, Canada; despite being part of the Residential Real Estate Brokerage & Management Industry, it is also a daycare company, that takes care of children from 1.5 years old to 6 years old.

Young Achievers Daycare

  • Young Achievers Daycare is part of a three-company family; its mission is to provide children a sense of belonging as well as teach them values that will influence their future. The daycare provides services to children from 3.8 years to 12 years old.

Educare Kindergarten & Daycare Centre

  • Educare Kindergarten & Daycare Centre has 2 locations, it's licensed by the ministry, and they have been operating for over 30 years. The centre offers childcare services to children from 18 months to 12 years old.

Research Strategy:

To determine the top six daycare providers in the province of Ontario, Canada, the research team used Hoovers, a company directory that profiles and categorizes businesses according to noted characteristics. We used Hoovers to locate the first company based on the highest revenue; we then compiled a list of daycare providers ordered from lowest to highest. Next, we filtered the companies by location, that is to say, we filtered only those located in Ontario, Canada. Please note that before using Hoovers we searched for articles, pre-compiled lists, and official information. Our first step was to find all daycare providers in Ontario, Canada. That led us to the official portal of the City of Toronto, in which there is a tool that allows families to find daycare providers based in what they want or like, where they live, their goals, etc. The reason why the team didn't use this tool was that the filter only provided families with individual daycare providers, in other words, it only gave information and review rankings about au pairs and such. Our second step included articles, experts' opinions, market reports, statistics, and press releases, but all we found were statistics about the number of families that use daycare providers, press releases and articles about the popularity of daycare providers in Canada, and several market reports about the daycare market in Canada but nothing that pre-compiled rankings. As a third option, we opted for researching about daycare companies in Canada, though none of them were considered "leaders" in the industry and they had limited published details. We couldn't find revenue or other data that served us to measure them. Based on these limitations, the team selected Hoovers' daycare rankings and data.
Part
04
of five
Part
04

Daycare Competitors, Part 2

The details regarding three of the top daycare competitors in the province of Ontario, Canada have been compiled into the attached spreadsheet columns C-E rows 5-8 and sources included in row 9. The section below features an overview of the findings, which are provided in full in the attached spreadsheet.

ONTARIO CANADA DAYCARE COMPETITORS

  • The companies profiled in the attached spreadsheet include St. Stephen’s Community House, which serves approximately 24,000 individuals annually under five categories namely childcare, family services, senior services, youth services, and neighborhood Services.
  • Another key competitor is Tropicana Community Services, which offers several programs and services, including life skills development, culturally-appropriate counseling, employment services, education services, daycare services, and social/recreational programming.
  • The third competitor, Mississauga Christian Academy, has an annual enrollment rate of approximately 150 students.
  • During the 2018-19 fiscal year, Tropicana Daycare Centers served an estimated 141 families and logged a total of 805 hours from students and volunteers.
  • Overall, customer sentiments about the three daycare centers are mainly positive. Excerpts from sample testimonials on Facebook, Google, and those published on individual websites are generally positive. Full customer testimonials are included in the attached spreadsheet.

RESEARCH STRATEGY

In-depth searches through St. Stephens Community House, Tropicana Community Services, and Mississauga Christian Academy & Daycare websites retrieved comprehensive information on the services these companies provide, their competitive advantages, and enrollment numbers. However, we uncovered enrollment data for St. Stephens Community House and Mississauga Christian Academy & Daycare from external websites, i.e., Volunteer United Cbus and Ourkids Media, respectively. Details on the competitive advantages of each organization were also uncovered from their website; however, the data was not readily available, so we had to explore the various website pages to amalgamate excerpts that reflect the competitive edge of each company. For Tropicana Daycare Centers, we retrieved the data from the company’s annual reports, which also featured the impact of their various other programs besides daycare services. Regarding customer testimonials, we relied on external sources, which are likely to reflect honest and unbiased opinions. In this regard, we explored the reviews published on Facebook and Google Knowledge Graph for each company. Overall, all the requested details are included in the attached spreadsheet, rows 5-8 columns C-E, with sources included in row 9.
Part
05
of five
Part
05

Daycare Competitors, Part 3

Howie Carl Limited is part of the Residential Real Estate Brokerage & Management Industry with daycare services for children 1.5 to 6 years of age. Young Achievers Daycare also offers daycare and summer camp with extracurricular activities, while Educare Kindergarten promises to provide a custom learning experience for each child within its program. All the available details for each of these three daycare providers can be found in columns F-H, rows 5-8 of the attached spreadsheet.


KEY SUMMARY

  • Howie Carl Limited owns and operates a daycare for infants ages 1.5 years old to children 6 years of age.
  • Howie Carl Limited also owns retirement apartments and hotels.
  • Young Achievers Daycare provides summer camp with field trips, arts and crafts, outdoor time, and guest speakers.
  • Young Achievers Daycare also operates an after-school program called "Where Children Grow."
  • The after-school programs are situated around many schools in the Catholic District School Board of Eastern Ontario (CDSBEO) and the Ministry of Education approved its program for children 3.8 to 12 years of age.
  • Educare Kindergarten and Daycare offers several programs for toddlers, preschool, junior, and senior children.
  • The programs Educare Kindergarten and Daycare offers include Kindergarten Class, School Age Classroom. They also offer meals and service during holidays and other special days.


RESEARCH STRATEGY

We began our research by looking for the official websites for each of the three daycare providers, while we were able to find information on Young Achievers Daycare, and Educare Kindergarten & Daycare Centre using this method, Carl Howie Limited does not operate a website specific to their daycare services. Therefore, we looked for information on their daycare services using business listings on resources such as Manta and Hoover. From here, we were able to find some information on the company, mainly that Carl Howie has hotels and retirement apartments. However, we could find no further information on Carl Howie. Additionally, our search through Young Achievers Daycare did not return any information regarding reviews or reports on the company or customers' experiences using the company's daycare services.

As a second approach for finding the missing information on Carl Howie and Young Achievers, we searched through preschool listing sites in Canada such as Kidsprogram.ca. These sites offer complete information about daycare programs in Canada. From here, we found some data on Carl Howie. However, we found no reviews for Young Achievers Daycare. Next, we tried looking for the information on each company's social media pages including Facebook, Instagram, and Twitter. However, these resources did not offer any further insight into the daycare services for these companies.

As a final method, we searched through the Ontario Government website, Ontario.ca. Using this approach, we found that the license status of Howie Carl Limited Harmony Kids is inactive, which explains why we could not find any further data about Howie Carl. Additionally, this method did not return any additional insight into reviews for Young Achievers. We assume that Young Achievers does not have public reviews for the safety and privacy of the children and families that they serve. All the available details for each of these three daycare providers can be found in columns F-H, rows 5-8 of the attached spreadsheet.
Sources
Sources

From Part 01
Quotes
  • "Cost estimates for starting a home-based daycare business range from $10,000 to $50,000. "
  • "Daycare center franchise startups range from $59,000 to $3 million. "
  • "Cost estimates for a startup daycare center that's not a franchise depend greatly on the building you choose, but a typical example of a daycare center for 76 children in a building that needs renovation is $95,000."
Quotes
  • "As a day care center owner, your initial investment will be the start-up costs, which Entrepreneur estimates will range from $10,000 to $50,000, just to get your small business off the ground. "
From Part 05
Quotes
  • "Howie, Carl Limited is a privately held company in Guelph, ON and is a Single Location business. Categorized under Retirement Apartments and Hotels. Current estimates show this company has an annual revenue of 1456800 and employs a staff of approximately 12."
Quotes
  • "Your child will enjoy many activities while enrolled at the Where Children Grow Summer Camp such as: * Field Trips * Talented Guest Speakers * Splash Pad Days * Outdoor Play with Games * Water Play"
Quotes
  • "Where Children Grow is a before and after-school program that has been in operation since 2006. Situated in many schools in the Catholic District School Board of Eastern Ontario (CDSBEO); licensed under the Ministry of Education for children 3.8 to 12 years of age."