If you’re wondering whether it’s possible to buy or sell a childcare centre that is enrolled in the CWELCC (Canada-Wide Early Learning and Child Care) program, the short answer is yes—but it must be done through a share purchase.
Two Ways to Buy a Business: Asset vs. Share Purchase
When purchasing a business, there are typically two structures to choose from:
Asset Purchase
In an asset purchase, you’re buying specific assets of the business—such as furniture, equipment, lease rights, and branding—rather than the company itself. This approach is common for small businesses because it protects the buyer from assuming the seller’s liabilities.
However, in the context of a licensed childcare centre, this approach comes with a significant drawback:
- A new Ministry of Education (MOE) license is required.
- CWELCC enrollment does not transfer—you would have to submit a brand-new application, which is likely will not be approved.
Important note: Some assume that buying just the assets makes the purchase cheaper. In reality, the valuation often remains similar to a share purchase, because you’re still acquiring the operation as a going concern.
Share Purchase
In a share purchase, you buy the shares of the corporation that owns the childcare centre. This means you take ownership of the existing corporation, including its assets, liabilities, contracts, staff, license, and CWELCC enrollment.
The main advantage of this structure is that:
- The existing MOE license remains in place.
- CWELCC enrollment typically continues, though the new owner is still expected to submit a new service agreement application, but the Region will treat it as a change of control.
The risk: You also inherit any liabilities—financial, legal, or operational—that may exist under the corporation, including “dirty laundry” the previous owner may not have disclosed. Proper due diligence and legal review are essential in this case.
Government Considerations
While the government doesn’t formally use the term “CWELCC transfer,” in practice, share purchases allow for continuity of the program under the new owner. That said, regional authorities may still request a re-application or update as part of their internal process, even though it’s usually approved.
Important disclaimer: Regulations are subject to change. The government can revise CWELCC policies or licensing rules at any time, so it’s crucial to consult legal and licensing experts before proceeding with a purchase.
