The bill bars subsidized educational childcare providers from using independent labour or personnel placement agencies except when the agency is a non‑profit body or a cooperative, and gives the government broad regulatory and exemption powers. It also creates a licensing‑adjacent regime that imposes operational requirements on agencies that lease staff to providers, and lets the Minister authorize time‑limited exceptions.
This matters for staffing models and compliance: for‑profit temp agencies face effectively being excluded from subsidized centres, providers must change how they fill shifts, and agencies and providers take on new reporting, insurance and anti‑poaching obligations. The instrument centralizes oversight with the Minister and enables administrative prohibitions and fines for breaches.
At a Glance
What It Does
The bill forbids subsidized childcare providers from calling on independent contractors or private placement agencies unless the agency is a non‑profit or cooperative, while empowering the Government to make targeted exceptions and set detailed rules. It also creates specific obligations for placement agencies that lease personnel (insurance, disclosure, training, invoicing and reporting) and enforcement tools for the Minister.
Who It Affects
Directly affected parties include subsidized educational childcare centres and home‑based providers, personnel placement agencies that lease workers to those providers, independent workers who supply services under a provider’s direction, and the provincial ministry that enforces the Act. Placement agencies that operate as non‑profits or co‑ops remain eligible to supply staff under this regime.
Why It Matters
The bill restructures how subsidized childcare can access temporary or outsourced labour, shifting demand away from for‑profit labour‑leasing models toward direct employment or non‑profit/cooperative suppliers. That change will influence operating costs, continuity of care, procurement practices and compliance obligations across the early‑childhood sector.
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What This Bill Actually Does
The bill inserts a new chapter into the Educational Childcare Act that defines two key concepts: “independent labour” (someone not on a provider’s payroll who works under the provider’s direction) and “personnel placement agency” (an entity required to hold a placement licence that leases employees to providers). With those definitions in place, the central rule is straightforward: subsidized providers may not call on independent contractors or personnel placement services unless the agency is a non‑profit or a cooperative.
The Government can carve out geographic or trade‑specific exceptions by regulation.
The Minister can grant authorizations in exceptional circumstances permitting a subsidized provider to use an agency (non‑profit or co‑op) or independent labour for a limited period and attach conditions; the Minister may renew such authorizations. Parallel to that discretion, the bill builds operational rules for agencies that do lease staff: they must hold a specified civil liability insurance policy, disclose previous employer refusals when relevant, maintain training programs, prevent solicitation of provider staff, and itemize regular hourly wages on invoices.On reporting and oversight, agencies must submit half‑year reports within 60 days after each six‑month period detailing hours worked by job title and facility, and must respond to requests from either providers or the Minister for documents and information required by the chapter or regulations.
The bill also forbids agencies from supplying persons who lack written employment contracts, former provider employees who left within the prior three months, or persons not authorized to work in Canada, and it voids non‑competition covenants aimed at stopping placements or hires.Enforcement comes through administrative measures and criminal‑adjacent fines. The Minister may temporarily or permanently prohibit an agency from offering services to providers, require providers to submit compliance plans, and order repayment where prohibited payments were made; unpaid ordered amounts can trigger the prohibition.
The Minister must give notice and a minimum 10‑day opportunity to be heard before taking measures, must publish a list of agencies under prohibition, and may lift measures when conditions are remedied. The bill also adds an offence and fine schedule for contraventions and amends entry powers so inspectors can enter placement agencies.
The Act comes into force six months after assent.
The Five Things You Need to Know
The bill requires placement agencies to carry a $2,000,000 civil liability insurance policy covering bodily injury and property damage and to send a copy of the policy to the provider before leasing staff.
Placement agencies must file, within 60 days after each half‑year, a report of hours worked by job title and by facility for services provided to subsidized providers.
Agencies may not supply persons who were employed by a provider within the previous three months, nor persons without a written employment contract specifying job title and hourly rate, nor persons not authorized to work in Canada.
Invoices from placement agencies must disclose the regular hourly wages paid to each leased worker for the period billed.
Contravening the core provisions or specified regulations triggers fines: $1,000–$25,000 for natural persons and $3,000–$75,000 for other entities, plus possible administrative prohibitions and repayment orders.
Section-by-Section Breakdown
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Definitions for ‘independent labour’ and ‘personnel placement agency’
This short section fixes the vocabulary the rest of the chapter relies on. ‘Independent labour’ is a person not on a provider’s payroll who nevertheless works under the provider’s direction or control; a ‘personnel placement agency’ is an entity required to hold a placement licence and that leases employees to meet providers’ staffing needs. That framing is consequential because the rules that follow hinge on whether a worker is a payroll employee or a leased staffer.
Prohibition with narrow paths for exceptions and ministerial authorizations
Section 64.2 establishes the general prohibition—subsidized providers cannot use independent labour or placement services except where the agency is a non‑profit or cooperative—and permits the Government to set regulatory exceptions by territory or trade. Section 64.3 gives the Minister a backstop power to authorize time‑limited use of agencies (including non‑profits/co‑ops) or independent labour in exceptional circumstances; the Minister can renew and attach conditions. Practically, this dual structure places most staffing choice with providers under strict limits while preserving centralized discretion for emergencies or local shortages.
Operational duties imposed on placement agencies that lease staff
These provisions create a compliance checklist for agencies that actually lease employees to providers: maintain a $2M liability policy and share it with the provider; disclose past refusals to accept a personnel member when relevant; operate a training and assessment program for leased staff; prevent soliciting of provider employees; provide invoices stating regular hourly wages; and refrain from enforcing non‑competes. They also ban agencies from supplying workers without written employment contracts, from supplying recent provider employees, and from supplying people not authorized to work in Canada—practical restrictions on the candidate pool and contractual arrangements.
Provider reporting obligation
Providers must notify the Minister within 60 days after each half‑year of the list of placement agencies that provided services during that period, broken down by facility where relevant. That creates cross‑checks with agency reporting and gives the ministry a recurring dataset on outsourcing activity in the subsidized sector.
Regulatory powers including hourly‑rate caps and scope for home providers
The Government gains broad regulatory authority: it can set a maximum hourly rate for leased work by job title or class, impose additional obligations on bodies or agencies, define other terms and conditions for using agencies, nominate which regulatory breaches are offences subject to fines, and decide the extent to which home educational childcare providers may call on independent labour. Regulations may vary across classes of agencies, sectors, personnel and territory, permitting granular tailoring.
Administrative enforcement, repayment and public prohibition list
The Minister may impose administrative sanctions, including prohibiting an agency from offering services or forcing a provider to submit a compliance plan, and may order reimbursement where prohibited payments occurred. Reimbursement orders accrue interest, and failure to repay can trigger prohibitions. The Minister must follow notice‑and‑comment timing before imposing measures, issue written decisions with reasons, keep and publish a list of agencies under prohibition and provide a mechanism to lift measures on remediation.
Inspection power, fines and coming into force
The Act’s inspection authority is extended so inspectors may enter placement agencies that lease staff to subsidized providers. A new penal provision creates fine ranges for contraventions (individuals and other entities). The Act is set to come into force six months after assent, giving the ministry and affected parties a short implementation window.
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Explore this topic in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Subsidized centre permanent staff — reduced competition from leased workers should improve continuity of care and job stability, making recruitment and retention of payroll staff easier.
- Parents and children — greater staff continuity and fewer short‑term contractors can mean more consistent relationships and reduced turnover in classrooms.
- Non‑profit and cooperative placement agencies — the exception for non‑profits/co‑ops steers demand toward these suppliers and could create a preferred market niche, especially for entities already embedded in community childcare networks.
Who Bears the Cost
- For‑profit personnel placement agencies — the near‑ban on supplying subsidized providers and the new compliance obligations (insurance, reporting, training, invoicing) reduce market access and raise operating costs.
- Subsidized providers — if they cannot rely on leased staff, providers may face higher payroll costs, scheduling pressures or gaps in coverage during recruitment; they also pick up reporting duties and must adjust procurement practices.
- Independent workers and gig‑style labourers — fewer opportunities to work shifts at subsidized centres and stricter eligibility rules (written contracts, work authorization) may shrink short‑term income avenues.
Key Issues
The Core Tension
The central dilemma is between stabilizing the subsidized childcare workforce by excluding for‑profit labour‑leasing models (protecting continuity and worker rights) and preserving staffing flexibility and rapid access to labour (which keeps centres operational during shortages). The bill leans toward stability and centralized control, but doing so risks short‑term service disruptions, higher operating costs, and increased administrative burdens unless matched by capacity‑building measures and clear regulatory design.
The bill trades flexibility for control, and the balance will fall on enforcement and market response. Restricting for‑profit placement agencies aims to protect workforce stability and curb profit extraction from publicly subsidized care, but it also tightens the supply of flexible staff that centres lean on during shortages.
If the labour market cannot supply enough payroll hires quickly, centres may face closures, reduced capacity or increased reliance on ministerial exemptions—offsetting the policy’s intent.
Implementation poses administrative and legal frictions. Verifying agencies’ compliance with training programs, wage disclosures and the ‘direction or control’ test for independent labour will require clear guidance and audit capacity; the ministry’s published prohibition list and half‑year reporting create transparency but also demand enforcement resources.
The maximum‑rate and home‑provider rules grant regulatory flexibility but raise questions about how rates will be set, whether caps will reflect local labour markets, and how home‑based providers—often operating on thin margins—will be treated differently from centres.
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