Buy or sell a licensed childcare program

In an asset sale, the buyer purchases the program’s business assets (for example, equipment, furnishings, play materials) without purchasing the corporation itself. 

Programs can be sold, but childcare licences cannot be transferred from one holder to another. As a result, the buyer will need to apply for a new licence.

In a share sale, buyers can purchase shares in the corporation that holds an existing licence, meaning no new licence application is required. 

• If the seller had Affordability Grant or Early Childhood Educator Workforce Supports Program agreements in place before the sale, they are automatically terminated and the buyer must apply for their own grants after the sale based on the current eligibility requirements to start a childcare program.
• If the seller had an Affordability Grant agreement in place to reduce parent fees, the buyer cannot increase those fees under a new grant agreement if the program is eligible for funding.

Since licences cannot be transferred or sold, you need to apply for a new licence when buying an existing program and go through many of the same steps as if starting a new one from the ground up. 

View the childcare licensing process flow chart to better understand the licence application process.

Processing times for licence applications can vary depending on the accuracy and completeness of the documentation you include with your application. To avoid service gaps, aim to submit your application as soon as possible so it can be processed in time for the sale.

As a starting point, ensure your corporation is registered in Alberta and get to know the licence application processes for facility-based programs and family day home agencies.

Childcare Connect coordinates all licensing applications, working with licensing staff and grant funding teams as needed. Licensing staff then reviews and approves the program plan, assesses the program for compliance with provincial standards, conducts the initial licensing inspection and issues your new licence.

Your licence application may be denied if the seller has outstanding debt owing to either the Government of Alberta or the Canada Revenue Agency. 

Be aware that Alberta Education and Childcare cannot discuss the seller’s finances or disclose any debt they might owe. You should speak to the seller directly if you have questions about their financial situation.

A fast-track option has been set up for asset sales that allows the licensing approval process to move more quickly. 

In a fast-tracked asset sale:

• the buyer agrees to adopt the seller’s ministry-approved program plan (which explains how the program will operate safely and meet legislative requirements) without making major changes for at least 3 months
• the buyer agrees not to change the existing fee structure

Even when an application is being fast tracked, all other standard licensing requirements remain in place, such as criminal record-check requirements and approvals from collateral authorities (fire, public health, zoning, etc.)

Whether following the regular or fast-track process, any directors, officers or shareholders listed on the corporate documents, as well as new program staff and volunteers, will need to provide recent criminal record and vulnerable sector checks (no older than 6 months). 

These criminal record checks can be issued by municipal or provincial police or by the RCMP, depending on where the person lives.

Once an asset sale is complete, the seller must provide proof to Childcare Connect. You can do this in 2 ways:

• provide a bill of sale confirming the sale is free and clear of all conditions (a redacted bill is acceptable), or
• provide a letter from the board director/officers or the buyer’s lawyer confirming the sale is free and clear of all conditions

In an asset sale, the seller’s provincial grant agreements cannot be transferred. Buyers must apply for their own provincial grants, including the Affordability Grant that lowers fees for parents and the Early Childhood Educator Workforce Supports Program that provides wage top-ups and professional development funding for certified staff. Learn more about eligibility for funding.

Once your program has been issued a licence, you can determine if the program is eligible for grant funding. Contact Childcare Connect to get started. They will help you understand next steps and will ensure that you are connected with the appropriate grant funding teams. To learn more about available funding and application processes, read the funding guides for the Affordability Grant and the Early Childhood Educator Workforce Supports Program.

If you are eligible for and sign grant agreements for provincial affordability and workforce funding, you can claim for the same month in which your agreement took effect. For example, if your agreement is effective as of April 15, you will be eligible to claim funding for the month of April.

Unlike asset sales, which require a new licence before they can proceed, share sales do not result in licensing changes. 

In a share sale of a facility-based program or family day home agency, the buyer purchases shares in a corporation that holds an existing childcare licence. This means:

• the legal entity attached to the program does not change
• the buyer does not apply for a new licence of their own, assuming responsibility for the program’s existing licence instead
• since the licence stays the same, the buyer takes on the seller’s compliance history after the sale, including any related licensing requirements or enforcement actions
• the program plan, which explains how the program will operate safely and meet legislative requirements, stays the same
• an initial inspection is not required
• the fee structure cannot change and any provincial government affordability and workforce grant funding agreements remain in place

Any new directors, officers or shareholders listed on the corporate documents, as well as newly hired program staff, will need to provide recent criminal record and vulnerable sector checks (no older than 6 months). These criminal record checks can be issued by municipal or provincial police or by the RCMP, depending on where the person lives.

After the share sale is complete, either the buyer or the seller is required to notify Childcare Connect in writing within 15 days, though it is best to notify them before the sale if possible. 

When you notify Childcare Connect of the sale, they will verify it by searching Alberta’s corporate registry once the buyer is recorded as a shareholder. You may be asked to provide additional documents, including:

• officer’s certificate or corporate resolution
• written confirmation of the sale from either the buyer’s legal counsel or the seller