Ontario parents are finally getting some long-awaited relief. Starting in 2025, the Canada Revenue Agency (CRA) has confirmed the launch of the Ontario Childcare Rebate, a provincial initiative designed to offset the high cost of raising young children. Families with children under the age of 7 could receive up to \$8,000 per year, per child, depending on their household income.
For parents who have long described daycare fees as a “second rent,” this new rebate marks one of the most significant provincial investments in family affordability in years.
Why this rebate matters
Childcare costs in Ontario are among the highest in Canada. In cities like Toronto and Ottawa, fees for licensed childcare can exceed \$1,200–\$1,600 per month per child, straining family budgets even when both parents are working full-time.
The Ontario Childcare Rebate provides a targeted, income-tested solution, giving the most relief to families with lower and moderate incomes while still offering partial support to middle-income households. By encouraging the use of licensed childcare, the rebate also helps maintain higher safety and education standards for children.
Eligibility rules for the Ontario Childcare Rebate 2025
To qualify for the new rebate, families must meet the following criteria as outlined by the CRA:
- Residency: Must be a permanent resident of Ontario.
- Tax filing: Must have filed a 2024 income tax return.
- Child’s age: The child must be under 7 years old.
- Childcare provider: Childcare must be through a licensed childcare centre or provider.
- Income cap: Full rebate available up to \$90,000 household income.
Eligibility is determined based on the 2024 Notice of Assessment, which the CRA uses to verify income and allowable childcare expenses.
How much can families receive?
The rebate operates on a tiered system, ensuring fairness by directing the highest benefits to those who need it most.
| Household Income Range | Maximum Annual Rebate |
|---|---|
| Up to \$90,000 | \$8,000 per child |
| \$90,001 – \$120,000 | \$6,000 per child |
| \$120,001 – \$150,000 | \$4,000 per child |
| \$150,001 – \$200,000 | \$2,000 per child |
| Over \$200,000 | Not eligible |
For a family with two children under 7, this could mean as much as \$16,000 per year, a dramatic reduction in annual childcare costs.
How to apply for the rebate
Unlike older, complicated childcare credits, the new Ontario Childcare Rebate uses a simplified application process through CRA systems.
Step-by-step process:
- Log into CRA My Account.
- Navigate to the Childcare Expenses section linked to your 2024 tax return.
- Upload or verify childcare receipts from licensed providers.
- Confirm your direct deposit information is correct.
- Submit your application and wait for CRA confirmation.
Rebate processing officially began in July 2025, with families expected to see their payments within 6–8 weeks, provided their documents are accurate and complete.
When will families get paid?
The CRA has confirmed that the first wave of payments began rolling out in July 2025. Families who filed taxes early and submitted receipts on time will see deposits or cheques between August and September 2025.
Ongoing payments will depend on processing timelines, but the CRA expects most eligible families to have received their rebate by the fall.
How the rebate supports Ontario’s economy
Beyond household budgets, the rebate is expected to have a broader economic impact:
- Encourages workforce participation: More parents, particularly mothers, may return to work earlier after parental leave.
- Supports licensed childcare centres: By directing funds toward licensed facilities, the rebate strengthens oversight and standards.
- Boosts local economies: With families spending less on daycare, more disposable income can flow back into communities.
- Reduces poverty risks: For low-income households, the rebate could mean the difference between financial strain and stability.
This initiative is part of Ontario’s alignment with the federal government’s vision of \$10-a-day childcare, complementing national efforts to make early childhood education more affordable.
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Planning ahead – what families should do now
Families hoping to benefit from the rebate should prepare in advance:
- File your 2024 taxes on time. Late filings may delay or reduce your rebate.
- Use licensed childcare only. Unlicensed or informal providers will not qualify.
- Save receipts and contracts. Documentation is essential for CRA verification.
- Update CRA My Account. Make sure your banking and mailing details are current.
By taking these steps now, families can ensure they don’t miss out when payments are processed.
Real-life impact: what \$8,000 means to parents
For a parent in Toronto paying \$1,500 monthly for daycare, the \$8,000 rebate could cover more than five months of childcare fees. For dual-income families in Ottawa or Hamilton, it could allow parents to redirect funds toward rent, groceries, or savings.
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For lower-income households, the support is even more transformative—providing breathing room to manage debt, medical costs, or rising utility bills.
5 SEO-Friendly FAQs
Q1: Who qualifies for the Ontario Childcare Rebate 2025?
Families with children under 7 who are Ontario residents, file their 2024 taxes, and use licensed childcare providers.
Q2: How much is the maximum rebate?
Up to \$8,000 per child, per year for households with incomes under \$90,000.
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Q3: Do families need to apply?
Yes. Applications are submitted through CRA My Account, with childcare receipts required.
Q4: When will payments arrive?
Rebates began processing in July 2025, with most families expected to receive funds within 6–8 weeks.
Q5: Can families with higher incomes still receive support?
Yes. Families earning up to \$200,000 may receive partial rebates, though support phases out at higher income levels.
