Heidi Higgins thinks of the children she looks after every day as her "extended family" but to comply with revamped rules for Ontario child care she had to tell one little boy's parents to find a different caregiver.

"It's difficult to go through that search. It's agonizing. So, it wasn't easy on any of us," Higgins said.

Higgins, the co-founder of the Coalition of Independent Childcare Providers of Ontario, runs an unlicensed daycare at her home in south Ottawa.

The new law, which takes effect Monday, limits unlicensed home daycare providers to look after a maximum of two children under the age of two, where previously they could care for five children of any age. They must also now include their own children, who are under age six, in the group of five children.

These two new rules take effect unless providers are caring for the same children today as they were on Dec. 4, 2014, in which case they have until Jan. 1 to comply.

Higgins recently surveyed 600 unlicensed home daycares in Ontario and found half consider closing their doors because they can't afford to operate with the new rules.

'It's difficult to go through that search. It's agonizing. So, it wasn't easy on any of us.' - Heidi Higgins

She said 16 of those surveyed have already closed, which does not surprise her because two fewer kids translates to about a 40 per cent pay cut.

Higgins said parents could also see fewer available spaces at unlicensed daycares, especially for children who are one year old, and a hike in rates.

First update to law in 32 years

The Ontario Child Care and Early Years Act replaces the Day Nurseries Act, which had not been updated since 1983. 

The new Act brings changes for licensed group child care centres and licensed home daycares, as well.

Staff members are required to obtain a police record check — for those working with the "vulnerable sector," maintain first-aid certification and follow the government's policy statement about child development in the early years. 

People who operate licensed home daycares also see their ratios change. They can now look after one extra child, to a total of six. Like unlicensed home daycares, though, that total must include operators' own children under age six.

The Ministry of Education said the new law gives families access to safe, high-quality care. The ministry is also working with child-care providers during the transition. The changes were first tabled in 2013 after a few cases of children dying in the care of unlicensed home daycares.

Fines jump significantly under new law

The new law also gives the government several extra tools to oversee the child care sector and enforce compliance.

For example, it can now issue administrative penalties of up to $100,000 per infraction. The ministry is also able to immediately shut down a provider if a child is at risk.

If someone is found guilty in court of committing an offence under the Act, the maximum penalty is now $250,000, up from just $2,000.

If found guilty under the new Act, the maximum penalty jumps from $2,000 to $250,000. - Ontario Child Care and Early Years Act

Many licensed child-care organizations had supported the new rules, but providers who don't have licences had fought the changes arguing the ratios would make their home daycares financially unviable. 

Higgins argued unlicensed home daycares can provide care that is as safe, if not safer than licensed home daycares.

"We were painted with the same brush as the illegal daycares where deaths occurred," Higgins said. 

Higgins's coalition now wants to create a co-op of licensed home daycares that would allow them to take on a sixth child and receive a wage subsidy.

Many unlicensed home daycare providers have no problem with government inspections or meeting standards for nutrition and play structures, Higgins said, but they don't want monthly home visits and costs associated with being licensed through an agency.

with files from Kate Porter