I seems two situation you not happy about. First is her vacation situation but you decided to stay. Second late notice of sickness.

As other said, it could be that she was sick. She might wake up feel sick and think it pass but when it not, made call to close for day. I think even though it was late, that preferable to exposing children to potential illness. Everyone know what it like trying work and being ill, with small children too, it very hard and it fact of home day care when there one person, that sometime sick will mean short notice closing.

I think you more annoyed about her vacation that her sick and if that true, you should have addressed that at time.

But go back to contract first and be really sure that it say will find substitute and not will try to.

Regulation changes from province to province, but I doubt Health Authority will get involved with contractual matter.