In terms of your provincial regs, it might be allowed. I know here, it's not. The requirement for a HOME daycare is that it's the primary residence of the person running it. That will also be true for CRA I expect. You are meant to claim a percentage of your bills for the business as the rest is personal use. If you rent a separate unit for the business, then you'd be claiming 100% of your power and light and rent as a business cost. I would check with a tax professional since that certainly doesn't fit with the jobcode of working from home and those permitted expenses.