Police were called to the daycare late Wednesday afternoon for a report of a girl who was not breathing.
The child was transported to hospital where efforts to revive her were unsuccessful.
Ontario's Education Ministry says a preliminary review has found no complaints related to the daycare, and is conducting an investigation.
"My heart goes out to the family and loved ones of the child at this devastating and unimaginable time," education minister Liz Sandals said in a release.
The ministry is being sued by the family of a two-year-old girl who died last summer in another unlicensed daycare in York Region.
Eva Ravikovich's parents launched a $3.5-million lawsuit against the ministry and the owners and operators of the daycare in Vaughan, Ont.
Ombudsman Andre Marin has launched an investigation into whether the government is doing enough to protect children in unlicensed daycares.