termination of daycare client

I run a day care business out of my home and recently had to terminate one of my clients. Here is a quick run down of the situation. I had them sign a contract in the beginning which took them two months to return and only one parent signed it. It stated all policies and expectations of my daycare. They were with me from September to January. Almost immediately, they started dropping and picking up late - all with no phone calls, and changing schedules weekly, as well as not paying me on time. Sometimes it was a week late! When I requested the extra charge for lateness, they did not pay, and complained that they were having financial trouble, and could I give them a break for a couple of months. I did so because we had been friends. Things continued much the same except the weekly changes to schedules became daily and sometimes they would not show up at all and not call. I talked with them and told them things needed to become more regular or they would have to find alternate daycare. Things would improve for a couple of days and then return to the same. I then gave them a written request to meet my policies and when things still deteriorated, I terminated the agreement with two weeks notice. They then got very angry, and for the next week they either would not show up or be very late and forget when they said they would be there. I then terminated the agreement one week early.
They are now slandering my business around our school and have refused to pay me monies owing.
My question is - What can I do legally at this point to get them to stop spreading false information around and make them pay for daycare?
This happened in Ontario.
Thankyou in advance for any info you have on this situation!

You could threaten a suit for defamation, and sue in small claims for that bill that is due!!