Contractor Deposit: How Much Is Normal in Each Province?

A contractor deposit is the money you pay at signing, before anything happens on site, which makes it the one payment with nothing to show for it. Ontario recommends keeping it to 10% or less, the industry's own guidance stops at 10 to 15%, and BC and Alberta add rules of their own. Where you sign matters too: in all three provinces, a contract signed at your home can be cancelled within 10 days of receiving your copy.

How much deposit is normal for a renovation

A deposit is an advance on the contract price, credited against later invoices, not a fee on top: the contractor's markup is already part of the price. On its size, Canadian guidance lands close together. Ontario's home renovation rights page says to keep down payments to a minimum and recommends no more than 10%, and RenoMark's deposit guidance says a deposit should not exceed 10 to 15% of the estimated total.

Deposit rules in Ontario, BC and Alberta

None of the three provinces caps the deposit on a contract signed at the contractor's office. The rules turn on where you sign and who takes the money.

Ontario: a recommendation, not a cap

Nothing in Ontario's Consumer Protection Act or its General regulation sets a maximum deposit; the contract rules ask for the terms of payment, not a ceiling. The province's advice is to keep the deposit to 10% or less, never pay the full amount before the work is done, avoid cash deals, and consider arranging your own financing rather than taking the contractor's.

A custom home built on your land carries more protection. The builder must hold an HCRA licence, and if it fails to substantially perform the contract on a home enrolled with Tarion, Tarion can compensate the difference between what you paid and the value of the work and materials supplied, up to $40,000.

BC: $100 on a contract signed at home

BC's limit turns on where you sign. Under the Business Practices and Consumer Protection Act, a contract entered into in person anywhere other than the contractor's permanent place of business, your kitchen table included, is a direct sales contract, and the Consumer Contracts Regulation sets its maximum down payment at the lesser of $100 and 10% of the price. If the contractor requires more, the contract is not binding on you.

A contract signed at the contractor's office, or by email after the site visit, falls outside the limit. Any deposit also counts toward the 10% holdback: BC's Builders Lien Act measures it on the greater of the work done and the payments made, so money paid ahead of the work raises what you keep back.

Alberta: a licence to take money up front

Alberta sets no percentage but controls who may take the money. A business that sells renovation work in person away from its own premises, such as at your home, and accepts money before the work is finished needs a prepaid contracting licence, which requires a criminal record check, standard contracts and a security. Alberta's Act lets the proceeds of a security be used for consumers who cancel and are not refunded, and a contract signed with a contractor that needed the licence and lacked it can be cancelled for up to a year.

Is a 50% deposit normal?

No. The CHBA's range stops at 15% and RenoMark's at 10 to 15%, and Alberta's guide to hiring a contractor lists one who demands "a large down payment to buy materials" among those to avoid, noting that most reputable contractors keep charge accounts with their suppliers. We treat 30 to 50% up front as that large down payment.

The exception is a custom, non-returnable item. The CHBA guide says custom-made products such as windows or doors may need a non-refundable payment when they are ordered, and RenoMark adds that such items, like custom countertops or non-stock windows, should be named in the contract.

How to protect your deposit

A deposit is only as safe as the business holding it, so it comes after the reference and insurance checks, never before. Write the amount into the payment schedule of a written renovation contract, pay the business in its legal name by card or cheque, and keep the receipt.

Getting a deposit back

A contract signed at your home can be cancelled for any reason within 10 days of receiving your copy in Ontario, BC and Alberta, and the contractor refunds within 15 days; in Ontario, you owe reasonable compensation for any work done during those 10 days. If work has not begun 30 days after the start date you can also cancel, wherever you signed in Ontario and BC, and in Alberta within 1 year of signing a contract made away from the contractor's business; a contract missing required terms, or signed with an Alberta contractor that lacked the licence it needed, can be cancelled for up to a year.

Paying by credit card adds a route in Ontario. Under the Consumer Protection Act, 2002 (s. 99), if you cancel under the Act and the contractor does not refund you in time, you can ask the credit card issuer in writing to reverse the charge, and the issuer must reverse it or explain in writing why not.