How to Hire a Contractor in Canada: Checks Before You Sign

Hiring a contractor in Canada is a sequence of checks: the business, its licences and insurance, its references, 3 written quotes on one scope, then a written contract with a small deposit. Ontario, BC and Alberta each add rules on licences, deposits and cancelling, and they do not match. Run the checks before the quotes, so only firms you would actually hire spend time pricing your job.

How to hire a contractor in 8 steps

Each step rules something out before money changes hands, so the checks come before the quotes and the contract comes before the deposit.

Define the job before you call anyone

A contractor can only price what you can describe: the rooms, what changes in each, the finishes and the date you need the work done. On large projects, the CHBA notes, design and specifications are often a separate paid job done first, so that every builder prices the same drawings.

Two questions shape the shortlist: does the work need a permit, and who runs the job? Moving walls, plumbing or windows, structural work, additions and suites usually need a building permit, and in Ontario and Alberta the homeowner answers for it even when the contractor applies. A general contractor books and supervises the trades for a fee that builders' 2026 figures from Toronto and Vancouver put at 10% to 20% of project cost, while running the trades yourself suits small jobs that need one or two of them.

A multi-room job runs in a fixed order, structure and services before finishes, so give every firm the full scope at once rather than room by room. Set the budget from what renovations cost for your kind of job, so you can tell a fair quote from a padded one.

Build a shortlist of 3 to 5 firms

Start with firms whose finished work you have seen: a neighbour's addition, a friend's kitchen. Ontario's advice is to check references even when someone you know recommended the contractor, so a referral earns a place on the list, not the job.

Match the firm to the work: a kitchen firm for a kitchen, and for a suite, a firm that has built legal basement suites in your city before. RenoMark, the CHBA's renovator program, sets a useful floor: its code, printed in the CHBA's homeowner guide to renovation contracts, commits members to a written contract for every job, a warranty of at least 2 years on all work except minor repairs, at least $2 million of liability insurance and returning calls within 2 business days.

Check the business and its complaint record

Get the firm's full legal name, the one that will go on the contract, and a street address: Alberta's guide to hiring a contractor lists a contractor who gives only a PO box among those to avoid. If the firm charges GST or HST, confirm its number in the CRA's GST/HST Registry. A firm with no number may simply be a small supplier, one whose taxable sales do not exceed $30,000 over 4 consecutive calendar quarters.

Then search the records. In Ontario, look up the business and the owner's name on the Consumer Beware List, which names businesses that did not answer the ministry about a consumer complaint or were charged or convicted under the Consumer Protection Act.

In Alberta, Find a Licensed Business shows whether a firm holds the prepaid contracting licence it needs to sell a job at your home and take money before the work is done. In Toronto, any business that repairs or renovates buildings, or advertises that it does, needs a City Building Renovator licence, one more line to compare across the general contractors in Toronto on your shortlist.

Do contractors need a licence in Ontario, BC or Alberta?

For an ordinary renovation, none of the three provinces asks for a builder licence. The provincial licences cover new homes and, in Alberta, money taken up front.

A builder's licence status is checked online by company name in each province's builder registry, and the HCRA calls a builder missing from Ontario's directory a serious warning sign.

The trades carry their own licences. In Ontario, nobody may run an electrical contracting business without an Electrical Safety Authority licence, whose number should appear on the work vehicle and the written estimate, and permit drawings should come from someone registered in the province's QuARTS registry. Alberta's qualified tradespeople carry a pocket certificate issued by the province.

Check insurance and workers' compensation

Two documents cover two different risks. Liability insurance pays when the contractor damages your house or a neighbour's, so ask for the certificate and check the business name and the policy dates; Alberta's guide calls it public liability and property damage cover.

Workers' compensation covers the crew, and the homeowner's position differs by province:

• Ontario. WSIB does not require a clearance when you hire a contractor directly for renovation work on the home you live in, though asking for one still shows the firm is registered.
• BC. If an independent business you hire is not registered and paying, WorkSafeBC says you could be held responsible for its premiums, so get a clearance letter first. Hiring someone who is not in business makes you an employer once the work reaches 24 hours in total.
• Alberta. WCB Alberta says to get a clearance before hiring and again before releasing payment, or you could be responsible for an uncovered contractor's premiums.

Call references and see finished work

Ontario's advice is to get at least 3 references and check them, from the recent past and from further back, because some problems take a year or more to show. Ask for jobs like yours, and stand in one if you can.

On the call, ask whether the job finished on time and on budget, how changes were priced, and whether the firm came back for the deficiency list. Then ask the question that settles it: would you hire them again?

Get 3 written quotes on the same scope

Ontario's home renovation rights page says to get written estimates from at least 3 contractors, never by phone or from a firm that has not inspected the area. The federal Office of Consumer Affairs adds that every firm should price the same specifications, with labour, extra charges, taxes and at least a partial cost breakdown.

The totals come last. Allowances and exclusions are where quotes for the same job drift thousands of dollars apart, and we treat a quote 30% or more below the other two as missing scope, not a better price.

Have the estimate written into the contract, because Ontario's rule applies to an estimate the agreement includes. Under the provinces' consumer protection Acts, Ontario bars a bill more than 10% over the estimate unless you agree to new work or a new price, Alberta bars more than 10% over, to a maximum of $100, and BC a price materially above it, in both cases unless you agreed to the higher price first.

Questions to ask a contractor before hiring

Ask every firm the same questions and write the answers down. The first 5 come from Ontario's own list.

1. Can you give me references for work like mine?
2. Will the estimate be part of the contract?
3. Will you get the permits, and will the contract say so?
4. How are disagreements handled if we have one?
5. What do I owe if I cancel after the work starts?
6. Who will be on site each day, and which trades do you subcontract?
7. What is not included in the price?
8. How are changes priced and approved?
9. What warranty do you give on workmanship, and for how long?
10. When can you start, and what would move that date?

Contractor red flags

Alberta's guide lists the contractors to avoid, and Ontario and the Office of Consumer Affairs add to it. Any one of these is a reason to cross a firm off:

• It knocks on your door. Door-to-door sellers top Alberta's list, and BC bans door-to-door sales of furnaces, water heaters and several other home products and services.
• It prices the job unseen. Ontario says never to accept an estimate over the phone or without an inspection.
• It offers a discount for cash or for advertising. Ontario says to avoid cash deals, and Alberta warns against the advertising discount.
• It wants a large down payment for materials. Most reputable contractors keep charge accounts with their suppliers, Alberta notes, and we would count 30 to 50% up front, with no custom order behind it, as that large down payment.
• It will not sign a written contract, commit to dates or give a street address. All three are on Alberta's list.
• It suggests skipping the permit. In Ontario and Alberta the permit is your responsibility, so the risk would be yours.
• It pushes you to sign today. A price that expires tonight leaves no time for the checks.

Sign a written contract

In Ontario, any home renovation contract worth more than $50 must be in writing; BC's contract rules start at $50, and Alberta's prepaid contract rules apply above $200. A complete renovation contract names both parties, describes the work and products, itemizes the price and tax, and sets the payments, dates, permits, change process and warranty. Fixed-price contracts are the most common, the CHBA says; cost-plus, which bills actual costs plus a fee, is used mainly on larger projects.

For major work, Ontario advises having a lawyer go over the contract and, when the contractor gets the permits, not letting work begin until you have seen them.

Pay in stages and keep the holdback

Ontario recommends a down payment of no more than 10% and never paying the full amount before the work is done; the CHBA's homeowner guide puts deposits at 5 to 15% and RenoMark at no more than 10 to 15%, so a deposit of about 10% is the benchmark. The exception is a custom, non-returnable item such as made-to-measure windows, paid for when it is ordered and named in the contract.

Where you sign matters in two provinces. In BC, a contract made in person away from the contractor's permanent place of business, your kitchen table included, does not bind you if the contractor required more than the lesser of $100 and 10% down. In Alberta, the security behind a prepaid contracting licence can be used for consumers who cancel and are not refunded.

After the deposit, pay as each stage is finished and inspected, and keep back 10% of the value of the work, as Ontario, BC and Alberta all require, until the holdback period ends: 60 days in Ontario and Alberta, 55 in BC. Hold the final payment until the final inspection passes.

Hiring a builder for a new home

A new house adds a licence check of its own. In Ontario, building or selling a new home without an HCRA licence is illegal, and the home must be enrolled with Tarion; in BC the licensed builder registers the home for warranty insurance before the building permit; in Alberta the builder needs a licence to get a new-home permit at all.

Tarion's steps for a custom home built on your land add three: the builder attaches a Warranty Information Sheet to the contract, you register the contract with Tarion, and a lawyer reviews it, liens and holdbacks included. The warranty that stays with the house is the reason to leave construction to the builder: in Ontario, too much owner control can turn a contract home into an owner-built one with no warranty, and BC leaves an owner builder responsible for defects for 10 years after occupancy.

What to do if a contractor does not finish the job

Start with the dates in the contract. If work has not begun 30 days after the start date, Ontario and BC let you cancel before it begins, and Alberta lets you cancel within 1 year of signing if the contract was made away from the contractor's business. Once work stalls partway, pay only for finished stages and keep the holdback.

Then write to the contractor with what is unfinished and a date to finish it. Consumer Protection Ontario recommends that letter before a complaint, then takes complaints free of charge and gets back to you within 15 business days; it can mediate and help with a refund or a cancellation, but it does not award damages or handle events more than 2 years old.

In Ontario, if you paid by credit card and cancelled under the Consumer Protection Act, you can ask the card issuer in writing to reverse the charge when the contractor has not refunded you in time. And if the builder of an Ontario custom home enrolled with Tarion fails to substantially perform the contract, Tarion can compensate the gap between what you paid and the value of the work and materials supplied, up to $40,000. When none of that settles it, the claim's size decides where it goes: