Ontario doesn’t issue a single licence to be a general-contractor for every conceivable renovation or construction-related business in the province. Requirements depend on the tasks you’ll do on projects, the municipality, whether you have employees, which trades are involved, whether you’re building new homes, and more.
Our editorial team reviewed HCRA’s new-home builder and vendor licensing guide, the City of Toronto’s Building Renovator licence page, WSIB’s construction clearance guidance and Ontario’s business-startup guide.
Read on to learn about who regulates which kinds of work, what to do if you’re setting up a business, permits, WSIB, trade licensing, and more. Some items are legally required, others are insurance or contract requirements.
How Do You Become A General Contractor In Ontario?
- Determine the work you’re looking to do. Coordinating renovations differs from building new homes and may include job-site control and hiring required trades. Understand what services you want to offer before moving to the next step.
- Register your business, confirm municipal licence(s) and permit requirements, verify trades, and understand your WSIB responsibilities, health and safety obligations, contracts and insurance.
| Work you plan to do | Main requirement to investigate | Where to confirm |
|---|---|---|
| Coordinate repairs or renovations | Municipal business licence, permits and project duties | Municipality and Ontario business services |
| Build or sell a new home | HCRA builder or vendor licensing and Tarion enrolment. | HCRA and Tarion |
| Perform compulsory trade work | Individual authorization or a valid exemption. | Skilled Trades Ontario public register |
| Hire workers or subcontractors | WSIB registration, clearances and employer duties. | WSIB |
| Control the construction project | OHSA constructor duties. | Ontario labour ministry guidance |
When Do You Need An HCRA Licence?
HCRA licences builders and vendors of NEW HOMES. HCRA does NOT licence kitchen remodels, roof replacements or commercial fit-outs anywhere in Ontario. If you are building a new home for a client on their land you will likely need an HCRA licence. Please check the enrolment, vendor and builder requirements before you advertise your services or sign a contract.
If the scope of the project is renovation work, call the municipalities in which you operate your business AND the jobsite. Ask about:
- a business licence to operate in their municipality
- whether your scope of work would require any of the following permits: building, demolition, plumbing, electrical, heritage, zoning, right-of-way, etc
Does Your Municipality Require A Contractor Licence?
Different municipalities may have different, or no, requirements around business licences. Ask:
- Does the city have a type of business licence that would cover the type of work you do? For example, if you offer repair or renovation services for buildings, the City of Toronto requires you to have a Building Renovator licence. Getting a licence involves submitting an application, being screened, making a declaration about workplace health and safety practices and passing a test.
- Can you advertise your business before getting licensed?
- Having a licence does not mean you’ve met requirements for trade credentials or gotten any permits that may be required for a project. Ask what permits may be required, who can apply for them and what types of inspections or close-out documentation may be needed. Always confirm requirements for the type of work and address.
How To Start An Ontario General Contracting Business
- Choose a business structure and register the business and its name through the Ontario Business Registry.
- Set up CRA program accounts as required, such as GST/HST and payroll.
- Know the rules. Understand how to manage projects, including contracts, estimating, scheduling, hiring, coordinating, supervising trades and subcontractors, and building science, HCRA requirements if you will build new homes, and which of Ontario’s compulsory trades under Skilled Trades Ontario your business and/or workers require authorization/qualification for. Ontario has no high-school graduation requirement to call yourself a general contractor.
- Check with your municipality if they require a business licence and what other permits will be required for each type of project before promising start dates, assuming permits will be granted.
- Determine your WSIB requirements, coverage, registration, clearance, etc. responsibilities before promising start dates to workers or subcontractors. Keep clearance certificates up to date at all times.
- Get insurance. Get advice on the right kind of insurance and amounts for the types of jobs, locations, and contract terms you intend to undertake, including subcontractors, tools, vehicles, warranty, design responsibility, and holdback. Only accept insurance certificates from a subcontractor’s broker or insurer. Keep insurance certificates up to date at all times.
- Define the types of jobs you will take on, including location, scope, size, and exclusions, that will not put your business at risk of performing trades/contracts you aren’t qualified, licensed, permitted, insured, or authorized for. Define your services (written scopes of work, payment schedules, deposits, progress billings, holdbacks, payment to subcontractors, taxes, close-out requirements, change-order process, warranties, health and safety responsibilities, etc.) and keep good books. Have a construction lawyer review your recurring/standard contract forms and agreements.
Read More: Review Business Insurance for a New Canadian Startup
Do General Contractors Need Trade Authorization Or Building Permits?
Ontario’s compulsory-trades rules explain which trades require authorization or an exemption for trade-related work. General carpentry is a non-compulsory trade. Other trades, such as electrical and plumbing, have their own authorizations and requirements. Being a GC does not necessarily authorize one to perform all types of trades.
The building permit only authorizes the work it was approved for and does not attest to a GC’s ability to carry out the project. Building permits also don’t replace any necessary zoning, trade, utility, conservation, or other approvals. Be clear on who gets which permits, inspections, certificate of completion/occupancy, etc.
Ontario’s Occupational Health and Safety Act defines the term as the individual who controls the project. It can be the owner, GC, PM, etc. Be clear on who is in charge of the project as this role has project-wide safety responsibilities. For more complicated projects where the GC, owner, and PM are all exercising control of the work being performed, it’s best to sort out site control before commencing the build and seek safety/legal advice if required.
How To Check WSIB Coverage And Subcontractors
A WSIB Clearance verifies that a WSIB-registered business, contractor, or subcontractor is active and in good standing under WSIB’s reporting and premium payment requirements.
In the construction industry, WSIB coverage rules are different for businesses and independent operators from other industries.
As a contractor, you’ll need to verify that you’re registered with WSIB and get a valid, up-to-date clearance for any subcontractors before work starts. Note that WSIB Clearance does not indicate trade competence, general liability insurance or permit approvals.
Maintain a vendor file for each subcontractor, including:
- the subcontractor agreement
- description of the scope of work
- trade authorization
- certificate of insurance
- WSIB certificate of clearance
- health & safety information, as required
- change orders, if applicable
What Business Insurance Does A General Contractor Need?
| Coverage | Risk it may address | Question to ask |
|---|---|---|
| Commercial general liability | Third-party bodily injury or property damage. | Do operations, completed work and subcontracted work match my scope? |
| Tools and equipment | Owned or rented tools, theft and damage. | Where must Items be kept? What terms of valuation apply? What terms apply if Items are stolen? |
| Builders risk or course of construction | Destruction/Damage to project in the course of construction. | Which project and parties are insured, and when does coverage end? |
| Installation floater | Loss or damage to goods in transit/temporary storage/materials whilst being installed. | Which property and locations are covered before acceptance? |
| Commercial auto | Vehicles used for business. | Are all drivers and business uses declared? |
| Professional liability | Design or professional-service errors where that exposure exists. | Am I providing design advice? If so, does policy cover that field of design? |
Ontario does not require all contractors to have general or professional liability insurance.
Even when insurance is not required, it’s still wise to have it to keep risks within tolerable limits. Specific coverage will be determined by policy wording and cause of loss. Policies often exclude or limit faulty workmanship, own work, professional services, pollution, hot work, roofing, excavation, subcontractor operations, etc.
To ensure appropriate coverage, contractors should share a comprehensive explanation of their business and provide contracts to their broker because generic GC packages can lack coverage.
Read More: See How a Certificate of Insurance Works
Read More: Explore Commercial General Liability Insurance
A Pre-Job Compliance Checklist
- Legal business name used in contract is the same name used with business registration and on business bank account
- Confirm whether permits and contractor licences are required for the municipality, address and scope of work
- Contract is in place and addresses: price, allowances, exclusions, process for making changes, schedule, payment, warranty, and how to address any concerns
- Any time a new home will be built and/or sold, HCRA and Tarion rules apply; verify that you’re in compliance
- Verify that anyone performing a compulsory trade is authorized or verify their exemption
- Safety documents are on-site and constructor, employer, and supervisor roles have been identified
- Verify that you’re WSIB registered and have clearances in place for your subs
- Verify that workers performing compulsory trades are authorized or exempt
- Review your insurance certificates to make sure they’re in place, compliant with project and contract requirements, minimum limits, and subcontractor requirements
Read More: See How a Business Owner’s Policy Combines Coverages