What licence and insurance do I need to become a general contractor in Ontario?

10/8/2014 at 8:38:05 AM

Hi Aldo,

You are required to obtain a Business License from your Municipality. In the case of Toronto, you are required to have a Criminal Records check, and take an exam at the Municipal Licensing and Standards offices (you have to schedule this and bring all of your ID and CRC with you).

Once you have passed the exam, your office location will need to be vetted and approved by Zoning.

After this, you will need a minimum of $2,000,000.00 Contractor's Liability Insurance. Pay particular attention to this as not all policies are created equal and this is one of the first things that Contractor's think they can save on and this can be a very serious mistake as General Contracting can be a very rewarding career but carries with it, almost more than anything else, a huge amount of risk and that risk can extend beyond your business to you personally in certain circumstances.

The insurance premium will be based on your annual revenues so you will be required to report them to your insurance company each year.

You will be required to register with the Workplace Safety and Insurance Board (WSIB). There was a time where independent owner / operators could opt out of this coverage, however changes in the legislation have removed that option for the construction industry. The premiums can be quite steep and are based on your labour revenues so take the time to understand this process fully and speak with a representative to determine your classification you fall under.

I am going to run out of space here, but I cannot stress enough the importance of a good Accountant. This is a crazy business with an almost endless trail of paperwork. Everyone wants to get going and start bringing in some money and figure they will get set up later. This is almost guaranteed to destroy your business within the first two years. Have a contingency fund to carry yourself for awhile as you will quickly see that it is very hard to compete with the guys that don't get set up, don't pay for insurance, licensing, WSIB, EI, CPP and everything else that goes along with it. And despite what any prospect says about quality, reliability, and professionalism being important, 9 times out of 10 they will pick the unlicensed guy with no overhead because he was the cheapest.

Best of Luck

10/8/2014 at 9:48:52 PM

Jason

You nailed that. There so many companies out there screwing the guys that do every thing by the book.