Updated: April 2025 | bremo.io financial guides
How to Hire a Contractor in Canada: Tips for Homeowners
The contractor you hire will make or break your renovation. A great contractor delivers on time, on budget, and with quality workmanship. A bad one can leave your home unfinished, take your deposit, and disappear. Contractor fraud and incompetence are real risks in Canada — especially in hot renovation markets. Here's how to protect yourself and find someone you can trust.
Step 1: Define Your Scope Before Contacting Anyone
Before reaching out to a single contractor, write down exactly what you want done. The more specific your scope of work, the more comparable your quotes will be. Vague requests lead to vague quotes, which makes it impossible to compare apples to apples.
Your scope document should include:
- What rooms or areas are involved
- What stays and what gets replaced
- Materials you want (specific products if you've chosen them, or quality level)
- Timeline expectations
- Any special requirements (permit needed? Specific brands?)
Step 2: Find Candidates Through Reliable Sources
How you find a contractor matters enormously:
- Personal referrals: Best source — ask friends, family, or neighbours who have had similar work done recently
- Houzz, HomeStars, or Google Reviews: Look for contractors with many recent reviews (not just a few old ones)
- BBB (Better Business Bureau): Check for complaints and resolution history
- Local building supply stores: Staff often know reliable local contractors
- Provincial trade associations: e.g., RenoMark in Ontario, Medallion Club in BC — contractors must meet standards to join
Be cautious of: Door-to-door contractors, cold calls, and anyone who approaches you after a storm or disaster ("storm chasers"). These situations produce a disproportionate number of fraud cases in Canada.
Step 3: Get at Least Three Quotes
Always get a minimum of three quotes for any renovation over $5,000. Quotes for the same job can vary by 30–50% or more. Here's what a solid quote should include:
- Line-item breakdown of labour and materials
- Specific products or specifications
- HST/GST itemized separately
- Estimated timeline with start and completion dates
- Payment schedule
- What's explicitly excluded from the quote
Step 4: Verify Credentials
Before accepting a quote, verify:
- Business registration: Any legitimate contractor should have a registered business. Ask for their business number.
- WSIB (Ontario) / WorkSafeBC / WCB: Workers' compensation coverage. If a worker is injured on your property and the contractor has no coverage, you can be held liable. Request a clearance certificate.
- General liability insurance: Minimum $2 million coverage. Ask for a certificate of insurance naming you as additionally insured.
- Trade licenses: Electricians, plumbers, and gas fitters must be licensed in all provinces. Ask for their license number and verify it online.
Step 5: Check References
Ask for at least three references from projects completed in the last 12–18 months. When you contact references, ask:
- Was the project completed on time and on budget?
- How did the contractor handle unexpected issues?
- Were workers professional and respectful of your home?
- Would you hire them again?
- Were there any post-completion issues, and how were they handled?
Step 6: Understand the Contract
Never proceed on a handshake. A proper renovation contract should include:
- Full scope of work (match your scope document)
- Material specifications and allowances
- Total price and payment milestones
- Timeline with milestone dates
- Change order process (how extras are handled — in writing, at what markup)
- Warranty terms (typically 1–2 years for workmanship)
- Dispute resolution process
- Contractor's insurance and WSIB/WCB information
Payment Structure: Protect Yourself
Payments should align with project milestones, never front-loaded:
- Deposit at signing: 10–15% maximum for most projects
- Progress payments: Tied to measurable milestones (framing complete, drywall done, etc.)
- Holdback (10%): Hold back 10% of the total until at least 45 days after substantial completion — this is your lien protection period under provincial lien laws
Never pay more than 15–20% upfront to any contractor, regardless of what they claim they need for materials. Demanding large upfront deposits is a major warning sign.
Red Flags to Watch For
- No physical business address or verified business registration
- Pressure to decide immediately or "deal is only good today"
- Requests for payment in cash only
- No contract offered, or refusal to put things in writing
- Unable to provide proof of insurance or WSIB/WCB
- Price dramatically lower than all other quotes (often means cutting corners)
- Unlicensed for trades that require licensing (electrical, plumbing, gas)
How to Handle Change Orders
No renovation goes exactly as planned. When something changes, a written change order — signed by both parties before work proceeds — is essential. It should state what's changing, why, and the exact cost impact. Never accept verbal change orders, and never let a contractor proceed on undocumented extras.