Registering with the Canada Revenue Agency (CRA)

Who This Guide Is For

You've just incorporated your construction company (see Guide 1). You have your Certificate of Incorporation and your corporation number. Now you need to register with the CRA to get your Business Number (BN), the single identifier that ties together all your federal tax accounts.

Without a BN, you can't collect HST, run payroll, file corporate taxes, open a business bank account, or register with WSIB. This is the one registration that unlocks everything else.

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How CRA Accounts Work: The BN System

Think of your Business Number as a trunk, with branches hanging off it. Your BN is a 9-digit number (e.g., 123456789). Each "program account" gets a two-letter code + a 4-digit reference number appended to it:

123456789 RT 0001  <-  HST/GST account
123456789 RP 0001  <-  Payroll account
123456789 RC 0001  <-  Corporate income tax account
123456789 RZ 0001  <-  Information returns

When you register for a BN, you can open all the program accounts you need at the same time on a single form. Do them all in one shot rather than registering them one by one.

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What You'll Need Before You Start

Have these ready before you begin the registration:

• Certificate of Incorporation (corporation number, date of incorporation)
• Corporation's legal name (exactly as it appears on the certificate)
• Registered office address
• Fiscal year end date (the month you chose; default is December 31)
• Director/owner information (name, SIN, home address, date of birth)
• Expected annual revenue (determines HST filing frequency)
• Whether you'll have employees (determines if you need a payroll account)
• Date you started (or will start) business activities
• Type of business activities (your construction trades/services)
• Banking information (optional at this stage, but useful if you want to set up direct deposit for refunds)

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Step-by-Step: Registering Your Business Number

Step 1: Choose Your Registration Method

You have three options:

Option A: Online via CRA Business Registration Online (BRO)

• Where: canada.ca/en/revenue-agency/services/tax/businesses/topics/registering-your-business/register.html
• Speed: BN issued immediately; program accounts active within 5-7 business days
• Requirements: You need the corporation's name and number exactly as filed
• Best for: Most people

Option B: By phone

• Call: 1-800-959-5525 (Business enquiries line)
• Hours: Monday to Friday, 8am-8pm local time
• Speed: BN issued on the call; confirmation letter mailed within 2-3 weeks
• Best for: If you have questions while registering or the online system isn't cooperating

Option C: By mail/fax using Form RC1

• Form: RC1 — Request for a Business Number and Certain Program Accounts
• Mail to: Your regional tax centre (address is on the form)
• Speed: 2-4 weeks
• Best for: Nobody, honestly. Use online or phone.

Step 2: Register Your Business Number

If you're going online, the BRO system will walk you through these sections:

Business identification:

• Legal name of the corporation (must match your certificate exactly, including "Inc." vs "Incorporated")
• Corporation number (from your Certificate of Incorporation)
• Type of business: Corporation
• Date of incorporation
• Province of incorporation (Ontario, or Federal)

Business address:

• Physical business address (where you actually operate from)
• Mailing address (can be different)

Owner/Director information:

• Full name, SIN, date of birth, home address of each director/owner
• Percentage of ownership

Why they ask for your SIN: CRA links the corporation to its directors. This is how they track whether you've been filing your personal taxes, whether you have outstanding debts, etc. Providing your SIN is mandatory and cannot be skipped.

Business activity details:

• Major activity: Construction
• Specific activity: e.g., "Electrical contracting", "General contracting", "Plumbing"
• NAICS code: The system will suggest one based on your description. Common ones:
  • 236110: Residential building construction
  • 236220: Commercial and institutional building construction
  • 238210: Electrical contractors
  • 238220: Plumbing, heating, and air-conditioning contractors
  • 238190: Other foundation, structure, and building exterior contractors

Once submitted, you'll get your BN immediately (if online or phone). Write it down. You need it for literally everything.

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Step 3: Register Your HST/GST Account (RT)

Do You Need to Register?

Mandatory registration: If your worldwide taxable revenue exceeds $30,000 in any single calendar quarter or in four consecutive calendar quarters, you must register.

Voluntary registration: You can (and probably should) register even if you're under $30,000. Here's why:

As a construction company, most of your clients are other businesses or project owners. They don't care whether you charge HST, because they claim it back as an Input Tax Credit (ITC) anyway. But if you're NOT registered, you can't claim ITCs on your own purchases. That means you're eating 13% HST on every tool, material, vehicle, insurance premium, and subcontractor invoice. For a construction company, this adds up fast.

Bottom line: Register for HST immediately. There is almost no scenario where a construction company benefits from not being registered.

How to Register

If you're registering your BN online, you can add the HST account at the same time. Just check the box for "GST/HST account." You'll need to provide:

• Effective date of registration: The date you want to start collecting HST. This can be your incorporation date or the date you start business activities. Don't backdate it unless you actually started making taxable supplies on that earlier date, because you'd owe HST on sales you may not have collected it on.
• Reporting period: This determines how often you file HST returns.
• Fiscal year for GST/HST purposes: Usually matches your corporate fiscal year.

Filing Frequency: Which Reporting Period?

CRA assigns a default, but you can request a different one:

For a new construction company, you'll likely start as annual. This means one HST return per year, due 3 months after your fiscal year end. As your revenue grows, CRA may reassign you to quarterly or monthly.

Pro tip: Even if you're assigned annual filing, you can voluntarily file monthly or quarterly to get your ITCs (refunds) faster. If you're spending a lot on materials and equipment in your early months, filing monthly means you get that HST back sooner instead of waiting 15 months.

What You're Actually Doing With HST

Once registered, you must:

1. Charge 13% HST on all taxable supplies (most construction services in Ontario)
2. Collect it from your clients (add it to your invoices)
3. Track your ITCs: the HST you paid on business purchases (materials, tools, fuel, subcontractors, rent, insurance, vehicles, etc.)
4. Remit the difference: HST Collected minus ITCs = what you owe CRA (or what CRA owes you)

Example:

Invoice to client:     $100,000 + $13,000 HST = $113,000 collected
Materials purchased:   $40,000 + $5,200 HST paid
Subcontractors:        $20,000 + $2,600 HST paid

HST collected:    $13,000
HST paid (ITCs): -$7,800
Net owing to CRA: $5,200

Common construction-specific HST traps:

• New residential construction has complex rules around HST rebates for buyers. If you're building new homes, get an accountant who knows construction.
• Subcontractor invoices must include their HST number for you to claim the ITC. If a sub gives you an invoice without their HST number, you technically can't claim the credit. Always verify.
• Progress billings: HST is triggered when you invoice, not when you get paid. If you invoice $500K in December but don't get paid until February, you still owe the HST in the filing period covering December.
• Holdbacks: The 10% Construction Act holdback is still subject to HST on the full invoice amount at time of billing, not at time of holdback release. This catches a lot of contractors off guard.

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Step 4: Register Your Payroll Account (RP)

Do You Need One?

Yes, if you will have employees. This includes yourself if you pay yourself a salary (as opposed to dividends only).

No, if you're a solo owner-operator paying yourself only in dividends and using only subcontractors (no employees). But be careful: CRA has strict rules about who qualifies as an independent contractor vs. an employee. In construction, this is heavily scrutinized. If you're telling someone when to show up, providing their tools, and they work exclusively for you, CRA will likely consider them an employee regardless of what your contract says.

How to Register

Same as HST: add it to your BN registration online, or call CRA. You'll need:

• Date of first payroll (when you'll first pay an employee)
• Number of employees you expect to have
• Pay frequency (weekly, biweekly, semi-monthly, monthly)

What You're Responsible For

Once you have a payroll account, you must:

1. Deduct from every paycheque:

   • CPP contributions (Canada Pension Plan): employee share + employer match
   • EI premiums (Employment Insurance): employee share + employer portion (1.4x the employee rate)
   • Income tax: federal and provincial, based on the employee's TD1 forms

2. Remit deductions to CRA on a schedule:

   • Under $25K/year in deductions: Quarterly remitter (due 15th of the month following the quarter)
   • $25K-$99K: Regular remitter (due 15th of the month following the pay period)
   • Over $99K: Accelerated remitter (due within 3 business days of payroll)

   New employers typically start as regular remitters, with deductions due by the 15th of the following month.

3. File T4 slips for every employee by the end of February each year

4. Issue Records of Employment (ROE) whenever an employee has an interruption of earnings (layoff, quit, termination, leave)

In construction, ROEs are frequent. Projects end, seasonal slowdowns happen, workers move between employers. You'll issue more ROEs than most industries. Get comfortable with the ROE Web system early.

Penalties for late remittance are severe:

• 3% if 1-3 days late
• 5% if 4-5 days late
• 7% if 6-7 days late
• 10% if more than 7 days late or multiple failures
• Plus interest compounding daily

CRA does not forgive payroll penalties easily. Directors can be held personally liable for unremitted payroll deductions. This is one of the few situations where incorporating does NOT protect you.

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Step 5: Corporate Income Tax Account (RC)

This one is usually automatic. When CRA processes your BN registration for a corporation, they create an RC program account automatically. If it doesn't appear, you can request it via the same BRO system or by calling.

What You Need to Know

• Filing deadline: Your T2 corporate tax return is due 6 months after your fiscal year end (e.g., if your fiscal year ends December 31, your T2 is due June 30)
• Payment deadline: Any taxes owing are due 3 months (for most small corps) or 2 months after your fiscal year end, which is BEFORE the filing deadline. You must estimate and pay before you've filed the return.
• Filing is mandatory even if the corporation had zero revenue and zero activity. A nil return must still be filed.
• Penalty for late filing: 5% of the balance owing + 1% per month, up to 12 months. Repeat offenders get doubled penalties.

Your accountant handles the T2 preparation. But you need to understand the deadlines so you don't get blindsided.

The Small Business Deduction

The first $500,000 of active business income earned by a Canadian-controlled private corporation (CCPC) is taxed at a combined federal-Ontario rate of approximately 12.2% (2024 rates). Income above $500K is taxed at the general corporate rate of approximately 26.5%.

This is one of the main tax advantages of incorporating. As a sole proprietor, all your income is taxed at your personal marginal rate (up to ~53.5% in Ontario). As a corporation, the first $500K is taxed at 12.2%, and you control when and how you take money out (salary vs. dividends).

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Step 6: Extra-Provincial Registration (Federal Corporations Only)

If you incorporated federally, you need to register in each province where you do business. For Ontario:

• Where: Ontario Business Registry
• Form: Extra-Provincial Licence application
• Cost: $60
• Processing: Same-day to a few business days

This gives your federal corporation the right to operate in Ontario. Without it, you technically can't carry on business in the province.

You'll need to maintain this registration annually alongside your federal annual return, which means you're filing two annual returns instead of one. This is why Guide 1 recommends Ontario provincial incorporation for most construction companies.

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Step 7: RC59 Authorization Form

The RC59 (Business Consent Form) authorizes a third party (like your accountant, bookkeeper, or AEC Stack) to access your CRA business accounts and deal with CRA on your behalf.

Why This Matters

Without an RC59 on file, nobody can:

• Call CRA about your account
• View your account information online
• File returns on your behalf (in some cases)
• Receive correspondence from CRA about your account

How to File It

1. Download Form RC59 from canada.ca
2. Fill in Part 1: Your corporation's BN, legal name, and address
3. Fill in Part 2: The representative's information (their name, business name, RepID or GroupID, phone number)
4. Fill in Part 3: Which accounts you're authorizing access to (check the boxes for BN, RT, RP, RC, typically all of them)
5. Authorization level:
   • Level 1: Disclose information only (the representative can view your account but not make changes)
   • Level 2: Disclose information AND request changes (this is what you want for someone managing your accounts)
6. Sign and date. Must be signed by an authorized director or officer.
7. Submit by mail, fax, or through CRA's Represent a Client service

Processing time: 2-4 weeks by mail/fax. Faster through Represent a Client online.

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Timeline: How Long Does All This Take?

Realistically, from the day you get your Certificate of Incorporation, you'll have your BN and all accounts active within 1-2 weeks. The RC59 takes longer but isn't blocking anything; your accounts are functional in the meantime.

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What This Costs

$0. All CRA registrations are free. There are no government fees to register for a BN, HST, payroll, or corporate tax accounts.

The only cost in this phase is the $60 extra-provincial registration, and only if you incorporated federally.

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Common Mistakes to Avoid

1. Not registering for HST because you're under $30K. You're leaving money on the table. Every dollar of HST you pay on materials, tools, and subcontractors is an ITC you can't claim. Register voluntarily on Day 1.

2. Backdating your HST registration. If you set your effective date earlier than when you actually started making taxable supplies, you may owe HST on transactions where you didn't collect it. Set it to the actual start date.

3. Forgetting that payroll deductions make you personally liable. Directors are on the hook for unremitted source deductions. This is the one corporate liability that pierces the veil. Set up payroll remittance processes from Day 1.

4. Not filing a nil T2 return. Even if the company did nothing all year with no revenue and no expenses, you must file a T2. CRA will send increasingly aggressive letters, then assess penalties. After 3 years of non-filing, they may dissolve your corporation.

5. Mixing up your HST reporting period. If you're an annual filer, your HST return is due 3 months after your fiscal year end. But your instalment payments may be due quarterly if CRA assigns them. Check your My Business Account regularly.

6. Not setting up CRA My Business Account. Go to canada.ca/my-business-account and link your BN. This gives you online access to all your accounts, filing deadlines, notices, and assessments. Don't rely on paper mail.

7. Classifying employees as subcontractors. CRA construction audits specifically target this. If a worker is an employee by their rules (you control when/where/how they work, you supply tools, they work exclusively for you), calling them a "subcontractor" doesn't make it so. The penalties include back-paying all CPP, EI, and income tax you should have deducted, plus penalties and interest, plus the director personal liability for the unremitted amounts.

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What Happens Next

With your BN and program accounts registered, you're ready for:

• Guide 3: WSIB & Provincial Registration: WSIB requires your BN. You can't bid on any project without WSIB clearance.
• Guide 7: Operational Setup: Open your business bank account (you need your Certificate + BN). Set up accounting software and payroll.

Your BN is now your identity with the federal government. Every future interaction with CRA (filings, payments, audits, correspondence) is tied to this number. Keep it somewhere you can always find it.