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Straight answers
The questions people ask most about starting and running a commercial construction business in Ontario. Answered straight, with links to the official sources.
Start with tenant fit-outs and interiors — they're smaller, faster, and don't demand heavy bonding, so they're the realistic on-ramp from residential. Use them to build references and a track record while you assemble the prequalification pieces (bonding, COR, insurance, financials). Then step up to larger ICI and institutional work as your prequalification strength grows.
Surety bonds (bid, performance, and labour & material payment bonds) guarantee you'll complete the contract and pay your subs and suppliers. Most commercial — and nearly all public/institutional — work requires them. You build bonding capacity by demonstrating financial strength and a clean track record to a surety, and that capacity effectively caps how much work you can carry at once.
COR® (Certificate of Recognition) is a safety-management certification administered through the IHSA in Ontario. It isn't law, but so many commercial, institutional, and public owners require it to prequalify that it's effectively mandatory for that market. Getting COR-certified is one of the gates you clear to move from residential into serious commercial work.
Fit-outs are the accessible commercial lane — interior build-outs for tenants and landlords, smaller and faster, with lighter bonding requirements. New ICI construction means full prequalification, bonding, and large, slow-paying projects. Most contractors enter through fit-outs and graduate to new construction as their bonding and references build.
It's holdback-and-draws, governed by the Construction Act: a 10% holdback, progress draws against completed work, and prompt-payment timelines after a proper invoice. The cash-flow reality is that you can be profitable on paper and still squeezed — you finance the work between draws, and developers/owners are slower payers than homeowners. Clean invoicing and lien-rights awareness are essential.
Incorporation, WSIB, $5M commercial general liability, and — to win most work — surety bonding capacity, COR® safety certification, and a prequalification package with financials and references. There is no special provincial licence for commercial GC work, but the prequalification bar is high.
Surety bonds (bid, performance, and labour & material payment bonds) guarantee that you will complete the contract and pay your subs and suppliers. Most public and institutional commercial owners require them. You build bonding capacity by demonstrating financial strength and a clean project track record to a surety.
COR® (Certificate of Recognition) is a safety-management certification administered in Ontario through the IHSA. It is not law, but many commercial, institutional, and public owners require it to prequalify, so it is effectively mandatory for that market.
Assemble a prequalification package: incorporation and WSIB documents, insurance certificates, bonding letter, safety program/COR, financial statements, key personnel resumes, and a list of completed projects with references. Owners and consultants score this before letting you bid.
A sole proprietorship is cheaper and simpler to start, but you are personally liable for the business's debts and claims. Incorporating creates a separate legal entity that limits personal liability, can reduce tax once you are profitable, and reads as more credible to larger clients. Most contractors incorporate once they have employees, real revenue, or work on others' property.
Yes — construction is a mandatory WSIB sector in Ontario. Even independent operators and partners with no employees generally must register, and clients and general contractors will require a valid WSIB clearance certificate before you can work on their site.
You must register for and charge HST once your revenue exceeds $30,000 over four consecutive quarters. Many contractors register before that threshold so they can claim input tax credits on tools, materials, and vehicles from day one.
Ontario's Construction Act sets the rules: a 10% holdback on most contracts, prompt-payment timelines (you must be paid within set periods after a proper invoice), and an adjudication process for disputes. Understanding holdback, lien rights, and prompt payment is essential to protecting your cash flow.