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Straight answers
The questions people ask most about starting and running a general contracting business in Ontario. Answered straight, with links to the official sources.
No provincial GC licence exists — but you typically need a municipal business licence, building permits per project, and (if you build or sell new homes) an HCRA licence with Tarion enrolment. You also can't self-perform compulsory trades like electrical or plumbing without those tickets. The "no licence" surprises people into thinking there are no rules; there are plenty.
Prevention beats cure: a written contract with a clear draw schedule, documented changes (signed change orders, not handshake "while you're here" adds), and invoicing that complies with the Construction Act's prompt-payment rules. When it still goes wrong, your remedies are lien rights and prompt-payment adjudication — but they only work if your paperwork was clean from day one.
Fixed-price wins clients and can be very profitable if you estimate tightly — but you carry all the overrun and scope-creep risk. Cost-plus protects your margin and is common on custom and high-trust jobs, at the cost of an open book the client can question. Many GCs use fixed-price with airtight scope and allowances, and cost-plus where the scope genuinely can't be pinned down.
Renovation is the lower-barrier entry: faster cash cycle, no HCRA, homeowner clients — but relentless client management and smaller jobs. New homes mean bigger projects and developer/landowner clients, but HCRA licensing, Tarion warranty, more capital, and longer timelines. Most GCs start in reno and graduate into new build when they have the track record and the cash.
Slowly, and by paying them well and on time — good subs work for GCs who don't make them chase money. Verify WSIB clearance and their own CGL on every one, every time. The GC's real asset isn't tools; it's a roster of reliable, licensed, insured trades who pick up your call.
Underpricing is the number-one killer of new GCs — usually from forgetting overhead, not padding for the unknowns, and "buying" jobs to stay busy. Price your overhead and profit as line items, not an afterthought; track actuals against estimates so you learn where you bleed; and walk away from jobs priced to lose. Busy and broke is the trap.
There is no provincial general contractor licence in Ontario. You do, however, typically need a municipal business licence to operate, building permits for each project, and — if you build or sell new homes — a licence from the Home Construction Regulatory Authority (HCRA). You also cannot self-perform compulsory trades like electrical or plumbing unless you are certified in them.
Budget roughly $400–$600 to incorporate, $0 for a CRA Business Number, a few hundred dollars a year for a municipal business licence, and $1,500–$4,000+ per year for $2M–$5M commercial general liability insurance depending on your work mix and revenue. WSIB premiums are a percentage of payroll. The biggest variable cost is bonding capacity if you plan to bid public work.
Construction is a mandatory WSIB sector. Independent operators, sole proprietors, and partners in construction generally must register for WSIB coverage even with no employees, and most clients and GCs will not let you on site without a valid WSIB clearance certificate.
Only if they personally hold the certification. Electrical work in Ontario is restricted to certified electricians working under a licensed electrical contractor (ESA/ECRA), and plumbing is a compulsory trade. A GC without those tickets must subcontract that scope to a licensed contractor.
At minimum, Commercial General Liability (commonly $2M–$5M), plus WSIB coverage. Most also carry builders risk / course-of-construction on projects, commercial auto for trucks, tools and equipment coverage, and — once they hold contracts where they design or specify — professional liability. Public and institutional owners frequently also require bonding.
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.