Question 1

Do I need to file a T5018 for my subs?

Accepted Answer

Yes. If your primary business activity is construction and you paid a subcontractor $500 or more for construction services during the year, you must file a T5018 slip for each sub and a T5018 Summary with the CRA. The deadline is six months after the end of your fiscal or calendar year. Give each sub their copy. Cash, cheque and e-transfer payments all count. Failure to file attracts penalties of $25 a day (minimum $100, maximum $2,500 per slip). Your subs must report these amounts as income.

Question 2

How much GST/HST do I charge if I am a contractor in Ontario?

Accepted Answer

In Ontario you charge HST at 13% on most construction services and materials you supply. HST is the 5% federal GST plus the 8% Ontario provincial portion. You must register for a GST/HST account once your taxable revenue exceeds $30,000 in any rolling four-quarter window. If your annual taxable revenue (including HST) is $400,000 or less, you can elect the CRA's Quick Method and remit only 8.8% of HST-included revenue for service businesses instead of tracking every ITC. Claim ITCs on the materials, equipment and subs you pay HST on.

Question 3

When are my income tax instalments due as a sole-prop contractor?

Accepted Answer

If your net federal tax owing this year or in either of the two prior years exceeds $3,000, you must pay quarterly instalments on March 15, June 15, September 15 and December 15 (the Quebec threshold is $1,800). The CRA sends you an instalment reminder notice. Missing or underpaying instalments attracts interest at the overdue prescribed rate (7% in 2026, compounded daily). You can use the CRA's no-calculation method, the prior-year method, or a current-year estimate, whichever minimizes the cost.

Question 4

What CCA class is my work van and can I write it off fast?

Accepted Answer

Most work vans, trucks and SUVs used for business fall under CCA Class 10 at a 30% declining-balance rate, and the half-year rule limits your first-year claim to 15% of cost. A $50,000 van would yield a $7,500 first-year CCA deduction under standard rules. If it qualifies as a zero-emission vehicle it falls under Class 54, 55 or 56 with enhanced expensing. If it is a passenger vehicle costing above the Class 10.1 ceiling (the 2026 limit is $39,000 before tax), it goes into a separate Class 10.1 and its cost is capped for CCA purposes.

Question 5

I pay myself as a sole prop. Do I pay CPP?

Accepted Answer

Yes. As a sole proprietor you pay both the employee and employer shares of CPP on your net self-employment income. For 2026 the combined rate is 11.90% (5.95% times two) on earnings between $3,500 and the YMPE of $74,600, for a maximum of $8,460.90. If your net self-employment income exceeds $74,600, CPP2 applies at 8.00% on earnings up to the YAMPE of $85,000 (maximum $832 additional). You report and pay through Schedule 8 of your personal T1 return, and CPP gives you both a deduction and a credit.

Question 6

Should I incorporate my trades business?

Accepted Answer

Incorporation can save tax when you leave profits in the company: a CCPC pays only 9% federal small business tax on the first $500,000 of active business income, versus the 15% general corporate rate and the higher personal rates. If you earn and spend most of your income personally, the deferral benefit may be limited. You also take on payroll admin, annual corporate T2 returns and separate accounting. Talk to a CPA, because the benefit depends on your net income, growth plans and province.

Question 7

What is the CRA prescribed rate for 2026 and why do I care?

Accepted Answer

The CRA prescribed base rate for early 2026 is 3%. This base rate sets the rate on taxable employment benefits, for example a loan to an owner-employee below 3% triggers a taxable benefit. The rate on overdue taxes is the base plus 4% (7%); on refunds to individuals it is 5%; on corporate overpayments it is 3%. If you have a company, a loan between you and the corporation should carry at least the prescribed rate to avoid the shareholder-benefit rules. Confirm the current quarter's rate with the CRA.

Question 8

Do I get the small business deduction if I run a landscaping corporation?

Accepted Answer

Yes. If your corporation is a CCPC earning active business income in Canada, you qualify for the SBD, which drops the federal corporate rate from 15% to 9% on the first $500,000 of profit. Landscaping, construction, roofing and most trades count as active business income. The SBD phases out when your group's taxable capital exceeds $10M and is reduced if passive investment income in the prior year exceeded $50,000. Add your province's small business rate for the total combined rate.

Question 9

How do I claim my RRSP as a contractor and can I also use an FHSA?

Accepted Answer

You can deduct RRSP contributions of up to 18% of your prior year's earned income, capped at $33,810 for 2026 (based on your 2025 income), and contributions reduce your taxable income dollar for dollar. If you have not bought a home yet, you can also open an FHSA and contribute $8,000 a year (up to $16,000 if you have unused prior-year room), deductible going in and tax-free coming out for a first home purchase. The two accounts are independent, so you can use both in the same year.

Question 10

My sub works only for me. Am I really his employer, and what is a dependent contractor?

Accepted Answer

The CRA and the courts look past labels. If your sub works almost exclusively for you, uses your tools and cannot profit independently, they may be classified as an employee for payroll purposes, triggering CPP, EI and income tax withholding. Even if they pass the CRA's contractor tests, a court may find them a dependent contractor for employment-law purposes, entitling them to reasonable notice on termination. Get a CPA and an employment lawyer to assess before you classify anyone as a sub.

Question 11

How long does my Ontario GC have to pay me after I invoice?

Accepted Answer

Under Ontario's Construction Act, once the GC receives your proper invoice they have 7 days to send a written deficiency notice if they think it is incomplete, or it is deemed proper. The owner then has 28 days to pay the GC from receipt of the proper invoice. The GC must pay you, the sub, within 7 days of receiving that owner payment or being deemed paid. If you do not get paid, file a Notice of Non-Payment immediately and preserve your lien within 60 days of last supply.

Question 12

What is a proper invoice in Ontario and what do I put on it?

Accepted Answer

Ontario's Construction Act defines a proper invoice as a written request for payment including your name and address; the invoice date; the period covered; a description of the services or materials; a reference to the contract; the amount payable; the payment terms; and any additional information the contract requires. If the owner believes it is deficient, they must notify you in writing within 7 days. If they miss the 7-day window, your invoice is treated as proper, starting the 28-day payment clock.

Question 13

How do I register a lien in Ontario if I have not been paid?

Accepted Answer

You preserve your lien by registering a claim for lien in the Land Registry Office (online through Teraview) against the title of the property where you supplied labour or materials. You have 60 days from your last date of supply (or from publication of the Certificate of Substantial Performance for most subs) to do this, and missing the deadline kills your lien rights. Within 90 days of preservation you must perfect the lien by issuing a court claim and registering a Certificate of Pending Litigation. Get a construction lawyer, because errors are fatal.

Question 14

What is adjudication and how do I start one in Ontario?

Accepted Answer

Adjudication is a fast-track, binding dispute resolution process under Ontario's Construction Act. You deliver a written Notice of Adjudication to the other party (you can do this up to 90 days after contract completion). ODACC appoints an adjudicator within 7 days. You submit your materials within 5 days, the other side has 5 days to respond, and the adjudicator has 30 days to decide. The losing party must pay the award within 15 days. Adjudication runs alongside the project, so construction does not stop.

Question 15

Can the GC hold back more than 10% on my invoices?

Accepted Answer

The Ontario Construction Act requires a mandatory basic holdback of 10%, the statutory minimum payers must retain to create the lien fund, and your contract cannot waive it. However, the owner or GC may contractually hold back additional amounts for deficiencies (deficiency holdback), which must be reasonable and proportionate to the estimated correction cost. The basic 10% holdback must be released after the lien expiry period, and now on a mandatory annual basis for contracts entered into on or after January 1, 2026.

Question 16

What is a lien in Alberta and how long do I have to file?

Accepted Answer

In Alberta, the prompt-payment and construction-lien regime (the Prompt Payment and Construction Lien Act, in force since 2022) gives contractors, subs and suppliers a right to register a lien on the owner's land if unpaid. You generally have 60 days from the earlier of completion of the contract, abandonment, or last supply of materials or services, extended to 90 days for some concrete and oil-and-gas work. Once registered you must commence a court action within 180 days to perfect the lien. Alberta also has a 10% holdback requirement. Confirm the current deadlines for your project type.

Question 17

What is a statutory trust in Ontario and can a GC use my money for something else?

Accepted Answer

No. Under the Ontario Construction Act, all money a contractor receives for a construction project is held on statutory trust for its subs and suppliers. The GC, as trustee, cannot use trust funds to pay unrelated creditors or expenses before paying the subs who earned those funds. Breach of trust is a criminal offence and directors can be personally liable. If a GC is going under, trust funds should be traceable, so document everything and see a construction lawyer immediately.

Question 18

How does prompt pay work in Quebec? Is it the same as Ontario?

Accepted Answer

No. Quebec does not have a province-wide prompt-payment and adjudication statute equivalent to Ontario's regime; as of mid-2026 prompt-payment rules in Quebec apply only on certain public projects, phased in. General payment disputes in Quebec are governed by the Civil Code of Quebec, contract law and the legal hypothec (the lien equivalent), which must be published in the Quebec land register within 30 days of the end of work. There is no province-wide 28-day payment clock or ODACC-style adjudication. Monitor for legislative developments.

Question 19

What is substantial performance and why does it matter for my lien?

Accepted Answer

Substantial performance is the threshold at which an Ontario construction contract is complete enough for the owner to use the project as intended and the cost to complete or correct defects is no more than 3% of the first $1M plus 2% of the balance of the contract price. It matters because when the prime contractor's Certificate of Substantial Performance is published in a designated construction news service, the 60-day lien preservation clock starts running for most subcontractors and suppliers below the prime. Miss this deadline and you lose your lien rights.

Question 20

Do I need a clearance certificate before releasing a sub's final payment in Ontario?

Accepted Answer

Yes. Best practice and sound risk management is to obtain a valid WSIB clearance certificate from every sub before releasing their final payment, and to re-verify every 90 days while they are on site. If a sub owes WSIB premiums and you paid them without a valid clearance, you, the hiring party, can be held liable for the unpaid premiums up to the value of the labour portion of the contract. Request clearances at clearances.wsib.ca, with no login required.

Question 21

Do I need an RBQ licence to do construction work in Quebec?

Accepted Answer

Yes. In Quebec, any contractor or owner-builder who carries out or has construction work carried out on a commercial, industrial, institutional or multi-unit residential building must hold a valid RBQ (Regie du batiment du Quebec) licence. Your licence number must appear on all business documents and marketing. The main exemption is work on your own single-family primary residence with no rental income. Get your RBQ licence at rbq.gouv.qc.ca; categories include General Contractor Residential, General Contractor Buildings, and trade-specific sub-categories.

Question 22

What is the difference between the RBQ and the CCQ in Quebec?

Accepted Answer

The RBQ licenses construction businesses and sets building safety standards, so it is about the company. The CCQ manages construction workers, collective agreements and competency cards (cartes de competence), so it is about the individual workers. On any construction site governed by Act R-20 (commercial, industrial, institutional, multi-residential), every worker doing construction activities must hold a CCQ competency card for their occupation, and the contractor holding the RBQ licence is responsible for ensuring their workers have valid CCQ cards.

Question 23

Do I need to be licensed as a new home builder in Ontario?

Accepted Answer

Yes. Anyone who builds or sells new homes in Ontario must hold a licence from the Home Construction Regulatory Authority (HCRA). Selling or building without an HCRA licence is an offence under the New Home Construction Licensing Act. All HCRA-licensed builders must enrol with Tarion, which administers Ontario's new home warranty. As of April 1, 2026, new home buyers must register their freehold purchase on the Tarion online portal within 45 days of signing the Agreement of Purchase and Sale. Check the HCRA's public registry before engaging any builder.

Question 24

What does the 2-5-10 warranty actually cover in BC?

Accepted Answer

In BC, the Homeowner Protection Act requires every new home built by a licensed residential builder to be covered by 2-5-10 warranty insurance from an approved provider: 2 years on labour and materials defects; 5 years on the building envelope (protection against water infiltration); and 10 years on the structure of the home. Coverage begins when you sign the purchase agreement. If the builder fails to honour a warranty claim, your warranty insurance provider steps in. Confirm your warranty provider's name through BC's licensed-builder lookup.

Question 25

What warranty does a new home buyer get in Quebec under GCR?

Accepted Answer

In Quebec, all new residential buildings must be covered by the GCR (Garantie de construction residentielle) plan, a mandatory warranty administered under provincial regulation. GCR provides 1 year for finishing defects; 3 years for defects in systems (plumbing, HVAC) and the envelope; and 5 years for major structural defects. The builder must be RBQ-licensed and enrolled in GCR. This is distinct from Ontario's Tarion program; they are separate provincial schemes with different coverage periods and claim processes.

Question 26

Do I need a Red Seal to work across Canada?

Accepted Answer

A Red Seal endorsement on your Certificate of Qualification lets your trade certification be recognized in participating provinces and territories without further examination. You get the Red Seal by passing the interprovincial exam in one of the 54 designated Red Seal trades. It does not automatically override provincial licensing requirements (for example, Ontario electrical still requires ECRA registration and Quebec requires a CCQ card), but it confirms your competency nationally. Federal programs that fund and recruit skilled trades change from budget to budget, so confirm the current initiatives.

Question 27

How does the gasfitter licence work in Ontario?

Accepted Answer

Ontario has two gasfitter Certificates of Qualification: G1 (Class A) authorizes all natural gas and propane work without restriction; G2 (Class B) covers residential and light commercial gas work within specified pressure limits. Both are compulsory trades under Skilled Trades Ontario, so you cannot legally do gas work without the appropriate C of Q. Exams and training approval are managed by the TSSA. Work done by an unlicensed person is illegal, voids insurance and creates serious liability.

Question 28

What licence do I need to do electrical work in Ontario?

Accepted Answer

To perform electrical work in Ontario, individuals need a 309A (Construction and Maintenance Electrician) or 442A (Industrial Electrician) Certificate of Qualification from Skilled Trades Ontario; these are compulsory trades. The employing electrical contractor must be registered with the Electrical Safety Authority (ESA) through the Electrical Contractor Registration Agency (ECRA). All electrical installations require an ESA permit and inspection before being energized. Working without a permit and C of Q is an offence under the Electricity Act.

Question 29

How much is WSIB in Ontario for a construction company in 2026?

Accepted Answer

WSIB set the 2026 average premium rate at $1.23 per $100 of insurable payroll, the lowest in over 50 years for Ontario businesses. Construction and trades firms are classified into industry rate groups that typically carry higher-than-average rates due to injury risk, and your actual rate depends on your experience-rating class. Register with WSIB at wsib.ca as soon as you hire workers, because failing to register is an offence. The premium applies on wages up to the maximum insurable earnings ceiling of $121,700 for 2026.

Question 30

How much is WorkSafeBC for a construction firm in BC in 2026?

Accepted Answer

WorkSafeBC's average base premium rate for 2026 is $1.55 per $100 of assessable payroll, held flat from 2025 due to strong financial results. Your actual rate is set by industry classification, and construction trades are typically higher than this average. Experience-rated employers may receive adjustments based on claims history. Register at worksafebc.com before hiring; WorkSafeBC issues clearance letters that GCs and owners use to verify your standing before releasing payment.

Question 31

What are the payroll deductions I need to take off my employees' cheques in 2026?

Accepted Answer

You must deduct federal income tax using the CRA withholding tables; CPP at 5.95% on earnings between $3,500 and the YMPE of $74,600 (maximum $4,230.45 employee) plus CPP2 at 4% on earnings between $74,600 and the YAMPE of $85,000 (maximum $416 employee); and EI on insurable earnings (the 2026 self-employed opt-in rate is $1.63 per $100, with a lower rate in Quebec). You match CPP and CPP2 as the employer and pay 1.4 times the employee EI premium. Use the CRA Payroll Deductions Online Calculator to avoid errors and confirm the current employee EI rate and ceiling.

Question 32

Do I have to pay vacation pay on top of wages in Ontario?

Accepted Answer

Yes. Under the Ontario ESA, most employees earn vacation pay of at least 4% of gross wages (equivalent to 2 weeks of paid vacation) for the first 5 years with one employer. After 5 years the rate rises to 6% (3 weeks). Vacation pay accrues on all wages, including regular pay, overtime, commissions, stat holiday pay and termination pay. You may pay it on each cheque (rolled in) or bank it and pay it during vacation time; the ESA governs the timing options.

Question 33

How much notice do I have to give to fire a worker in Ontario?

Accepted Answer

Under the Ontario ESA minimum standards: less than 1 year of service is 1 week notice; 1 to 3 years is 2 weeks; 3 to 4 years is 3 weeks, increasing by 1 week per year to a maximum of 8 weeks at 8 or more years. If your payroll exceeds $2.5M and the employee has 5 or more years, you also owe severance pay (1 week per year of service, maximum 26 weeks). The ESA is the floor; common law notice periods are usually much longer, so get legal advice before terminating.

Question 34

What is a JHSC and do I need one on my construction sites?

Accepted Answer

A JHSC (Joint Health and Safety Committee) is required in Ontario for workplaces with 20 or more regularly employed workers. It needs at least one worker representative and one management representative, and at least one from each side must be certified (OHSA-trained). On large construction projects with 50 or more workers and an expected duration of 3 or more months, a JHSC is mandatory. The JHSC conducts monthly inspections, investigates incidents and makes recommendations. Failure to establish a required JHSC is an offence under the OHSA.

Question 35

Do my workers in Quebec get WCB coverage and who pays?

Accepted Answer

In Quebec, workplace injury and illness coverage is administered by CNESST (Commission des normes, de l'equite, de la sante et de la securite du travail). Employers must register with CNESST and pay premiums based on the industry classification rate and their payroll. As with other provincial boards, the employer pays 100% of the premiums, with no employee contribution. CNESST issues attestations de conformite (the Quebec equivalent of clearance certificates), which you should obtain from subs before paying them.

Question 36

Can a self-employed contractor register for EI special benefits?

Accepted Answer

Yes. Self-employed Canadians can voluntarily register with ESDC through a My Service Canada Account to access EI special benefits (maternity, parental, sickness, compassionate care). You pay premiums at the employee rate: $1.63 per $100 of self-employment income (maximum $1,123.07 in 2026), or $1.30 per $100 (maximum $895.70) in Quebec, where QPIP already covers parental and maternity. You must wait 12 months from confirmed registration before your first claim, and you do not pay the employer portion.

Question 37

Do I need Working at Heights training in Ontario to work on a roof?

Accepted Answer

Yes. Ontario's OHSA construction-projects regulation (O. Reg. 213) requires that any worker on a construction project who uses a fall protection system (travel restraint, fall arrest, safety net, work belt or safety belt) complete a CPO-approved Working at Heights training program before using that equipment. The training is about 6.5 hours (theory plus practical). Refresher training is required every 3 years, and your employer must keep training records on site. Inspectors can issue stop-work orders for non-compliant workers.

Question 38

What is WHMIS and what training do my workers actually need?

Accepted Answer

WHMIS (Workplace Hazardous Materials Information System) 2015 is Canada's national hazard communication standard, aligned with the international GHS. Employers must train every worker who works with or around hazardous products (paints, solvents, adhesives, fuels) on hazard identification, Safety Data Sheets and safe handling and storage. There is no nationally standardized WHMIS certificate; training is employer-delivered and tailored to the specific hazardous products in your workplace, and records of worker training should be kept on file.

Question 39

What happens if a worker is critically injured on my construction site in Ontario?

Accepted Answer

Call 911 first if it is an emergency. Then, without delay, notify the Ontario Ministry of Labour (MLITSD) by phone at 1-877-202-0008; the JHSC or health-and-safety representative; and the union if applicable. You must preserve the scene and not disturb anything except to save life, relieve suffering, prevent unnecessary property damage or maintain an essential public utility. Failing to notify or disturbing the scene without authorization is an offence under the OHSA, with fines up to $100,000 for an individual or $1.5M for a corporation.

Question 40

What is a worker's right to refuse unsafe work and can I fire them for it?

Accepted Answer

Under Ontario's OHSA (and equivalents in all provinces), a worker who reasonably believes a situation is likely to endanger their health or safety may refuse to work. The process is: the worker tells the supervisor, who investigates; if unresolved, the JHSC investigates; if still unresolved, an MLITSD inspector is called. The worker is paid normal wages throughout. You absolutely cannot dismiss, discipline, suspend or threaten a worker for exercising a genuine right to refuse, as reprisal is an offence with significant penalties.

Question 41

What OHS rules are different in Quebec versus Ontario for construction?

Accepted Answer

Quebec OHS on construction sites is governed by the Act respecting occupational health and safety and the Safety Code for the Construction Industry, administered by CNESST. Key differences from Ontario: prevention programs must be written and project-specific on larger projects; prevention coordinators are required on projects over a certain size; CNESST inspectors enforce both OHS and labour standards together; and workers also have union-based health-and-safety representatives on CCQ-covered sites. Fines and penalties differ from Ontario.

Question 42

Do I need a COR safety certificate to bid on big jobs?

Accepted Answer

COR (Certificate of Recognition) is a voluntary safety-management-system certification, not a legal requirement, but it is increasingly a prequalification condition on large industrial, oil-and-gas and public infrastructure projects. In Ontario, IHSA administers COR for large employers and SECOR for small employers (under 10 field workers). Certified employers often receive WCB premium rebates, which vary by province. Many major GCs and public owners require COR to bid, so if you target larger work, plan 12 to 18 months to achieve certification.

Question 43

When do I need a building permit in Ontario?

Accepted Answer

Under the Ontario Building Code Act, a building permit is required before constructing, demolishing, adding to or materially altering most buildings. Exemptions can include some small sheds under 15 square metres (depending on the municipality), minor repairs using the same materials and methods, and certain agricultural buildings. Apply through your local municipal building department with drawings and specifications. Work begun without a required permit can result in a stop-work order, mandatory removal of non-compliant work and fines, so always check with your municipality before starting.

Question 44

What is the BC Energy Step Code and does it affect my new build permit?

Accepted Answer

The BC Energy Step Code is part of the BC Building Code and requires new buildings to meet performance-based energy efficiency targets (Steps 1 to 5). Under the 2024 BCBC, in force since March 8, 2024, all new buildings must comply with at least Level 1 of the Zero Carbon Step Code, requiring measurement and disclosure of operational greenhouse gas emissions. New residential construction also requires a pre-permit energy model by a Licensed Energy Advisor and post-construction blower-door testing. Check what Step your municipality requires, as some require Step 3 or higher.

Question 45

What is a minor variance and how do I get one for a deck or addition?

Accepted Answer

A minor variance is an authorization from the Committee of Adjustment to deviate slightly from a municipal zoning by-law requirement (for example your deck setback is 1.4m but the by-law requires 1.5m). You must meet the four tests of the Ontario Planning Act section 45(1): the variance is consistent with the intent of the official plan; consistent with the intent of the zoning by-law; desirable and appropriate development; and minor in nature. Apply to your local Committee of Adjustment, pay the fee and attend the hearing. Decisions can be appealed to the Ontario Land Tribunal.

Question 46

What is an RPR in Alberta and do I need one to sell a property?

Accepted Answer

An RPR (Real Property Report) is a legal survey document prepared by a licensed Alberta Land Surveyor showing your property boundaries and the location of all visible improvements (house, garage, fences, decks). When selling, most Alberta real estate purchase contracts require the seller to provide a current RPR with a Certificate of Compliance from the municipality confirming improvements comply with local bylaws. Municipal compliance fees vary, so confirm the current fee with your city. An RPR typically takes a few business days to prepare, longer in peak real estate seasons.

Question 47

What insurance does a contractor need as a minimum in Canada?

Accepted Answer

At minimum, construction contractors should carry Commercial General Liability (CGL), typically $2M per occurrence and required by most GC and owner contracts; automobile insurance on company vehicles; WCB or WSIB coverage for employees and yourself where required; tools and equipment coverage; and errors and omissions cover for design-build or professional services work. Many GCs require you to name them as an additional insured on your CGL policy and provide a Certificate of Insurance before starting work. The required minimums vary, so always read your contract.

Question 48

What is a performance bond and when is it required?

Accepted Answer

A performance bond is a three-party surety agreement under which the surety company guarantees that the bonded contractor will complete the contract, or the surety will arrange completion or pay damages up to the bond amount (typically 50% or 100% of contract value). It is not insurance: if the surety pays out, the bonded contractor must reimburse it, like a co-signer. Performance bonds are almost always required on federal and provincial public-sector projects and are increasingly common on larger private commercial projects. Bonding capacity requires good financial statements and credit history.

Question 49

When does a GC need a builders' risk policy and what does it cover?

Accepted Answer

A builders' risk policy (also called construction all-risk or course-of-construction insurance) covers physical loss or damage to a project under construction: materials on site, work in place, scaffolding and, typically, materials in transit. It is usually placed by the owner or the prime contractor and covers all insured parties, including subs. It typically includes waiver-of-subrogation provisions so insurers cannot sue other project parties. Builders' risk does not cover workers' compensation, liability or professional errors, which need separate policies.

Question 50

What is a labour and material payment bond and who can claim on it?

Accepted Answer

A Labour and Material Payment Bond (CCDC 221) protects unpaid subcontractors, sub-subcontractors, labourers and material suppliers when the bonded prime contractor fails to pay. The surety guarantees valid payment claims up to the bond amount. To make a claim, you must give written notice to the surety within the required timeframe (typically 120 days from your last date of supply), then file following the surety's process. On federal government contracts and most provincial public projects, both a performance bond and an L&M bond are mandatory.

Question 51

Should I use a B-lender for my construction business financing?

Accepted Answer

B-lenders (credit unions, mortgage investment corporations, trust companies) can be a legitimate bridge when traditional bank financing is unavailable, for example if your business has less than 2 years of tax returns or a recent credit event. Their rates are typically 1 to 3% above bank rates and they may impose shorter terms (12 to 24 months) and exit fees. Use them strategically for short-term bridge or construction draws, then refinance through an A-lender once you have the financial history. Always compare the true cost of capital (rate plus fees plus penalties) before signing.

Question 52

What is an MCA and why do construction guys get burned by them?

Accepted Answer

A Merchant Cash Advance (MCA) advances cash against your future receivables, repaid by daily or weekly automatic withdrawals at a factor rate, often equating to an effective APR of 40 to 150% or more. Construction businesses are especially vulnerable because MCA repayment schedules are rigid and daily, while construction payment cycles are slow (28-day invoices, 90-day holdback). Missed project payments trigger automatic overdrafts while the MCA still withdraws daily. MCA contracts often contain confession-of-judgment clauses letting the lender freeze your account without court. Avoid MCAs and use a construction draw line of credit instead.

Question 53

Do I need disability insurance as a self-employed tradie?

Accepted Answer

Yes. As a self-employed person you have no employer-paid sick leave, no WCB unless you opt in, and limited CPP disability benefits unless you have qualifying years of contributions. If you are injured and cannot work for 6 to 12 months, your business stops generating income. Own-occupation disability insurance (which pays if you cannot do your specific trade) is the gold standard but more expensive; any-occupation policies only pay if you cannot work in any occupation, a much harder bar. Premiums are generally not personally tax-deductible for the self-employed but may be a corporate deduction. Get quotes before you turn 40, as rates rise with age and health conditions.

Question 54

How does QPIP work for a self-employed contractor in Quebec?

Accepted Answer

QPIP (Quebec Parental Insurance Plan / RQAP) is mandatory for all Quebec workers, including the self-employed. Self-employed Quebec residents are covered for maternity, paternity and parental benefits, unlike the rest of Canada where EI special benefits are voluntary for the self-employed. Benefits are paid as a percentage of insurable weekly earnings for up to 50 weeks combined under the basic plan. The contribution rates and the maximum insurable earnings are set annually, so confirm the current figures and your self-employed premium at rqap.gouv.qc.ca.

Question 55

What are the TFSA, RRSP and FHSA limits I can use to save in 2026?

Accepted Answer

Three accounts to know for 2026. TFSA: $7,000 new contribution room, with total cumulative room since 2009 of $109,000 for a qualifying adult; growth and withdrawals are tax-free. RRSP: contribute 18% of your 2025 earned income up to $33,810, fully tax-deductible going in, with taxable withdrawals. FHSA (first-time buyers only): $8,000 annual limit (up to $16,000 if you have unused prior-year room), with a lifetime maximum of $40,000, deductible contributions and tax-free withdrawals for a qualifying first home. Max out the FHSA first if you have not bought, as it combines both RRSP and TFSA advantages.

The questions tradespeople actually ask - with straight answers.

Tax & CRA

Getting Paid, Liens & Prompt Pay

Licensing & Warranty

Employing People & WCB

Health & Safety (OHS)

Codes & Permits

Insurance & Bonds

Money & Life

Important disclaimer