For a small or new contractor, subcontracting is the practical way into public and larger commercial work. Instead of bidding the whole project against the owner, you bid your trade scope to the general contractor (the prime) who holds the head contract. The prime carries the bid bond, the performance bond and the overall site responsibility; you supply your trade, get paid by the prime, and build the track record that later lets you become a prime yourself. It is lower-risk, it needs no bonding from you on most jobs, and it earns you the references that public prequalification packages demand.
Subcontractor versus prime: who carries what
The difference comes down to who you contract with and who carries the risk.
- Your contract is with the prime, not the owner. You answer to the general contractor for your scope; the prime answers to the owner for the whole job.
- Bonding usually sits with the prime. On most jobs you need no bid bond or performance bond of your own, because the prime has already posted them. That removes the single biggest barrier for a small firm (bonding mechanics are covered in Bonding and Surety and Surety Bonds Explained).
- You are still paid by the prime, and you still carry your own obligations. Workers' compensation coverage and insurance are always on you, and your lien rights run against the owner's property even though your contract is with the prime.
Why subcontracting is the right starting point
The advantages stack up for a contractor who is not yet ready to prime:
- No bonding facility needed on your end for most subcontracts.
- No bid bond to post, because the prime already carries it on the head contract.
- A chance to build a track record, references and proof of public-project experience.
- Work you can later cite in your own prequalification packages when you move up to priming (see Prequalification and Vendor Registration).
How to get on a prime's sub-trade list
General contractors building tendered public projects need sub-trades, and they find them through requests for subcontractor quotes, often posted on MERX's private construction stream, through provincial construction association networks, or by direct solicitation to firms they already trust. To get onto a prime's preferred list you need the basics ready: a current workers' compensation clearance, insurance certificates naming the general contractor as an additional insured, the right trade licensing, and competitive, reliable pricing. Reliability matters as much as price here, because a prime who is on the hook to the owner wants subs who turn up and finish.
Your safety duties do not transfer
This catches subcontractors out. In every Canadian jurisdiction, occupational health and safety obligations are non-delegable: you cannot contract out of your duty to keep your own workers safe, even though the prime carries the overall site safety role as the constructor or prime contractor. Run and document your own safety program. If the prime fails in its duties, the owner can be deemed the prime contractor, but that does nothing to relieve you of responsibility for your own crew.
Getting paid as a sub: your protections
You have real payment protection as a subcontractor, and it is worth knowing before you start.
- Lien rights. You can register a builders lien against the owner's property for the value of the work and materials you supplied, even though your contract is with the prime. Lien deadlines are short and strict and vary by province, so diarise yours from day one.
- Labour and material payment bond. On Ontario public contracts of $500,000 or more, a labour and material payment bond is mandatory under section 85.1 of the Construction Act and protects sub-trades directly. If the prime does not pay you, you file a written notice of claim, generally within 120 days of the date you last supplied labour or materials, and the claim goes to the surety, the prime and the owner. Outside Ontario, payment-bond rights exist where the prime has furnished a bond, but the timelines and procedures vary by province, so check the bond wording and your provincial lien legislation.
- Prompt payment, where it is in force. In the provinces with prompt-payment law, the chain has to pay down on a fixed clock, and a sub-subcontractor can pursue a claim through construction adjudication rather than waiting on a court.
A realistic path from sub to prime
You do not jump from a trade sub to priming a major contract in one step. A sensible progression is to subcontract on jobs in the roughly $100,000 to $500,000 range for a few years, building references and a clean delivery record, then prime small municipal work under the bonding threshold, then move up to bonded contracts above $500,000 once you have a surety facility and a Certificate of Recognition in place. Each rung earns you the track record the next one demands.
Common mistakes
- Thinking the prime's bond covers your workers. It does not. Your workers' compensation and insurance are always your responsibility.
- Assuming safety duties pass up to the prime. They are non-delegable. Document your own program regardless of who is the constructor.
- Missing your lien deadline. Your lien clock runs even though you contracted with the prime, not the owner. It is short and unforgiving.
- Pricing for the work but not the relationship. Primes rebook subs who are reliable. Competitive pricing gets you the first job; delivery gets you the next ten.
- Trying to prime too soon. Build the track record and the bonding capacity first. A leap too far spooks owners and sureties alike.
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