How to Choose a Contractor in Toronto: 9 Hard Rules from a Decade of Bids

After bidding alongside hundreds of other GTA contractors on Toronto renovations, here is what actually separates the ones you want to work with from the ones who turn a $40,000 bathroom into a $70,000 legal headache. Nine rules. Seven myths. One short conversation that costs the equivalent of a sub-trade lien if you skip it.

Seven Myths That Cost Toronto Homeowners Real Money

Each of these has been the opening sentence of a homeowner who eventually called us to fix the previous contractor's work.

Myth 1 — "My friend used him, that's enough vetting."

Friends recommend the contractor they hired, not the one whose paperwork would have survived scrutiny. Run the same nine checks regardless of who pointed you there.

Myth 2 — "They have a licensed plumber, so the GC is licensed."

Trade licensing covers the trade, not the general contractor. The GC has its own obligations under HCRA (where applicable) and the Construction Act, completely separate from any individual sub-trade.

Myth 3 — "They pulled the permit, so the work is permitted."

A pulled permit triggers required inspections at framing, rough-in plumbing, rough-in electrical, insulation, and final occupancy. If the contractor never books the inspections, the permit lapses and the work shows up as unpermitted on the title search at closing.

Myth 4 — "A 50% deposit is normal in Toronto."

The conservative pattern is 10–15% deposit, 25% at rough-in inspection passing, 35% at substantial completion, 30% at occupancy. A request for 50% upfront is almost always a cash-flow problem somewhere else dressed up as a payment term.

Myth 5 — "Cash discount is a good deal."

Cash payment with no receipt removes your CRA paper trail, your warranty leverage, your insurance protection, and your ability to register a lien. The 13% you saved is the contractor's untaxed margin and your future legal exposure.

Myth 6 — "HCRA only matters for new home builders."

HCRA covers new dwelling units, full stop. The moment you add a kitchen and a separate entrance to a basement, you have created a new dwelling unit and the builder must be HCRA-licensed.

Myth 7 — "Verbal change orders are fine between gentlemen."

Every contractor dispute we have seen in the past decade traces to undocumented changes. Ontario small-claims court sides with the written contract and the signed change order. Every. Single. Time.

Rule 1: Verify the HCRA Licence Before You Talk About Price

Go to hcraontario.ca/builders-search, type the company name, confirm the licence is active and the trade scope matches what you are hiring for. If the contractor balks at giving the licence number, walk — disclosure is a regulatory obligation, not a courtesy. The licence number belongs in the contract header, on the quote, and on the truck.

Reminder on scope: HCRA is required for new homes and new dwelling units. Renovating your existing house, kitchen, bathroom, or deck does not require HCRA licensing of the GC — but the GC's other credentials still apply.

Rule 2: Insist on a Written Schedule of Values, Not a Round Number

A schedule of values is the line-item budget the contractor commits to: demolition, framing, plumbing rough-in, electrical, drywall, tile, fixtures, finish carpentry, contingency — each with a dollar amount, each with a description of what is included.

A round-number quote ("$45,000 turn-key") gives the contractor unlimited room to claim later that any addition is "outside scope." A schedule of values with allowance lines for tile, fixtures, and finishes forces the conversation upfront, while you still have leverage. Ask for the CCDC 17 or CCDC 18 contract template — both are accepted across Ontario and both require the schedule as an attached schedule.

Rule 3: WSIB and Insurance — Verified the Same Day You Sign

The WSIB Clearance Certificate is free, expires every 90 days, and verifies online in under a minute at clearance.wsib.ca. If the contractor's WSIB number is current, you are protected from a worker injury claim hitting your homeowner policy. If it has lapsed mid-project, you are personally on the hook for that injury claim.

Liability insurance: ask for a current Certificate of Insurance with a minimum $2,000,000 commercial general liability limit. The COI should name your address as the project location. Phone the broker on the certificate and confirm the policy is in force — photocopied certificates from a year ago are common and worthless.

Rule 4: The 10% Construction Act Holdback Is Yours — Use It

Under the Construction Act of Ontario, the homeowner is required to withhold 10% of every progress payment, plus 10% of the final payment, for at least 60 days after the date of substantial performance. This is the lien window: sub-trades and material suppliers can register a construction lien against your property in this window if the GC has not paid them.

Do not release the holdback until 60 days have passed AND the contractor has provided a Certificate of Substantial Performance AND a clean lien search of your property title. The lien search runs about $50 and is the cheapest insurance you'll buy on the entire project.

Rule 5: Ask for Three Recent References, Then Ask the Right Questions

Anyone can produce three happy references on demand. The better request: "send me the contact information for the last three projects you completed." That removes the cherry-picking bias.

What to actually ask the references:

• Did the project finish on the original budget? If not, by how much, and were the change orders communicated before or after the work?
• Did the project finish on the original schedule? If not, what slipped, and was the reason inside or outside the contractor's control?
• Were permits pulled, and did inspections clear without re-work?
• Were any disputes raised about change orders, sub-trade workmanship, or warranty?
• Knowing what you know now, would you hire them again — and would you recommend them for the same scope or a different one?

Rule 6: Demand Permit-Pulled Work, Even When It's Called Optional

A Toronto Building permit triggers inspections at framing, rough-in plumbing, rough-in electrical, insulation, and final occupancy. Without those inspections, your insurance company can deny a future claim related to the work, and your sale's closing can be delayed if the title search flags unpermitted work.

The "we don't need a permit, it's just cosmetic" line is true for like-for-like fixture swaps and only those. Anything that adds rooms, moves walls, relocates plumbing or drainage, or adds electrical circuits requires a permit — and a contractor who pretends otherwise is signalling that they don't carry the credentials to pull one.

Rule 7: No Cash, No HST-Less Quotes, No Exceptions

The Construction Act, the Income Tax Act, and the Employment Standards Act all expect a paper trail. Every invoice should show the contractor's CRA business number and the HST charged on the labour component. Anyone who can't or won't quote with HST is operating outside the regulated economy and will not be there in five years for the warranty call.

Cash payment also forfeits the homeowner's right to register a builder's lien if there is later a dispute, and removes the eligibility of any related expense from CRA tax credits (Multi-Generational Home Renovation Tax Credit, Greener Homes Loan, accessibility retrofit credits).

Rule 8: Tie Payments to Inspection Milestones, Not the Calendar

Pay 10–15% deposit on contract signing. Pay 25% at rough-in inspection passing (framing, plumbing, electrical signed off by the City). Pay 35% at substantial completion (occupancy/use possible, minor deficiencies remain). Pay the final 25–30% at the end of the 60-day Construction Act holdback window with a clean lien search.

If you pay on a calendar ("$15,000 at week three"), you have no leverage when week three arrives and the inspection has not passed. Inspections concentrate the contractor's attention on actually finishing the prior phase to a passable standard. That is exactly the leverage payments are supposed to provide.

Rule 9: Read the Change-Order Clause Out Loud Before You Sign

Standard CCDC contracts require change orders to be written, priced, signed, and delivered before the changed work begins. A clause that says "changes will be invoiced at completion based on time and material" is a wide-open invoice at the end. A clause that says "changes require a signed change order with a fixed price before execution" is the homeowner-friendly version.

If the contract uses CCDC 17 or CCDC 18 unmodified, you are in good shape. If they have substituted their own one-page contract, read every line out loud with someone who is not buying a renovation that day. The clauses you cannot rewrite later are the ones that matter most.

Quote Comparison: Reading Three Bids Side-by-Side

When you have three quotes back, line them up against each other:

• Total band. Three legitimate bids on the same scope land within roughly 15% of each other. Anything 25%+ below the median is suspicious — walk the scope until you find what is missing.
• Allowances. Tile, fixtures, vanity, and finish allowances should be similar across the three. A wildly low allowance is just deferring the cost to a change order.
• Excluded items. Read the exclusions list carefully. "Excluding electrical" on a renovation that obviously needs electrical means a $5,000+ surprise.
• Permit handling. Included in the price, or homeowner-pulled? Either is acceptable; surprise is not.
• Schedule. Wildly different durations are a red flag in either direction. Too short is unrealistic; too long is overhead bloat.
• Payment terms. Closest to a 10/25/35/30 progression is the cleanest.

After You Sign: Five Documents to Keep on File

1. The signed contract with the schedule of values attached.
2. Certificate of Insurance ($2M minimum) and current WSIB Clearance Certificate.
3. HCRA licence verification screenshot (if applicable to the scope).
4. Toronto Building permit number and the City inspection log as it is updated.
5. Every change order, signed by both parties before the changed work was executed.

Keep all five accessible — not in a drawer, in a folder you can email a lawyer in 60 seconds. The day you need them is the day you do not have time to look for them.

Sources & further reading

1. Home Construction Regulatory Authority (HCRA)
2. WSIB Ontario — Clearance Certificates
3. Government of Ontario — Construction Act
4. City of Toronto — Apply for a Building Permit