Some provinces and municipalities require contractors to have a business license in order to operate. However, there is a great deal of variation in terms of what is required to obtain a license, and what type of contractors must have one.

In some places, obtaining a municipal license may require only that the contractor has a legal business address and pays a fee. Elsewhere, such as in Alberta, licensing requirements go further than this and stipulate that contractors must provide customers with a written sales contract.

Before hiring someone, you need to check with your municipal building services office to determine what contractor licenses are required in your community. If needed, then verify that the contractor has the required licenses. Otherwise, any contract you sign may not be legal.

In addition to licensing, in some areas of the country contractors are required to post a Surety Bond. For instance, the Province of Alberta requires that contractors who accept money before all the work is done be bonded.

A bond is either an amount of cash or a financial guaranty from a third party, that is held by government to insure that the contractor's obligations are met. In the event that work by the contractor is not done properly, and the contractor is unable to rectify the problem, the bond is available to satisfy outstanding customer claims.

Check with your municipal building services department to determine if contractors must be licensed and/or bonded in your community.

To check on provincial contractor bonding requirements, contact the appropriate provincial authorities. Click HERE for provincial contact information.