Bonding and Business Licences
Before you hire a contractor, check with your municipal building services office to find out if a contractor license is required in your community. If the contractor you hire doesn’t have a required license, the contract you sign may not be legal.
What’s required to obtain a license? In some parts of Canada, a contractor needs to provide only a legal business address and a fee. Elsewhere, a licensed contractor is also required to agree to provide customers with a written sales contract.
When you’re talking to your municipal building services office about licenses, also ask if contractors are required to post a surety bond. This 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. If a contractor’s work is substandard and the contractor is unable to rectify the problem, the homeowner.may have recourse against the bond.