2026-01-28
How to Hire a Renovation Contractor in Canada (2026 Guide)
Why Hiring the Right Contractor Matters
Choosing the wrong contractor is the single biggest risk in any renovation project. A bad contractor can blow your budget, miss deadlines by months, deliver subpar work, or worse — disappear mid-project with your deposit. The good news: following a systematic vetting process dramatically reduces these risks.
Whether you're planning a kitchen renovation, bathroom remodel, basement finish, or deck build, this guide will help you hire with confidence.
How to Find Contractors
Start with multiple sources and aim for at least 5-6 candidates to narrow down to 3 for quotes:
- Personal referrals: The #1 source. Ask friends, family, neighbours, and coworkers who've recently renovated. Ask specifically about budget accuracy, timeline adherence, and communication quality.
- Google Maps reviews: Search "[your city] renovation contractor" and focus on companies with 50+ reviews and 4.5+ stars. Read the negative reviews carefully — they're more informative than positive ones.
- HomeStars / Houzz: Canadian-specific platforms with verified reviews and contractor portfolios.
- Local lumber yards: Staff at building supply stores know which contractors are active, reliable, and pay their bills on time.
- Your real estate agent: Agents see the results of renovations constantly and know who does quality work.
Vetting and Shortlisting
Before requesting quotes, verify these essentials for each candidate:
| Requirement | Why It Matters | How to Verify |
|---|---|---|
| Business license | Legal requirement in most cities | Check with your municipal business registry |
| Liability insurance ($2M+) | Protects you if they damage your property | Request a certificate of insurance; call the insurer to verify |
| WSIB/WCB coverage | Workers' compensation for their employees | Request clearance certificate |
| 3+ years in business | Survival rate — many fly-by-night contractors fold within 2 years | Check business registration date |
| 3+ recent references | Verified work quality and professionalism | Call references; visit a completed project if possible |
Getting and Comparing Quotes
Get a minimum of 3 written quotes for any project over $5,000. Here's how to make them comparable:
- Same scope: Give each contractor an identical written scope of work. Vague scopes lead to incomparable quotes.
- Itemized breakdown: Insist on line-item pricing (labour, materials, fixtures, permits). Lump-sum quotes hide markups and exclusions.
- Allowances vs. fixed: Ask what's an allowance (you'll pay actual cost) vs. fixed price. Allowances on fixtures can balloon your budget.
- Timeline: Each quote should include start date, milestone dates, and completion date.
- Exclusions: What's NOT included? Common surprises: permits, dumpster, structural engineering, painting, cleanup.
Don't automatically choose the cheapest quote. If one quote is 30%+ below the others, it usually means they're cutting corners, underestimating scope, or planning to hit you with change orders later.
What Your Contract Should Include
Never start work without a written contract. Essential clauses:
- Detailed scope of work: Every item, material, and finish specified in writing
- Total price and payment schedule: Tied to milestones, not dates
- Start and completion dates: With penalties for excessive delays (e.g., $100/day after X date)
- Change order process: How changes are documented, priced, and approved
- Permit responsibility: Who pulls permits and pays fees
- Warranty: Minimum 1-year workmanship warranty; 2 years is better
- Insurance and WSIB: Proof of current coverage
- Dispute resolution: Mediation before litigation
- Right to terminate: Conditions under which either party can end the contract
Recommended Payment Schedule
| Milestone | Payment | Notes |
|---|---|---|
| Contract signing | 10-15% | Deposit to secure the start date; never more than 15% |
| Materials delivered | 25-30% | Verify materials on-site before paying |
| Rough-in complete | 25-30% | Framing, plumbing, electrical before walls are closed |
| Substantial completion | 20-25% | When the space is usable but punch list remains |
| Final completion | 10% | Holdback released after all punch list items are done |
Key rule: Always hold back 10% until every punch list item is completed to your satisfaction. This is your leverage to ensure the contractor finishes the job properly.
Red Flags to Watch For
- Demands large deposit upfront (30%+): Legitimate contractors don't need your money to buy materials. They have credit with suppliers.
- No written contract: "We'll figure it out as we go" is a recipe for disaster.
- Can start immediately: Good contractors are booked 4-8 weeks out. Immediate availability may signal they can't keep clients.
- Cash-only / no receipts: They're avoiding taxes, which means they're also avoiding accountability.
- No insurance proof: If a worker gets hurt on your property without WSIB, you could be liable.
- Pressures you to decide quickly: "This price is only good today" is a classic sales tactic, not a sign of a busy professional.
- Quote is dramatically lower than others: 30%+ below average usually means change orders are coming.
- Bad online reviews about the same issues: One bad review could be unfair. Three reviews mentioning "went over budget" or "disappeared for weeks" is a pattern.
Frequently Asked Questions
How many quotes should I get?
Minimum 3 for any project over $5,000. For major renovations ($50,000+), get 4-5 quotes to ensure you understand the market range.
How much deposit should I pay?
10-15% maximum. Never pay more than 15% upfront. Some provinces have consumer protection laws capping deposits.
Should I hire the cheapest contractor?
No. Choose the contractor who offers the best combination of fair pricing, clear communication, verified references, proper insurance, and a detailed contract. The cheapest quote often leads to the most expensive project.
What if the contractor goes over budget?
With a proper contract and fixed-price agreement, the contractor absorbs overruns. Change orders (scope changes you request) are the main source of budget increases. A clear change order process in your contract protects both parties.