5 Laws Every Canadian Builder Needs to Know

by John Burke

2 min read

If you want to be a builder, contractor, or other type of construction professional, you need to understand more than just the key skills in your industry. You also have to understand business law in Canada. This is particularly important if you plan to work for yourself.

1. Training and Certification

In many cases, you can work for an employer on a construction site without special licenses or certifications. However, if you want to work as a skilled contractor or tradesperson, you need to have the right certifications, licenses, or training requirements in place. In some cases, you may also need to complete an apprenticeship program.

2. Tax Laws

If you do construction work for an employer, you are obligated to report your earnings to the Canada Revenue Agency. Similarly, if you work as a self-employed builder, doing work for clients, you also have to report your earnings, but for self-employed builders, the task is a bit more complicated. When you work for yourself, the CRA considers you as a small business. As a result, you have to report all of your business income but may also deduct business expenses.

In addition, although the laws may vary based on your province. construction work or labour is typically considered a taxable service. As a result, you may need to collect provincial sales tax, harmonized sales tax, or goods or service tax from your clients and remit it to the government.

3. Insurance

As a builder, you are responsible if anything goes wrong on the job site, and to protect yourself from a legal and financial perspective, you should invest in property damage and liability insurance. Depending on your area, you may not be legally obligated to carry coverage, but it can provide a lot of peace of mind to both you and your clients. Some clients may insist on seeing your policy before they agree to hire you.

4. Building Codes and Permits

It’s critical to ensure your work is up to code, and that means understanding International, Canadian and local building codes. In many cases, your work may need to be inspected when you are done, and if it fails to meet codes, you may have to invest time, money, and materials into redoing the work

5. Worker’s Compensation Requirements

Once your construction or building company gets larger that you need help, you may find yourself hiring employees or subcontractors. It’s important to understand the differences between these two categories. Namely, you have to remit payroll taxes and source deductions on behalf of employees but not contractors, and if you mistakenly categorize an employee as a contractor, you may end up owing back taxes or facing penalties. Additionally, under the business laws in many areas, you are legally required to carry worker’s compensation for all employees and subcontractors.

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