The ten per cent holdback is not optional
Under Ontario's Construction Act the basic statutory holdback is ten per cent of the price of the services or materials as they are actually supplied. It sits in subsection 22(1) of the Act, it applies to a homeowner as an owner of an improvement, and it is the mechanism that protects you from a subcontractor's lien when the general contractor has been paid and the subcontractor has not.
The payment schedule should account for the statutory holdback where applicable. Ask how it will be calculated and released for your contract; lien and transition rules can affect timing.
The Construction Act includes annual release of accrued holdback under rules effective in 2026. Ask a construction lawyer or contract administrator how the notice, lien and transition provisions apply to your project.
HST at thirteen per cent, and the rebate that does not apply
Ask for HST to be shown separately in the written quote so the tax treatment is clear before work starts.
The GST/HST new housing rebate reaches only a substantial renovation, which the Canada Revenue Agency defines by a ninety per cent test: generally, ninety per cent or more of the interior of an existing house has to be removed or replaced. Only livable areas count, so a finished basement and attic are in and a garage and crawl space are out.
The CRA is explicit that renovating a basement, or adding a garage or a deck, by itself does not meet the definition. A major addition can qualify where it is combined with substantial renovation such that the result looks like a newly built house, and converting non-residential property to residential use can qualify too. Ask for an itemized invoice and written warranty terms. Whether a supplier must charge HST depends on its tax status and the supply.
Where Tarion stops
The Tarion new home warranty covers newly built homes in Ontario, freehold, contract and condominium, built by a builder licensed by the Home Construction Regulatory Authority, with coverage in one year, two year and seven year periods and maximum limits that depend on when the agreement of purchase and sale was signed.
It does not cover a renovation of an existing home. Tarion's own list of exclusions names defects in materials, design and work supplied by the homeowner, and alterations, deletions or additions made by the homeowner. A basement finish, a kitchen, a bathroom or an addition on a house you already own falls outside it.
Review the applicable permit and inspections, any written contractor warranty, and the statutory holdback; each covers a different risk. Get the warranty in writing, with a term, a scope and a named party, and ask whether it is transferable if you sell. A verbal assurance on a doorstep is not a warranty.
WSIB, and who is covered on your property
Since January 2013 WSIB coverage has been compulsory in construction for independent operators, sole proprietors, partners in a partnership and executive officers of a corporation, with limited exemptions. Coverage and liability depend on the circumstances; verify the contractor and subcontractor arrangements before work starts.
There is a home renovation exemption, and it is narrower than people assume. It applies where the work is on an existing private residence occupied by the person who directly retains the contractor, or by a member of that person's family, and where the contractor gives estimates and invoices in their own name and is paid directly by that occupant.
Critically, WSIB's own policy states that the exemption does not extend to subcontractors hired by the main contractor, because they lack the direct relationship with the homeowner. So a general contractor may be exempt while the crews they bring are not. Ask whether the direct-hire home-renovation exemption applies, and how any subcontractors are covered. A clearance certificate is not required for every directly retained home-renovation contractor.
A short checklist before you sign
A written fixed-price or clearly structured contract, with a scope, a schedule, an allowance list and a payment schedule that shows the ten per cent holdback as its own line. Thirteen per cent HST stated separately. Permit responsibility named: who applies, who pays, who arranges inspections.
Proof rather than assurances: WSIB status or a clearance certificate where required, a certificate of liability insurance with limits, authorization for compulsory trade work, the applicable credentials of the permit-drawing designer, and responsibility for structural design.
A written warranty with a term and a scope, and a change-order process that requires your signature and a price before extra work happens. Almost every renovation dispute in this city comes down to a change that nobody priced and nobody wrote down.