How much deposit should I give a contractor before work starts?

In Ontario, you should never pay more than 10% of the total contract value as a deposit before work begins, and many reputable contractors will ask for even less.

The Ontario Consumer Protection Act specifically limits deposits for home improvement contracts over $50. For contracts under $50, no deposit can be required. This protection exists because upfront payments are one of the biggest red flags in contractor scams across Ottawa and the GTA.

What Ottawa Contractors Typically Request

Legitimate contractors in Ottawa usually follow one of these payment structures:

Small deposits (preferred): Many established contractors ask for just enough to cover initial material orders - often 5-10% or a flat amount like $500-1000 for smaller projects. This shows they have sufficient working capital and aren't using your money to fund their business operations.

No deposit: The best contractors often require no money upfront, especially for projects under $10,000. They'll invoice you after materials are delivered or work milestones are completed.

Material-based deposits: For custom work requiring special orders (like kitchen cabinets or specialty tiles), contractors might request the exact cost of materials that need to be ordered, but this should be clearly itemized and reasonable.

Red Flags to Avoid in Ottawa

Be extremely cautious of contractors who:

• Demand large upfront payments (25-50% of contract value)


• Want full payment before starting


• Only accept cash payments


• Pressure you to "secure materials today"


• Can't provide proper licensing (ESA for electrical, TSSA for gas work)


• Don't have WSIB clearance certificates

Door-to-door contractors in Ottawa neighborhoods like Kanata, Orleans, and Barrhaven often use high-pressure tactics around deposits. Never pay significant money to someone who shows up unsolicited.

Payment Schedule Best Practices

Structure payments around completed work phases:

• 10% deposit (maximum)


• 25% when materials arrive on site


• 25% at rough-in completion


• 25% at substantial completion


• 15% final payment after deficiencies corrected

Remember Ontario's Construction Lien Act requires you to hold back 10% of the contract value for 60 days after substantial completion to protect against liens from unpaid subcontractors or suppliers.

Verification Steps Before Any Payment

Before giving any deposit in Ottawa:

• Verify ESA licensing at esasafe.com for electrical contractors


• Check TSSA certification at tssa.org for gas/HVAC work


• Confirm WSIB clearance certificate


• Verify business registration and insurance


• Get multiple detailed quotes for comparison

If a contractor pressures you for immediate payment or claims they need money to "hold your spot," walk away. Reputable Ottawa contractors understand these consumer protections and work within them.

For major renovations requiring permits through the City of Ottawa (613-580-2424), ensure your contractor can pull the necessary permits before any money changes hands. This verification protects you from unlicensed operators who can't legally do the work they're promising.