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 experts recommend paying even less or nothing until materials arrive on site.

The Ontario Consumer Protection Act specifically limits deposits to 10% for home improvement contracts over $50. This law exists because upfront payments are the #1 way homeowners get scammed by fly-by-night contractors who disappear with your money.

What Ottawa Contractors Typically Request

Legitimate contractors in Ottawa usually ask for one of these payment structures:

Materials Deposit Only: Many reputable contractors will start work with no upfront payment, then request payment for materials once they're delivered to your property. This protects both parties - you see the materials arrive, they get reimbursed for their investment.

Small Deposit (5-10%): Some established contractors request a small deposit to secure your spot in their schedule, especially during busy seasons. For a $30,000 kitchen renovation, this would be $1,500-$3,000 maximum.

No Deposit: The best contractors often require no money upfront, especially for smaller projects under $10,000. They're confident in their cash flow and want to earn your trust.

Red Flags for Ottawa Homeowners

Be extremely cautious if a contractor asks for:

• More than 10% upfront (illegal under Ontario law)


• Large sums for "materials ordering" before work starts


• Full payment or large percentages upfront


• Cash only payments with no receipt


• Payment to secure materials that are "on sale this week only"

Door-to-door contractors and those without proper ESA/TSSA licensing often use high-pressure tactics around deposits. Always verify their credentials through esasafe.com (for electrical) or tssa.org (for gas/HVAC) before any payment.

Protecting Yourself in Ottawa

Set up a payment schedule tied to work completion, not calendar dates. A typical structure might be:

• 0-10% to start (if any)


• 25% when materials arrive


• 25% at rough-in stage


• 25% at substantial completion


• 15% final payment after deficiencies corrected

Always pay by cheque or credit card (never cash) and keep the 10% Construction Lien Act holdback for 60 days after substantial completion. This Ontario law protects you from liens if the contractor doesn't pay their suppliers.

For any contract disputes in Ottawa, contact Ontario's Consumer Protection Office at ontario.ca/consumer or 1-800-889-9768. Never let payment pressure override your gut instinct about a contractor's legitimacy.