Is it a red flag if a contractor only wants cash payment?

Yes, a contractor demanding cash-only payment is a major red flag in Ottawa and should be avoided. This is one of the most common warning signs of unlicensed contractors, tax evasion, or outright scams.

Why Cash-Only is Problematic

Legitimate contractors in Ottawa accept multiple payment methods because they run proper businesses with business bank accounts, insurance, and proper licensing. When a contractor insists on cash only, they're often trying to avoid:

• Paying HST to the Canada Revenue Agency
• Creating a paper trail for warranty claims
• Proper business licensing and registration
• WSIB coverage verification
• Income tax obligations

Cash payments also leave you completely vulnerable if something goes wrong. You have no recourse for disputes, no proof of payment for warranty claims, and no way to recover funds if the work is substandard or incomplete.

What Ottawa Homeowners Should Expect Instead

Professional contractors in Ottawa typically accept:

• Business cheques made out to their registered company name


• Electronic transfers to business accounts


• Credit cards (though some may add processing fees)


• Certified cheques for larger projects

They should provide proper invoices with their business registration number, HST number if applicable, and detailed breakdown of materials and labor costs.

Payment Schedule Red Flags

Beyond cash-only demands, watch for contractors who want:

• Large upfront payments (more than 10% down is suspicious)


• Full payment before starting work


• Payment to personal names rather than business names


• No written contracts or invoices

Under Ontario's Construction Lien Act, you're entitled to hold back 10% of payments for 60 days after substantial completion to protect against liens.

Verify Before You Pay

Always verify any contractor through:

• ESA contractor lookup at esasafe.com for electrical work


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


• WSIB clearance certificate verification


• Better Business Bureau and online reviews


• City of Ottawa business license verification

Protecting Yourself

If a contractor pressures you for cash payment, especially with urgency tactics like "cash discount today only," walk away immediately. Legitimate contractors understand that homeowners need time to verify credentials and arrange proper payment methods.

For consumer protection issues in Ontario, contact the Ministry of Government and Consumer Services. For building code violations, contact City of Ottawa Building Code Services at 613-580-2424.

Remember: paying by traceable methods protects both you and legitimate contractors who follow proper business practices in Ottawa.