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Things to know

  • Architectural and engineering professionals are provincially regulated, and both individuals and businesses must be licensed.
  • Licenses for General Contractors are generally not required, but provinces/territories generally require licensing for specialized trades or activities.
  • Non-resident businesses performing work in Canada are subject to a statutory withholding tax. 
  • Canada has a “contract-based” approach to competitive procurement - tendering and requests for proposals - resulting in potential liabilities for bidders and bid-calling entities alike. This is applicable to both the private and public sectors.  
  • Quebec is a civil law province, with unique requirements for procurement and contract matters, including the law of latent defects.  
  • Standard-form design and construction contracts come from the Canadian Construction Documents Committee (CCDC) and the Royal Architectural Institute of Canada (RAIC).  However, they tend to be modified by supplementary conditions or replaced entirely depending on the owner, industry, and the project.
  • Each province/territory has legislation that requires statutory holdbacks (the equivalent of a “retainage” in the U.S.) and creates lien rights. Some provinces have legislation creating trust rights.
  • Starting in 2019, Ontario introduced U.K./U.S.-style “prompt payment” regimes along with a U.K.-style adjudication regime, and other jurisdictions in Canada may follow with similar initiatives.
  • The legalization of marijuana in Canada may impose new challenges for the construction industry.

Things to do

  • Identify key provinces/territories of interest, and understand the applicable licensing and registration requirements.
  • Develop a corporate structure for the contracting entity (e.g. branch or subsidiary), including consideration of non-residency tax issues, and how much and how regularly work will be performed in Canada.
  • Determine what contracts you are expected to enter into and want to use in Canada, and “Canadianize” as necessary for the province/territory at issue.
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