Why You Don't Want To Be Your Own Contractor
by Robert Wright, Citadel Renovations
Some people may say “I can run my own project and save some money” or “they are doing a favour for a friend by looking after the project”. The “favour” could be very costly, as most people have no idea what issues they are exposing themselves too.
The problems as usual revolve around government regulations and the insurance industry. The government is concerned with safety and taxes of course, but the insurance industry is worried about risk and paying out claims.
The insurance companies are not happy with owner work because of the unknown and the surprises. If a man gets hurt while working on your home and does not have WSIB coverage; it is likely – but not always – that your home insurance will cover the medical expenses. If it does, you will likely not get insurance coverage again. When you are selling or buying a home; most insurance companies are now asking if permits were pulled for any work done in your home. The areas they are most concerned about are decks and basements. This is because insurance companies have had to rebuild damaged houses when these areas cause a collapse, a fire, or flood. Some homeowners have had to get building permits and inspections done, years after the work was completed; before they can close the sale of there home.
For the government; the biggest issues revolve around CRA, WSIB, and MoL. There are other ministries and levels of government, but these guys are the big ones. CRA is very watchful of the construction industry. This is because the construction associations have brought to their attention the “under ground economy” i.e. cash payments; and the extensive use of subcontracting out of work i.e. piece work. The added bonus is the available 1-800 “snitch line” and they are only too happy to follow up on the calls. They want the source deductions from wages and GST payable sent to them. These guys have a law called the Income Tax Act which allows them to take what they want and you have little recourse!
WSIB ensures that the men working on your project are protected if they get hurt. WSIB wants to be paid for this coverage and have regulations to ensure they can collect. You must ensure that the men are either “independent contractors” and can provide the documents or the men provide a “clearance certificate”. If you did not get this paperwork, then you have to withhold the WSIB premium and forward it to WSIB. If they find out you did not send money to them, they will collect from you after the fact. What happens when you have a man hurt? WSIB will pay the bills, however they will come after you to pay the bills. If your home insurance company pays the bill, you may find yourself uninsurable in the future.
MoL – Ministry of Labour have some regulations and powers you may not be aware of. If you have a project above a $50k value, you must notify them. If you are designated as a “constructor” you must know and enforce the many health and safety regulations and labour laws. The “Green Book” is the bible for these; i.e. is the safety equipment correct; do you need a health and safety committee and do you know the requirements?; is there a designated substances report?; and what are your obligations. An inspector from MoL has the power to shutdown projects, issue fines, and collect your personal information. In addition, if a man is seriously hurt or dies on site, you get can charged criminally (with a Criminal Code Offence) and will have to prove you are innocent.
Now all the governments and ministries have linked databases. So if you show up on one database, the others will know about the project and you. So how do you avoid this? Do you really want to deal with this aggravation? Hire a professional renovation contractor. One who can provide the WSIB clearance, has a GST #, knows about designated substances, and is a member of the BBB and GOHBA. I don’t want to add you to my list of people caught by the inspectors and other nasty surprises.
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