Canadian contractors typically ask for 10 to 30 percent as a deposit. Ontario's Consumer Protection Act allows any amount but makes deposits over 10 percent harder to defend if the job goes sideways, Quebec's Consumer Protection Act restricts advance payments on some door-to-door and home improvement contracts, and most provinces have no hard cap. The practical ceiling is what a reasonable client will accept: ask for 50 percent and many will walk.
What the deposit actually covers
A deposit does three jobs: it confirms the client is serious, it covers materials you buy before starting, and it filters out the clients who never intended to pay. It does not protect your margin. On a $40,000 job with a 25 percent deposit, you are still delivering $30,000 of work on trust.
The math most contractors do not run
Your real exposure is the outstanding balance at your point of maximum investment, usually right before the final payment. Structure of a typical job:
- 25 percent deposit received before starting
- 25 percent progress payment at rough-in
- 50 percent outstanding through finishing, inspection, and handover
That last 50 percent is exactly the payment clients dispute, delay, or negotiate down, because by then they have the finished work and you have used up your leverage.
Closing the gap the deposit leaves open
Progress billing helps: more milestones mean smaller outstanding balances. The stronger structure is having the entire contract funded before work begins, with payments releasing as stages are approved. The client proves the money exists on day one, and the final payment is not a new decision they get to make after delivery. That structure used to require a bank. Payment infrastructure now makes it possible as simple software.