How much deposit should a contractor ask for in Ontario?

What the province says

Ontario's consumer guidance recommends a down payment of no more than about 10% of the contract value, cautions against paying the full price up front, and recommends progress payments that track completed work. Note what that is: guidance, not a statutory cap. Nothing in the Consumer Protection Act makes a 40% deposit illegal. It just makes it unwise, and the province says so.

What the market actually does

Ontario practice runs wider than the guidance: roughly 10 to 15% on smaller jobs, and 20 to 30% on larger, material-heavy projects where the contractor is ordering custom cabinetry, windows or steel before mobilizing. Canadian industry guidance lands near the province's number: about 10%, or 10 to 15% before work begins on a fixed-price contract.

When a larger deposit is legitimate

There's one honest reason a deposit exceeds the guidance: non-returnable special orders. Custom cabinets, engineered beams, special-order windows. The legitimate version has three features: the deposit is itemized against those specific materials in the contract, the receipts or supplier orders are shown to you, and the labour portion still follows completed milestones. The illegitimate version is a round percentage with no itemization, and it funds the contractor's previous job.

"If I ask for more than ten percent, you'll see exactly which order it's paying for, with the supplier's paperwork attached. A deposit is you buying materials early, not me borrowing your money. Any contractor who can't show you the difference is telling you which one it is."

Mitch Fraser, owner, Ontario Contracting Co.

The deposit demands that signal fraud

• Over 25% with no itemization. The most consistent warning sign across BBB and Ontario consumer-law sources; a Caledon homeowner documented by TS Lawyers lost a $12,000 deposit to a contractor who delayed two years and vanished.
• Cash only. No trail, no recourse. This pairs with the "save the tax" pitch in the documented Ontario scam patterns.
• Deposit before contract. Money should never move before the written agreement exists; over $50 of renovation work, that agreement is legally required.
• "Full payment up front discount." There is no legitimate version of this.

The structure that protects both sides

A clean payment schedule looks like: modest deposit (about 10%, or itemized materials), progress draws tied to milestones you physically inspect (framing done, rough-ins passed, drywall closed), and 10% held back at the end. That last piece isn't stinginess; it's the Construction Act's statutory holdback, your legal shield against liens from unpaid subcontractors, explained fully in the parent guide on your legal rights. And if you're still comparing contractors, the payment-schedule conversation belongs in the interview stage, before anyone is chosen.