Bonding and Insurance Requirements in Ontario Public Bids, Explained

On a lot of Ontario public electrical tenders, the price isn't the first filter. The bid bond, the agreement to bond, the insurance certificate and the WSIB clearance are. Miss one and the buyer never opens your numbers.

Here's what those pieces are, what Ontario law requires after award, and how they show up on a real municipal tender.

Three bonds, three jobs

The Surety Association of Canada (SAC) describes the tender-stage tools clearly. A bid bond is a three-party instrument that assures the owner the bidder is bondable and will follow through: sign the contract and provide the bonds the documents call for. An agreement to bond (consent of surety) is the surety's written commitment to issue the performance and/or payment bonds if you win — not a guarantee you will enter the contract at your bid price.

After award, two companion bonds take over. A performance bond guarantees the contractor will perform; SAC notes these are typically for 50% of the contract amount (sometimes 100%). A labour and material payment bond guarantees payment to direct trades and suppliers on that job. SAC says payment bonds are usually issued with the performance bond, not alone, and owners typically ask for 50% (sometimes 100%).

The Canadian Construction Documents Committee's current forms are CCDC 220 (bid), 221 (performance) and 222 (labour and material payment), published May 21, 2024. Many Ontario buyers accept those or substantially equivalent SAC wording.

What Ontario law requires on public contracts

Bonding at tender is mostly a buyer rule. Bonding after award on larger public work is also a statute.

Under Construction Act s. 85.1, a "public contract" is a contract for an improvement where the owner is the Crown, a municipality or a broader public sector organization. On entering such a contract (architects and engineers excepted), the contractor must furnish both a labour and material payment bond and a performance bond, in the prescribed form, from an insurer licensed under the Insurance Act to write surety and fidelity insurance. The owner can still demand other bonds or security on top.

O. Reg. 304/18 sets the floor: section 85.1 applies when the contract price is $500,000 or more, and the minimum coverage for each of those two bonds is 50% of the contract price. On a qualifying public electrical prime contract, expect at least 50%/50% performance and payment bonds after award even if the tender was quieter about them.

What the tender actually asks for

Municipal construction RFTs usually want security with the bid. York Region's electrical upgrades tender at Fairy Lake Gardens (RFTC-3177-25) required a digital bid bond of not less than 10% of the bid price, plus a digital undertaking to bond, from a surety authorized in Ontario, on the Region's forms or substantially CCDC 220 / SAC forms. Thunder Bay's standard Information to Tenderers also calls for a digital 10% bid bond on CCDC Form 220 (or equivalent) and an agreement to bond; scanned or unverifiable bonds are rejected, and the deposit is forfeited if the winner doesn't sign or produce the performance and labour and materials payment bonds within two weeks of acceptance.

Oshawa's Bid Submission Procedure shows how owners vary after award: 100% performance, or 50%/50% performance and labour and materials, or 100% performance plus 50% labour and materials. Read the specific bid document.

Insurance and WSIB

Insurance limits are set in the tender or contract, not in one provincial schedule. Toronto's published construction Certificate of Insurance form shows commercial general liability (CGL) minimums of $2 million or $5 million (unless otherwise requested), with the City as an additional insured, and extensions such as contractual liability, owner's and contractor's protective, products-completed operations, contingent employers liability and non-owned auto. Your electrical RFT will name its own limits — pull that page first.

Separately, WSIB policy on clearance certificates in construction says a principal who retains a contractor for construction work must obtain a clearance before work begins and keep it in force for the whole job. Starting without one is an offence for both. A clearance is valid for up to 90 calendar days and is renewable; WSIB's clearances page confirms only registered businesses in good standing can get one.

A simple shop habit

The week you decide to bid, call your surety with the tender number, close date, estimated price and the bond percentages in the documents. Confirm digital/authenticatable bonds if the portal requires them. Keep a current WSIB clearance and a matching CGL certificate ready to upload. On public work at or above the Construction Act threshold, plan for 50% performance and 50% payment bonds after award even before the RFT spells them out.

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