Licensing for contractors in Alberta
Alberta trips people up because there are two unrelated licences and contractors often assume one covers the other. One is about taking a deposit. The other is about building a new home. You can easily need both, or one and not the other.
The rules, with sources
Every line below links to the authority it came from and the date we last read it.
| Prepaid contracting licence | A business that requests an upfront payment before work commences, or payments before a renovation is completed, is a prepaid contracting business and must be licensed with Service Alberta and post a security. |
Consumer Protection Act ↗
checked 2026-09-09
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|---|---|---|
| What a prepaid contract covers | Construction, maintenance, repair, alteration, addition to or improvement of private dwellings — including real property used with a dwelling, such as landscaping. |
source ↗
checked 2026-09-09
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| Prepaid exemptions | Commercial and business buildings; contracts between contractors and sub-trades; and home construction or renovation already covered by the Alberta New Home Warranty Program or the National Home Warranty Program. |
source ↗
checked 2026-09-09
|
| Residential builder licence | All residential builders must hold a builder licence to obtain permits for new homes and to construct them, under the New Home Buyer Protection Act. |
NHBPA ↗
checked 2026-09-09
|
| Which builder licence | A General Contractor licence covers homes of 1 to 4 residential units. A Developer licence is required for multi-family buildings of 5 units or more, such as condominiums. |
source ↗
checked 2026-09-09
|
The deposit is the trigger, not the job size
The prepaid contracting licence has nothing to do with how big the job is. It is about when the money moves. Ask a homeowner for a deposit before you start, or for a progress payment before a renovation is finished, and you are a prepaid contracting business — on a $4,000 bathroom as much as a $400,000 addition.
Working commercially, or as a sub-trade to another contractor, sits outside it. So the same crew can need the licence for their residential work and not for the rest.
Warranty coverage can remove the prepaid requirement
Home construction or renovation already covered by the Alberta New Home Warranty Program or the National Home Warranty Program is exempt. That is worth knowing before you apply — for a new-home builder already enrolled in warranty, the prepaid licence may simply not apply.
Two licences, two thresholds
The builder licence is about new homes and is what the permit desk checks. The prepaid licence is about deposits and is what a consumer complaint will check. A renovator taking deposits needs the prepaid one and not the builder one; a new-home builder enrolled in warranty may need the builder one and not the prepaid one.
Questions people actually ask
Do you need a licence to be a contractor in Alberta?
It depends on what you do. If you take payment before the work is complete on a private dwelling, you need a prepaid contracting licence from Service Alberta. If you build new homes, you need a residential builder licence under the New Home Buyer Protection Act.
What is a prepaid contracting business in Alberta?
A business that requests an upfront payment before work commences, or payments before a renovation is completed. It must be licensed with Service Alberta and post a security.
Do renovators need a licence in Alberta?
If they take money before the work is finished, yes — the prepaid contracting licence. Renovation does not require the residential builder licence, which applies to new homes.
Which builder licence do I need in Alberta?
A General Contractor licence for homes of 1 to 4 residential units, or a Developer licence for multi-family buildings of 5 units or more.
Is sub-trade work exempt from the prepaid licence?
Yes. Contracts between contractors and sub-trades are exempt, as are contracts for commercial and business buildings.
Deposits and progress payments are the trigger for the prepaid rules, and GoBuild records both against the job — so what you took, and when, is answerable without going through a bank statement.
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This is a plain-English summary written for contractors, not legal or tax advice, and it is not a substitute for reading the source or talking to your accountant or lawyer. Rules change; each line above carries the date we last checked it. If you find something out of date, tell us and we will fix it.