Frequently Asked Questions

The Alberta government has introduced legislation, the New Home Buyer Protection Amendment Act, to create a builder licensing program that will hold builders accountable and improve the integrity and safety of residential construction.

These are some common questions about the New Home Buyer Protection Amendment Act. If you don't see an answer to your question, please contact us toll-free at 1-866-421-6929.

Why does Alberta need a builder licensing program when the province already has mandatory home warranty coverage under the NHBPA?

Do any other jurisdictions have builder licensing programs?

Who did government consult with to develop this proposed builder licensing framework? What were the results of the consultation?

What difference is builder licensing going to make for Albertans?

How will builder licensing benefit Alberta’s residential construction industry?

How will Albertans know if a builder is licensed? What specific information will be available online for consumers researching potential builders?

What will be the requirements for builders under a builder licensing program?

Will builders be required to take courses in order to obtain a licence and maintain active licence?

What are the proposed licensing fees? How do the proposed fees compare to other jurisdictions? Does government collect any other fees from builders?

Will builder licensing apply to the construction of condominiums?

How will builder licensing be applied to renovations?

How will builder licensing impact trade sub-contractors?

Will builder licensing pass extra costs on to consumers? Will builder licensing result in increased home prices?

Who will be exempted from builder licensing requirements?

Why does Alberta need a builder licensing program when the province already has mandatory home warranty coverage under the NHBPA?

  • Albertans have shared many stories about poor home construction leading to massive repair costs.
  • The recent consultation on builder licensing indicated that homeowners want builders to be held more accountable for their work.
  • Builder licensing will directly address builder accountability. The NHBPA does not address the qualifications for being a home builder, and right now anyone in Alberta can be a builder regardless of their experience or skills. This is unlike other aspects of building construction where plumbers, gasfitters, and master electricians are required trades.
  • There is also no provision under the NHBPA to prevent a builder from building in Alberta, even under extreme circumstances such as fraud or imminent bankruptcy.
    • Licensing builders will help prevent issues in home construction by requiring builders to be accountable for their actions. For example, a builder may set up a numbered company, which can later be dissolved. The builder can walk away from a business without any repercussion while transferring the cost and risk of a low-quality build to the consumer. Builder licensing will enable tracking of these types of practices, and those with poor track records may find their company without a licence.

Do any other jurisdictions have builder licensing programs?

  • Ontario, British Columbia, and Quebec have builder licensing programs in place. This means that 75 per cent of Canadians have the benefit and protection of builder licensing.
  • Manitoba is expected to introduce a licensing and warranty system in 2017.

Who did government consult with to develop this proposed builder licensing framework? What were the results of the consultation?

  • Municipal Affairs conducted targeted stakeholder engagement in February and March 2017 to hear stories from Albertans and determine the appropriate scope of a builder licensing program in Alberta.
  • 1,269 Albertans responded to an online survey, and 130 participants (homeowners, owner-builders, builders, renovators) attended 11 engagement sessions across the province.
    • Seventy-eight per cent of survey respondents were in favour of government exploring options for licensing builders.
    • Support varied between urban and rural respondents, with 78 per cent of urban respondents indicating they supported government exploring options for builder licensing, while 66 per cent of rural respondents supported the idea.
    • Forty-one per cent of all respondents indicated they were dissatisfied with the current state of residential construction in Alberta.
    • Several builder survey respondents noted the challenges with competing with poor builders, and that they would welcome a builder licensing program.
  • Some themes that came out of the online survey and engagement sessions were:
    • a general lack of satisfaction with the current state of residential construction;
    • consumers feel there is insufficient information available to them when choosing a builder; and
    • consumers feel there is little accountability for builders and there is concern about the lack of requirements to be a builder.
  • Municipal Affairs also met with warranty providers, engineers and architects, government stakeholders, permit issuers, municipalities, and jurisdictions with builder licensing in place.

What difference is builder licensing going to make for Albertans?

  • Home ownership is the largest investment Alberta families make, and Albertans have told us they want to be protected, informed and confident in their decision.
  • There are no provisions to remove poor builders to protect consumers. Under a builder licensing framework, builders who have demonstrated a pattern of disreputable behaviour or have consistently failed to meet standards may have their licence revoked.
  • Homeowners have expressed frustration with having limited access to information and not being able to easily or accurately research their builders. With builder licensing, consumers will have access to consistent and reliable online information about licences and licence holders to help them make informed decisions.
  • Throughout the consultation, we also heard frustration from homeowners who felt like they were on their own when it came to residential construction process with no assurance that someone was looking out for them. Builder licensing, combined with mandatory home warranties, will increase builder accountability and will help homeowners feel confident that mechanisms are in place to protect their interests.

How will builder licensing benefit Alberta’s residential construction industry?

  • Builder licensing will support the overall integrity and reputation of Alberta’s residential construction industry.
  • Builder licensing is about supporting those who do good work, and helping them to differentiate themselves from those who don’t.
  • Builder information will be available online, which will enable anyone to know who the builders are that do good work and will help people make more informed choices when hiring a builder.
  • Disreputable builders will be held accountable, which will improve the quality and safety of residential construction and boost consumer confidence in the industry.
  • Reputable builders will not have to compete with those that cut corners, misrepresent the industry, or try to gain an unfair market advantage by deceiving homeowners.

How will Albertans know if a builder is licensed? What specific information will be available online for consumers researching potential builders?

  • Only a licensed builder would be able to use the term ‘licensed residential builder.’ All licensed builders will be listed online in the New Home Buyer Registry so that consumers can research builders.
  • The registry will post information about a builder’s licence status and information submitted as part of their declaration when they applied for a licence.

What will be the requirements for builders under a builder licensing program?

  • Builders will be required to submit an application, pay a fee ($600 application, $500 renewal), and hold an active licence in order to build.
  • The licence will be for a one-year period and allows the builder to apply for multiple building permits during that time, after which the builder will have to apply for a renewal.
  • The application process will require builders to submit information about their history, track record, financial standing, and corporate structure to allow the Registrar of the New Home Buyer Protection Office to assess all licence applications and determine whether an applicant presents a risk to the consumer. This will be similar to the process required under the enhanced builder information program for Fort McMurray.
  • To avoid duplication of activities where possible, the application process will incorporate many of the existing requirements for a builder under the NHBPA. The Registrar will then determine if the applicant meets the licence criteria and whether any conditions should be placed on a licence.
  • Government is committed to working with stakeholders in the coming months to refine the process and ensure a smooth transition.

Will builders be required to take courses in order to obtain a licence and maintain active licence?

  • Builders have expressed a need for better training for practices outside of trades such as siding installation, insulation, and windows. Courses are not being considered at this time. We want to implement builder licensing first and phase in courses over the next few years.
  • By phasing in training or course requirements, we will be able to first assess the program, determine strengths and gaps, and better align any required training to address the gaps.
  • Both British Columbia and Ontario have had builder licensing in place for some time and have only recently introduced course requirements.

What are the proposed licensing fees? How do the proposed fees compare to other jurisdictions? Does government collect any other fees from builders?

  • The proposed fees are $600 for a new application and $500 for annual renewal.
  • Ontario charges $2,500 for a new application and $500 annual renewal (this involves warranty application fees).
  • British Columbia charges $600 for a new application and $500 annual renewal.
  • Quebec charges $1,048 for a new general applicant and $1,378 for a specialized licence, with a range of renewal fees depending on license type.

Will builder licensing apply to the construction of condominiums?

  • The construction of condominiums is regulated under the NHBPA, as is any new home construction. Builder licensing will, therefore, apply to condominium developers.

How will builder licensing be applied to renovations?

  • Builder licensing will be required for substantial renovations where at least 75 per cent of the home’s footprint is changed such as a full rebuild or top-floor redesign.
    • This aligns home warranty requirements under the NHBPA where renovations that alter 75 per cent of home’s footprint are defined as being a new home, and therefore, require a warranty.
    • Applying builder licensing only to substantial renovations will prevent over-regulation of the industry.
  • Renovations vary significantly and range from painting, deck building, finishing a basement, or replacing a furnace to a full rebuild of a home.
  • Builder licensing is focused on ensuring quality construction. Renovations such as painting or tiling are cosmetic and less complex and do not have safety impacts. As result, these types of renovations will not be covered under builder licensing as they are also regulated under Service Alberta’s Prepaid Contracting Business Licensing Regulation
  • Renovations such as putting in new electrical wiring or finishing a basement are more complex and require journeypersons and permitting. The Prepaid Contracting Business Licensing Regulation also applies to many of these renovations. As a result, these types of renovations are regulated.

How will builder licensing impact trade sub-contractors?

  • Trade sub-contractors would not be required to be licensed. The builder is responsible for managing the project, including which sub-trades to hire and how much financial risk they will assume. Sub-trades are not covered under builder licensing because they are the responsibility of the builder.
  • Alberta has a strong system of qualified tradespeople and competent builders. Builder licensing is about supporting those who do good work and helping them to differentiate themselves from those who don’t. Builder licensing will not impact trades.
    • Builder licensing would apply only to the construction of new homes, including condominiums and major renovations to most or all of an existing home. The majority of renovations requiring tradespeople are less complex and already covered under existing permit systems and prepaid contracting regulations.

Will builder licensing pass extra costs on to consumers? Will builder licensing result in increased home prices?

  • Home ownership is the largest investment Alberta families make, and Albertans have told us they want to be protected, informed and confident in their decision.
  • The average builder in Alberta builds approximately seven homes per year. Using the proposed $500 fee for licensing renewal, the yearly cost per home would be roughly $80
  • In general, housing prices are determined by supply and demand, and, much less directly, by underlying costs, such as materials like lumber. Ultimately, high demand by consumers, consumer confidence and availability of supply will determine housing prices. An underlying cost in the form of licensing fee is, therefore, unlikely to be passed onto the consumer in any appreciable way.
  • The overall affordability of housing in Alberta is appreciably below the Canadian average and will not be significantly impacted by builder licensing.

Who will be exempted from builder licensing requirements?

  • Owner-builders constructing their own home would not be required to maintain an active builder licence.
  • Charitable organizations, such as Habitat for Humanity, could also be exempt from builder licensing because they have a different business model. Builder licensing is focused on regulating those in the business of being a builder.
  • Date modified: 2017-05-03