Facility Maintenance Contracts Template for Canada

A comprehensive contract should cover the scope of maintenance services, service schedules and response times, performance standards (SLAs), pricing and payment terms including GST/HST treatment, insurance requirements, health and safety responsibilities, liability limitations, indemnification provisions, termination rights, and dispute resolution. It should specify which party is responsible for providing materials and equipment.

Ontario's Construction Act grants lien rights to contractors and subcontractors who supply services to improve a property, which can include significant maintenance work. Property owners are required to maintain a statutory holdback (currently 10%) from each payment until the lien period expires. Maintenance contracts should address holdback obligations, lien waiver procedures, and prompt payment timelines consistent with the Act.

Both the facility owner and the maintenance contractor have OHS obligations under provincial legislation. The contractor is typically the employer of its own workers and bears primary responsibility for their safety. However, where the facility owner controls the premises, they also owe a duty to the contractor's workers under the Occupiers' Liability Act. The contract should clearly allocate safety responsibilities and require the contractor to provide evidence of OHS compliance.

Contractors should carry commercial general liability insurance (typically $2 million to $5 million per occurrence), workers' compensation coverage from the relevant provincial authority, and professional liability insurance if the work involves engineering or specialised technical services. The contract should specify minimum coverage requirements, require the facility owner to be named as an additional insured, and mandate certificates of insurance before work commences.

Emergency response provisions should define what constitutes an emergency, guaranteed response times (for example, two hours for critical systems), after-hours contact procedures, and the applicable rate structure for emergency callouts, which is typically different from scheduled maintenance fees. Clear escalation procedures reduce disputes when equipment fails outside normal business hours.

Yes. Maintenance services are generally taxable supplies under the Excise Tax Act. Contractors registered for GST/HST must charge the applicable rate (5% GST or HST at the applicable provincial rate) and remit it to the CRA. The contract should state clearly whether prices are quoted exclusive of GST/HST and who bears the tax cost, which is almost always the client.

Contracts typically include both for-cause termination (allowing termination where the other party materially breaches and fails to remedy within a notice period) and convenience termination (allowing either party to end the contract on a set notice period, typically 30 to 90 days). The agreement should address what happens to pre-paid amounts, outstanding work orders, and transition assistance obligations on termination.

The contract should specify whether the contractor may subcontract services and, if so, under what conditions. The contractor typically remains liable for the performance of subcontractors. Where OHS obligations are relevant, the contract should require subcontractors to hold appropriate insurance and comply with the same safety standards as the primary contractor, and should address how lien risks from unpaid subcontractors are managed.