What Is a General Contractor (GC)? Cost Structure, How to Hire, and Contract Tips in BC

What Does a General Contractor Actually Do?

If you’re planning to build or renovate in Canada, a General Contractor (GC) is the person who runs the show. More than just a tradesperson with a hammer, a GC manages the entire project — planning, scheduling, hiring subcontractors, sourcing materials, pulling permits, and taking overall responsibility for the result.

Think of a GC as the orchestra conductor of a construction project. They coordinate specialists in electrical, plumbing, framing, drywall, and finishing trades (subcontractors), keep the schedule moving, handle unexpected problems on site, and ensure the work meets local building codes. The homeowner or building owner deals primarily with the GC — not with each individual trade.

GC Cost Structure: Is 10–20% Markup Too Much?

This is the question most people ask. Many assume GC markup is around 5–8%, but in residential and renovation work, 10–20% is the standard range. Here’s why.

Project scale drives the difference. On large commercial projects where the contract value is in the millions, a lower markup rate still generates enough to cover operations. On residential renovations — smaller scope, more variables, tighter margins — the rate needs to be higher for the business to be sustainable.

More importantly, GC markup is not pure profit. Embedded within it are overhead costs (office rent, vehicles, licensing fees), insurance premiums (liability insurance is more expensive than most people realize), and contingency — the buffer for surprises like discovering mold behind a wall or material prices spiking mid-project. Once you account for all of this, the actual net profit is considerably less than the markup percentage suggests.

GC vs. Owner-Builder: Is DIY Management Actually Cheaper?

Some homeowners skip the GC and manage subcontractors directly as an Owner-Builder, hoping to save on markup. In practice, it’s more complicated than it sounds.

When you act as your own GC, you’re responsible for negotiating individual contracts with every trade, coordinating schedules, and sourcing materials. If one subcontractor runs late, the next one’s schedule cascades, and the cost of that delay comes out of your pocket. You also need to pull and manage all the permits yourself — in BC, that means separate permits for building, electrical, plumbing, mechanical, and more, each with their own inspection requirements.

If you have significant construction experience and plenty of time, Owner-Builder can work. If you don’t, the GC’s markup is really a risk management and project management fee — and it’s often worth it.

How to Find a Good GC in BC

In BC, the three things that matter most when vetting a GC are licence, insurance, and references.

Any GC taking on a contract over $10,000 in BC is required to hold a Residential Builder Licence from BC Housing. You can verify this for free on the BC Housing website. Hiring an unlicensed contractor significantly reduces your legal protection if something goes wrong.

On the insurance side, ask for proof of General Liability Insurance (covering property damage and personal injury during the project) and confirmation of WorkSafeBC coverage for their workers. Without these, you as the homeowner could be held liable for accidents on your property.

For references, ask for contact information for two or three previous clients and actually call them. Ask specifically about how the GC handled deficiencies after completion, whether they met their schedule commitments, and how communication was throughout the project. This gives you a much clearer picture than online reviews alone.

What to Check in a Quote

When you receive a quote, don’t just look at the total. The Scope of Work section is critical — it should clearly define exactly what is and isn’t included. Vague scope descriptions lead to disputes about who pays for unexpected items.

Pay close attention to Allowance line items. An entry like “Tile materials — $2,000 allowance” means if your actual tile selection costs more than $2,000, the difference is added to your final bill. Quotes that look competitive can inflate significantly once allowances are exceeded. A detailed breakdown of what’s fixed-price versus what’s an allowance is essential before signing.

The payment schedule also matters. Be cautious of any GC requesting full payment upfront before work begins. A reasonable structure typically looks like 10–20% at contract signing, progress payments tied to completion milestones, and a final holdback amount released after satisfactory completion.

Contract Essentials and BC Warranty Obligations

Always get the contract in writing. Verbal agreements offer very little legal protection in a dispute. The written contract should cover scope of work, total price, payment terms, project schedule, and warranty provisions.

In BC, new home construction is governed by the Homeowner Protection Act, which mandates statutory warranties: one year for materials and labour, two years for the building envelope (waterproofing, insulation), and ten years for structural defects. When hiring a GC for new construction, confirm that their warranty coverage aligns with these minimums and that it’s spelled out in the contract.

GC vs. Sub-contractor vs. Project Manager: What’s the Difference?

One of the most common points of confusion for first-time clients is deciding who to hire. Here’s a side-by-side comparison of the three roles.

Aspect	General Contractor (GC)	Sub-contractor	Project Manager (PM)
Core role	Oversees and is responsible for the entire project	Performs a specific trade (electrical, plumbing, etc.)	Manages schedule, budget, quality, and coordination
Who they contract with	Directly with the owner	Usually with the GC	With the owner (coordinates instead of a GC)
Cost structure	Project cost + markup (10–20%)	Quote for their trade only	5–15% of total project cost as a management fee
Scope of responsibility	Completion and defects overall	Limited to their trade	Management (not the actual construction)
Best when	You want a single turnkey point of contact	You’re contracting each trade yourself	You hire trades directly but need coordination

For a smaller renovation, handing the whole job to one GC on a turnkey basis usually means less hassle. If you want to save money by hiring trades directly, contracting subs individually while using a PM for coordination can work in your favour.

Questions to Ask a GC Before You Sign

Don’t just compare quotes — ask the questions below. How specific the answers are tells you a lot about whether a GC is trustworthy.

Can you show proof of business registration, liability insurance, and WorkSafe coverage (including expiry dates)?
Do you have recent projects of a similar size and references I can contact?
What is included in the quote, and what is excluded (allowances or items billed separately)?
How are change orders priced and approved once work has started?
Is the payment schedule based on progress milestones or fixed dates?
What is the estimated timeline, and are there terms for delays or penalties?
What is the warranty period, and how are post-completion issues handled?
Who applies for permits, and who covers the cost?

If a contractor can’t answer these clearly in writing — or is evasive about one item in particular — it’s worth slowing down before you commit.

BC construction guides: Canadian Construction Site Terminology Guide · BC Builders Lien Act: Holdback & Substantial Completion · Types of Construction Contracts in Canada (BC)