Starting a Snow Removal Business in Quebec: Permits, Contracts and Incorporation

You have a pickup truck, a plow, and a few neighbours already asking you to clear their driveway this winter? That's often how a snow removal business gets started in Quebec. But between the city permit, the contracts with your clients and the question of whether to incorporate, there are a few steps to take care of before the first storm. Here's what you need to know to start off on the right foot.

Self-employed or corporation: which structure should you choose?

You can start out as a self-employed worker. However, as soon as you operate under a name other than your own, such as “Tremblay Snow Removal,” you must register your business with the Registraire des entreprises.

The real question is risk. In snow removal, a scraped fence, a scratched car or a fall on an icy driveway can quickly become expensive. As a self-employed worker, you and your business are one and the same: your personal assets are exposed. A corporation creates a separate entity, which puts a barrier between your personal assets and the business's debts. It doesn't replace good insurance, but it adds to your protection.

Incorporation also becomes worthwhile as your income grows, thanks to favourable tax treatment of profits kept in the business. And many commercial clients, such as property managers and shopping centres, prefer to award their contracts to an incorporated business. With Lexstart, you can incorporate your business online in about 5 business days, just in time for the season.

Snow removal permits: rules that vary from city to city

This is the step many people discover too late: most large cities require a permit for private snow removal contractors.

In Montreal, you need a permit for each vehicle you use, valid from November 1 to April 15 and renewable every year. You must also install an identification post on every property you clear. In Laval, contractors must apply for registration with the Public Works department every season. Other cities, such as Repentigny, issue a sticker for each vehicle and require a marker showing your name and phone number.

Since the rules vary, check them in every municipality where you have clients. And keep in mind that property owners are often required to make sure their snow removal contractor holds a valid permit: one more reason to be compliant.

Door-to-door sales: watch out for OPC rules

Planning to find clients by knocking on doors? In Quebec, selling your services anywhere other than at your place of business is considered itinerant selling. You then need a permit from the Office de la protection du consommateur, and your contracts must be in writing and follow specific rules, including a 10-day period during which the client can cancel at no cost.

If the client calls or writes to you, the situation is different. A flyer in the mailbox or a Facebook page that gets the phone ringing can make your life easier.

Snow removal contracts: clear terms to avoid disputes

Most snow removal disputes come from a contract that's too vague. How many centimetres trigger a visit? By what time must the driveway be cleared? Are snowbank blowing and de-icing included? Who pays if something gets damaged? A good contract answers all of these questions, along with the length of the season and the payment terms.

With commercial clients or subcontractors, a service agreement template reviewed by lawyers gives you a solid foundation. With individual homeowners, keep in mind that Quebec's Consumer Protection Act adds its own requirements.

GST and QST: the seasonality trap

A snow removal business earns most of its revenue in just a few months. Yet the $30,000 threshold that makes GST and QST registration mandatory also applies to a single calendar quarter. With a solid client base and prepaid contracts, you could cross it between December and February without realizing it. If that happens, you must start collecting taxes on the very sale that puts you over the threshold.

If you hire drivers for the season, also plan to register for source deductions with Revenu Québec and with the CNESST.

Insurance and vehicles: leave nothing to chance

Civil liability insurance is a must in this line of work. Also remember to notify your auto insurer: a vehicle used for business purposes must be declared as such, or you may not be covered when you need it most.

Frequently asked questions

Do you need a permit to do snow removal in Quebec?

It depends on the city. Montreal, Laval and Repentigny, among others, require private snow removal contractors to obtain a permit or register, often every season. Check the rules in each municipality where you have clients.

Do you need to incorporate to run a snow removal business?

It's not mandatory: you can start out as a self-employed worker. Incorporation does become worthwhile, though, to protect your personal assets in case of a claim, and as your income grows.

Do you have to charge GST and QST on a snow removal contract?

Only if you are registered for GST and QST. Registration becomes mandatory once your taxable sales exceed $30,000 in a single calendar quarter or over four consecutive quarters.

What should a snow removal contract include?

At a minimum: how many centimetres trigger a visit, the time by which the driveway must be cleared, the services included such as snowbank blowing or de-icing, liability in case of damage, the length of the season and the payment terms.

In summary

Starting a snow removal business means first choosing the right structure, getting a permit in every city you serve and signing clear contracts. It also means keeping an eye on your revenue so you don't cross the GST and QST threshold without knowing it.

Ready to get started this winter? Lexstart supports you from incorporation to the annual update, so you can focus on the snow.

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