Contractor accountant in Selkirk, Manitoba

The equipment and subcontractor questions here are shared with contractors everywhere; the national contractor accounting page covers what the CRA looks at on a construction file.

Building around Selkirk

The City of Selkirk points to recent residential growth — single-family homes, apartments and condos — and to expanding commercial and industrial areas. Work in the neighbouring rural municipalities of St. Andrews and St. Clements is handled the same way on the books. That growth keeps general contractors, framers, electricians, plumbers, HVAC, concrete, excavation and finishing trades busy, and many of them are small: an owner, a crew and a truck. The city also handles planning and building permits through its own planning division, so permit timing on a Selkirk job is a city matter, separate from anything on the tax side. What we do is make sure the money side keeps up with the work.

A short season, concentrated income

Manitoba’s building season is compressed, and that shapes the whole file. Revenue arrives in a narrow window while costs run year-round, which makes instalments easy to misjudge in both directions — overpaying through a slow winter, or arriving at the deadline short after a strong summer. Instalments calculated on a flat projection of last year’s tax do not reflect that shape. We set them against the real pattern and revisit them as the operation grows, and we put the corporate balance owing and the GST and RST returns on the same calendar so a good summer does not turn into a tight spring.

Subcontractors, T5018s and classification

A business whose main activity is construction and which pays subcontractors for construction services generally files T5018 information returns for those payments. The harder question sits behind it: whether a given worker is genuinely a subcontractor. The answer rests on how the work actually runs, not on how the invoice is addressed — who sets the hours, whose tools are on site, who stands to gain or lose, and whether someone else could be sent. A drywaller or electrician who only ever works your jobs, on your timetable, is where the risk sits. Reclassification brings CPP and EI liability with interest. T5018 reporting for construction and subcontractor versus employee go further.

Holdbacks and when revenue is actually earned

Owners keep back part of each progress payment until a job is signed off. The crew has finished that stage and the bill has gone out, yet the retained cash is still with the owner. Count it as income only when it arrives and the season looks smaller than the work done; ignore the cut-off and profit can run ahead of the money. With several sites open at once, the year-end cut-off is where most errors start. We list open jobs and the amounts retained on each at year-end, so the return records the season’s actual work.

RST: selling materials or installing them

Manitoba levies retail sales tax at 7% alongside the 5% GST, and for contractors the interaction is not intuitive. Contractors are commonly treated as the end user of materials they install into real property, which means paying RST on those materials rather than charging it to the customer. A contractor who also sells materials or equipment outright may be on the other side of that line for those sales. Materials bought from out of province without RST need self-assessing. Which side a job falls on depends on the contract, so confirm the treatment before you price the work. GST, meanwhile, applies to your sales in the normal way, and the GST you pay on materials and equipment comes back as input tax credits.

Equipment and the year-end purchase question

A loader, a work truck, a trailer, scaffolding or a new shop heater is deducted gradually through capital cost allowance at the rate for its class. The first-year claim is usually halved by the half-year rule; the Accelerated Investment Incentive lifts that limit on eligible property, which can make the opening deduction far larger. The asset must be available for use before year-end to be claimed at all. A big purchase just before year-end is worth planning, but only when that year has the profit to absorb the claim. The half-year rule explains the mechanics.

Taking on employees, and the remittance schedule that changes

Hiring is the biggest change in a trades file, and it is usually forced by a contract rather than planned. From the first pay run there are source deductions, a remittance schedule set by your average monthly withholding, WCB Manitoba coverage, Manitoba holiday pay rules for construction employees, records of employment when the season ends, and T4s at year-end. The remittance frequency is not fixed; it tightens as withholding grows. Penalties attach to the deduction rather than the tax, so a missed date costs far more than the amount involved. Payroll services in Selkirk covers the details.

WCB and subcontractor coverage

If you have workers, WCB Manitoba coverage generally applies, and the hiring contractor can be held responsible where a subcontractor is not covered. Confirm each sub’s standing before final payment and keep the confirmation with their invoice. Coverage for a director or owner of the corporation is treated separately from employee coverage, so check your own status rather than assuming it is included.

What lenders and bonding companies ask to see

Growth usually needs someone else’s comfort: a lender financing equipment, a bonding company backing a contract, or a general contractor running a vendor check. All three ask for financial statements, and for most owner-managed trades the appropriate form is a compilation engagement under CSRS 4200. It is not an audit and not a review, and the report says so. Where a counterparty specifically requires assurance, that is a different engagement and we will say so before you submit anything. Statements are far quicker to produce when the bookkeeping has been current all year. See financial statements in Selkirk.

What EverStone handles for you

Everything below, from one CPA, for a fee fixed at the start:

• Year-end statements and the corporate T2, or the T2125 for a sole proprietor
• Holdbacks and unfinished jobs sorted at the cut-off
• T5018 slips for construction payments to subcontractors
• Each sub’s status supported in writing
• GST and Manitoba RST registrations, returns and self-assessment
• CCA on vehicles and equipment, with purchase timing planned
• Payroll, remittances, WCB reporting and T4s
• Instalments planned around a short season

Fixed fees, fully online

Everything runs by email, video and secure upload, which fits a business run from a truck. Receipts can be photographed on site, bank feeds arrive automatically, and nothing needs dropping off. The fee is fixed and agreed before work starts. A 45-minute Advice Call on one question is $200 + GST. See what it costs.

Remote contractor accounting

EverStone is a fully virtual CPA firm serving Selkirk contractors online. There is no Selkirk office and no local staff. Meetings are by video, documents move by secure upload and e-signature, and no visit is required at any point.

How it works

1. Email enquiry. Tell us about the business, its structure and what is due. A fixed fee comes back in writing.
2. Authorize and upload. CRA access through My Business Account, bank feeds connected, prior returns uploaded.
3. Set the calendar. GST, RST, payroll, T5018 and T2 dates planned around the season.