Oil downturn leads to rise in underground contractors

Renovation companies are warning about a rise in so-called tailgate contractors, who offer a low price but lack experience and don't follow the rules.

Construction industry warns against using unlicensed companies

Licensed contractors are insured and offer a warranty. 'Tailgate' contractors leave a homeowner exposed. (Associated Press)

Originally published July 14.

Renovation companies are warning about a rise in so-called tailgate contractors, who offer a low price but lack experience and don't follow the rules.

The problem is particularly bad in Alberta in the wake of the oil industry downturn. Tens of thousands of oilpatch workers lost their jobs in the last two years, and some have turned to the construction industry to make money.

The concern is many of these new construction contractors or tradespeople are not qualified or lack the proper insurance and paperwork. 

Just educating yourself so people aren't going to try pulling the wool over your eyes- Rob Stevens, Smart Site

"In this downturn, they are doing whatever they can to make whatever money they can, which is sad," said Shannon Lenstra, who runs her own development company and represents the Calgary chapter of the Canadian Home Builders' Association. 

"It doesn't take someone with education to do this line of work, it takes someone with experience, has worked under someone else and has their ticket or is licensed," she said.

Lenstra's company, Kon-Strux Developments, has usually received four or five resumés a week, but that number has spiked since the oilpatch woes began and the company now gets up to 20 resumés a day. 

There are many potential problems with underground contractors. If they are not insured, the homeowner could be liable if someone suffers an injury while working at the property. In addition, the quality of work may suffer.

"It's actually huge in a number of ways," said Lenstra. "The ones that are sliding in to do the work don't have the same warranty, the same workmanship, so the homeowner is not necessarily getting what they are paying for, even if they are paying a lower price."  

How to find asbestos in your home and remove it.

CBC News: Calgary

5 years ago
Rob Stevens, with Smart Site, detected asbestos in this 1970s bungalow in NW Calgary 1:46

Risky business

Some trades are particularly risky if a contractor is not qualified. Asbestos abatement is a heavily regulated field, with Alberta companies required to follow numerous rules and regulations in a 150-page manual.

But not everyone follows the rules.
Smart Site and other renovation companies are concerned about a rise in underground contractors in Calgary who are cutting corners. (Kyle Bakx/CBC)

"I call them Wizard of Oz contractors because up front they have the paperwork, it looks like, and they look good, but you get into it and they are cutting so many corners," said Rob Stevens, with Calgary-based asbestos removal company Smart Site.

The cutting of corners includes improper ventilation and throwing hazardous materials straight into a dumpster instead of bagging them. With asbestos, there is a risk contractors could expose themselves, other tradespeople and the homeowners to airborne fibres, which are known to cause cancer.
Some asbestos-removal contractors aren't properly disposing of materials, according to Rob Stevens. Before being thrown into a dumpster, the building materials should be bagged so the asbestos isn't released into the air. (Submitted by Rob Stevens)

"Asbestos abatement is a pretty specialized trade. There's a lot of things that go into it — the equipment, the insurance, the expertise, dealing with all the paperwork with the government, things like that," said Stevens.

Considering the health risk, he calls it "disturbing" to see so many unqualified contractors. Government regulators don't have the resources to inspect all the job sites, Stevens said, so it's largely up to homeowners to hire the right people for the job.

"Just educating yourself, so people aren't going to try pulling the wool over your eyes," he said.

Protect yourself

There are many ways to vet a contractor before hiring one to renovate your bathroom or stucco your house. No matter the size of the project, it's worth researching which contractor is best for the job.

"It's like buying a car. You want to know exactly what you are buying — a Kia, Honda, Lexus, Porsche, or Ferrari — and you want to know what options that go into the car. It's the same as with a house," said Lenstra.

Here's a checklist to follow before making your decision:

  • Check whether a company has a business licence.
  • Contact the company's references.
  • Call any consultants they have worked for.
  • See if Occupational Health and Safety has any records about the company.
  • Obtain an estimate, in writing, from three or four contractors.
  • Have the contractor sign a written contract that includes details such as completion date, scope of the project and the total cost.

In addition, the City of Calgary has a database of licensed contractors which can be accessed through or over the phone by calling 403- 268-5521.

Contractors can offer a two-year warranty and insurance if they are a part of the Canadian Home Builders' Association's RenoMark program, which was established to guard against illegitimate operators.

A renovation warranty is also offered by the Alberta New Home Warranty Program.


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