What is licence-contracting?
The Electrical Safety Authority (ESA), the regulator for electrical safety in the Canadian province of Ontario, is warning of a rise in so-called “licence-contracting,” literally the practice of “contracting out a licence.” Under this scheme, a licence holder lends their electrical licence to someone who holds no licence of their own, making uncertified work appear to be properly licensed.
The warning follows a recent case against Aya Electric Inc. and its owner, Razi Khan, who together were fined $122,000 Canadian dollars under the Electricity Act, 1998; Khan also received a term of probation. According to the ESA, Khan applied for permits for residential electrical work in the Ontario municipalities of Clarington, Brantford, Milton and Markham without carrying out or supervising that work himself. Inspectors reportedly uncovered the case after work at one address could not be traced back to the person who had applied for the permit.
Emily Larose, the ESA’s Vice-President of Regulatory Affairs and General Counsel, told the trade publication Canadian Occupational Safety that she sees the trend partly as a side effect of consumer education about the importance of hiring a licensed contractor. To track down uncertified operators, the regulator works with, among others, the classified-ads site Kijiji, and the issue was also discussed on a panel at the Canadian Safety Summit.
What safety risks does this create?
According to the ESA, licence-contracting undermines the entire oversight system: electricians who work under someone else’s licence often have no demonstrable training and no insurance, and their work escapes inspection and compliance checks. Certified contractors who do follow the rules face unfair competition as a result.
Figures from Statistics Canada showed that in 2021 Ontario had the highest level of informal, or “underground,” economic activity of any Canadian province; nationally, residential construction was a major contributor to that figure. A survey by research firm Léger, commissioned by the ESA, found that 40 percent of Ontario homeowners had not checked whether the required permits had been obtained for their projects; more recent figures were not immediately available, according to the trade publication. The ESA advises homeowners to ask a contractor for their seven-digit ECRA/ESA licence number before work begins and to verify it through the regulator’s online search tool. General contractors who subcontract electrical work must also verify that the electrician actually working on site holds a valid licence of their own.
Context
The case fits a pattern of ESA enforcement against unlicensed electrical work in Ontario. In July 2024, the regulator announced that Serge Yasmine, an unlicensed electrician from Ottawa, and his company, BMX Renovations Inc., were together fined $32,500 Canadian dollars, plus a victim surcharge of $8,125 Canadian dollars and two years of probation. They pleaded guilty to, among other things, operating an electrical business without a licence on three separate occasions in connection with the installation of in-ground swimming pools at three locations, where the pool equipment had not been properly grounded. That case shows that the ESA had already taken action against unlicensed electrical work before, separate from the licence-contracting scheme.
Source: Licence-contracting schemes rising, warns Electrical Safety Authority, October 31, 2026
Also researched: Electrical Safety Authority, press release “Electrical Safety Authority investigation results in $32,500 total fines for unlicensed Ottawa electrician and his company,” July 17, 2024.
