Ontario Construction News staff writer
A new study from the Canadian Centre for Economic Analysis (CANCEA) reaffirms the benefits of requiring surety bonds on publicly funded construction projects across Canada.
Released on May 27, 2025, the report concludes that mandatory surety bonding not only protects taxpayers, small businesses and workers, but also provides measurable value to the broader economy—safeguarding GDP, supporting job creation, and allowing governments to recover a significant portion of bonding costs through increased tax revenues.
“Surety bonds combine financial assurance with project accountability, ensuring work is finished, workers are paid, and taxpayer dollars deliver full value—no matter the economic climate,” said CANCEA president and CEO Paul Smetanin.
The report’s key findings include:
- Risk Mitigation: Non-bonded contractors are 10 times more likely to become insolvent than bonded firms, highlighting the effectiveness of the surety industry’s due diligence processes.
- GDP Protection: In unstable economic conditions, surety bonds help protect $27.24 million in gross domestic product for every $1 million paid in bonding premiums.
- Job Creation: For each $1 million in premiums, bonds help protect 29.4 full-time jobs in stable markets—and up to 207.6 jobs during periods of economic volatility.
- Revenue Recovery: Depending on economic conditions, governments can recover between $0.43 and $3.02 of every $1 spent on bonding premiums through tax revenues generated by timely project completion.
“In volatile times, governments actually become net financial beneficiaries of surety bonding,” Smetanin noted.
The study was commissioned by the Surety Association of Canada (SAC), whose president, Steve Ness, said the findings offer clear and quantifiable evidence in favour of mandatory bonding for public projects.
“The CANCEA report provides empirical evidence that confirms the value of surety bond protection to governments and other key industry stakeholders,” Ness said. “It clearly demonstrates that all public work should be protected by performance and payment bonds.”
In addition to the national data, CANCEA has also prepared region-specific analyses for Atlantic Canada, Québec, Ontario, the Prairies, Alberta and British Columbia. These regional reports are available on the SAC website at: suretycanada.com.
