A dependent contractor is Ontario common law’s middle category — someone who runs their own business but is economically dependent on one client relationship, and who keeps a termination protection employees have and true contractors don’t.
Treadstone Law sets out the category directly: “Ontario recognizes a middle category that many employers miss: the dependent contractor. A dependent contractor is legally distinct from both an employee and a true independent contractor.” Its hallmarks, as that source describes them, are workers who “have their own business structure (incorporated or sole proprietor),” “work for multiple clients — but derive the majority of their income from one business relationship,” and “have limited economic alternatives if that relationship ends.”
The consequence is the part firms miss: “Dependent contractors are entitled to reasonable notice on termination, similar to employees. If you end a long-standing contractor relationship without notice and a court finds the person was a dependent contractor, you may owe months of notice pay.” A signed contractor agreement that says “independent contractor” on its face does not settle the question — economic dependency does, and a court looks past the label to the actual working relationship.
An incorporated framing sub, Firm Co., has worked almost exclusively for one general contractor for four years; roughly 85% of its billed hours in that time trace to that single GC. The GC ends the relationship with two weeks’ notice, treating it as a routine vendor cancellation. If Firm Co. can show the economic-dependency pattern — one dominant client, no realistic ability to replace that revenue quickly — a court may find it was a dependent contractor rather than a true independent one, and award reasonable notice measured in months, not the two weeks the GC assumed it owed.
See also: Employee vs contractor: getting it right · T5018: reporting what you paid subs · Overtime rules on a construction crew.
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