A Guide for Indigenous Independent Contractors

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Steps to Become an Independent Contractor

Becoming an independent contractor is an exciting way to build a business around your skills and expertise. Whether you’re just starting out or looking to formalize what you’re already doing, this guide walks you through the essentials: choosing your structure, understanding your responsibilities, and accessing resources, including supports designed specifically for Indigenous entrepreneurs.

What Is an Independent Contractor?

An independent contractor is someone who provides services to another person or organization under the terms of a contract. Unlike employees, independent contractors:

  • Run their own business.
  • Pay their own expenses.
  • Do not receive employee benefits.
  • Decide how and when the work gets done (as long as the contract is fulfilled).

You may hear terms like consultant, freelancer, or self-employed — these often fall under independent contracting.

Why Choose Independent Contracting?

Independent contracting offers flexibility and independence, but also requires you to handle business responsibilities yourself. Common reasons people choose this path include:

  • Greater control over your work and schedule.
  • Opportunity to work with multiple clients.
  • Ability to grow into a larger business.
  • Potential tax advantages.

However, contractors also take on the risks: inconsistent income, no paid benefits, and full responsibility for taxes, insurance, and compliance.

Employee vs. Independent Contractor

It’s important to understand how an independent contractor differs from an employee. The table below summarizes some of the key differences.

EmployeesIndependent Contractors
Work under direction/supervisionControl how and when work is done
Paid salary or wagesPaid per project, contract, or invoice
Employer deducts taxes, CPP, EIResponsible for own taxes, CPP contributions, and GST
Receive employee benefits (vacation, health, etc.)Provide own benefits and insurance
Protected by employment standardsGoverned by contract terms

If you’re unsure about your status, you can use the CRA Employee or Self-Employed Guide or seek legal advice.

Tip: Business Link advisors can help you decide which structure best fits your goals.

Do You Need a Business Plan?

Yes! A business plan organizes your ideas and goals and maps out, step by step, how you’ll achieve them. It’s useful to share with partners and advisors and is usually required for financing.

Your plan should be a professional document with these sections:

  1. Cover Page: Title, business name, owner(s) name(s), and date.
  2. Executive Summary: Summary of the plan, goals and objectives, or purpose of the plan.
  3. Company Description: Background and history, mission and vision, detailed product/service descriptions, and competitive strengths and weaknesses.
  4. Marketing: Market analysis (industry, customer profile, product/service strategies, competitive analysis, SWOT), plus a marketing plan (objectives, promotional tactics, location/distribution, pricing).
  5. Operations: Production/service delivery processes, land and building needs, equipment needs, insurance, suppliers, government regulations, and bank information.
  6. Human Resources: Staffing needs, key managers/employees, professional resource team (e.g., accountant, lawyer, advisors), and legal structure.
  7. Finance: Current and 3-year funding needs, use/source of funds, 3-year financial projections, financial statements, and break-even analysis.
  8. Appendices: Resumes, product photos, contracts, and client testimonials.

Tip: Refer to Business Link’s Indigenous Business Planning Workbook for more on writing your plan.

Can You Afford to Start and Run Your Business?

Know how much capital you’ll need to start and operate. Ask yourself:

  • How much money is required to start?
  • How much of your own money can you invest?
  • Do you already own any of the equipment/tools needed (assets)?
  • Do you have a strong personal credit rating or a line of credit available?

If you apply for funding, lenders review your credit history (credit score) to assess repayment likelihood. A higher score improves approval chances; a lower score can limit access or raise interest rates.

Financing Options

Personal Money may include: savings, RRSPs, personal line of credit, personal overdraft, friends, and family.

Grants may be available from federal/provincial organizations and economic development agencies. If you live on-reserve, you may be eligible for a grant directly from your First Nation—ask your Economic Development Officer or Band Manager.

Financing can include: investors, loans, commercial banks, credit unions, leasing companies, and specialized lenders.

Funding Opportunities:

If you are looking for funding for your business start-up, consider the following:

Setting up your Business

1. Naming and Registering Your Business

Choosing the right name is one of your first big steps as an independent contractor. Your business name is how you’ll present yourself to clients, so it needs to be professional, memorable, and legally compliant.

In Alberta, you can operate under your own legal name or register a business name (sometimes called a trade name). If you plan to use anything other than your personal name, you must register it with the Government of Alberta. Registration ensures that clients know who they are dealing with, and it makes things easier when you’re invoicing or setting up business bank accounts.

Tips to keep in mind when naming your business:

  • Choose something that reflects your services.
  • Check that your name isn’t already taken (search the NUANS database for incorporated names, or the Alberta Corporate Registry for trade names).
  • Keep it simple and easy to spell.

Registering your name is a fairly quick process. In Alberta, you can do it through a local registry office.

2. Choosing a Business Structure

Next, you’ll need to decide what type of legal structure makes sense for your work. Each option comes with different tax responsibilities, liability considerations, and setup requirements.

The most common structures for independent contractors include:

  • Sole proprietorship:
    The simplest option. You and your business are legally the same, which means you’re personally responsible for debts and liabilities. Income is reported on your personal tax return.
  • Partnership:
    If you’re contracting with a partner, you can form a partnership where both of you share profits, responsibilities, and liabilities. A partnership agreement is strongly recommended.
  • Corporation:
    This creates a separate legal entity. Incorporating can reduce personal liability, may offer tax advantages, and can sometimes make you more attractive to clients (especially larger companies). However, it involves more paperwork, regulations, and costs.

Your choice depends on your comfort with risk, your tax situation, and how you plan to grow your contracting work. Read a more thorough breakdown of each option in our resource, Choosing a Business Structure.

3. Business Number and Taxes

Once your business is registered, you may need a Business Number (BN) from the Canada Revenue Agency (CRA). This is like your business’ ID for federal tax purposes.

You’ll definitely need a BN if you:

  • Incorporate your business
  • Collect GST/HST
  • Have employees
  • Need to import or export goods

If you’re a sole proprietor making under $30,000 annually, you may not need to register for GST/HST right away — but once you cross that threshold, it becomes mandatory.

Direct Tax (Income Tax)

If your business is a sole proprietorship or a partnership, you will pay taxes by reporting income on your personal income tax and benefit return (T1 General Income Tax and Benefit Return).

If your business is a corporation (separate legal entity), you will file a separate income tax return and your business will potentially have to pay corporate income tax (T2 Corporation Income Tax Return). As an employee and/or director of the corporation, you can earn money from the salary or wages you earn or from the dividends (profits) you collect. You will then have to file a personal income tax return to claim your own income.

If your business is incorporated, any revenue earned by your company may be subject to corporate tax. If you are a sole proprietor or collect a salary as an employee of your corporation (not as a shareholder), the following, may apply:

If you live on-reserve and conduct 90% or more of your business on-reserve, any income earned through self-employment may be exempt from tax.

f you live on-reserve and conduct less than 90% of your business on-reserve, (that is, you split your work between on and off-reserve), any business done off- reserve may be subject to tax. Any work done on a reserve may be exempt from tax.

Indirect Tax (Sales Tax)

Goods and Services Tax (GST) is taxed on most goods and services in Canada at a rate of 5%. To collect GST from your customers, you must register for a GST account with CRA and have a GST number. Any business with annual sales greater than $30,000 must register for a GST number. You may want to register for a GST number even if your annual sales are less than $30,000 per year to recover GST you may have paid out of your business to vendors. Once you get a GST number you are required to start collecting GST even if you have not earned $30,000.

If your business is on-reserve and is incorporated, any goods purchased are subject to GST and/or any applicable provincial sales tax.

For any goods you sell on-reserve (to Treaty Status), you do not need to collect GST, but you must document applicable status details such as band/family name/number for every sale. GST must be charged to all non-status customers, on or off-reserve.

Other tax considerations for contractors:

  • You may be required to pay into the Canada Pension Plan (CPP).
  • You’ll likely need to make quarterly instalment payments to the CRA since taxes won’t be deducted automatically.
  • Keep receipts for all your business expenses — many can be written off (like software, a home office, or travel for client meetings).
  • Consider hiring an accountant familiar with independent contractors.

4. Business Licences and Permits

Depending on the type of work you do, you may need additional licences or permits to operate legally.

Examples include:

  • A municipal business licence if your city requires one.
  • Professional licences or certifications for certain regulated fields (like engineering, accounting, or health-related services).
  • Industry-specific permits (for example, if you’re handling hazardous materials).

Always check with your municipality and professional association to confirm what applies to your field.

5. Insurance

Insurance is essential for protecting yourself and your business. Even if you’re operating solo, a single mistake or accident could lead to significant costs.

Common insurance types for independent contractors include:

  • General liability insurance: Protects against claims of property damage or injury.
  • Professional liability (errors and omissions) insurance: Covers mistakes or negligence in the services you provide.
  • Commercial property insurance: If you have an office or equipment.
  • Health and disability insurance: Since you won’t have an employer’s benefits package, it’s wise to protect your income and wellbeing.
  • Worker’s Compensation Board (WCB): Some industries require WCB coverage.

Insurance requirements can vary by industry, and sometimes clients will insist you have certain coverage before they hire you.

6. Workplace Safety Requirements

Even if you’re working solo, workplace safety still applies. In Alberta, independent contractors are responsible for their own health and safety and may also have obligations to protect others they work with or hire. This means you’ll want to familiarize yourself with Alberta’s Occupational Health and Safety (OHS) legislation.

A few key things to know:

  • Employer vs. Contractor Roles: If you’re truly independent (no employees, just you), you’re responsible for your own safety practices. But if you take on workers or subcontractors, you’re legally considered an “employer” under OHS rules and must meet additional requirements, like hazard assessments, training, and proper safety equipment.
  • Workers’ Compensation Coverage: While not mandatory for all contractors, coverage through the Workers’ Compensation Board (WCB Alberta) can protect you in case of a workplace injury. Many clients actually require contractors to have WCB coverage before they’ll sign a contract.
  • Site-Specific Rules: If you’re working on a client’s site — for example, in construction, oil and gas, or even a corporate office — you’ll likely need to follow their safety protocols in addition to provincial laws.
  • Training and Compliance: Basic certifications (like WHMIS for handling hazardous materials, or first aid/CPR) may be mandatory depending on your industry. Even if they’re not, they help you stay competitive and credible.

Bottom line: As an independent contractor, safety isn’t just about protecting yourself, it’s also about showing potential clients you’re professional and compliant with Alberta regulations.

Managing Your Business

Setting Up a Business Bank Account

Opening a business bank account is one of the first things you should do when you start your business. A business bank account will keep your business and personal finances separate.

If you’ve started a corporation, a separate bank account is required. It’s a good idea to open your business bank account at a bank that is different than where you have your personal account to prove you made the effort to avoid the mixing of finances. Also, if your business ever gets into financial trouble and your business bank account is frozen, you are less likely to have your personal bank account affected. If your personal finances are at the same bank as your business, you’re more likely to have both accounts

frozen while an investigation takes place.

If you’ve started a sole proprietorship a separate bank account is not required, but it is recommended to avoid confusion with your personal financial transactions.

Managing Cash Flow

One of the biggest challenges independent contractors face is the unpredictable nature of income. Unlike traditional employees who receive a steady paycheque, contractors may experience peaks and valleys depending on the season, industry demand, or payment timelines. That’s why actively managing your cash flow is essential to keeping your business sustainable.

A few strategies to consider:

  • Set aside money for taxes. Since taxes aren’t automatically deducted from your earnings, you’ll need to budget for them yourself. A common rule of thumb is to save 25–30% of each payment you receive.
  • Plan for slower months. Create a buffer fund so you can cover business and personal expenses when work is quieter. This is especially important if your industry has seasonal fluctuations.
  • Invoice promptly and clearly. The sooner your clients receive your invoice (with clear terms), the sooner you’ll get paid. Late or unclear invoices often result in delayed payments.
  • Track your income and expenses. Use accounting software or a simple spreadsheet to monitor what’s coming in and what’s going out. This helps you spot cash flow gaps before they become an issue.
  • Consider deposits or retainers. For larger projects, asking for partial payment up front can help stabilize your cash flow and protect you from non-payment.

By treating your cash flow like the lifeline of your business, you’ll be better prepared to handle the ups and downs that come with contracting.

Hiring Staff

It is often difficult for a small business owner to decide when to hire an employee(s). The need for employees comes at different times for every business and depends on your industry, location and skills as a business owner. In addition, hiring employees requires you to maintain adequate cash flow so that you have enough money to pay your employees on time. Business owners need to carefully consider whether hiring an employee(s) is affordable.

Subcontractors

When thinking of hiring help, you should consider the type of work you need done. Is the work short-term or a one-time occurrence? If so, you should consider hiring a subcontractor. Many services can be outsourced temporarily or for specific expertise, such as bookkeeping, web-site design, or marketing. Hiring a subcontractor can save you money and time.

Employees

If you require long term or permanent help, you may want to proceed with hiring an employee. When hiring an employee you will need to:


If your business is located on-reserve, your employees will be subject to Alberta’s Employment Standards Code. However, there are exceptions depending on the type of business you have. Consult a business lawyer or Human Resource (HR) professional to understand the employment rules and regulations that apply to you.

Growing Your Business


Finding business opportunities in your industry can be difficult if you don’t know where to look. Luckily, there are strategies that you can implement to help you successfully grow your business.

Procurement

Procurement is the purchasing of goods or services from an external source (contractor). The goods or services must meet the needs of the hiring company in terms of quality, quantity, time, and location, and are purchased at the best possible price. In summary, procurement is the process by which hiring companies acquire goods and services via a bidding process.

When a company announces a bidding opportunity, they may request an independent contractor to submit a proposal. Popular terms used to reference bid submission requirements include:

RFP: Request for Proposal

RFQ: Request for Qualifications

RFB: Request for Bid

ITT: Invitation to Tender

Be Visible and Build Relationships

By getting involved in your industry, you can build strong relationships and stay well-informed of upcoming contract opportunities. Consider the following ways to become known as a local supplier in your industry and to be considered for contract opportunities:

  • Contact hiring company purchasing specialists directly.
    • If you provide business-to- business services, reach out to the companies that you are interested in working with and ask to speak to a purchasing (procurement) specialist or the local Field Supervisor. Ask if the company has an Indigenous Liaison Officer who you can talk to. Many corporations are committed to using more Indigenous-owned businesses, and can tell you what you need to do in order to be considered a contractor.
  • Register with business databases/directories.
    • Research business directories or databases for you to register your company. Registering on these types of listings will make your business more visible to anyone looking to find a contractor. For example, Canada’s Aboriginal Business Directory (www.ic.gc.ca) is a directory that is available to Industry and the federal procurement community to identify Aboriginal-owned businesses. See page 43 for a list of helpful websites.
  • Join an industry association.
    • Industry associations are great sources of information such as market research data and tender (RFP) listings and can provide excellent networking opportunities through workshops, conferences, and trade shows where you can showcase your business and meet other people.

Get Your Company Pre-Qualified

Many hiring companies will require you to become a ‘pre-qualified’ supplier. Becoming pre- qualified means your business meets all of their regulations such as safety, bonding, insurance, and resource and equipment requirements.

Some companies may require you to register with industry-specific contractor/supplier management databases. The purpose of these databases is to help hiring companies create lists of ‘preferred vendors/suppliers/contractors’ for specific types of work (i.e. Water Trucks, Reclamation, Emergency Services, Catering, etc.).

Once you have met all of the pre-qualification criteria, you are added to a ‘preferred list’. Being on a preferred list means that when contracts become available (for the type of work your company does), you will be asked to bid for the work.

The advantage of pre-qualifying your company and getting on a contractor/supplier management database, is that you will then only compete against a handful of contractors which will improve your chances for success. The most popular Supplier/Vendor Management databases in Alberta are:

ISNetworld
ComplyWorks
Avetta

Part of getting your business ready for pre-qualification is getting your safety program recognized by external experts. The following sections introduce you to Partners in Injury Reduction, Certifying Partners, and the Small Employer Certificate of Recognition (SECOR).

Partnerships in Injury Reduction (PIR)

The Partnerships in Injury Reduction (PIR) program supports workplace health and safety by working with safety associations, industry groups, educational institutions, and labour organizations.

Partners can be associations, corporations, or organizations that sign a Memorandum of Understanding (MOU) with the Alberta government. This agreement outlines the commitments of both parties, with Partners taking a leadership role in promoting health and safety. Currently, about 70 organizations in Alberta are Partners in PIR.

Small Employer Certificate of Recognition (SECOR)

An employer that develops a health and safety program that meets their industry’s standards can apply for a Small Employer Certificate of Recognition (SECOR). The SECOR is for businesses with up to 10 employees. If your business has more than 10 employees, you would qualify to apply for the standard Certificate of Recognition (COR).

To get a SECOR, you must conduct a self-assessment of your health and safety management system, then have the assessment reviewed by your Certifying Partner.

Obtaining SECOR status is beneficial because:

  • You will show existing and future employees that you care about their safety.
  • You will have better leverage when bidding on tenders/contracts.
  • You may qualify for a discount on your WCB premiums.

Finding Contract Opportunities


In the contracting world, opportunities to bid on projects are often called “open tenders.” These are formal invitations for qualified suppliers or contractors to provide products or services, either for a specific project or on an ongoing basis.

You can explore open tender opportunities through several key platforms:

  • MERX – A Canadian electronic tendering service featuring public tenders, private tenders, and private-sector construction opportunities.
  • CanadaBuys – The Government of Canada’s official tendering service for public works and government services.
  • Alberta Purchasing Connection (APC) – The Province of Alberta’s official system for posting and sharing purchasing opportunities from the Alberta public sector.
  • BidsCanada – A service that searches multiple websites for RFP (Request for Proposal) and RFQ (Request for Quotation) opportunities and consolidates them into one easy-to-access location.

Writing Contracts and Agreements

As an independent contractor, contracts are your best friend. They protect both you and your client by clearly outlining expectations.

A solid contract should cover:

  • Scope of work (what’s included — and what’s not).
  • Payment terms (how much, when, and how you’ll be paid).
  • Timelines and deadlines.
  • Ownership of work (who owns the deliverables after you’re paid).
  • Confidentiality agreements, if needed.
  • Termination clauses (what happens if either party ends the agreement).

Never rely on a handshake deal. Written contracts reduce misunderstandings and give you a legal leg to stand on if something goes wrong.

Invoicing and Getting Paid

Cash flow is the lifeblood of your contracting business, and invoices are how you make it happen.

Best practices for invoicing:

  • Send invoices promptly after completing work.
  • Include all necessary details: your business name, client name, date, description of work, payment terms, and accepted payment methods.
  • Use invoicing software or apps to keep things organized (many also integrate with accounting tools).
  • Set clear payment terms — 30 days is standard, but you can adjust.

Don’t be afraid to follow up if a client is late on payment. Professional, polite reminders go a long way.

Indigenous Supports for Independent Contractors

Business Link is proud to offer dedicated Indigenous Services to support Indigenous entrepreneurs and contractors across Alberta. These services include:

Indigenous-Specific Resources

If you’re an Indigenous contractor, we encourage you to connect with Business Link’s Indigenous Business Strategists for tailored guidance.

How Business Link Can Help

Business Link is here to support you at every stage of your journey:

  • Free one-on-one advice with business advisors.
  • Indigenous Services team with specialized supports.
  • Resources and guides, including business planning tools.
  • Market research to help you find opportunities.
Book a Free Meeting with a Business Link Strategist

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