How much does a bid bond cost in Canada?
Bid bonds are the entry ticket to most public-sector construction tenders — here is what they actually cost, who sets the amount, and the two ways sureties charge for them.
What a bid bond is (and why the amount is set by the buyer)
Under the federal Government Contracts Regulations (SOR/87-402), a bid bond is "a bond given by a person to guarantee entry into a contract if the contract is awarded to that person," and bid security means a bid bond or a security deposit given to guarantee that entry. The face value is set by the buyer in the tender documents. The standard Canadian form is CCDC 220 – 2002 from the Canadian Construction Documents Committee, which established the 10%-of-bid-price standard; most requirements sit at 10% but can range from 5% to 15% of the tendered amount.
The two ways bid bonds are priced
Canadian sureties price bid bonds one of two ways. Standalone premium: brokers estimate roughly 1–3% of the bond's face value, often charged as a flat $250–$750 on small and mid-sized contracts (BidFit, 2026 — a market estimate, not a regulated rate). Bond facility: an annual administration fee — typically $1,500–$2,500 (FCA Insurance) — covers issuing unlimited tender bonds for the year, whether you bid once or fifty times. Established contractors almost always run a facility, which is why frequent bidders often describe bid bonds as "free" — the cost is already in the annual fee.
What the money actually does
The premium is not refundable. The bond itself is returned when the bid validity period ends — typically 60 to 90 days — or earlier once you sign the contract and deliver the required performance security. If you win and walk away, the buyer claims the bond. Under SOR/87-402 s. 12, the contracting authority must hold the bid bond until the terms of the security are fulfilled.
Budget the rest of the bond package too
Bid security is usually only the first bond in the package. Winners on Canadian public-sector construction work are typically asked for a performance bond (CCDC 221, commonly 50% of contract value) and a labour and material payment bond (CCDC 222, also commonly 50%), often quoted as one combined premium of roughly 0.5–1.5% of contract value paid once at award (BidFit, 2026). See our bid bond vs performance bond breakdown, and run your numbers in the bid bond calculator.
Frequently asked questions
How much does a bid bond cost in Canada?
Canadian surety brokers quote bid bonds in two ways: a standalone premium typically estimated at 1–3% of the bond's face value — often a flat $250–$750 for small and mid-sized contracts — or a annual bond facility with an administration fee, typically $1,500–$2,500 a year, that covers issuing unlimited tender bonds. These are market estimates from Canadian surety brokers (BidFit, FCA Insurance, 2026), not regulated rates.
What is the standard bid bond amount?
The standard Canadian bid bond form is CCDC 220 – 2002, which established the 10%-of-bid-price standard. Most tenders require 10%, but the buyer can set any value — requirements commonly range from 5% to 15% of the tendered amount. Always read the bid security clause in the tender documents.
Do you pay for a bid bond every time you bid?
Not usually. Contractors with a surety bond facility pay an annual administration fee and can have tender bonds issued through the year at no per-bid charge — the same fee applies whether you bid once or fifty times. A standalone bond carries a one-time premium per issue, and that premium is not refundable.
Why do government tenders require bid security?
A bid bond guarantees entry into the contract: if you win and refuse to sign, or fail to provide the required performance bond, the buyer claims the security to cover the cost of re-tendering or awarding to the next bidder. Under the federal Government Contracts Regulations (SOR/87-402, s. 12), the contracting authority must hold any bid bond it receives until the terms of the security are fulfilled.
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