Starting up
How to start a staffing agency in Ontario (2026): licence, WSIB, insurance, first client
Starting a staffing agency in Ontario requires seven ordered steps: registering your business, obtaining a $1,500 THA licence plus a $25,000 letter of credit, registering with WSIB within 10 days of hiring your first worker, opening a CRA payroll account, securing insurance, landing a client, and building your operational spine for intake and dispatch.
The Canadian employment services industry generates $24.7 billion in annual revenue (2023 data from ACSESS). Operating without a THA licence carries a $15,000 penalty for a first contravention, $25,000 for a second within three years, and $50,000 for a third.
Step 1: Register your business
Decide on your legal structure: sole proprietorship, partnership, or corporation. Register with Service Ontario or consult a business lawyer for the structure that fits your situation. You will need a business name, and most agencies operate as a sole proprietor or corporation in Ontario. This is a prerequisite for the THA licence application.
Step 2: Obtain the THA licence
Apply for a temporary help agency licence under Part XVIII.1 of the Employment Standards Act. The application costs $1,500 in 2026 (it was $750 before January 1, 2026) and includes a requirement to hold a $25,000 irrevocable letter of credit or surety bond. Your bank or a surety company issues this; most will require collateral or a hold on your funds, so treat it as capital to set aside.
Applications are submitted online. Expect to receive your licence status within a few weeks. Ontario publishes all licence statuses on the public registry, so clients and competitors can see whether you are licensed, pending, or refused. A licence is mandatory to operate legally; as of July 1, 2024, operating without one is illegal, and clients are also prohibited from knowingly using an unlicensed agency.
Step 3: Register with WSIB
Register with the Workplace Safety and Insurance Board (WSIB) within 10 calendar days of hiring your first worker. As a staffing agency, you are the employer of record, so you pay WSIB premiums on your workers' wages. When you register, expect an initial advance payment of $250, which is credited to your account and applied toward future monthly premiums. Complete your full registration form by the final day of the month following the month in which your first worker starts.
Step 4: Open a CRA payroll account
Register for a Canada Revenue Agency (CRA) payroll account before your first remittance due date, which is the 15th of the month following the month in which you begin withholding payroll deductions. Register online via CRA e-services for fastest processing. You will use this account to remit payroll taxes (CPP and EI deductions) on behalf of your workers.
Step 5: Secure insurance
Ontario law does not mandate commercial general liability insurance for general (non-security) staffing agencies. However, most clients require it in their contracts with you, so norms are driven by client demand, not law. Check with an insurance broker familiar with staffing agencies to understand what clients in your sector typically ask for. This is a cost to budget for.
Step 6: Land your first client
With your licence, WSIB registration, and payroll account in place, you can now sign your first client. Negotiate rates (the pay you collect from the client and the wage you pay to your workers). Document your terms clearly: shift timing, cancellation policies, rate per role, and overtime rules. Your client will likely ask for proof of your THA licence and a WSIB clearance certificate, which you can request from WSIB free of charge.
Step 7: Build your operational spine
Before your first shift, set up systems for intake (applying workers), screening (verifying their background and skills), confirmation (confirming they will work), and hours tracking (collecting signed timesheets). Intake can be a form on your website or a phone line. Screening might be a brief call or a reference check. Confirmation means contacting workers before the shift to confirm they are still available. Hours tracking means collecting signed timesheets from workers and clients after each shift, then exporting those hours to your payroll provider by the deadline.
This is the 'operational glue' that separates a licensed agency from a chaos-driven one: a worker's credential status (driver's license, food handler certificate, criminal record check), their assignment history, and their hours, all in one place.
| Step | Cost | Timing |
|---|---|---|
| Business registration | Variable (lawyer fees or DIY) | 1 to 2 weeks |
| THA licence application (fee only) | $1,500 | Submitted immediately after registration |
| Letter of credit or surety bond | $25,000 (capital to set aside or finance) | Arranged before or with licence application |
| WSIB registration | $250 initial advance payment | Within 10 days of first hire |
| CRA payroll account | Free | Before first payroll remittance due (15th of month) |
| Insurance (if client-required) | Variable (typically $500 to $2,000 annually) | Before signing first client |
| First client and operations | None (client pays you; you pay workers) | Ongoing once licensed and registered |
What happens if you operate without a licence?
- A first contravention carries a $15,000 fine. A second within three years is $25,000, and a third is $50,000.
- The Ministry of Labour can order you to stop operating and can prosecute you.
- Clients are also prohibited from knowingly using an unlicensed agency, so an unlicensed status bars you from legitimate contracts.
Common questions
Can I start hiring workers before my THA licence is approved?
No. Operating as a temporary help agency without a licence is illegal as of July 1, 2024. You must wait for your licence to be approved by the Ministry of Labour before you hire or assign any workers to clients.
What is the $25,000 letter of credit for?
It is security held by the Ministry of Labour to protect workers' unpaid wages if your agency fails to pay them. It is not a fee you lose; it is a credit the ministry can draw on. It auto-renews unless the issuer gives 90+ days notice. If you operate compliantly, it remains in place indefinitely.
How long does THA licence approval take?
The timeline is not published by the ministry, but applicants typically see approval or a decision within 2 to 4 weeks. Submit your application online and monitor the public registry or check your application status on the ministry portal.
Do I need a recruiter licence as well as a THA licence?
Only if you find workers for employers to hire directly (not assign them yourself). If you only assign workers to clients for temporary work, a THA licence is sufficient. If you do both, one application covers both licences; the combined security is $25,000, not two separate amounts.
Can I start with just a few workers, or do I need a full workforce immediately?
You can start with one worker. Register with WSIB within 10 days of hiring your first worker, and scale from there. Your operational systems should accommodate growth, but size is not a barrier to entry.
What is the difference between the $1,500 application fee and the $25,000 letter of credit?
The $1,500 is a one-time application fee paid to the Ministry of Labour. The $25,000 is security (collateral) held by the ministry to protect workers' unpaid wages. You arrange it through a bank or surety company, and it typically requires capital or collateral on your end.
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