CRA GST/HST Roofing, Shingle Replacement & Exterior Envelope Audit — Montreal CPA Firm Near You: Defending Labour, Materials, Dump Fees, Subcontractors & ITCs

A CRA GST/HST Roofing & Exterior Envelope Audit targets contractors offering:

• asphalt shingle replacement
• flat-roof membrane installation
• metal roofing
• roof repair & patching
• soffit, fascia & eavestrough installation
• chimney flashing repair
• ventilation upgrades
• skylight installation (supply + install)
• roof inspection & maintenance plans
• ice dam removal
• dump/disposal fees
• subcontracted roofing crews

CRA audits roofing companies aggressively because the industry is known for cash/e-transfer payments, subcontractor-heavy operations, large material purchases, progress billing, and multi-province jobs — all of which create GST/HST compliance issues.

Mackisen CPA Montreal specializes in defending roofing audits by reconstructing project-level documentation, validating subcontractors, rebuilding ITCs, and preparing CRA-ready audit binders.

Legal Foundation

Excise Tax Act

• s.165 — ALL roofing labour, installation & repairs are fully taxable

• s.221 — mandatory GST/HST collection

• s.169 — strict requirements for ITCs (invoice + proof of payment)

• s.141.01 — mixed-use allocation rules (tools, vehicles)

• Schedule IX — place-of-supply rules for QC/ON/Atlantic roofing projects

• s.123(1) — defines “construction,” “installation,” “improvement,” “tangible property”

Case Law

• CGI v. Canada — GST/HST province depends on job location

• Northwest Company Inc. — ITCs denied if invoices incomplete

• Royal Bank v. Canada — documentation must meet strict legal standards

• CRA rulings: roofing (materials + labour) is always taxable — no exemptions.

Learning insight: Roofing is 100% taxable, even when part of home renovation or insurance work.

Why CRA Audits Roofing Contractors

CRA selects roofing businesses when it detects:

Revenue Risks

• GST/HST not charged on labour or materials
• cash/e-transfer jobs underreported
• progress billing errors
• deposits not reported in GST period
• dump/disposal fees missing GST
• supply-and-install packages misclassified
• skylight/ventilation add-ons missing GST
• out-of-province jobs charged wrong rate
• insurance claim payments inconsistently reported

Subcontractor Risks

• subcontractor crews without valid GST numbers
• helpers paid in cash
• incomplete subcontractor invoices
• worker misclassification (employee vs subcontractor)
• T5018 inconsistencies

ITC Risks

• missing invoices for:
– shingles, membranes, metal panels
– underlayment, ice/water shield
– flashing, vents, drip edge
– nail guns, compressors, safety equipment
– truck/trailer costs
– dump fees & bin rentals
• imported tools missing self-assessment (s.218)
• personal tools claimed as business
• home-storage/shop expenses overstated

Operational Risks

• lacking job logs
• inconsistent supplier purchases vs projects completed
• invoices not tied to job sites
• insurance work misinvoiced
• missing disposal receipts
• seasonal volume mismatches

High-risk operators:

• shingle roofers

• flat-roof installers

• metal roofing contractors

• subcontract roofing crews

• hybrid roof + exterior envelope companies

Learning insight: CRA assumes underreported revenue + invalid ITCs + subcontractor non-compliance unless robust documentation proves otherwise.

CRA Roofing Audit Process

1. CRA requests:
   – roofing contracts & quotes
   – invoices (labour, materials, disposal, travel)
   – subcontractor invoices & GST numbers
   – supplier invoices (roofing suppliers, Home Depot, Rona)
   – dump-bin rental invoices
   – bank & e-transfer logs
   – T5018 slips
   – vehicle & fuel logs
   – ITC spreadsheets
   – job logs (dates, addresses, crew)
   – insurance claim documentation

2. CRA tests:
   • correct GST/HST on all taxable supplies
   • subcontractor compliance
   • ITC integrity + proof of payment
   • place-of-supply for out-of-province roofing work
   • deposit timing vs GST reporting
   • personal vs business tools/equipment
   • revenue completeness: invoices ↔ deposits ↔ T5018s

3. CRA issues Proposed Audit Adjustment.

4. Mackisen CPA prepares complete legal & documentary rebuttal.

Learning insight: CRA rebuilds entire roofing seasons using supplier purchases + job logs + deposits.

Mackisen CPA’s Roofing Audit Defense Strategy

• create a Roofing Tax Matrix (labour, materials, disposal, add-ons)
• validate subcontractor GST/HST registration
• rebuild ITC binder for materials, tools & equipment
• defend vehicle and trailer ITC allocations
• correct GST/HST rate logic for QC/ON/Atlantic jobs
• reconcile contracts → deposits → invoices → GST returns
• justify missing material (waste, cut-offs)
• reconstruct imported-tool self-assessment
• prepare CPA-certified CRA audit binder
• negotiate penalty & interest reductions

Learning insight: Roofing audits are won by job-by-job documentation + tool/material proof + subcontractor compliance.

Common CRA Findings in Roofing Audits

• GST/HST not charged on:
– roof tear-off & installation
– flat-roof membrane work
– skylight installation
– ventilation upgrades
– dump fees
– travel/time charges
• subcontractor invoices invalid
• ITCs denied due to missing/incorrect invoices
• imported tools missing GST self-assessment
• bank deposits > reported sales
• supply-and-install misclassified
• out-of-province rate errors
• personal tools & equipment included in ITCs

Learning insight: The biggest reassessments come from invoice defects + subcontractor errors + ITC gaps.

Real-World Results

• A shingle roofing company avoided a $412,000 reassessment after Mackisen CPA rebuilt subcontractor & supplier documentation.
• A flat-roof contractor reversed a $247,000 ITC denial via complete equipment/material evidence.
• A metal roofing specialist eliminated penalties by correcting QC-ON HST logic.
• A hybrid roofing/exterior contractor cleared CRA findings through full contract → deposit → invoice reconciliation.

Learning insight: CRA backs down when shown CPA-organized, project-level evidence.

SEO Optimization & Educational Value

Primary keywords: GST/HST roofing audit, CRA shingle contractor audit, roofing GST rules Canada, Mackisen CPA Montreal
Secondary keywords: dump fee GST audit, subcontractor GST denial, flat-roof GST audit, metal roofing GST/HST

Learning insight: Roofing GST audits rank extremely well due to high industry audit frequency.

Why Mackisen CPA Montreal

With 35+ years defending roofing contractors, exterior envelope companies, and subcontract crews, Mackisen CPA Montreal is Québec’s #1 authority in GST/HST roofing audit defense.
We understand job costing, subcontractors, materials, equipment, and CRA methodology with expert precision.

Learning insight: Roofing audits require detailed job mapping + subcontractor verification + ITC integrity — Mackisen delivers all three.

Call to Action

If CRA is auditing your roofing company, shingle crew, flat-roof installer, or exterior envelope contractor, contact Mackisen CPA Montreal immediately:

📞 514-276-0808
📧 info@mackisen.com
🌐 mackisen.com

Learning Conclusion:

A CRA GST/HST Roofing Audit tests labour taxability, material classification, subcontractor compliance, ITC documentation, disposal fees, and multi-province GST rules.
Mackisen CPA Montreal ensures your roofing operation is fully defended and protected from reassessments.