What's the difference between a bid bond, an agreement to bond, and consent of surety?

The three documents, in the order they show up

Most Canadian construction tenders run on standard forms from the Canadian Construction Documents Committee (CCDC), refreshed in 2024 — the first update since 2002.

• Bid bond — CCDC 220. Submitted with your bid. It guarantees two things: that you'll enter the contract if accepted, and that you'll furnish the required contract security. The amount is typically 10% of the bid price, though an owner can set 5%, a fixed dollar figure, or another amount — always read the tender. Most owners will accept bid security as a bid bond, an irrevocable letter of credit, or a certified cheque.
• Consent of surety / agreement to bond. Often required alongside the bid bond. Here your surety states it's reviewed the project and is willing to issue the performance and labour-and-material payment bonds if you win. It's signed by the surety only, not by you — and it is not the same as a prequalification letter, which is non-binding.
• Performance bond (CCDC 221) and labour & material payment bond (CCDC 222). Issued after award, not at bid time. The performance bond is commonly 50% or 100% of the contract price and guarantees completion; the payment bond protects your subcontractors and suppliers.

A bond is credit, not insurance

This trips up newer contractors. A surety bond is a three-party instrument — you (the principal), the owner (the obligee), and the surety. Insurance expects to pay claims; surety expects zero losses. Before any bonds are issued you sign a General Agreement of Indemnity, and if the surety ever pays out on your behalf, you reimburse it in full. That's why the bid bond doubles as a pre-qualification signal: a surety that backs your bid has already vetted your finances and track record.

What a bid-bond claim actually costs you

If you win but then refuse to sign, or can't provide the required bonds, the owner claims against your bid bond. The payout is the lesser of the bond penalty or the spread to the next lowest compliant bid. Bid $1.2M, next compliant bid $1.27M, and you can't proceed — the owner recovers the $70,000 gap, well inside a $120,000 (10%) penalty. The bond exists to make walking away expensive, which is exactly why owners trust it to filter the field.

The admissibility trap: a bond is a compliance item first

Here's the part that matters for staying in the running. The bond isn't just a financial instrument — it's a mandatory document that has to be right. Bids get knocked out at this layer for ordinary reasons:

• Consent of surety missing when the tender required it — the bid can be declared non-compliant before evaluation.
• Wrong amount or wrong form of bid security versus what the tender specified.
• Improper execution — missing signatures or seals, or, in some provinces, no commissioner where the form needs one.
• A closing-date extension that pushes past the bond's validity period (the 2024 CCDC 220 defaults to 60 calendar days from closing if the tender doesn't state otherwise).
• A scope or price change after tender — material changes can require the surety to re-approve; a consent of surety doesn't cover an unlimited project.

The 2024 update even removed the old "Tender Date" field from CCDC 220 precisely because the confusion it caused had, in some cases, gotten tenders disqualified. The lesson stands: on bonds, small paperwork errors carry the same penalty as a bad number — you're out.

How to never get caught short

• Establish a surety facility before you bid, not when you find a job. An annual surety facility fee (often around $1,500–$3,000) typically covers your underwriting plus the bid bonds, consents, and prequalification letters you'll need that year.
• Requisition early. Once you spot a bondable job, your broker prepares a bond requisition with the project details — owner, estimated price, closing date, duration.
• Read the bid-security clause line by line: the amount, the acceptable form(s), whether a consent of surety is required, and the delivery format the portal demands.
• Check execution before it goes in the package — signatures, seals, and any commissioner requirement.
• Watch every addendum that moves the closing date, and confirm your bond's validity still covers it.

Where AIVARA fits

We don't underwrite, sell, or arrange your bonds — that's your surety broker, and it should stay that way. What we do is make the bond a non-event in your submission. We read the tender's exact bid-security requirement, flag it early so your broker has runway, confirm the form, amount, and execution, track the addenda that affect validity, and place the document in the package so it's never the reason your bid is set aside. You own the number; the bid-security amount follows from it; we make certain it lands in the submission, correct and on time.

Start with a free Bid Readiness Audit → get a free bid audit.

This article is general information about Canadian construction tendering and surety, not legal, financial, or bonding advice. Bond forms, amounts, and their legal effect vary by jurisdiction, surety, and the specific solicitation; confirm bonding with a licensed Canadian surety broker and anything contract-related with a Canadian construction lawyer.