A Canadian Statement of Work (SOW) is a project-specific document that defines the detailed scope, deliverables, timeline, milestones, acceptance criteria, and pricing for a professional services engagement between a client and a service provider. It is typically issued under a Master Service Agreement (MSA) but can also function as a standalone contract when no MSA exists. The SOW translates high-level business requirements into specific, measurable, and time-bound commitments that both parties can track and enforce.

In the Canadian legal context, a SOW creates binding contractual obligations between the parties. Canadian contract law in the common law provinces requires offer, acceptance, consideration, and intention to create legal relations for a valid contract. The SOW satisfies these requirements by defining the work to be performed (offer), the client's agreement to pay for that work (acceptance and consideration), and the formal execution by authorized representatives (intention). Courts interpret SOW provisions using the principles established in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, considering the surrounding circumstances and the factual matrix when resolving ambiguities.

Intellectual property ownership is a critical consideration in any Canadian SOW. Under section 13(1) of the Copyright Act (R.S.C. 1985, c. C-42), the author of a work is the first owner of copyright, unless the work was created in the course of employment. Since service providers engaged under a SOW are typically independent contractors rather than employees, they retain copyright in the deliverables unless the SOW contains an explicit assignment clause. The SOW must also address GST/HST obligations under the Excise Tax Act, as professional services are taxable supplies subject to the applicable federal and provincial sales tax rates. Payment terms must comply with the Criminal Code (R.S.C. 1985, c. C-46, s. 347) interest rate provisions, and confidentiality obligations should reference PIPEDA (S.C. 2000, c. 5) where personal information is processed in the course of the project.

A Canadian Statement of Work is needed whenever a client engages a service provider for a defined project with specific deliverables, timelines, and budget. Technology companies commissioning software development, website design, data migration, or cloud infrastructure projects use SOWs to document exactly what will be built, how it will be tested, and when it will be delivered. Marketing agencies, management consultants, engineering firms, and other professional services providers issue SOWs to define the boundaries of each engagement and prevent scope creep.

The SOW is essential when multiple projects are performed under a single Master Service Agreement. Each SOW establishes the project-specific terms while the MSA governs the overarching relationship, including indemnification, insurance, and general terms and conditions. This structure allows parties to add new projects without renegotiating the foundational contract terms each time.

Organizations subject to procurement policies, including government agencies and Crown corporations governed by federal and provincial procurement legislation, require SOWs as part of their contracting process. The SOW provides the specificity needed for budget approvals, audits, and performance evaluations. Private sector companies use SOWs to establish clear acceptance criteria that trigger milestone payments and to document exclusions that prevent disputes about what was and was not included in the project scope.

Without a written SOW, both parties risk disputes over deliverable specifications, timeline expectations, and payment obligations. Verbal agreements and email chains do not provide the clarity and enforceability of a properly drafted SOW that specifies exactly what will be delivered, how it will be evaluated, and how changes will be managed throughout the project lifecycle.

A comprehensive Canadian Statement of Work must begin with clear identification of both parties, including their full legal names and registered addresses, and should reference any governing Master Service Agreement by title and date. The SOW reference number provides a tracking mechanism when multiple SOWs exist between the same parties.

The project overview section should describe the objectives and context of the engagement in sufficient detail to establish the purpose of the work. The scope of work and deliverables section must list every specific item the service provider will produce, using numbered or bulleted lists for clarity. Equally important is the exclusions section, which explicitly states what is not included in the SOW to prevent scope creep and manage client expectations.

The timeline section must include the project start date, the estimated completion date, and key milestones with their target dates. Milestones serve as checkpoints for progress tracking and are often tied to payment schedules. The pricing section must state the total project cost in Canadian dollars, the pricing model (fixed price, time and materials, or milestone-based), the payment schedule, and the payment terms (Net 30, Net 60). The SOW must address GST/HST applicability and include late payment interest provisions that comply with the Criminal Code interest rate limits.

Acceptance criteria define the standards each deliverable must meet and the process for client review, including the review period and the procedure for rejection and resubmission. The change order process establishes how scope changes are requested, evaluated, priced, and approved in writing before additional work begins.

The intellectual property clause must explicitly assign or licence IP rights, addressing the default position under the Copyright Act that the author (service provider) retains ownership. The confidentiality clause should reference PIPEDA where applicable. Include limitation of liability, termination provisions (for cause and for convenience), force majeure, governing law, and project contact information. Both authorized representatives must sign the SOW.