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Cote Qualité GCR

Every contractor accredited with GCR is assigned a Cote Qualité GCR.

General information

The grading scale for the Cote Qualité GCR ranges from AA to D.

This score is assigned by assessing financial ratios, customer satisfaction and the quality of buildings constructed. Contractors who have not yet received a technical assessment are temporarily given a score of N (not scored).

The Cote Qualité GCR helps ensure fair risk management for all accredited contractors.

The contractor’s Cote Qualité GCR is assigned by assessing the number of months the contractor has been accredited:

Under 36 months

  • Technical rating: 50%
  • Financial rating: 50%

36 months or more

  • Technical rating: 50%
  • Financial rating: 40%
  • Customer satisfaction rating: 10%

For the customer satisfaction rating to be used in establishing the Cote Qualité GCR, a contractor must have registered at least three buildings that were delivered at least one year ago to the GCR Guarantee Plan (pre-acceptance inspection form).  Even if a contractor has been accredited for over 36 months, if they registered fewer than three units or delivered these units less than a year ago, the Cote Qualité GCR will be based solely on the financial and technical ratings.

 


Caution

The Cote Qualité GCR is reassessed when accreditation is renewed annually in order to take into account any changes in the contractor’s financial and technical situation.


A Cote Qualité GCR assigned to more than one contractor

A contractor who wants to assign their company’s Cote Qualité GCR to another company accredited with GCR must be the RBQ guarantor for both companies. This contractor must own 50% of both companies to have them assigned the same Cote Qualité GCR.

In other words, it is possible for a contractor who owns 50% of one company that has a Cote Qualité GCR of AA to have the same score attributed to another company of which the contractor owns 50%.

Technical aspect

Counts for 50% of the Cote Qualité GCR.

GCR shall assign a technical rating to the company when it has completed three (3) inspections. This technical assessment takes into consideration the elements of non-compliance found during each inspection carried out by GCR. Inspections are conducted  with the 2020 Inspection Program (in french).

GCR inspections are valid for a period of three (3) years in the calculation of the technical rating. A company that has been assigned a Cote Qualité GCR may lose it if three (3) inspections have not been completed during this period.

 

How the technical rating is calculated

The technical rating* is determined in direct relation to the quality of the construction built. Each project receives an average technical rating, broken down into 100 points:

  • 90% is awarded for the average of the technical ratings from each inspection
  • 10% is awarded for the best practices incorporated into the project

Upon completion of construction, an average technical rating is assigned to the project based on the scores received during inspections and the best practices incorporated. The average of the technical ratings from projects counts for 50% of the Cote Qualité GCR.

For example, a project that was subject to two inspections that received ratings of 75 and 73 would have an average rating of 74 out of 90. If it incorporated three best practices, 6 points would be added to its technical rating, which would bring it to a total of 80 points. Therefore, the contractor’s technical rating would be 80.

*GCR takes into account contractor collaboration in correcting incidents of non-compliance found on site or in providing required documentation (collaboration rating). A maximum of 10 points can be subtracted from the total technical rating used to establish the Cote Qualité GCR.

 

AA technical rating

A contractor that wants to maintain or obtain a AA technical rating must meet the three following criteria:

  • Demonstrate that at least one best practice has been applied for each project inspected
  • Obtain an average of at least 91 points on inspection reports
  • Lose no collaboration points

Training

GCR works with various industry partners, including the Association des professionnels de la construction et de l’habitation du Québec (APCHQ) and the Association de la construction du Québec (ACQ) to recognize a training for contractors. Contractors who take this training can be awarded up to 5 bonus points on their Cote Qualité GCR.

→ See the terms of the training (in french). 


 

Financial aspect

If the customer satisfaction rating is used to calculate the Cote Qualité GCR, then the financial rating counts for 40% of the Cote Qualité GCR. Otherwise, the financial rating counts for 50%.

GCR’s senior management, in concert with the Vice President of Contractor Services, has assigned an expert to fully assess the criteria of the financial rating and the securities grid.

 

Securities grid

The expert conducted an assessment in comparison with other guarantee plans in Canada, as well as several private insurers, and confirmed that the principle of the securities grid helps define GCR’s risk assessment in a way that is fully transparent for the contractor. The securities grid will therefore undergo no changes in the short term. However, the amounts required will change based on the risk and a contractor with a AA score will have to provide the minimum security provided for under the regulation.

 

Financial rating

The financial rating has changed from being 50% of the overall assessment of the Cote Qualité GCR to 40% when the satisfaction rating is used. Some adjustments are planned for the financial rating’s evaluation grid. These changes are the result of constructive discussion between contractors and GCR.

 

Ratio assessment

The Accreditation Department assigns a financial rating based on five financial ratios provided for by the Regulation respecting the guarantee plan for new residential buildings: gross earnings, net earnings, capital ratio, debt/equity and net worth.

GCR also evaluates two other financial ratios: the cash ratio and the inventory-to-sales ratio. This financial rating is updated annually, based on the new financial statements provided with the review engagement report.

 

Here is the evaluation grid for the 2018 financial rating, which has been in force for all membership renewals since March 1, 2018 (in french).

 

Ratio calculation method

Ratio Calculation method
1- Debt/equity ratio (Total liabilities minus debts to affiliated companies and board members) / (Total assets minus advances to affiliated companies and board members).
2- Capital ratio (Short-term assets minus advances to affiliated companies and board members) / (Short-term liabilities minus debts to affiliated companies and board members).
3- Net worth/sales ratio (Net worth plus debts to affiliated companies and board members minus advances to affiliated companies and board members) / Revenue
4- Gross earnings ratio Gross earnings / Revenue
5- Net earnings ratio Net earnings / Revenue
6- Cash ratio (minus inventory) (Short-term assets minus advances to affiliated companies and board members minus inventory) / (Short-term liabilities minus debts to affiliated companies and board members)
7- Inventory-to-sales ratio Inventory (including land) / Revenue

 

GCR evaluation grid – Financial statements

The chart below outlines the adjustments made by GCR in the course of analyzing contractor financial statements.

 

Assets
Short term  
Accounts receivable, affiliated companies  50 %

Associates adjustment

If no repayment terms and/or no guarantee and/or interest rate 9.9% or less.

 100 %

Third-party adjustment

If no repayment terms and/or no guarantee and/or interest rate 9.9% or less.

 100 %

*All inventory, home inventory, ongoing construction, materials, model homes presented in the short term, etc. will be considered as inventory.

 Long term
Associates adjustment

Investments: any shares held in a private company. If no repayment terms and/or no guarantee and/or interest rate 9.9% or less.

 100 %

Third-party adjustment

If no repayment terms and/or no guarantee and/or interest rate 9.9% or less.

100 %

Liabilities
Short term  
Accounts payable, affiliated companies  50 %

Associates adjustment

If no repayment terms and/or no guarantee and/or interest rate 9.9% or less.

100 %

Third-party adjustment

If no repayment terms and/or no guarantee and/or interest rate 9.9% or less.

50 %
 Long term
Associates adjustment

If no repayment terms and/or no guarantee and/or interest rate 9.9% or less.

 100 %

Third-party adjustment

If no repayment terms and/or no guarantee and/or interest rate 9.9% or less.

50 %

Definitions

Associates adjustment: any joint venture, cooperative, general partnership, limited partnership, subsidiary, company connected to board members or shareholders, sister company, parent company, board members, etc.

Third-party adjustment: parents, employees, friends, a close relative’s company, etc.

Adjustments: debts to associates, advance, loan, bill payable, amount outstanding, etc.

Notes

*Deposits on land will be added to inventory.

*The CPA auditor, CA or accounting firm must always sign your review engagement report. 

*Adjustments are subtracted from the total amount of your assets and/or liabilities (short-term and long-term).

 


Important

GCR will not be able to assign a financial rating in the following cases:

  • Notice to reader
  • Opening balance sheet
  • Financial statements demonstrating revenue less than $100,000
  • Interim financial statements

 

Useful info

To increase your chances of receiving a AA Cote Qualité GCR, you must demonstrate an excellent financial balance sheet and construction quality that surpasses industry standards.

Score required for the financial and technical ratings
AA 91 points and above
A 81-90 points
B 71-80 points
C 45-70 points
D 44 points and below

Customer satisfaction rating

Counts for 10% of the Cote Qualité GCR

The customer satisfaction rating takes two things into consideration:

1 – The number of claims compared to the number of registrations (counts for 1/3 of the 10%).

This number only considers claims that have found to be justified. For example, if a consumer files a complaint regarding elements of construction and GCR decides against it, the claim will not be considered.

  • 0.99% of claims: 5/5
  • 1%–3% of claims: 3/5
  • 3.01%–4.99% of claims: 1/5
  • 5% or more of claims: 0/5

 

2 – Failure to comply with a conciliator’s decision, necessitating the performance of work by GCR (counts for 2/3 of the 10%).

  • Compliance with all decisions: 10/10
  • Non-compliance with fewer than 1% of decisions: 8/10
  • Non-compliance with 1%–3% of decisions: 5/10
  • Non-compliance with over 3% of decisions: 0/10

 

In consideration of the ISO 9001 standard and the need to gauge client satisfaction, GCR has arranged for customer satisfaction surveys to be conducted.

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