As Canada increases infrastructure spending, the industry should consider integrating AI-assisted surety practices to keep pace. Outdated bonding processes threaten project delays, forcing contractors and underwriters to adapt or risk falling behind.
With digitization and regulatory shifts accelerating, Dustin SanVido (pictured), a senior account executive at AI Insurance, has seen how the industry evolves. His message to skeptics and traditionalists? Stop blaming AI and embrace it.
A key example of this is how electronic authentication tools like DocuSign have virtually eliminated the need for paper bonds. This transformation has done more than speed things up. Processes are smoother, there are fewer errors, and transactions move faster.
"It's scarce that you run into a municipality or a township still looking for that paper. We've completely adapted on the construction side,” SanVido said. "The industry is very happy, and we're all making more money. At the end of the day, that's what surety is here to do—to make the contractors money."
Regulatory Shifts Are Reshaping the Industry
Beyond digital transformation, regulatory changes are also reshaping the surety landscape. The global surety market was valued at $18.19 billion in 2023, with revenue expected to grow to $27 billion by 2030, driven by evolving regulations and increased infrastructure investments.
One notable development is Ontario's new Planning Act, which came into effect in late 2024. Under the old system, developers used irrevocable letters of credit and other direct collateralization methods with these owners requiring security—none truly protected their investment when developers were brought onto a project. The new framework changes that.
"This instrument is considered on-demand and provides similar security as an irrevocable letter of credit (ILOC)", SanVido said. "Right in the bond framework, claimant places a default claim, and surety has 15 days to pay. This allows the contractor/developer to deploy capital elsewhere as opposed to tying up in a bank for an indeterminate amount of time."
This fast-tracked claim process is great for developers but has made underwriters more cautious.
"Bonding companies are more conservative in their underwriting because they won't apply the same underwriting metrics, they would to a traditional contractor because of that claim trigger," he said.
But the rollout has been chaotic. The result? It was a slow and muddied transition.
"There isn't an agreed-upon framework in the wording itself," SanVido said. "So, from township to township, city to municipality, no one uses the same framework yet. It's a wait-and-see approach right now. The sureties will, long term, agree to a single common form, and it's learning as we go."
Risk Assessment Is No Longer Just About the Three C’s
For decades, underwriting in surety has been built on the "three C’s": capital, character, and capacity.
Capital measures financial strength. Character assesses organizational stability. Capacity ensures the contractor can handle the job. But now, two more C’s have entered the equation: cash management and communication.
"Cash management has become a large concern with underwriters," SanVido said. "They're not just looking at whether there is money but how it's being managed—shareholder loans, cash and debt balances, working capital efficiency."
Communication is just as crucial, as underwriters now factor in how responsive and engaged a contractor is.
"We are in the age of AI; we're in the age of remote work. Communication is becoming so much more important—promptness, accountability, transparency, availability,” SanVido said.” If you're someone who's quick to provide the information, if you're open and spending the time learning and developing that relationship, it's become such an important factor."
Estate bonds: Myths, costs, and the fight for awareness
Beyond contract surety, fiduciary bonds play a critical role in estate administration, yet many misunderstand their necessity and function. Executors and administrators often assume that only large estates require bonding, leading to confusion about legal triggers and financial responsibilities.
"I have requests where it is down to a $1,000 estate, $5,000 estates," he said. "The triggers are in place; the legislation currently is still what it is."
Cost is another major misconception. Many believe estate bonds are prohibitively expensive, deterring executors from exploring their options.
"When you get into seven-figure and eight-figure estates, that number can grow," SanVido said. "Even at rates that are universally under 1%, those become big numbers, and that can be discouraging for people."
However, the biggest challenge isn’t cost—it’s awareness. Some professionals in the legal field don’t even realize when estate bonds are required, creating gaps in estate planning and administration.
"It's 2025, and I'm the only specialist out there who’s consistently teaching law firms, consistently trying to speak at Association events and educate them on the whole," he said.
Lawyers themselves often don’t understand estate bonding nuance, SanVido said.
“The first conversation I have with a lawyer is, 'I've practiced law for 30 years. I've never needed one of these things. How do we do this?' That is the most common question I receive in the legal profession in Canada,” he said.
To change that, he’s pushing education—seminars, webinars, conference presentations. He highlights how surety professionals need to reconsider how we provide typical bonding solutions to our product industries.
The future: AI and specialized bonds are taking over
Two forces are reshaping the future of surety: artificial intelligence and the rise of specialized bond instruments. But can AI truly replace human underwriters? SanVido is skeptical.
"AI is coming; it's already here in the United States surety market, and it's only a matter of time before it's adapted in Canada,” he said. "I think AI is accurate for tangible underwriting and administration. I think it's great for suitable analytics and automating workflow processes. But I don’t believe that it can assess the character of an organization."
Surety relies on trust, relationships, and gut instinct.
"I don't think there's a way that AI can currently replicate that,” SanVido said.
At the same time, specialized bonds are gaining traction, as is the need for subcontractor bonding programs and mid-tier contractor accessibility initiatives.
"There should be smaller contractor bond programs that allow these contracts to flow to emerging small-to-medium contractors, instead of having a mega contractor come in and scoop up everything,” he said.
The pandemic forced surety into modernization in construction. But there’s still work to do on the judicial side.
"We need to ask the courts to consider adopting technological advancements likewise because it is still wet signature, ink, manually typing out the bonds and submissions to court," SanVido said. "It's an exciting time for surety. We're entering a soft market, the industry is hungry and wants to write business, and we're very excited about where things are going."
