April 29, 2026 · Updated October 6, 2026

How to read a construction estimate, from Class D to Class A

To read a construction estimate well, start with four things before the total: what class of estimate it is and which drawings it was measured from, what it excludes, what it carries as allowances, and how it treats the lines that tend to run thin (site overhead, escalation, contingency, owner costs and HST). Only then compare the total against your budget or another estimate.

We’ve written estimates for more than twenty years, with experience built at PCL Constructors and Oxford Properties, from trade-level takeoffs on the contractor’s side to full project budgets on the owner’s side. Formats vary from firm to firm, but the weak spots tend to be the same. This is how we read an estimate someone else produced, in the order we read it.

Class D, C, B and A estimates

The first thing to find on any estimate is its class, because the class tells you how much the number can be expected to move. In Canada, public owners and most cost consultants use four classes, D through A, in ascending order of design completion. Public Services and Procurement Canada (PSPC) defines them, and the Royal Architectural Institute of Canada reproduces those definitions in appendix A of the Canadian Handbook of Practice for Architects, citing PSPC’s cost estimate definitions as published in 2020.

What each class is built from

• Class D (indicative). Built from a statement of requirements, an outline of possible solutions or a functional program. PSPC says its purpose is to give an indication of final cost good enough to rank the options being considered. It is prepared in elemental format, usually as a cost per square metre against each building element.
• Class C. Built from schematic or conceptual design. PSPC requires measured quantities of all items of work, in elemental format, and describes it as sufficient for making the investment decision.
• Class B (substantive). Built from design development drawings and outline specifications, including the preliminary design of all major systems and the results of site investigations. PSPC describes it as the estimate that sets realistic cost objectives and supports project approval.
• Class A (pre-tender). Built from completed construction drawings and specifications before tenders are called, on fully measured quantities, in both elemental and trade format. PSPC describes it as sufficient for a detailed reconciliation or negotiation with a contractor’s tender.

How accurate each class is

PSPC states accuracy as a design allowance: a Class D estimate should need no more than a 20% design allowance, a Class C no more than 15%, a Class B no more than 10% and a Class A no more than 5%. The design allowance is the money carried for design that hasn’t been drawn yet, so the percentage shrinks as the drawings fill in.

The Guide to Cost Predictability in Construction, published in November 2012 by a joint federal government and industry taskforce and hosted by the Canadian Construction Association, puts the same classes in plus-or-minus terms and adds project complexity. Its variance matrix gives ±20% to ±30% for Class D, ±15% to ±20% for Class C, ±10% to ±15% for Class B and ±5% to ±10% for Class A, with the low end for a standard, repetitive building and the high end for a complex one. The taskforce widened Class A from the earlier ±5% to allow for non-standard projects. It also notes that significant renovations and difficult sites need their own allowance on top.

Alberta Infrastructure’s Classes of Construction Cost Estimates (Design and Technology Series #19, July 2025) confirms that PSPC uses the four-level D to A system and that it is based on the Canadian Institute of Quantity Surveyors classes. Alberta itself uses the five ASTM classes described below. It makes one point every owner should hold onto: accuracy ranges overlap between classes. A less-defined estimate on a repeat project with reliable cost history can be as accurate as a more-defined one on a project using new or untested methods. The range should come from a risk review of the specific project, not from a default.

Sources: design allowances from PSPC via RAIC CHOP appendix A (2020); plus-or-minus ranges and the 33% and 66% benchmarks from the Guide to Cost Predictability in Construction (2012).

What this means for your decision

Match the decision to the class. A Class D is the right tool for deciding whether a project is worth pursuing and which option to develop. It isn’t the right tool for signing a loan, fixing a lease rate or promising a board a number. If your lender or investment committee wants a figure before schematic design is done, give them the Class D with its range stated and carry a budget that can absorb the top of that range. On a moderately complex building the guide’s matrix sits around ±25% at Class D, so a $10 million Class D reads as roughly $7.5 million to $12.5 million.

Ask for the class to be written on the cover of every estimate, along with the drawing set and date it was measured from.

AACE Class 5 to Class 1

If you’ve seen “Class 4 estimate” or “Class 5 estimate”, that’s the AACE International system, which the ASTM E2516 standard builds on and which counts the other way, from Class 5 (least defined) to Class 1 (most defined). Alberta Infrastructure’s 2025 bulletin puts a Class 4 schematic design estimate at about -20% to +30%, and a Class 5 order-of-magnitude estimate at -30% to +50%. Notice the ranges lean upward. In our experience that matches how early estimates tend to miss: designs gain things as they develop more often than they lose them. Canada’s public sector mostly uses D to A, and Ontario cost consultants will usually label their reports that way.

Elemental vs trade estimates

Next, look at how the estimate is organized. There are two common shapes.

The elemental breakdown

An elemental estimate divides the building into its functional parts: substructure, structure, exterior enclosure, roofing, interiors, conveying, plumbing, HVAC, fire protection, electrical, equipment and sitework. The best-known version is UNIFORMAT II, published as ASTM E1557. The Canadian Institute of Quantity Surveyors has had its own standard list of elements since 1972, which the RAIC adopted, according to NIST’s UNIFORMAT II report (1999). PSPC requires the elemental format at every class, D through A.

The elemental view is the one an owner wants early, because it lines up with the decisions you’re actually making: how much glass, how many elevators, what kind of mechanical system. NIST’s report makes the point directly. A product-based estimate is time-consuming and inappropriate at the early design stages, which is exactly when cost comparison between alternatives matters most.

The trade breakdown

A trade estimate is organized the way the building will be bought: by MasterFormat division (concrete, masonry, metals, wood, openings, finishes, mechanical, electrical and so on) or by trade package. Contractors price this way because it’s how subcontract bids arrive. PSPC asks for a trade breakdown alongside the elemental one only at Class A, when the estimate needs to be reconciled against tenders.

A trade-format number early in design is harder to use: you can’t see whether the envelope is carrying its share without reassembling several divisions.

Reading the shape

Whatever the format, divide the estimate into its big blocks and compare each one against benchmarks for the building type. This takes an hour and catches what totals hide: a number that looks right overall while mechanical is carried light and structure heavy.

A block that sits well outside the benchmark tells you where the design and the budget haven’t met yet. That’s a conversation to have with the design team now, while it costs a meeting rather than a change order. We go through the budget side of this in the budget that matters most is the first one, and if a block has to come down, value engineering done without wrecking the building covers how to find savings that keep the function intact.

Exclusions, assumptions and quantities

Some of the most important pages are the last ones. Every estimate carries a list of assumptions, clarifications and exclusions, often in smaller type. “Excludes rock removal.” “Assumes clean soils.” “Permits by owner.” “Escalation beyond Q2 excluded.” “Design contingency not included.” The 2012 cost predictability guide tells owners and project managers to read the exclusions and inclusions list carefully and review it with the cost consultant, and we read it before the line items.

Each exclusion is a cost that has moved from the estimate to you. Read the list first and put a rough figure against each line as you go, because the total on page one is only comparable to your budget after the exclusions are added back. Two estimates a few million dollars apart can describe identical buildings with different exclusion lists.

Exclusions worth checking every time

• Ground conditions. Rock, contaminated soil, dewatering, shoring of neighbouring buildings. On a Toronto infill site any of these can be significant, and a geotechnical report should exist before a Class B is relied on.
• Hazardous materials in existing buildings. Asbestos, lead and other designated substances on a renovation. Before tendering an alteration or repair, an Ontario owner must have the material likely to be disturbed examined for asbestos (O. Reg. 278/05, s. 10), and abatement is often excluded from the estimate until that report exists.
• Utility connections and upgrades. Hydro, water, sanitary and storm. Often listed as “by owner” or “by others”.
• Permits, development charges and municipal fees. Commonly excluded from construction cost because they sit in the owner’s budget.
• Furniture, fixtures and equipment, IT, AV and security. Frequently by others, and frequently forgotten until a move-in date.
• Phasing and after-hours work. On an occupied building, the hours the work can happen change the price.

Assumptions

Assumptions are quieter than exclusions. “Assumes the existing roof structure can carry the new rooftop units.” “Assumes open site access from the lane.” Read each as a question for the design team: is this true, and if not, what does it cost?

Check what the quantities stand on

An estimate from 50% design development drawings is a different document from one measured off tender drawings, even when they’re formatted identically. Ask two questions: what drawing set was this measured from, and what date was it issued? The design will have moved since, and the estimate won’t have moved with it unless someone updated it.

Look for whether the quantities are measured or factored. A Class C or B estimate should show measured quantities for the major elements (square metres of wall, tonnes of steel, number of fixtures). A Class D will lean more on cost per square metre from comparable buildings, which is appropriate for that stage. Trouble starts when a factored Class D number is carried forward through design and keeps being quoted as though it were measured.

The cost predictability guide allows at least two weeks after drawings are complete to prepare a proper Class A. If a pre-tender number arrived the day after the drawings, ask what was measured and what was carried forward.

Interrogate the allowances

Allowances are placeholders for things not yet designed, and they’re where optimism tends to sit. A modest allowance for a lobby the architect describes as a landmark needs a closer look.

For every significant allowance, ask for its reference: what project, what specification level, what year. Good estimators answer specifically (“based on the lobby package on a comparable office building, priced last year, mid-range stone”). A vague answer means the allowance is still a guess, and you should treat it as one.

Three checks on allowances

1. Add them up. Sum the allowances as a share of the total. An estimate that is a large share allowances is that share undesigned, whatever its bottom line suggests, and it belongs to an earlier class than its cover may say.
2. Check what each one covers. An allowance for “lobby finishes” may or may not include lighting, millwork, security desk and signage. Ask for the inclusions in writing.
3. Find out how each will be closed. Which drawing or decision turns the allowance into a measured price, and when? An allowance with no date to close it tends to stay open until construction, where it becomes a change order.

Our guide to where change orders come from covers what happens when allowances meet the real price.

Check the quiet lines

Five places where estimates habitually run thin, worth checking every time.

General conditions and site overhead

Site trailers, hoisting, temporary power and heat, site supervision, protection, cleaning and waste. On a tight urban site these are real money: a tower crane, hoarding along a busy street, traffic control. A thin line here usually means nobody has yet worked out how the building gets built on that site.

Escalation

Ask what date the estimate is priced to, what date construction is expected to start and finish, and what escalation rate covers the gap. If escalation isn’t mentioned, the estimate is in current dollars and will be short by however much prices move before the work is bought.

Contingency

Ask whose contingency it is and what it’s for. A design contingency covers design that isn’t drawn yet and should shrink as the class improves. A construction contingency covers what turns up on site. They shouldn’t be blended into one number, and they should be sized to the design stage rather than set by habit. The 2012 guide lists design, pricing, bid, construction, escalation and scope contingencies as the set a Class D should consider.

Owner costs

Design fees, permits, development charges, utility connections, testing and inspection, commissioning, legal, insurance, financing, furniture and moving. They usually sit outside a construction estimate, which is fine as long as the project budget carries them. For a small build, our garden suite cost guide shows how far the total can sit above the builder’s number once those items are added.

HST

Ontario’s HST is 13%, per the Canada Revenue Agency. Construction estimates often exclude it. How much you can recover depends on the building and who owns it, which is a question for your accountant, and whatever can’t be recovered belongs in the budget.

Comparing two estimates or bids

Owners are often handed two numbers that don’t agree: the consultant’s estimate and a contractor’s price, or three tenders that are far apart. The totals can’t be compared until they describe the same building. Getting them there is called levelling, and it’s the core of the independent estimate review we do when bids come back.

A levelling checklist

1. Confirm the same documents. Every number should be priced on the same drawings, specifications and addenda. A bidder who missed an addendum is pricing a different building.
2. Line up the exclusions. List every exclusion and qualification for every bidder or estimate, and put a price on the ones that matter so each number is complete.
3. Line up the allowances. Compare the amounts each one carries for the same items. A low allowance makes a number look lower without making the building cost less.
4. Check for scope gaps. Make sure every trade is in every number, especially sprinklers, fire alarm, controls, and any trades a landlord requires.
5. Compare general conditions and fee. Duration, supervision, hoisting and site costs, and the contractor’s markup. Large differences here usually reflect different assumptions about the schedule.
6. Compare escalation and contingency. Same base date, same assumptions, and the same treatment of contingency (carried, excluded or held by the owner).
7. Compare unit prices and markups on changes. These set the cost of every change order to come, so they matter beyond the tender total.
8. Compare by element or trade, not just total. The difference between two bids usually sits in two or three places, and those are the questions to ask.

Once levelled, the lowest number is often still the right choice, and now you know what it includes. If one bid sits far below the others, ask the contractor to walk you through it before signing. It may be a smarter approach to the work or a misread drawing, and both are worth knowing. Our guide to planning an office renovation in Toronto has a fit-out version of this checklist for levelling bids.

When the consultant’s estimate and the bids disagree

The 2012 guide describes a pre-tender estimate as a determination of fair market value for the work, not a prediction of the low bid, and expects a good Class A on new construction to land within 5% to 10% of the median of competitive bids. If the bids are well outside that range, the market may have moved, the documents may be unclear in a way that made bidders add cover, or the estimate may have missed something. Levelling by element usually shows which.

Frequently asked questions

What is a Class D estimate?

A Class D estimate is the earliest of Canada’s four estimate classes, prepared from a functional program or concept before schematic design. It’s used to rank options and test whether a budget is realistic. PSPC expects it to need no more than a 20% design allowance, and the 2012 Guide to Cost Predictability in Construction puts its accuracy at about ±20% to ±30% depending on complexity. It’s a feasibility number, not a number to finance against.

How accurate is a construction estimate?

It depends on the class. The 2012 Guide to Cost Predictability in Construction gives ±20–30% for Class D, ±15–20% for Class C, ±10–15% for Class B and ±5–10% for a pre-tender Class A, with complex projects and renovations at the wider end. Alberta Infrastructure’s 2025 guidance adds that ranges overlap and should come from a project-specific risk review. Ask for the range to be stated on the estimate.

What’s the difference between an estimate, a budget and a bid?

An estimate predicts cost from measurement and judgment. A budget is what you’ve decided to spend, ideally informed by an estimate and carrying the owner costs the estimate leaves out. A bid is a contractor’s offer to do defined work for a price, with its own exclusions. When you report to a lender or a board, say which of the three each number is.

How much does an independent estimate review cost?

A review of someone else’s estimate on a mid-size project is typically days of work, not weeks, and small against construction value. It has to catch one thin block or one missed exclusion to repay itself. We go through that reasoning in why independent estimates pay for themselves.

Should I share my budget with the estimator?

With your own cost consultant, yes. Knowing the target helps them tell you early where the design and the budget disagree. With a bidding contractor, generally no: you want their price for the documents, not for the target.

What to do with the estimate on your desk

Start by writing the class, drawing set and date on the cover if they aren’t there. Then go through the exclusions and put a figure against each, add up the allowances, and check the five quiet lines. If you have two numbers that disagree, level them by element before you compare totals. That’s a few hours of work, and it turns the estimate into something you can make decisions with.

The question to ask the estimator

When you’ve read the document, ask the estimator one question: “What in this number are you least sure about?”

Good estimators answer quickly and specifically, because they’ve been looking at that line for a week. An answer like “the envelope pricing is soft, we had one data point” tells you where to focus, and it tells you this is someone whose numbers you can work with. If the answer is that nothing is uncertain, ask to go through the allowances and exclusions together, since every estimate before tender has something unresolved in it.

If the number matters and you’d like a second read from someone who has written estimates on both sides, we do construction cost and estimate reviews at every class from D to tender.