Ontario Construction Act amendments now in effect Ontario Construction Act amendments now in effect

On January 1, 2026, several amendments to Ontario’s Construction Act (the Act) came into force pursuant to Bill 216, the Building Ontario For You Act (Budget Measures) and Bill 60, the Fighting Delays, Building Faster Act, 2025. As we discussed in our Amendments to Ontario’s Construction Act webinar, the amendments to the Act most notably include modifications to the provisions on prompt payment, adjudication and the payment of holdback, including transitional measures built into section 87.4 of the Act.

Prompt payment and adjudication

Many of the amendments relate to the prompt payment and adjudication scheme under the Act. The amendments modify the requirements for the type of “proper invoice” required to trigger prompt payment requirements, and further deem any invoice to be proper unless an owner gives its contractor written notice of a deficiency in the invoice within seven days of receiving it..

While all adjudications were previously conducted by individuals listed on a roster maintained by Ontario Dispute Adjudication for Construction Contracts (ODACC), the amendments permit parties to hire private adjudicators who are trained and qualified by ODACC. Prior to the amendments, a notice of adjudication was required to be delivered before completion of a contract or subcontract in order to commence adjudication (unless the parties agreed otherwise). However, the amendments now give parties a 90-day window after completion, abandonment or termination to give this notice. The types of issues for which adjudication is available have been expanded, and moved from the Act to the regulations made under the Act. These amendments broaden the scope and availability of adjudication while giving parties more autonomy in the process.

Any party to a contract or subcontract can now seek a consolidation of adjudications for related matters in respect of the same improvement under section 13.8 of the Act. Additionally, the amendment to section 13.12(1) of the Act clarifies that adjudicators may make determinations about their own jurisdiction to conduct the adjudication, and about whether they have exceeded that jurisdiction. The new section 13.12.1 sets out a process for a party to raise objections when making submissions to the adjudicator.

A new section 13.17.1 creates a mechanism for adjudicators to make corrections to their determination within five days of the determination being communicated to the parties. The corrections may either address superficial errors, such as typographical and calculation errors, or may correct an injustice caused by an oversight by the adjudicator. These changes expand the powers of the adjudicator and work to refine the construction adjudication process, which was introduced in Ontario in 2019.

Liens for pre-construction services

Section 14(1) of the Act created a lien for a person who “supplies services or materials to an improvement”. Pertinent to design professionals, a newly-added section 14(4) deems a design, plan, drawing or specification for the making of a planned improvement to fall within the scope of section 14(1), unless the owner can prove that the value of the owner’s interest in the land has not been enhanced. This will give design professionals the benefit of such liens.

Payment of holdback

The amendments to the Act also create a mandatory scheme for the annual payment of holdback. Where a payer has retained basic holdback, the Act previously permitted a payer to make payment of the accrued holdback on an annual or phased basis if certain conditions were met. The amendments require mandatory annual payments of accrued basic holdback following each anniversary of the date in which the contract was entered . The amendments also repeal section 27.1 of the Act, which permitted payers to refuse to pay holdback under certain circumstances. These changes will work to streamline the flow of payments down the construction pyramid.

Upon the expiry of liens under section 31 of the Act, owners now have 14 days to make payments to contractors of all accrued holdback in respect of services or materials supplied by the contractor during the past year (unless a preserved or perfected lien continues to exist, and certain other conditions are met). A contractor will then have 14 days from receiving payment of holdback to make payment to subcontractors of all accrued holdback.

Conclusion

Many of the amendments to the Act reflect recommendations made in the independent review of the Act and related industry consultations, which were commissioned by the Ministry of the Attorney General, and are available here [PDF]. Some of the recommendations not implemented call for solutions that involve further discussion and stakeholder participation. These suggestions include the development of alternate forms of bonds for projects that use collaborative contracting, and the option to create a standing disputes board on public projects in place of minimum bond coverage. It remains to be seen whether these other recommendations will be taken up by Ontario’s provincial government and what further changes may arise.