Ontario Construction Act 2026: What Changed and What Your Firm Needs to Do

Overview: The Biggest Overhaul Since Prompt Payment

On January 1, 2026, two pieces of legislation changed the way Ontario construction contracts handle money. Bill 216 (the Protecting Construction Workers and Their Families Act, 2024) and Bill 60 (the Get it Done Act, 2024) together represent the most significant set of amendments to the Construction Act (R.S.O. 1990, c. C.30) since the prompt payment and adjudication regime came into force in October 2019.

These amendments touch five areas that matter to every ICI general contractor, major subcontractor, and project owner in the province: holdback management, proper invoices, adjudication, trust obligations, and statutory notices. If your firm works on contracts longer than one year, you are already operating under the new rules.

This page is a plain language walkthrough of each change, the relevant section numbers, and the practical steps your accounting and project management teams need to take. It is not legal advice. For your specific situation, consult a qualified Ontario construction lawyer.

Annual Holdback Release (Section 26)

This is the headline change. Before January 1, 2026, annual holdback release under the Construction Act was optional and only available on contracts valued at $10 million or more. The vast majority of projects simply accumulated holdback until substantial performance.

That is no longer the case. Under the amended Section 26, annual holdback release is now mandatory for every improvement contract that spans more than one year, regardless of dollar value. There is no opt out. A $1.5 million school renovation that runs 14 months triggers the same obligation as a $90 million hospital build.

How the Annual Release Cycle Works

The process follows a precise calendar. On each anniversary of the contract, the owner must publish a Notice of Annual Release of Holdback (Form 6) within 14 days on a designated construction trade news website. That publication opens a 60 day window during which any lien claimant may preserve a lien against the holdback being released. If no liens are preserved (or if preserved liens are discharged), the owner must release the accrued holdback to the general contractor no earlier than day 60 and no later than day 74 after publication.

The general contractor then has 14 days to release holdback to each subcontractor, and each subcontractor has another 14 days to pass payment down the chain to sub-subcontractors. The math is straightforward, but the deadlines are strict.

Example: Contract Signed March 15, 2026

Section 27.1 Is Repealed

The old Section 27.1, which allowed an owner to refuse annual holdback release by issuing a notice of non-payment, has been fully repealed. Owners can no longer block the annual release cycle. If you had internal processes or contract clauses that relied on Section 27.1 refusal notices, those need to be removed.

Transition Rules for Pre-2026 Contracts

Contracts entered before January 1, 2026 are not grandfathered out of the new regime permanently. However, the mandatory annual release obligation begins on the second anniversary of the contract that falls on or after January 1, 2026. For example, a contract signed on June 1, 2024 has its first anniversary on June 1, 2025 (before the amendments), and its second anniversary on June 1, 2026 (after the amendments). The annual holdback release obligation kicks in on June 1, 2026.

P3 Exemption

Public-private partnership (P3) agreements entered into before January 1, 2026 are exempt from the mandatory annual holdback release provisions. This exemption recognizes the unique financing and payment structures of legacy P3 projects. P3 agreements entered on or after January 1, 2026 are subject to the new rules like any other contract.

Proper Invoice Changes (Section 6.1)

The prompt payment regime already required owners and general contractors to pay proper invoices within strict timelines: 28 days from owner to GC, 7 days from GC to sub. Those timelines remain. What changed is the deeming rule and the clarity around what makes an invoice "proper" in the first place.

The 7 Day Deeming Rule

Under the amended Section 6.1, if a party that receives an invoice does not issue a written notice of dispute or non-compliance within 7 days of receipt, the invoice is deemed to be a proper invoice. Previously, there was ambiguity about when an invoice became "deemed proper," and some owners used that grey area to delay payment by endlessly requesting additional documentation.

The 7 day deeming rule closes that gap. If you receive an invoice and you believe it is incomplete or non-compliant, you must say so in writing within 7 days. If you stay silent, the clock starts ticking on the 28 day payment obligation.

Updated Section 6.1 Requirements

The amendments also clarify the minimum contents of a proper invoice. A proper invoice under the updated Section 6.1 must include: the contractor's name and address, the date of the invoice, the amount payable (including holdback), the improvement and contract to which the invoice relates, a description of the services or materials supplied, the period the invoice covers, and any other information the contract specifically requires.

What Owners Need to Do Differently

Owners and their project managers must implement a tighter review process. The 7 day window to dispute an invoice is short. If your accounts payable team currently takes two weeks to review a progress billing, you are at risk of invoices being deemed proper before anyone has looked at them. Build a review workflow that flags incoming invoices on the day they arrive and assigns a reviewer with authority to approve or dispute within 5 business days.

What Contractors Need to Do Differently

Contractors should ensure every invoice they submit meets the Section 6.1 requirements on the first attempt. A clean, compliant invoice gives the recipient less room to dispute it and starts the payment clock immediately. Standardize your invoice template to include every required field. Track the date of delivery so you know exactly when the 7 day deeming window and the 28 day payment window begin.

Expanded Adjudication

Ontario introduced adjudication as a fast, interim dispute resolution mechanism when prompt payment came into force in 2019. The 2026 amendments broaden the scope of disputes that can be referred to adjudication and make the process more accessible.

Broader Scope

Adjudication now covers a wider range of disputes, including disagreements over change orders, scope of work, valuation of services or materials, and disputes related to holdback payment obligations. Previously, adjudication was primarily tethered to proper invoice disputes. The expanded scope means that more disagreements can be resolved quickly (within the standard adjudication timeline of roughly 46 days) rather than sitting in litigation for years.

Private Adjudicators Qualified by ODACC

The Ontario Dispute Adjudication for Construction Contracts (ODACC) authority continues to administer the adjudication registry. Under the 2026 amendments, private adjudicators must meet updated qualification standards set by ODACC. The minimum fee for an adjudication has been set at $1,000, ensuring that qualified professionals are available for even smaller disputes without the cost spiralling into litigation territory.

More Flexibility in Process

The amendments give adjudicators more procedural flexibility to manage hearings efficiently. This includes the ability to consolidate related disputes, request additional evidence, and adjust timelines in limited circumstances. The goal is faster, more practical resolution. For contractors and subcontractors, this means that adjudication is now a realistic tool for a broader set of project disputes, not just narrow invoice questions.

Holdback as Trust Fund

The 2026 amendments clarify and strengthen the trust provisions that apply to holdback funds under Part II of the Construction Act. Holdback money has always been impressed with a trust in Ontario, but the amendments make the obligations more explicit and the consequences of breach more severe.

Commingling Implications

The amended provisions reinforce that holdback funds must be identifiable and traceable. Owners and contractors who commingle holdback with general operating funds risk being found in breach of their trust obligations. Best practice is to hold statutory holdback in a dedicated bank account or, at minimum, in a clearly segregated ledger with a corresponding cash reserve. If your firm currently tracks holdback as a line item in your general ledger without ring-fencing the actual cash, the risk profile under the 2026 amendments is higher than it was before.

Personal Liability for Directors and Officers

Directors and officers of a corporation that is a trustee of construction trust funds may be held personally liable for a breach of trust. This is not new, but the 2026 amendments tighten the language and remove some of the defences that directors previously relied on. If you sit on the board of a general contractor or a major subcontractor, make sure your firm has documented trust fund compliance procedures. A paper trail showing that holdback was segregated, tracked, and released in accordance with the Act is your best protection.

Statutory Notices Go Digital (Section 32)

Before 2026, several notices required under the Construction Act had to be published in a newspaper. That requirement has been replaced. The amendments designate three construction trade news websites as the official channels for publication.

The Three Designated Websites

• Daily Commercial News (dcnonl.com)
• Link2Build (link2build.ca)
• Ontario Construction News (ontarioconstructionnews.com)

Form 6 (Notice of Annual Release of Holdback), notices of non-payment, and other statutory notices must now be published on one of these designated websites. The change makes publication faster, cheaper, and easier to search. It also means that contractors, subcontractors, and lien claimants need to monitor these sites actively. If you are not already watching Daily Commercial News or Link2Build for notices that affect your projects, you should start now.

What This Means in Practice

For owners, the cost and delay of newspaper publication is eliminated. You publish Form 6 on one of the three designated sites and the 60 day lien window begins on the date of publication. For lien claimants, the onus is on you to monitor these websites. A lien claimant who misses a published notice because they were not checking the designated sites has no recourse. Set up alerts or assign someone on your team to check on a regular schedule.

Lien Rights Are Not Affected

This section matters because it addresses the single biggest concern the industry raised during the legislative process. When annual holdback release was first proposed under Bill 216, contractors and subcontractors worried that releasing holdback annually might shorten or complicate lien preservation timelines. Bill 60 addressed that concern directly.

Decoupling Holdback Release from Lien Expiry

The amendments explicitly decouple the annual holdback release cycle from lien preservation deadlines. Releasing holdback on an annual basis does not restart, shorten, or otherwise alter the lien preservation period under Part III of the Construction Act. Lien preservation timelines continue to run based on the date of last supply of services or materials, just as they did before.

This means a subcontractor who receives annual holdback does not lose the right to preserve a lien for unpaid amounts that fall outside the holdback. The two mechanisms (holdback release and lien rights) operate on independent tracks.

Why This Matters for Your Workflow

From an operational standpoint, you need to track two separate sets of dates: the annual holdback release calendar (driven by contract anniversaries and Form 6 publication) and the lien preservation calendar (driven by last supply dates). Do not confuse the two. A system that merges them into a single timeline will produce incorrect deadlines. Keep them parallel but distinct in your project management and accounting software.

Key References

The following resources provide the full text of the legislation, regulatory guidance, and detailed legal commentary on the 2026 amendments. We recommend bookmarking them.

• Ontario Construction Act (full text) ontario.ca/laws/statute/90c30
• Council of Ontario Construction Associations (COCA) coca.on.ca
• Ontario Dispute Adjudication for Construction Contracts (ODACC) odacc.ca
• Construction Act Forms (Ontario Court Forms) ontariocourtforms.on.ca
• Fasken: Ontario's Amendments Take Effect January 1, 2026 fasken.com
• BLG: Changes to Ontario's Construction Act Effective January 1, 2026 blg.com