Ontario's 2026 Construction Act Changes: What They Mean for Getting Paid

Key takeaways

• Since January 1, 2026, an Ontario invoice is treated as a proper invoice unless the owner flags what is missing, in writing, within 7 days.
• Owners must now release accrued holdback every year, after each contract anniversary, unless a lien has been preserved.
• Adjudication is available for up to 90 days after a contract ends, and an adjudicator's award must be paid within 15 days.
• The core clocks have not changed: the owner pays a proper invoice within 28 days, and each tier below pays within 7 days of being paid.

The clocks that did not change

Ontario's prompt payment clocks have been the same since October 1, 2019. The 2026 amendments change what happens around them: when an invoice counts, when holdback comes back, and how long you can adjudicate. Start with the clocks, because everything else hangs on them.

Under Part I.1 of the Construction Act:

Owner to contractor

• Who pays: Owner
• Who is paid: Contractor
• Deadline: 28 days after receiving a proper invoice
• Section: s. 6.4(1)

Contractor to subcontractor

• Who pays: Contractor
• Who is paid: Subcontractor
• Deadline: 7 days after receiving payment from the owner
• Section: s. 6.5(1)

Subcontractor to sub-subcontractor

• Who pays: Subcontractor
• Who is paid: Sub-subcontractor
• Deadline: 7 days after receiving payment from the contractor
• Section: s. 6.6(1)

When the owner has not paid

• Who pays: Contractor, if the owner did not pay
• Who is paid: Subcontractor
• Deadline: 35 days after giving the proper invoice to the owner
• Section: s. 6.5(4)

When the contractor has not paid

• Who pays: Subcontractor, if the contractor did not pay
• Who is paid: Sub-subcontractor
• Deadline: 42 days after the proper invoice was given to the owner
• Section: s. 6.6(5)(b)

The last two payment situations matter most to trades. If the owner does not pay, the money owed down the chain still comes due on day 35 and day 42. A contractor or subcontractor can only avoid that obligation by giving a notice of non-payment on time.

If you are a subcontractor counting toward day 42, you need to know when the contractor gave its invoice to the owner. The Act lets you ask. The contractor must confirm that date as soon as possible (s. 6.6(10)).

Which contracts these rules cover. Projects whose contract was entered into, or whose procurement started, before July 1, 2018 are still governed by the former Construction Lien Act (s. 87.3(1)). Prompt payment and adjudication also do not apply to contracts entered into before October 1, 2019, to contracts whose procurement started before that date, or to subcontracts under them (s. 87.3(4)). The 2026 annual holdback rules do not apply to pre-July 2018 projects (s. 87.4(1)).

Change 1: an owner's silence now makes the invoice proper

An invoice that is missing required information is now deemed a proper invoice unless the owner objects in writing within 7 days of receiving it (s. 6.1(2)). The owner's notice must say what is deficient and what is needed to fix it.

Before 2026, an invoice could be bounced weeks later for a missing purchase order number. That left the trade unsure whether the 28-day clock had ever started. Now the owner has a 7-day window to raise problems. If the owner says nothing, the clock starts on the day the invoice was received.

A proper invoice must contain:

1. The contractor's name and address.
2. The invoice date and the period, milestone or other payment entitlement it covers.
3. Information identifying the contract or authorization, such as a contract number, line item or purchase order number.
4. A description of the services or materials supplied, with quantities where appropriate.
5. The amount payable and the payment terms.
6. The name, title, mailing address and phone number of the person or office that receives payment.
7. Any other information the owner reasonably requests that is necessary for its accounts payable system. This item is new in 2026.
8. Any other prescribed information.

The same 7-day rule applies to a revised invoice (s. 6.3(6)). A proper invoice can be revised only if the owner agrees in advance and the invoice date does not change (s. 6.3(5)).

The rule has two limits. First, it covers invoices from the contractor to the owner. It does not by itself make a subcontractor's invoice to a GC proper, so check your subcontract terms. Second, a deemed proper invoice can still be disputed. The owner keeps the right to give a notice of non-payment within 14 days of receiving the invoice (s. 6.4(2)). Silence fixes the paperwork, not the amount owed.

For the bookkeeper: The deemed-invoice rule covers invoices from the contractor to the owner. If you bill the owner directly, record the date each invoice is received and count 7 days from it. If no written deficiency notice arrives by day 7, note that in the file. That note is your evidence that the 28-day clock is running.

Change 2: holdback now comes back every year

Ontario owners must now release accrued holdback after every contract anniversary, not just at the end of the job (s. 26). Holdback is still 10 per cent of the value of services or materials supplied (s. 22(1)). For a multi-year project, that money no longer has to wait until the end.

The annual release follows four steps:

1. Notice by the owner. Within 14 days after each anniversary of the contract date, the owner publishes a notice of annual release of holdback (Form 6) on a construction trade news website: the Daily Commercial News, Link2Build or Ontario Construction News (O. Reg. 304/18). The notice states the amount and the intended payment date (s. 26(3)).
2. Payment by the owner. At least 60 days and no later than 74 days after the notice is published, the owner pays the contractor all holdback accrued on work supplied in the year before the anniversary (s. 26(4)). The count runs from the date the notice is published.
3. Payment by the contractor. Within 14 days of receiving that holdback, the contractor pays each subcontractor its share for the same year (s. 26(5)).
4. Payment down the chain. The same 14-day rule applies between subcontractors (s. 26(6)).

One thing stops the release: a lien that has been preserved or perfected for the contract or subcontract and has not been discharged or vacated. When that lien is dealt with, the payer has 14 days to release the holdback (s. 26(7)).

Holdback is protected when a job ends early. If a contract or subcontract is abandoned or terminated, no payer may use the holdback to hire a replacement or to pay claims against the contractor or subcontractor. That restriction lasts until all liens that may be claimed against the holdback have expired or been resolved (s. 30, as amended by Bill 60). An owner who terminates needs other funds to finish the job.

Contracts signed before January 1, 2026 are on a delayed schedule (s. 87.4(4)). The first anniversary that triggers a release is the second one after January 1, 2026. That first release covers all holdback accrued before that anniversary, not just one year's worth. For a contract signed on March 15, 2025, the first triggering anniversary would be March 15, 2027. Check the date for each of your contracts.

For the trade owner: On a long job, holdback that used to sit until the end now comes back yearly. Put each contract's anniversary in your calendar. Look for the owner's notice within 14 days after it, then count 60 to 74 days to the payment date.

Change 3: you can still adjudicate after the job ends

A party to a contract can now start adjudication up to 90 days after the contract is completed, abandoned or terminated (s. 13.5(3)). This gives trades a fixed window after the last day on site.

For subcontracts, the 90 days runs from the earliest of three dates (s. 13.5(3.1)):

• The day the main contract is completed, abandoned or terminated.
• The day the subcontract is certified complete under s. 33.
• The day the subcontractor last supplied services or materials to the improvement.

For most trades, the last date is the one that matters. If your last day on the job was April 30, your adjudication window closes 90 days later. Waiting for the GC to close out the main contract does not extend it.

Other 2026 adjudication changes:

• The parties can agree on a private adjudicator if the prescribed conditions are met, or use a registry adjudicator (s. 13.9).
• Jurisdictional objections must be raised early, when you first make submissions (s. 13.12.1). A ground that could have been raised then generally cannot be used later on judicial review (s. 13.18(5.1)).
• The deadline to seek leave for judicial review is now 35 days after the determination is communicated (s. 13.18(2)).

For counsel: The last-supply date now limits adjudication rights for subcontracts. A client who calls in month four may already be out of time. Daily logs and delivery records that prove the last-supply date are worth keeping in the file from the first day.

Change 4: adjudication awards are due in 15 days

A party ordered to pay under an adjudicator's determination must pay within 15 days after the determination is communicated (s. 13.19(2)). Late amounts earn interest at the prejudgment rate, or at the contract rate if it is higher (s. 13.19(3)).

If the payment does not arrive, the contractor or subcontractor owed the money can suspend work until three amounts are paid (s. 13.19(5)):

1. The amount in the determination.
2. Interest on that amount.
3. Reasonable costs caused by the suspension.

When work resumes, the paying party also owes the reasonable costs of restarting (s. 13.19(6)).

Check the determination as soon as it arrives. For 5 days after it is communicated, the adjudicator may correct typographical, calculation and similar errors. The adjudicator may also amend it to fix an injustice caused by an oversight. Either can happen on the adjudicator's own initiative or at a party's written request (s. 13.17.1). The Act does not say whether a correction changes the 15-day payment deadline. Ask counsel before relying on a correction to delay payment.

A determination binds the parties until a court, an arbitrator or a written agreement between them resolves the matter (s. 13.15(1)). A party can file a certified copy with the court and enforce it like a court order (s. 13.20). Filing must happen within 2 years.

For the GC controller: A sub who wins an adjudication can stop work 15 days after the determination. On a job with a tight schedule, the cost of a late payment now includes the delay, not just interest.

What did not change: notices of non-payment

A notice of non-payment in the prescribed form is still the only lawful way to hold back money that is due on a proper invoice. If the notice is missed, the payment deadline stands.

Owner disputes a proper invoice

• Who withholds: Owner
• Why: Disputes the proper invoice
• Notice deadline: 14 days after receiving the proper invoice
• Extra requirement: Specify the amount and all reasons
• Section: s. 6.4(2)

Contractor has not been paid by the owner

• Who withholds: Contractor
• Why: The owner did not pay
• Notice deadline: 7 days after the owner's notice, or before day 35 if the owner gave none
• Extra requirement: Undertake to refer the matter to adjudication within 21 days; attach the owner's notice
• Section: s. 6.5(5), (7)

Contractor disputes a subcontractor's entitlement

• Who withholds: Contractor
• Why: Disputes the sub's entitlement
• Notice deadline: 7 days after the owner's notice, or before day 35 if the owner gave none
• Extra requirement: Specify the amount and all reasons
• Section: s. 6.5(6), (7)

Subcontractor has not been paid by the contractor

• Who withholds: Subcontractor
• Why: The contractor did not pay
• Notice deadline: 7 days after the contractor's notice, or before day 42 if none
• Extra requirement: Undertake to adjudicate within 21 days, unless the owner was the one who did not pay; attach notices received
• Section: s. 6.6(6), (8)

Subcontractor disputes a lower-tier subcontractor's entitlement

• Who withholds: Subcontractor
• Why: Disputes a lower-tier sub's entitlement
• Notice deadline: 7 days after the contractor's notice, or before day 42 if the contractor gave none
• Extra requirement: Specify the amount and all reasons
• Section: s. 6.6(7), (8)

Reasons for non-payment can include set-off under s. 12 or lien set-off under s. 17(3) (s. 6.7).

Interest. Amounts not paid when due earn interest at Ontario's prejudgment interest rate under the Courts of Justice Act. If the contract sets a different rate, the higher of the two applies (s. 6.9).

Holdback still applies. Every payment under Part I.1 is subject to the 10 per cent holdback (s. 6.2).

What to do now, by role

If you own a trade business

• Put each Ontario contract's signing date and anniversaries in your calendar.
• Write down your last day on site for every subcontract. Your 90-day adjudication window runs from it.
• Ask the GC to confirm when it gave its invoice to the owner. Day 35 and day 42 are counted from that date.
• Read every notice of non-payment you receive and check its date. A late or incomplete notice may not excuse payment.

If you keep the books

• If your firm invoices the owner directly, log the day each invoice is received and day 7 after it. No written deficiency notice by day 7 means it is treated as proper. If you invoice a GC, your clocks run from the GC's invoice to the owner, so ask for that date.
• Add item 7 to your invoice template: any accounts payable information the owner has reasonably requested.
• Track holdback per contract, by contract year, so you can check each annual release.
• Keep the evidence of receipt with each invoice.

If you are a GC controller

• Collect sub invoices early enough to build a complete proper invoice to the owner. If the owner misses its 7-day window to object, your invoice is treated as proper and the clocks below it start.
• Diarize the 14-day window after each anniversary for annual holdback notices on contracts where you are the owner's contractor. Then diarize the 14-day window to pay subs once holdback arrives.
• When the owner gives a notice of non-payment, your own notice to subs is due within 7 days. It needs the undertaking to adjudicate within 21 days.
• Budget for adjudication awards falling due in 15 days, because the right to suspend work makes late payment costly.

If you are construction counsel

• Check the transition rules in s. 87.4 for every pre-2026 contract before advising on holdback timing.
• Raise jurisdictional objections in the first submission (s. 13.12.1).
• Tell clients the 90-day adjudication window may already be running from their last day of supply.

Frequently asked questions

When did Ontario's 2026 Construction Act amendments take effect? January 1, 2026. Most changes came from the Building Ontario For You Act (Budget Measures), 2024, with further changes from the Fighting Delays, Building Faster Act, 2025.

How long does an Ontario owner have to pay a proper invoice? 28 days after receiving it, unless the owner gives a notice of non-payment within 14 days (s. 6.4).

What happens if an owner does not object to an incomplete invoice? If the owner does not notify the contractor in writing within 7 days, the invoice is deemed a proper invoice (s. 6.1(2)).

When is annual holdback paid in Ontario? The owner publishes a notice on a construction trade news website within 14 days after each contract anniversary, then pays 60 to 74 days after the notice (s. 26). Contracts signed before 2026 follow a delayed start (s. 87.4(4)).

How long after a job can a subcontractor start adjudication? 90 days from the earliest of: the main contract's completion, abandonment or termination; certification of the subcontract as complete; or the sub's last supply (s. 13.5(3.1)).

How quickly must an adjudication award be paid? Within 15 days of the determination being communicated. If unpaid, the party owed can suspend work (s. 13.19).

Sources

• Construction Act, R.S.O. 1990, c. C.30, e-Laws consolidation from January 1, 2026. Sections cited: 1, 6.1 to 6.9, 13.5, 13.9, 13.12.1, 13.15, 13.17.1, 13.18 to 13.20, 22, 26, 30, 87.3, 87.4.
• O. Reg. 304/18 (General), Construction Act, publication of Form 6 on a construction trade news website.
• Osler: Ontario Construction Act amendments now in effect.
• Blakes: Amendments to Ontario's Construction Act now in force.
• Cassels: The Construction Act, what's new in the new year.
• Bennett Jones: Updates to Prompt Payment Legislation in Ontario, British Columbia and Alberta, February 20, 2026.

This article is general information about Ontario's Construction Act. It is not legal advice, and Tiercord is not a law firm. Deadlines depend on your contract, your tier and the facts of your project. Speak with construction counsel about your situation.