Ontario Proper Invoice Deficiency Notice: The 7-Day Rule

An Ontario proper invoice deficiency notice now has a hard seven-day deadline. Since January 1, 2026, an owner that receives a deficient invoice must tell the contractor in writing what is wrong and what will fix it within seven days. If the owner stays silent, Ontario's Construction Act deems the invoice proper for the prompt-payment rules.

That change closes a costly gap in the old process. An invoice can no longer sit in an approval queue for weeks before someone says that a purchase order, payment period or remittance contact was missing. However, the new rule also creates two live review tracks for owners: a seven-day completeness review and a separate 14-day payment-dispute review.

This guide explains the current law, how to count the seven days, what a useful notice should contain, and what owners and contractors should change in their workflows.

In brief: Receipt starts the sequence. By day 7, the owner must identify any invoice deficiency and the required cure in writing. By day 14, the owner must use the prescribed notice of non-payment if it disputes payment. Subject to a valid notice of non-payment and statutory holdback, payment falls due by day 28.

What changed on January 1, 2026?

Ontario does not have a statute titled the “Prompt Payment Act.” Its prompt-payment regime appears in Part I.1 of the Construction Act. New subsection 6.1(2) creates a deemed proper invoice rule.

The rule is simple but strict. An invoice that misses a requirement in subsection 6.1(1) is still treated as proper for Part I.1 unless the owner acts no later than seven days after receipt. The owner must notify the contractor in writing of both:

• the deficiency; and
• what the contractor must do to address it.

The change came from Schedule 4 of the Building Ontario For You Act (Budget Measures), 2024. Ontario brought the relevant amendments into force on January 1, 2026 through Order in Council 1523/2025.

The policy reason matters. Ontario's 2024 independent review found that technical invoice objections could delay payment and strain cash flow. It recommended a short written-review window. The Legislature adopted that approach, while also allowing owners to request information needed for a functioning accounts-payable system.

Notably, subsection 6.1(2) is an owner-to-contractor rule. It does not create a general seven-day statutory rejection form for every invoice at every subcontract tier. Downstream payment duties still depend on the proper invoice given to the owner, payments received and the separate notice rules in sections 6.5 and 6.6.

Ontario proper invoice deficiency notice timeline

An Ontario proper invoice deficiency notice belongs to the first of three potential owner-side deadlines. For an invoice that is proper on receipt or becomes deemed proper, each period runs from receipt, not from the date printed on the invoice.

• Day 0 — receipt: Record when and how the owner received the invoice.
• Day 7 — deficiency deadline: If the invoice is incomplete, send a written notice that identifies the defect and the required cure under subsection 6.1(2).
• Day 14 — non-payment deadline: If the invoice is proper or deemed proper and the owner disputes all or part of the amount, give the contractor a prescribed Form 1.1 notice of non-payment under subsection 6.4(2).
• Day 28 — payment deadline: If the invoice is proper or deemed proper, pay the amount payable, less any amount covered by a valid notice of non-payment and any holdback that Part IV requires.

Importantly, the seven-day review does not add seven days to the other clocks. Both the 14-day notice period and the 28-day payment period are measured from receipt of the proper invoice. If silence causes a deficient invoice to be deemed proper, the original receipt date remains the anchor. A timely notice about an actual subsection 6.1(1) defect may mean the invoice has not yet triggered those clocks, but that conclusion can itself be disputed.

For that reason, an owner should not wait for the deficiency review to finish before starting the merits review. The two reviews should run together.

What must a proper invoice in Ontario contain?

Subsection 6.1(1) defines a proper invoice in Ontario as a written bill or other payment request for services or materials supplied to an improvement under a contract. It must meet statutory requirements and, subject to the Act's restriction on prior approval, any other invoice requirements in the contract.

The current statutory checklist is:

1. The contractor's name and address.
2. The invoice date and the period, milestone or other contractual payment entitlement to which it relates.
3. The contract or other authorization for the supply, such as a contract number, contract line-item number or purchase order number.
4. A description of the services or materials, including quantity where appropriate.
5. The amount payable and the payment terms.
6. The required remittance contact. This may be a named person with title, mailing address and telephone number, or an office or department with its name, mailing address and telephone number.
7. Other information that the owner reasonably requests because it is necessary for the proper functioning of the owner's accounts-payable system.
8. Any other information prescribed by regulation.

The seventh item deserves care. The Act does not give an owner an unlimited right to invent new hurdles after an invoice arrives. The information must be necessary to the accounts-payable system, and the request must be reasonable. Owners should state those requirements in the contract, billing guide or onboarding material. Contractors should keep proof of the requirements they received.

Meanwhile, subsection 6.3(2) makes a contract term ineffective if it conditions the giving of a proper invoice on prior certification by a payment certifier or prior owner approval. The Act does permit certification or approval after the invoice is given. It also preserves a specific exception for testing and commissioning provisions.

What should the written deficiency notice say?

The Construction Act does not prescribe a form for an Ontario proper invoice deficiency notice. That differs from a notice of non-payment. The current Forms regulation assigns Forms 1.1 through 1.5 to notices of non-payment, but it does not assign a form to subsection 6.1(2).

Still, a bare rejection such as “invoice incomplete” does not track the statute. A sound written notice should make the two required points clear and create reliable evidence of delivery. In practice, include:

• the project, contract and invoice number;
• the date and method of receipt;
• each missing or non-compliant item;
• the statutory or contractual requirement tied to each item;
• the exact information or document needed to cure each defect;
• the person and channel for the corrected submission; and
• the notice date, sender and delivery record.

For example, write that the invoice does not identify the milestone under subsection 6.1(1), then name the milestone reference that the owner needs. Do not merely say that the invoice “failed review.” Specific wording lets the contractor cure the problem and helps both parties preserve the record.

Also, send the notice through a contract-authorized channel that produces a timestamp. Email may create a useful record, but the contract may impose additional delivery rules. Keep the sent message, attachment, server timestamp and acknowledgement together.

A deficiency notice is not a notice of non-payment

This is the most important operational distinction. An invoice-completeness objection under subsection 6.1(2) and a payment dispute under subsection 6.4(2) do different jobs.

The Ontario proper invoice deficiency notice addresses missing information or another failure to meet the invoice requirements. It has no prescribed form, but it must be written, specific and sent by day 7.

A notice of non-payment in Ontario addresses the owner's refusal to pay all or part of a proper invoice. It must reach the contractor by day 14, state the unpaid amount and detail every reason for non-payment. In addition, O. Reg. 303/18 requires Form 1.1, while O. Reg. 304/18 permits paper or electronic delivery.

Therefore, one notice should not be assumed to replace the other. An owner may believe that an invoice is incomplete and also dispute the value, scope or quality of the work. In that situation, both deadlines may matter. A prudent workflow escalates the invoice for legal review before either window closes.

If the owner misses day 7, the invoice becomes a deemed proper invoice for Part I.1. The owner may still have time to dispute payment through a valid Form 1.1 by day 14. If the owner misses that deadline too, subsection 6.4 requires payment by day 28, subject to statutory holdback. Section 6.9 also makes interest accrue on late amounts at the applicable statutory or contractual rate.

How are the seven days counted?

The seven days are calendar days, not business days. Under section 89 of Ontario's Legislation Act, 2006, the count excludes the day the invoice arrives and includes the last day.

If the last day falls on a statutory “holiday” listed in section 88, the deadline moves to the next day that is not a holiday. That list includes Sunday, Easter Monday, Remembrance Day and Boxing Day. However, Saturday is not automatically a holiday under that list.

For example, assume an owner receives an invoice on Monday, October 5, 2026. Day 7 is Thanksgiving Monday, October 12. Section 89 moves the deadline to Tuesday, October 13.

By contrast, if day 7 falls on a Saturday, do not automatically move it to Monday. Section 89 has a separate rule for a place that is closed during regular business hours, but its application depends on the act required and the delivery setting. Build the workflow to meet the Saturday date unless project counsel confirms otherwise.

What happens after a timely deficiency notice?

A timely notice prevents an actually deficient invoice from becoming proper merely through owner silence. The contractor can then supply the missing information or challenge the asserted defect.

The Act separately addresses revisions to a proper invoice in subsection 6.3(5). A contractor may revise one only if the owner agrees in advance, the invoice date does not change, and the revised invoice meets subsection 6.1(1). The new deeming rule applies to a revised invoice with necessary changes under subsection 6.3(6).

However, the Act does not set out one detailed cure protocol for every invoice rejected under subsection 6.1(2). The parties should document the corrected submission, its receipt and the treatment of the invoice date. If the proper-invoice status or clock anchor remains disputed, get project-specific legal advice quickly. Construction adjudication may become relevant to the resulting payment dispute.

Owner checklist for the seven-day review

First, centralize invoice receipt. A shared address or portal should capture the original file and create a reliable timestamp.

Second, run statutory, contractual and accounts-payable checks on day 0 or day 1. Do not leave the review with one vacationing approver.

Third, route technical certification and commercial review at the same time. Prior certification cannot generally block the giving of an invoice, but review after receipt can support a payment decision.

Fourth, if the invoice is deficient, send a complete written notice well before day 7. Identify every known defect and the exact cure. Preserve proof that the contractor received it.

Finally, keep the day-14 Form 1.1 decision on a separate task. The deficiency process does not safely replace the payment-dispute process.

Contractor checklist before and after submission

First, build the subsection 6.1(1) fields into the invoice template. Include the relevant period, milestone or payment entitlement and a clear contract, line-item or purchase-order reference.

Next, collect the owner's reasonable accounts-payable requirements before the first billing cycle. Confirm the delivery address and the person or system that records receipt.

Then, submit through the agreed channel and keep the transmission record. The invoice date alone does not prove when the owner received it.

If an Ontario proper invoice deficiency notice arrives, compare each objection with the statute and contract. Cure real gaps promptly, but do not silently change the date or status of the invoice. Record what changed, when it was resubmitted and what the owner agreed.

Finally, track the 14-day and 28-day payment deadlines from the defensible receipt date. If the owner relies on a late or vague deficiency notice, seek legal advice before the payment dispute grows.

Does the 2026 rule apply to existing projects?

Generally, yes, if the project already falls under the current Construction Act prompt-payment regime. Section 87.4 says the 2024 amendments apply to an improvement from their in-force date, subject to stated exceptions. As a result, subsection 6.1(2) applies from January 1, 2026 to eligible ongoing improvements, not only to head contracts signed in 2026.

Two transition filters still matter. First, section 87.3 keeps the pre-July 1, 2018 Act for certain older improvements, including those with an older head contract or procurement process. Second, Parts I.1 and II.1 generally apply to contracts entered on or after October 1, 2019 and to subcontracts under those contracts. Review the project documents when a contract, procurement or lease crosses those dates.

Does Ontario require a prescribed deficiency notice form?

No prescribed form currently appears in the Act's Forms regulation for a subsection 6.1(2) deficiency notice. The legal requirements are a written notice, delivery no later than seven days after receipt, identification of the deficiency, and an explanation of what will address it. Contractual notice rules may add delivery requirements.

Does a deficiency notice replace Form 1.1?

No. A deficiency notice concerns whether the invoice meets the proper-invoice requirements. Form 1.1 is the owner's prescribed notice for disputing payment of all or part of a proper invoice. The first deadline is day 7 and the second is day 14. Depending on the facts, an owner may need both.

Are the seven days business days or calendar days?

They are calendar days. The receipt day is excluded. If day 7 is a holiday under section 88 of the Legislation Act, 2006, section 89 extends the deadline. Saturday does not automatically qualify as a holiday in Ontario.

What if the owner says nothing for seven days?

The invoice is deemed to be a proper invoice for Part I.1 even if it missed a subsection 6.1(1) requirement. The owner's 14-day notice-of-non-payment deadline and 28-day payment deadline remain tied to receipt. The owner should not treat silence as extra review time.

The practical takeaway

The new Ontario proper invoice deficiency notice rule shifts delay risk to the party best placed to find a defect quickly. Contractors gain a clear response deadline. Owners gain a direct way to demand a cure, but only if they review the invoice and explain the problem on time.

In practice, the safest system treats invoice receipt as a legal event. Capture it once, run completeness and merits reviews in parallel, and preserve each notice with its delivery evidence. That discipline protects the payment deadlines in Ontario and keeps a technical invoice issue from becoming a larger prompt-payment dispute.

Legal information, not legal advice. This article gives general information about Ontario law as reviewed on July 21, 2026. It does not address every contract, transition rule or project fact. Consult qualified Ontario construction counsel about a specific invoice or deadline.

Legal and research sources: Ontario Construction Act · O. Reg. 303/18 (Forms) · O. Reg. 304/18 (General) · Ontario Construction Act forms · Legislation Act, 2006 · Order in Council 1523/2025 · 2024 Independent Review: Updating the Construction Act · Ontario Association of Architects Prompt Payment Practice Tip