Effective January 1, 2026, key amendments to Ontario’s Construction Act (Act), enacted by Building Ontario For You Act (Bill 216) and Fighting Delays, Building Faster Act, 2025 (Bill 60), came into force. Bill 60 refines certain provisions originally introduced by Bill 216, which we summarized in our November 2024 bulletin.
This bulletin highlights changes Bill 60 made to Bill 216 and summarizes the amendments to the Act regarding dispute interim adjudication, administration and release of holdbacks, definitions and deeming amendments, and transitional rules that came into force on January 1, 2026.
Interim Adjudication
Our previous bulletin addressed the interim adjudication provisions introduced by Bill 216. Bill 60 does not affect any of the dispute interim adjudication amendments introduced by Bill 216.
Administration and Release of Holdbacks
Bill 216 introduced a mandatory annual holdback release regime that coupled the annual release of holdbacks with lien expiry. Bill 60 maintains the annual holdback release mechanism but decouples holdback release from lien expiry. As of January 1, 2026, owners must publish a notice of annual release of holdback within 14 days of each 1-year anniversary of the contract. Owners must then wait 60 days from publication, after which they have 14 days to release accrued holdback amounts (unless a lien has been preserved or perfected).
Bill 60 also amends section 30 of the Act to clarify that if a contract or subcontract is abandoned or terminated, the holdback cannot be used to obtain substitute services or materials to finish the job or to satisfy any claim against the contractor or subcontractor until all potential liens against that holdback have been resolved. This replaces prior language that referred to a contractor’s or subcontractor’s default in performance, rather than contract abandonment or termination.
Under Bill 60, section 31 of the Act is amended as follows:
- The notice of termination of a contract must be published by the owner or contractor or other person whose lien is subject to expiry, no later than seven days after a contract is terminated.
- The date of termination is deemed to be the date on which the notice is published (or, if multiple notices are published, the date of the first notice).
Validity of the termination may still be contested, notwithstanding publication of the notice.
Definitions and Deeming Amendments
Bill 60 retains the amendments to the Act regarding the requirements of a “proper invoice,” the definition of “price” and the deeming provision involving multiple improvements set out in Bill 216, as outlined in our prior bulletin.
Transitional Rules
As a general rule, the amendments to the Act apply to all “improvements” on and after January 1, 2026, except that:
- For contracts entered into before January 1, 2026, the new holdback release rules will apply with a delayed start date: the first annual holdback release will be required as of the second anniversary of the contract date that falls after January 1, 2026. When the first annual holdback payment is made, such payment must include all holdback that accrued before that anniversary date, effectively catching up on previously accumulated amounts.
- Certain prescribed public-private partnership project agreements entered into before January 1, 2026, are governed by the former holdback release regime under the Act. For clarity, certain contracts and procurement processes entered into or commenced before July 1, 2018, remain governed by the former Construction Lien Act (section 87.3 of the Act).
There are also certain exceptions related to holdbacks for designs or plans, notices of termination and notices of adjudication.
Conclusion
Bill 60’s amendments to the Act are now in force and will impact the day-to-day administration of construction projects. The changes are designed to preserve the ability of subcontractors to call on the holdback, receive the applicable holdback amounts earlier and receive notices in a timely manner (among other things).
Industry participants should take note of the key changes, particularly the timing for annual holdback release, and update their processes to ensure compliance with the Act. Industry participants should also ensure they have sufficient funds (other than the holdback) or other security set aside to complete a project in the event a contract is terminated early, including for non-performance.
Given the nature of the transitional rules, industry participants will want to obtain advice to confirm the applicability of the amendments to their specific situations.
For further information, please contact the authors of this bulletin or any member of our Construction Dispute Resolution group.
