Key Changes to Ontario’s Construction Act for January 1, 2026
Ontario’s Construction Act is undergoing significant changes. These changes have been in the works since the Act had an expert review in 2024. There have been revisions and consultations since the changes were originally introduced.
With Bill 60 having recently passed in the Provincial Legislature on November 27, 2025, we now have confirmation on the changes and their date of implementation.
These changes will come into force on January 1, 2026, meaning everyone in Ontario’s construction industry will have to become familiar with them quickly. Some of the more significant changes are discussed below.
Annual Release of Holdback
In our view, mandatory annual release of holdback is the most significant of the changes to the Act.
As of January 1, 2026, it will be mandatory for the 10% statutory holdback to be released following each annual anniversary of the contract date for a contract between an owner and contractor. Owners must publish a notice of annual release of holdback stating the amount of holdback the owner intends to release and the intended payment date. All holdback accrued during the preceding year of the contract must be released.
The changes also originally contemplated annual lien expiry in relation to the holdback release, but this has since been removed. Lien expiry will continue to function as it does under the current version of the Act.
Adjudication
These changes to the Act also touch on several aspects of the Construction Act’s adjudication process. Some of the important changes to adjudication include:
- Limits on when an adjudication must be commenced: A party wishing to commence an adjudication must do so no later than 90 days after the date on which the contract is completed, terminated, or abandoned, or in the case of a subcontract, no later than the 90 days after the contract is completed, terminated, or abandoned, the date the subcontract is certified to be complete, or the date the subcontract last supplied services or materials.
- Public determinations: Adjudicators’ determinations will be published on ODACC’s website. The parties will be able to elect whether the determination is anonymized before publishing.
- Private adjudications: Parties are currently limited to only adjudicators from ODACC’s registry. These new changes will permit parties to select a private adjudicator, provided the adjudicator must charge at least $1,000 per hour and the parties and adjudicator enter into a written agreement.
- Corrections to determinations: Parties will be able to propose corrections to a determination no later than 5 days after the determination is released to the parties.
Proper Invoices
These changes to the Act will also impact proper invoices in the prompt payment system. There are some clarifications as to the requirements for a proper invoice. Most importantly, a contractor’s invoice to an owner will be deemed a proper invoice for the purposes of prompt payment unless the owner notifies the contractor in writing of the deficiency in the invoice and what is required to address the deficiency to make it a proper invoice, within 7 days of receiving the invoice. This places a new onus on the owner.
Amended Definition of “Price”
The Act currently defines the “price” of a contractor or subcontract as the price agreed on between the parties, or, if no specific price is agreed, the actual market value of the services or materials supplied under the contract or subcontract. This has been criticized as not appropriate for certain types of contracts. The new changes to the Act will permit the definition of “price” to be supplemented or amended in the regulations.
This article is not legal advice and is provided for informational purposes only.