Effective January 1, 2026, the Construction Act, R.S.O. 1990, c. C.30 operates under a substantially new regime introduced by Bill 216. The changes affect every Ontario commercial construction project — from owner-led developments through general contractors and subtrades — and every set of template forms and processes built for the pre-amendment Act now needs to be reviewed.
The single biggest change is the mandatory annual release of holdback. An owner must publish a notice of annual release of holdback within 14 days of each contract anniversary. Holdback is then released no earlier than 60 and no later than 74 days after that notice. That release flows down the contracting chain on a 14-day clock. Liens expire 60 days after the notice, not at the end of the project. Owners who fail to publish on time face downstream cash-flow disruption and elevated lien risk.
The prompt-payment regime tightens in parallel. A 'proper invoice' is now deemed proper unless the owner objects in writing within seven days. Once deemed proper, payment timelines from the Construction Act run automatically. Combined with adjudication under Part II.1 — already in force since 2019 — the practical effect is that disputes over interim payment now resolve in weeks, not months.
What we are doing for clients today: rebuilding template construction contracts to reflect the new annual-holdback regime; adding the new notice forms to standard project document packages; updating internal workflows for owners and finance teams to track contract anniversaries and notice deadlines; and walking lender/lawyer/contractor teams through the practical compliance steps before their first 2026 anniversary triggers.
If you operate, finance, or counsel construction projects in Ontario and have not yet revisited your templates and processes against the January 1, 2026 framework, this is the right month to do it.
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