Seven days to object, or the invoice is proper: what changed in the Construction Act on 1 January 2026

On 1 January 2026, the largest set of amendments to Ontario's Construction Act since 2018 came into force. They were enacted by Schedule 4 of the Building Ontario For You Act (Budget Measures), 2024 (Bill 216, S.O. 2024, c. 20) and then substantially rewritten, before they ever took effect, by Schedule 2 of the Fighting Delays, Building Faster Act, 2025 (Bill 60, S.O. 2025, c. 14).

That last point is why this article exists. A great deal of guidance published between late 2024 and late 2025 describes a version of the law that never came into force. If your understanding of the 2026 regime came from a webinar or a bulletin in that window, there is a reasonable chance one of the things you took away is wrong — and it is the most consequential thing in the package.

Start with the correction, because it is the one that can cost a lien

Lien rights do not expire annually.

When Bill 216 passed in November 2024, it contained a provision that would have tied lien expiry to publication of the new annual holdback release notice. Commentary at the time — accurately, for the law as then written — warned contractors that liens would start expiring year by year.

Bill 60 repealed that provision on 27 November 2025, before it ever came into force. Ontario's e-Laws amendment table for section 31 records it plainly: Bill 216's section 27 is marked “no effect”.

The law in force today is the law you already knew:

• Preservation: 60 days. For a contractor, from the earlier of publication of the certificate or declaration of substantial performance, or the date the contract is completed, abandoned or terminated. For anyone else, from the earliest of publication, the date of last supply, the date the contract is completed, abandoned or terminated, or the date a subcontract is certified complete under section 33.
• Perfection: a further 90 days from the last day on which the lien could have been preserved (s. 36(2)).

Sixty plus ninety. One hundred and fifty days, anchored to project milestones, exactly as before — the regime set out in our guide to the 60-day preservation window, which remains accurate.

One genuinely new trigger does matter: where a contract is terminated, section 31(6) now requires the owner or the contractor to publish a notice of termination within seven days, and section 31(7) fixes the termination date for lien purposes as the date that notice was published. Termination used to be a murky date that parties argued about afterwards. It is now a published one — which is better for everybody, provided you are watching for it.

The seven-day deemed proper invoice

This is the change with the broadest reach, because it affects every invoice on every project.

Ontario's prompt payment clocks only start when a proper invoice is delivered. Before 2026, an owner who did not want to pay could sit on an invoice for two or three weeks and then reject it for a missing backup document, resetting the cycle. The amended section 6.1(2) closes that: an invoice that does not meet the proper-invoice requirements is deemed to be a proper invoice unless, no later than seven days after receiving it, the owner notifies the contractor in writing of the deficiency and of what is required to address it.

Seven days. In writing. Specifying what is missing. Otherwise the invoice is proper by operation of law, even if it genuinely was deficient.

The payment clock itself is unchanged: the owner pays within 28 days of receiving the proper invoice (s. 6.4(1)), unless it gives a notice of non-payment within 14 days in the prescribed form (s. 6.4(2)). Those are two different objections. Day 7 is about the form of the invoice. Day 14 is about the merits of the work. An owner who misses day 7 has not lost its right to dispute the work — but it has lost its ability to argue the clock never started.

Mandatory annual holdback release

For decades, a trade whose work finished in year one of a four-year build had 10% of its contract price locked up until substantial performance of the whole project. The optional annual-release regime in the old section 26.1 existed, and owners almost universally declined to use it. Sections 26.1, 26.2 and 27.1 are now repealed, and section 26 makes annual release mandatory.

The sequence, from the statute:

• Each anniversary of the owner–contractor contract triggers the annual cycle (s. 26(2)).
• Within 14 days after the anniversary, the owner publishes a notice of annual release of holdback in the prescribed form, stating the amount it intends to pay and the intended payment date (s. 26(3)).
• At least 60 and not later than 74 days after publication, the owner pays the contractor all accrued holdback for the preceding year (s. 26(4)).
• Within 14 days of receiving it, the contractor flows the holdback down to its subcontractors (s. 26(5)), and each further tier gets a further 14 days (s. 26(6)).

The notice is Form 6, published on a construction trade news website.

Two qualifications matter. First, the payment obligation is conditional: section 26(4) requires payment unless a lien has been preserved or perfected in respect of the contract and the specified discharge, vacating or expiry conditions have not been met. Where payment is blocked that way, section 26(7) requires it within 14 days after the impediment ceases. Second, the repeal of the old notice of non-payment of holdback (s. 27.1) means an owner can no longer withhold annual holdback by serving that notice — but the Act still contains other set-off mechanisms (s. 12, s. 17(3)), and amended section 30 restricts applying holdback on abandonment or termination only until the relevant liens have expired or been resolved. “No set-off ever” overstates it.

The transition, and the payout it produces

For contracts entered into on or after 1 January 2026, the regime bites on the first anniversary.

For contracts entered into before that date, section 87.4(4) gives a runway: the first anniversary to which section 26 applies is the second anniversary of the contract date falling after 1 January 2026. And on that date, the owner must release all holdback accrued since the beginning of the project in one payment.

A contract signed in June 2025 therefore reaches its first mandatory release in June 2027 — and it is a multi-year payout, not a single year's accrual. For a subcontractor sitting on holdback from a long build, that is a real date with a real number attached, and it is worth diarizing now. (Prescribed P3 project agreements entered into before commencement are carved out under s. 87.4(5) and continue under the old section 26.)

Adjudication, trust claims, and design liens

Adjudication survives completion. Interim binding adjudication used to end when the contract did. Section 13.5(3) now allows a notice of adjudication up to 90 days after the contract is completed, abandoned or terminated, unless the parties agree otherwise; section 13.5(3.1) adds the subcontract equivalents. Any party may now seek consolidation of related adjudications — though under section 13.8(2) that requires the agreement of the adjudicators where the parties do not consent. Parties may also agree to a private adjudicator outside the registry, if the prescribed conditions are met. New sections 13.12.1 and 13.17.1 add a formal jurisdictional objection process and let an adjudicator correct an error within five days.

Trust claims can now be joined to a lien action. Previously an unpaid subcontractor who wanted both a lien and a Part II breach-of-trust claim — the one that reaches directors and officers personally — had to fund two parallel proceedings. O. Reg. 302/18, section 3(3) now provides that a party may, in an action, join a lien claim and a claim for breach of trust under Part II of the Act. One lawsuit, two theories, and the personal exposure of the people who diverted the funds is in front of the same judge as the lien.

Preconstruction design work. New section 14(4) creates a presumption that the supplier of a design, plan, drawing or specification holds a lien where the owner retains holdback — but note the limit the headlines leave out: it applies where the planned improvement is not commenced, and the owner can rebut it by proving the value of its interest in the land was not enhanced. It also does not apply to holdback retained before 1 January 2026 (s. 87.4(3)).

The diary that comes out of all this

• Day 7 after each invoice — did a written form objection arrive? If not, the invoice is proper.
• Day 14 — notice of non-payment deadline for the owner.
• Day 28 — payment due.
• Each contract anniversary — watch for the notice of annual release within 14 days, then the payment window at days 60 to 74 from publication, then your 14-day flow-down.
• Within 90 days of completion, abandonment or termination — adjudication is still available. It was not, before.
• Still 60 + 90 days from the traditional milestones for preservation and perfection. That has not changed, whatever you read in 2025.