Short answer
Owners hold back 10% of each payment as holdback; since January 1, 2026 accrued holdback must be released annually on each contract anniversary. Proper invoices must be paid within 28 days unless the owner gives a notice of non-payment within 14 days, and contractors must pay their subcontractors within 7 days of being paid. Disputes can go to fast, interim-binding adjudication.
Holdback
- The owner retains 10% of the value of work as holdback.
- Annual release (since January 1, 2026): accrued holdback must be released on each anniversary of the contract. The owner publishes a notice within 14 days after the anniversary and pays — unless a lien has been preserved — between 60 and 74 days after publication.
- Contractors pass holdback down to subcontractors within 14 days of receiving it.
- Holdback can no longer be used to cover deficiency or corrective-work claims.
- For contracts signed before 2026, the first annual release is deferred — check your contract dates.
Prompt payment
| Step | Deadline |
|---|---|
| Owner flags a deficient invoice | 7 days after receipt, or it is deemed proper |
| Owner gives notice of non-payment | 14 days after receiving a proper invoice |
| Owner pays a proper invoice | 28 days after receipt |
| Contractor pays subcontractors | 7 days after being paid (or 35 days after invoicing the owner) |
Adjudication
Payment and certain contract disputes can go to an adjudicator for a fast decision that is binding in the interim. Since 2026 adjudication expressly covers scope of work, changes in contract price and extensions of time, and a notice of adjudication can be given up to 90 days after the contract is completed, abandoned or terminated.
What owners should do
- Diarize every contract anniversary and the holdback notice deadline.
- Tell your contractor what your accounts-payable system needs on an invoice — before the first one.
- Review invoices within 7 days, and give any notice of non-payment within 14.
- Keep deficiency claims separate from holdback.
- Have your contract reviewed by your own lawyer.
How much is holdback in Ontario?
Ten percent of the value of the work. Since January 1, 2026, accrued holdback must be released annually on each contract anniversary.
How long does an owner have to pay a contractor in Ontario?
Twenty-eight days after receiving a proper invoice, unless the owner gives a notice of non-payment within 14 days.
What changed in Ontario's Construction Act in 2026?
Mandatory annual holdback release, a deemed-proper-invoice rule with a 7-day window to flag deficiencies, and broader adjudication covering scope, price changes and time extensions.
Sources
- Bennett Jones — Updates to Prompt Payment Legislation (2026)
- Building Excellence — Two key changes to Ontario's Construction Act (Bill 216 and Bill 60)
- Construction Act, R.S.O. 1990, c. C.30.
General information, not legal advice. Have your contract reviewed by your own lawyer.