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Overview of Changes
On October 23, 2025, the Ontario Government published further proposed amendments to Ontario's Construction Act (the "Act"), as Schedule 2 of Bill 60: Fighting Delays, Building Faster Act, 2025 (the "Amendments"). The main change is that the annual holdback release process contemplated in the Amendments will no longer be accompanied by lien expiry every year. Instead, lien expiry has reverted back to the Act's current language. Other changes in the Amendments, among others, include updating notice requirements for contract termination and providing transitional provisions for enumerated project agreements.
The proposed Amendments are open for comment until November 22, 2025. The Amendments are contemplated to come into force alongside amendments under the Bill 216: Building Ontario For You Act (Budget Measures), 2024. For a primer on other relevant amendments to the Act, consult our earlier posts on adjudication, mandatory annual holdback release, and proper invoices and housekeeping.
Key Takeaways
- Holdback Release no longer tied to Lien
Expiry: Bill 216's prior not-yet-in-force amendments
eliminated phased holdback release in favour of mandatory annual
lien expiry triggering annual release of holdback (save for
specific circumstances for perfected or preserved liens). The
proposed Amendments under Bill 60 remove reference to the expiry of
the lien period when determining when holdback can be released. The
proposed Amendments to section 26 provide for annual holdback
release "at least 60 days but not later than 74 days after the
date on which the notice of annual release of holdback is
published".
Amendments to subsection 87.4(5) of the Act clarify that for certain public-private partnership agreements under subsection 1.1(1) of the Act that were entered into before recent legislative changes to Bill 216 on November 6, 2024, the previous version of section 26 will continue to apply. The prior proposed amendments under Bill 216 mandated the proposed section 26 to apply to older agreements, with some exceptions. This change promotes continuity and avoids retroactive disruption to existing contracts, which is especially important for long-term major infrastructure projects with institutional stakeholders. - Holdback Retention: Section 30 of the Act currently states that where a contractor or subcontractor "defaults" in the performance of a contract or subcontract, holdback funds cannot be used to obtain substitute services or materials for that supplier until all liens have expired, been satisfied or are discharged. The proposed Amendments to Section 30 have removed the reference to "defaults" and substituted it with the concept of either abandonment or termination. It remains to be seen whether the removal of the concept of "defaults" in Section 30 will have any significance attached to it, given the unchanged requirement in the Act to retain holdback until all liens have expired, been satisfied or are discharged.
- Notice Requirements: Notice of Termination must be published within 7 days of contract termination. The termination date is then deemed to be the publication date of the notice, or if multiple notices were published, the date of the first notice. This change provides clarity on the obligation to publish a notice of termination, helping prevent disputes over when a contract was actually terminated for the purpose of determining lien expiry. Proposed subsection 31(8) clarifies that parties may still contest the validity of the termination.
Closing Remarks
These proposed changes eliminate mandatory annual lien expiry while keeping the concept of mandatory annual holdback release. Multi-year projects across Ontario will have holdback flow faster, but reduce holdback balances available for unpaid subcontractors as those projects approach the finish line. Industry stakeholders should familiarize themselves with the Amendments in advance of the date they come into force, in order to anticipate and adapt to necessary changes that they bring in the administration of holdback in Ontario.
Bill 60 passed its first reading on October 23, 2025 and its second reading is currently being debated. Review and comment on these proposals must be submitted no later than November 22, 2025.
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