2025 CCDC Contract Updates: What Construction Professionals Need To Know

In mid-2025, the Canadian Construction Documents Committee (CCDC) released new versions of several standard construction contracts to modernize these agreements, provide greater clarity, reflect current practices, and address recent legislative changes. Below, we outline which contracts were updated, summarize key changes, and explain how these affect construction stakeholders.

Which CCDC Contracts Were Updated in 2025?

On June 30, 2025, CCDC introduced updated editions of four major contract forms:

• CCDC 5A – 2025: Construction Management Contract – for Services.
• CCDC 5B – 2025: Construction Management Contract – for Services and Construction.
• CCDC 17 – 2025: Stipulated Price Contract between Owner and Trade Contractor for Construction Management Projects.
• CCDC 30 – 2025: Integrated Project Delivery (IPD) Contract

The first three contracts were last updated in 2010, and CCDC 30 in 2018. Since then, many provinces adopted prompt payment laws and risk allocations have shifted. The 2025 updates introduce new concepts like "Ready-for-Takeover" milestones and termination for convenience while aligning with modern project delivery methods and legal requirements.

These CCDC forms are widely used across Canada. The 2025 changes to the CCDC 5A, 5B, 17 and IPD contract affect project delivery approaches, payment processes, dispute resolution, insurance responsibilities, and risk allocation in ways that impact all stakeholders' bottom line.

Ready-for-Takeover: A New Completion Milestone (and Early Occupancy)

One of the most significant changes in the 2025 CCDC contracts is the introduction of a Ready-for-Takeover project milestone in CCDC 5A, 5B, 17, and even in the updated IPD contract. This concept was first introduced in the CCDC 2 (Stipulated Price) 2020 edition, and it expands the definition of project completion beyond the old standard of substantial performance.

Under the Ontario Construction Act, "substantial performance" is a legal threshold triggering lien periods and holdback release. Previously, substantial performance often signaled project handover, the commencement of warranties and shifting insurance responsibilities, even if close-out tasks were unfinished. Ready-for-Takeover builds on substantial performance by requiring operational readiness before true project completion. Substantial performance remains essential for lien purposes, but Ready-for-Takeover adds owner-oriented completion criteria for smoother handover.

To achieve Ready-for-Takeover, the updated CCDC contracts require consultant verification of: occupancy permits and regulatory approvals, final site cleaning and debris removal, delivery of operating and maintenance manuals, turnover of as-built drawings, completion of required owner staff training, and other contract-specific deliverables. This ensures contractors provide everything owners need to actually use and operate the facility.

The 2025 CCDC updates formalize early occupancy procedures. With contractor consent and required approvals, owners may occupy portions of the project early. Any occupied area is deemed Ready-for-Takeover for that portion, shifting safety, site control, warranties, and insurance coverage to the owner. Before early occupancy, owners should ensure proper permits and notify insurers, as early use affects builder's risk and liability coverage.

Practical tip: Contractors should track Ready-for-Takeover requirements from day one to avoid end-of-project scrambling. Owners must understand that substantial completion under lien legislation does not guarantee immediate possession until the Ready-for-Takeover checklist is complete. For early occupancy, all parties should document consent and clarify responsibilities for site security, insurance, and defect corrections. These provisions align legal milestones with practical completion, reducing post-handover confusion.

Prompt Payment: New Payment Terms and Progressive Holdback Release

Another major driver of the 2025 CCDC updates is the wave of prompt payment legislation being enacted across Canada. The new 2025 CCDC contracts now build prompt payment concepts into the standard payment terms, whereas previously many of these had to be added by way of supplementary conditions.

28 Day Payment Timeline:

The Old CCDC forms of contracts required the Contractor to deliver an Application for Payment to the Consultant then the Consultant reviews/certifies the Application for Payment and then payment would be due 20 days after the Consultant certification.

The updated 2025 CCDC contracts now require owners to pay within 28 calendar days of receiving a proper invoice, aligning with prompt payment legislation in jurisdictions like Ontario. Contractors must ensure monthly applications include all required information (work description, period, etc.), and owners must process payments faster than the old 20-day standard, promoting predictable cash flow.

Progressive Release of Holdback:

New contracts mandate progressive holdback release for completed work portions, aligning with modern lien legislation allowing annual or phased holdback release rather than waiting until project completion. Previously, CCDC forms only contemplated early release for subcontracts; construction managers' work was excluded.

Now, construction managers can request progressive holdback release for eligible work portions under lien laws, significantly improving cash flow. Owners must track milestone dates and prepare for multiple releases, while contractors should follow procedural requirements to exercise this right.

Practical Tip: Contract administrators should update billing procedures for prompt payment compliance. Contractors must label invoices as "Proper Invoice" with requisite details to start the 28-day payment clock. Owners should ensure internal approvals complete within 28 days to avoid statutory interest or adjudication. All parties must maintain good records for phased completion and holdback releases to avoid confusion and ensure lien law compliance.

Emphasizing Pre-Construction Services and Planning (CCDC 5A & 5B)

The 2025 updates clarify pre-construction services in Construction Management projects. Construction managers often provide early design consulting (budgeting, scheduling, constructability input) before construction begins. Previously, contracts acknowledged this in appendices without treating pre-construction as a distinct phase. Now, contracts clearly separate pre-construction and construction responsibilities.

CCDC 5B-2025 explicitly defines "Pre-Construction Services" separately from "Construction Services." Key changes include: separate fee structures for pre-construction work (often fixed fees or hourly rates) independent of construction management fees; pre-construction invoices go directly to owners for approval rather than through consultants; pre-construction claims bypass consultant decisions and are handled directly between owners and construction managers; the definition of "Work" excludes pre-construction services; and reimbursable expenses are tied only to pre-construction services since construction costs are covered as "Cost of the Work".

CCDC 5A-2025 allows parties to allocate the construction manager's "Fee for Services" across three phases – pre-construction, construction, and post-construction – each with different percentages or amounts. This increases transparency and helps avoid disputes by clearly setting compensation for early design-phase input versus construction and close-out services.

Clearer pre-construction treatment reflects increasing early collaboration. Owners engage construction managers during design for better budgeting and scheduling. Construction managers should negotiate dedicated pre-construction agreements or fees. Owners should define pre-construction scope (value engineering, estimating, constructability advice, scheduling input) and tie fees to deliverables. Well-defined pre-construction planning sets early expectations and leads to smoother construction with fewer surprises.

In CCDC 5B, owners may request formal "Execution Plans" outlining the construction managers' approaches, including trade contractor procurement, construction methodology, use of own forces, and cash flow projections. This encourages better up-front planning and communication, ensuring alignment before construction begins. Owners should consider making this standard to promote transparency and shared project understanding.

New Termination for Convenience Rights

The 2025 CCDC contracts give owners new flexibility: termination for convenience (without cause). CCDC 5A and 5B now allow owners to terminate anytime, even without contractor wrongdoing. Previously, owners wanting early exit had to convince contractors to mutually part ways or terminate "for cause" by alleging default, potentially causing disputes. The new clause provides contractual "off-ramps" for business reasons (funding loss, scope changes, changed circumstances) without contract breach, though fair compensation is required.

CCDC 5B-2025 specifies different entitlements based on termination timing. Pre-construction termination entitles construction managers to predefined "Break Fees" – cancellation fees based on estimated construction cost percentages. Construction phase termination entitles construction managers to direct damages including reasonable lost profit on remaining work. CCDC 5A similarly allows convenience termination with payment for services provided plus reasonable termination costs or fees.

Construction managers should negotiate adequate break fees covering overhead and lost profit for pre-construction cancellations. Owners should budget for potential termination costs and carefully follow contract notice requirements. While termination for convenience avoids having to prove a default under the contract, it does not eliminate all costs and could impact contractor relationships.

Termination for convenience reduces litigation needs when projects must be shelved, providing cleaner exit strategies. Without this clause, owners might only terminate by alleging contractor default (adversarial and often litigated). Now both sides have clarity: owners can exit by paying stipulated compensation, and contractors know their entitlements.

Updated Insurance and Liability Provisions

Ready-for-Takeover and early occupancy provisions affect insurance handover timing. Traditionally, contractor builder's risk insurance covers projects until substantial performance, then owner insurance takes over. Early occupancy requires careful insurance coordination – owners likely need property insurance for occupied portions while contractor coverage continues elsewhere. All parties should notify insurers when planning early occupancy to ensure continued coverage. Standard insurance requirements have been updated only as needed for new contract structures.

New liability caps limit damages for uninsured losses. CCDC 5A-2025 caps construction manager liability at the greater of the CM fee or $2 million, up to $20 million maximum. CCDC 5B-2025 and CCDC 17-2025 cap liability at the greater of the Contract Price or $2 million, also capped at $20 million. These increased from the older contracts, ensuring meaningful but not unlimited exposure for uninsured risks like negligence or breaches. Contractors should maintain robust insurance as a primary defence, while owners gain certainty about damage recovery limits.

Waiver of Consequential Damages:

The updated CCDC 2025 contracts include mutual waiver of consequential damages, subject to limited exceptions. Both parties agree not to claim indirect losses (i.e. loss of use, loss of profits, or loss of business) in order to reduce the risk of disproportionate delay-related exposure. However, the waiver typically does not apply to claims arising from criminal acts, fraud, or intentional misconduct. In practice, this means each party is expected to absorb its own indirect losses or manage that risk through insurance and other commercial arrangements. Because "consequential damages" is not always expressly defined, complex projects may benefit from supplementary conditions that clarify what is included and excluded.

Practical Tip: All parties should review insurance and risk management strategies. Contractors may need increased professional liability or CGL limits to match the $2M minimum. Owners should understand recovery limitations beyond insurance and caps (absent misconduct). This highlights proper insurance importance – for critical risks like schedule delays causing business losses, owners might seek delay insurance or liquidated damages clauses since contractor claims are likely waived. Both sides should consider cap values when negotiating, as large projects might warrant higher caps while small projects may accept $2M defaults.

Dispute Resolution Now Includes Adjudication

Dispute resolution provisions remain structurally similar (mediation first, then arbitration or litigation) but now recognize statutory adjudication processes accompanying prompt payment legislation. In prompt payment provinces, interim adjudication allows quick dispute resolution (especially payment disputes) by qualified adjudicators on provisional bases. The 2025 CCDC contracts explicitly "contemplate adjudication as prescribed by applicable legislation."

In prompt payment jurisdictions, parties can refer eligible disputes (like non-payment) to adjudication per statute. Adjudicator decisions are interim binding (subject to later arbitration or court if contested). This ensures CCDC contracts do not contradict legally required adjudication steps.

For contractors, this provides faster unpaid bill resolution without lengthy lawsuits. Owners must prepare for quick adjudication responses. While legally required, including these provisions in contracts reminds parties to familiarize themselves with provincial adjudication procedures and establish internal protocols for handling adjudication notices. This emphasizes faster dispute resolution trends rather than letting issues fester.

Mediation remains standard, and project-specific dispute resolution boards can still be used by agreement. Adjudication provisions simply ensure statutory compliance.

Integrated Project Delivery (CCDC 30 – 2025): Collaborative Contract Updates

Updated CCDC 30-2025 refines Integrated Project Delivery (IPD) contracts. IPD is a collaborative project delivery model where owners, consultants, contractors, and key trades sign single multi-party contracts, sharing risks and rewards for optimal outcomes. The revised CCDC 30 incorporates lessons from the 2018 version, further aligning with core IPD principles.

Key CCDC 30-2025 changes include restructured contract phases:

• Validation Phase (Segment A): Formally defined post-signing, where IPD teams collaboratively develop detailed Validation Reports confirming scope, target cost, schedule, and risk contingencies before proceeding. Project Execution Phase (Segment B) covers final design, construction, and warranty periods, including target cost finalization using Target Value Design. General articles (Segment C) apply across phases. This structure clarifies IPD project roadmaps and decision points, emphasizing all parties are contractually bound from day one through Validation.
• Lean Practices and "Big Room": Updated CCDC 30 formalizes Lean construction principles and collaborative tools. It mandates "Big Room" practices – co-location spaces (physical or virtual) where key team members work together continuously for real-time problem-solving and communication. Contracts explicitly require Lean planning and execution tools, reinforcing efficiency and continuous improvement cultures. This ensures IPD projects follow through with collaborative behaviors rather than nominal collaboration.
• Optional IPD Advisor: The updated CCDC 30 – 2025 allows optional joint appointment of "IPD Advisors" – independent facilitators experienced in IPD and Lean processes. The IPD Advisors can guide teams, especially during Validation Phases, helping implement IPD best practices. While optional, IPD Advisors benefit teams inexperienced with multi-party collaboration.
• Ready-for-Takeover in IPD: IPD contracts introduce Ready-for-Takeover milestones marking construction completion and Warranty Phase beginnings. This gives IPD teams clear operational readiness targets and helps coordinate responsibility transitions as projects near completion within single contracts.
• Enhanced Clarity on Termination and Remedies: Updated IPD contracts provide enhanced termination and remedy guidance. If Validation Reports are not accepted (project not viable within budget/goals), contracts outline termination procedures and team member compensation. New cure period clauses allow structured opportunities to correct defaults before drastic action, bringing certainty to scenarios underdeveloped in 2018 editions.
• Other IPD Tweaks: Additional IPD improvements include: renaming shared risk/reward pools as "Profit Pools" to better reflect profit at risk; allowing Added Value Incentive Items (AVIIs) during construction, not just design phases, for owner upgrade flexibility; expanded, customizable Reimbursable Costs schedules; and separate editable standard schedules (cost matrix, responsibility matrix) for easier tailoring without special amendments.

In summary, CCDC 30-2025 fine-tunes IPD contracts for deeper collaboration and clarity. IPD success requires full participant understanding and commitment to principles (mutual trust, transparency, shared risk/reward). With structured Validation Phases, mandatory Big Rooms, and IPD Advisors options, contracts provide frameworks requiring good faith execution. If done right, updated IPD contracts can achieve outstanding outcomes with fewer disputes and true "win-win-win" results. IPD newcomers should seek guidance and expert facilitation given steep collaborative learning curves.

Conclusion and Takeaways

The 2025 CCDC updates significantly modernize Canada's construction contract toolkit, responding to prompt payment laws and collaborative project delivery desires while addressing contract pain points. These changes should benefit construction professionals by bringing clarity and balanced risk allocation, potentially reducing disputes. The updates "offer greater clarity and certainty for owners, construction managers, and trade contractors" by modernizing key concepts and aligning with operational realities.

Standard form contracts are starting points. Parties will likely continue using supplementary conditions for project specifics (defining Ready-for-Takeover requirements, adjusting insurance provisions). All parties should familiarize themselves with new baselines before adding changes.

Practical Next Steps:

• Educate teams on new concepts like Ready-for-Takeover. Contractors should train their teams that final handover requires all as-builts, training, etc., not just substantial performance. Consultants should update close-out procedures to verify Ready-for-Takeover checklists. Everyone should understand how Ready-for-Takeover differs from and complements substantial performance milestones.
• Plan for early occupancy scenarios. If anticipated, outline processes: request procedures, required consents, responsibility shifts. This manages safety, security, and warranty issues for occupied portions. Include/consult insurance brokers to adjust coverage when needed.
• Update payment processes for prompt payment requirements. Contractors should format monthly applications as "proper invoices" (work lists, timeframes, etc.) since owners have fixed 28-day payment windows. Owners might need streamlined internal approvals. Set up progressive holdback release tracking systems to ensure timely fund releases without premature releases.
• Leverage pre-construction engagement in CCDC 5A/5B. Owners should involve construction managers early and define pre-construction deliverables (estimates, scheduling, value engineering). Both parties should agree on pre-construction fees and scope in writing. Well-defined pre-construction prevents costly later changes. Consider requiring Execution Plans (5B) to ensure construction managers outline game plans from the start.
• Anticipate termination options. Owners: if insisting on termination for convenience clauses, budget for worst-case break fees and document termination decisions carefully. Contractors/CMs: understand entitlements (demobilization costs, break fees, profit on unperformed work) and do not waive entitlements without negotiation. This clause eases contract endings but should not be taken lightly – it's owner insurance with contractor premiums if invoked.
• Reassess insurance and liability coverage. Contractors might need increased policy limits matching contract demands (note $2M liability cap floors). Owners should verify required contractor insurance and consider whether default coverage suffices. Both sides must recognize liability limitations: generally, no recovery beyond caps for uninsured losses. Address critical risks (equipment delays causing downtime millions) through insurance or specific contract clauses rather than expecting unlimited liability.
• Prepare for adjudication in prompt payment provinces. Have rapid dispute resolution plans including quick project record access and key personnel availability for immediate adjudication response. Be proactive addressing disputes since waiting could trigger adjudication claims. CCDC adjudication acknowledgment signals fast-track resolutions are the new normal. Engage legal advice early when disputes loom.

The 2025 CCDC updates bring contracts up-to-date and should instill project confidence. By introducing Ready-for-Takeover, formalizing early occupancy, clarifying pre-construction services, aligning with prompt payment legislation, expanding termination rights, and sharpening risk allocation, new contracts better align with actual project delivery. Construction professionals should get acquainted early with the updated CCDC 25 contracts. Understanding the changes and adjusting project management practices accordingly strengthens oversight, reduces friction, and minimizes disputes. The result, more successful projects with fewer surprises. When in doubt, seek legal counsel, but armed with this knowledge, you'll navigate new CCDC contracts confidently.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.