The New Rules of the Build: Ontario’s 2026 Construction Act Overhaul

That era is over.

The 2026 Construction Act amendments represent a fundamental rewiring of the construction pyramid. The provincial government’s goal is clear: accelerate liquidity, reduce the "hoarding" of capital, and provide a private, expert-led path for dispute resolution. At Cabinet Sauvé Law, we know that for our clients, these changes are a double-edged sword. They offer better cash flow but demand a level of administrative precision that many firms aren't prepared for.

Now, annual release is a statutory obligation. If your project lasts longer than one year, you are legally required to flow that 10% back down the chain on an annual basis.

The Precise 74-Day Cycle

To comply with the Act, Owners must now follow a strict chronological "rhythm" based on the anniversary of the contract:

1. The Anniversary Trigger (Day 0): The clock starts on the date the contract was signed.
2. The Publication Window (Day 0–14): Within 14 days of the anniversary, the Owner must publish a Notice of Annual Release of Holdback (Form 6) in a construction trade newspaper.
3. The Preservation Period (Day 15–60): This 45-day window allows sub-trades to file a lien if they have unpaid claims from the previous year.
4.  The Payment Window (Day 60–74): If no liens are preserved, the Owner is legally obligated to release the accrued holdback to the Contractor.

Why this is a "Peace of Mind" issue: If an Owner misses the publication deadline, they could be found in breach of the Act, potentially triggering interest penalties and disrupting the entire downstream payment schedule.

Since 2019, the Ontario Dispute Adjudication for Construction Contracts (ODACC) has been the "emergency room" for payment disputes. It was fast and effective, but for complex, multi-million dollar builds, some felt the roster of adjudicators was too general.

In 2026, the Act introduces Private Adjudication.

• Custom Expertise: Parties can now jointly name a specific expert to act as their adjudicator.
• The Benefit: If you are building a high-tech data centre in Ottawa or a complex marine structure in Simcoe County, you can now choose an adjudicator who is an engineer or lawyer with specific experience in those sub-sectors.
• Finality: Private adjudication carries the same weight as the ODACC roster—the decisions are "interim binding," meaning the money moves now, and you argue the rest in court later (if at all).

This is the change that is catching the most firms off guard. Under the Prompt Payment rules, the 28-day clock to pay only starts when a "Proper Invoice" is delivered.

Historically, Owners would wait 20 days, then reject the invoice because a backup document was missing, effectively getting a free 20-day extension. That is no longer legal in 2026.

• The 7-Day Limit: An Owner has exactly seven days to dispute an invoice as being "improper."
• The "Deemed" Rule: If the Owner does not issue a formal notice of non-payment or a rejection within those 7 days, the invoice is deemed proper by law. Even if it’s missing data, the payment clock is running.

Conclusion: We can work with General Contractors to implement "Audit-on-Arrival" protocols. If you don't catch an error in the first week, you’ve legally accepted the invoice.

To ensure your firm maintains its "Peace of Mind" through this transition, it's recommended to take the following four steps:

1. Audit Your Prime Contracts: Ensure your definition of a "Proper Invoice" is robust and includes all 2026 requirements (like WSIB clearances and statutory declarations).
2. Set "Anniversary Alerts": Your accounting software needs to flag contract start dates so you don't miss the 14-day Form 6 publication window.
3. Review Subcontractor "Flow-Down": Ensure your subcontracts mirror the new annual holdback timelines so you aren't paying out money you haven't received yet.
4. Identify Private Adjudicators: For large projects, agree on a "shortlist" of private adjudicators before a dispute arises.