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New amendments streamline annual holdback release, clarify termination rules and protect long-term project agreements, prompting contractors to reassess administrative and cash-flow practices ahead of 2026.
The Ontario Legislative Building where the Legislative Assembly of Ontario meet. Image courtesy of DXR.
Ontario contractors are facing another significant regulatory shift as the provincial government introduced further amendments to the Construction Act through the passing of Bill 60: Fighting Delays, Building Faster Act, 2025. For contractors, subcontractors and project owners, particularly those delivering multi-year civil and infrastructure builds, the amendments represent a meaningful reset concerning the way annual holdback cycles will be administered.
Holdback release uncoupled from lien expiry
The most consequential update under Bill 60 is the government’s decision to decouple the annual holdback release from mandatory annual lien expiry. Earlier amendments under Bill 216, which are not yet in force, envisioned a system where lien expiry would occur each year, triggering mandatory annual release of holdback funds. Bill 60 reverses that approach with lien periods reverting to the Act’s existing structure, while annual holdback release will still occur. Contractors can expect release between 60 and 74 days after publication of a notice of annual release – a change intended to preserve cash flow on long-term projects without altering the broader lien framework.
This clarification is particularly important for public-private partnership (P3) agreements. Amendments to subsection 87.4(5) confirm that certain P3 agreements entered into before legislative changes in late 2024 will continue operating under the previous version of section 26. This avoids the retroactive disruption that many industry stakeholders had raised concerns about, especially concerning those on multi-year transportation, healthcare and utilities projects where financing structures are often tightly integrated with contract terms.
New notice and termination rules add clarity
There are also revisions to termination-related provisions, which represent a recurring challenge for contractors navigating lien timelines. Under the new language, a Notice of Termination must be published within seven days of the termination event. The termination date will be legally deemed to be the publication date of that notice, or the date of the first notice if multiple notices are issued. By standardizing the trigger point, the province aims to reduce disputes over when lien rights begin and end.
Another subtle but notable revision appears in Section 30, which currently restricts the use of holdback funds to obtain substitute services until all liens have expired or have been discharged. Bill 60 replaces the term “defaults” with “abandonment or termination.” While the practical implications remain unclear, the shift could influence how parties frame disputes or document performance issues in the future.
Industry impact and next steps
Overall, the amendments maintain the push toward faster, more predictable holdback release cycles while removing the more contentious annual lien expiry system. For contractors, this means improved cash flow during multi-year delivery, but potentially lower holdback reserves available near project closeout, which could affect subcontractor security.