More Changes to the Construction Act: What Bill 60 Means For You
Ontario’s Construction Act is changing again. Just as the industry began bracing for the sweeping amendments introduced by Bill 216 (Building Ontario For You Act, 2024), the most extensive update to the Act since 2018, the Government of Ontario has introduced new amendments in Bill 60 (Fighting Delays, Building Faster Act, 2025).
While Bill 60 retains much of the broader suite of changes introduced in Bill 216, it amends the legal mechanics of the annual holdback release regime. In particular, Bill 60 eliminates the proposed annual expiry of lien rights introduced under Bill 216, decoupling each event. Mandating the annual expiry of lien rights was too restrictive. Moreover, Bill 60 further limits an owner’s ability to withhold or apply holdback funds unless, among other things, the contract has been terminated or abandoned.
Here’s what you need to know about the changes that come into force on January 1, 2026.
Simplifying the Annual Holdback Timeline
Bill 216 mandates that project holdback funds are to be released annually, marking an end to the phased holdback regime. Project owners would be required to release all accrued holdback for services or materials supplied in the previous year within 14 days after the expiry of the lien period, unless a lien is preserved or perfected.
It also proposed that a party’s right to lien would expire annually following the publication of a notice of annual release of holdback. This process would have required contractors to register liens every year in the event of non-payment in order to preserve their lien rights.
Bill 60 clarifies and simplifies the timeline for the annual release of holdback. The amended provision requires owners to pay the holdback at least 60 days, but not later than 74 days, after the date on which the notice of annual release of holdback is published, regardless of the expiry of the lien period under section 31 of the Act.
This amendment effectively separates the mandatory annual holdback release from the expiry of liens. The benefit is clear: it establishes a fixed and predictable payment window following publication of the notice, rather than tying holdback release to annual lien expiry periods.
Importantly, contractors or subcontractors are no longer required to register liens on an annual basis to preserve their lien rights. The expiration of lien rights remains tied to the current milestones in section 31 of the Act, including substantial performance, and completion, termination, and abandonment of the contract. Contractors and subcontractors therefore continue to enjoy the robust lien period prescribed in the current statutory scheme.
If you are an owner, you will now need to update your project management calendar to diarize notice publication dates for each contract. You must be prepared to pay out holdback funds within the 60-to-74-day window post-publication. Contractors, on the other hand, can expect more consistent annual cash flow without the burdensome requirement of filing ‘protective’ liens annually.
Contract Termination & Abandonment: Implications for Holdback Release
Bill 60 also introduces a material amendment to section 30 of the Construction Act, significantly narrowing the circumstances in which an owner may restrict the application of holdback funds.
Under the current Act, an owner is prohibited from applying holdback funds toward the completion of a contract or the satisfaction of damages in the event of a contractor or subcontractor default, and until all liens are satisfied or expired. Bill 60 amends section 30 so that this prohibition applies only where the contract has been abandoned or terminated.
This narrower language resolves any ambiguity surrounding the meaning of default and excludes disputes related to contract performance or delay that fall short of formal termination or abandonment. Absent termination or abandonment, owners, contractors, and subcontractors are prohibited from withholding holdback under any circumstances, following the repeal of section 27.1 in Bill 216.
This renewed focus on contract termination in section 30 is coupled with a procedural requirement under section 31, first introduced in Bill 216 and retained in Bill 60. Where a contract is terminated, the owner is now required to publish a Notice of Termination in a construction trade newspaper, including the Daily Commercial News, Link2Build and Ontario Construction News. The legislation deems the termination date to be the date of publication, regardless of when Notice of Termination was delivered to the contractor.
Owners should treat this procedural requirement seriously. A failure to promptly publish a Notice of Termination could effectively delay the commencement of the 60-day lien preservation period, leaving the project unnecessarily exposed to a claim for lien.
The Bottom Line
The amendments to the Construction Act in Bill 60 form part of a larger slate of changes taking effect in the new year, including expanded access to adjudication and significant changes to proper invoicing under the prompt payment regime. These changes should be viewed as supplementary and corrective to the legislative updates in Bill 216.HOW WE CAN HELP
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