Ask any drywall subcontractor what keeps them up at night, and the answer is usually the same: not the work itself, but waiting 90 days to get paid for it. On January 1, 2026, Ontario’s Construction Act changed substantially, with amendments from Bill 216 (Building Ontario for You Act) and Bill 60 (Fighting Delays and Building Faster Act, 2025) overhauling prompt payment timelines, lien processes, and workplace safety requirements.
$68.7 billion in GDP in 2024. More than 580,000 workers. Ontario’s construction sector is the province’s third-largest industry by employment and the single largest consumer of skilled trades labour. Late payments here ripple through the entire provincial economy.
Why Subcontractors Were Going Broke
Before Ontario’s prompt payment framework, the province had no statutory timelines requiring owners to pay general contractors or general contractors to pay subcontractors. None. Payment delays became endemic.
Sixty-seven days. That was the average payment cycle for a commercial construction project, according to a 2019 OGCA survey. Some subcontractors reported waits of 90 to 120 days. Residential was shorter but still bad: around 45 days.
Small and mid-sized subcontractors got crushed. A drywall contractor with 15 employees and $2 million in annual revenue can’t absorb 90 days of unpaid invoices without borrowing against a line of credit, delaying payroll, or deferring payments to their own suppliers.
The cascade is predictable: owner holds payment from the GC, GC holds it from the mechanical sub, mechanical sub holds it from the plumber, plumber holds it from the pipe manufacturer. Everyone financing someone else’s delay.
Ontario first introduced prompt payment legislation in 2019 but the framework had gaps.
The January 2026 amendments tighten those provisions considerably.
What the New Rules Require
New payment chain: Owner pays within 28 days of invoice. Disputes must be raised within 14 days. General contractor pays subcontractors within 7 days of receiving payment.
The prompt payment provisions now establish clearer, shorter mandatory timelines. An owner must pay a proper invoice within 28 days of receipt. Dispute it? Issue a notice of non-payment within 14 days, specifying the amount and reasons. The general contractor, upon receiving payment, has seven days to pay each subcontractor their portion.
The amendments also nail down what counts as a “proper invoice,” closing a loophole where owners would reject invoices on technicalities and restart the payment clock. (A favourite trick.) Invoice requirements must be established at the time of contracting, and an owner who fails to respond within 14 days is deemed to have accepted.
For disputed amounts, the new rules direct parties to an adjudication process rather than litigation. Adjudicators, drawn from a roster maintained by the Authorized Nominating Authority, must render a decision within the prescribed timeline. The adjudicator’s determination is binding on an interim basis, meaning the disputed amount must be paid even while a party pursues further legal remedies.
“Pay now, argue later.” That principle is the backbone of prompt payment regimes worldwide, and it was the key element missing from Ontario’s earlier framework.
Federal prompt payment legislation took effect in 2019, setting a 28-day standard. Saskatchewan followed in 2022, Nova Scotia in 2023. British Columbia still relies on an industry-led code of conduct rather than legislation, and Alberta, despite years of industry lobbying, has nothing on the books. Ontario’s updated framework is now among the most prescriptive in the country.
The basic lien period stays at 60 days from last supply, but the process for preserving and perfecting a lien has been simplified for digital record-keeping. Holdback provisions (the 10% an owner retains until the lien period expires) are structurally the same but now have clearer release rules. Anyone managing a construction project in Ontario needs to update their paperwork.
AED Requirements
Starting January 1, 2026, construction projects expected to last three or more months with 20 or more workers must have an AED installed and maintained on-site. This one is straightforward. Construction is physically punishing work, and cardiac events on job sites are not rare (particularly with an aging workforce and summer heat exposure).
Administrative Monetary Penalties
A new Administrative Monetary Penalty scheme under the Occupational Health and Safety Act lets inspectors levy financial penalties for violations instead of relying solely on orders and prosecutions.
Faster enforcement. Fewer court proceedings.
Workplace Safety Broader Changes
The Working for Workers Seven Act, which received Royal Assent on November 27, 2025, also brought OHSA amendments into force on January 1, 2026. These include updates to workplace safety standards and enforcement procedures that affect construction sites alongside other workplaces.
Faster Payments, More Homes?
Prompt payment reform matters beyond fairness. Ontario has committed to building 1.5 million homes by 2031 (good luck with that), and contractors who face persistent payment delays are less willing to take on new projects, less able to hire additional workers, and more likely to bid higher on future work to compensate for financing costs. RESCON has argued that prompt payment reform is a necessary precondition for meeting housing supply targets, with payment delays adding an estimated 1.5% to 3% to the cost of a typical residential project. That margin compounds across thousands of projects. The reforms will not solve the housing crisis. But cutting financial friction in the payment chain keeps more contractors in the market and more projects on schedule.
The industry says these changes were overdue by at least a decade. They are right.
Industry Response
The OGCA called the amendments “the most significant improvement to the Construction Act in a generation.” The AED requirement has been well received. The AMP scheme? Less so. Some contractors worry about inconsistent application across inspectors and regions.
For project managers and site supervisors, January 1 meant updated compliance checklists, revised contract language, and new safety equipment procurement, all layered on top of tariffs, labour shortages, and materials inflation. A lot to absorb at once.
Sources and verification: Bill 216 (Building Ontario for You Act) and Bill 60 (Fighting Delays and Building Faster Act, 2025) amendments are from Ontario legislature records. The January 1, 2026 effective date is confirmed by Fasken, Hicks Morley, and the Ontario government. Ontario construction sector GDP ($68.7 billion) and employment figures (580,000+) are from Statistics Canada and the Ontario Construction Secretariat’s 2024 annual report. The 67-day average payment cycle and subcontractor survey data are from the Ontario General Contractors Association’s 2019 industry report. The 28-day payment timeline, 14-day dispute notice, and 7-day subcontractor payment requirements are from the amended Construction Act provisions. The adjudication process and Authorized Nominating Authority details are from the Construction Act’s prompt payment and adjudication regulations. Federal prompt payment legislation details are from the Federal Prompt Payment for Construction Work Act. Saskatchewan and Nova Scotia prompt payment provisions are from their respective provincial legislation. The AED requirement (three months, 20 workers) is from the OHSA amendments. The AMP scheme details are from Hicks Morley’s December 2025 analysis. The Working for Workers Seven Act (Bill 30) Royal Assent on November 27, 2025 is from the Ontario legislature. RESCON’s analysis of payment delay cost impacts is from their published policy papers. Ontario’s 1.5-million-home target is from the provincial housing supply action plan. Prompt payment and lien provision changes are summarized from Fasken’s knowledge article on construction act amendments.
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