Ontario's Prompt Payment Rules: What the 2026 Changes Mean for You

Ontario's January 2026 amendments to the *Construction Act* are the most significant overhaul of construction payment law in the province in decades. If you're a homeowner managing a renovation or a contractor waiting on payment, the new rules change what you're owed, when you're owed it, and what happens if someone doesn't pay.

What Actually Changed on January 1, 2026

Two pieces of legislation — Bill 216 (Building Ontario For You Act, 2024) and Bill 60 (Fighting Delays, Building Faster Act, 2025) — brought a sweeping set of amendments into force at the start of this year. The changes touch three big areas that affect everyday construction projects:

Each of these has real consequences for homeowners hiring contractors and for general contractors managing subcontractors. Let's walk through them.

The 28-Day Rule (and the Chain Below It)

Under Ontario's prompt payment regime, once a contractor submits a proper invoice to a homeowner or owner, the clock starts:

That cascading structure is intentional. The law is designed so that money flows through the payment chain quickly, rather than pooling at the top while workers and suppliers wait.

What this means for homeowners: If your contractor sends you a proper invoice, you have 28 days to pay — or you must formally dispute it within 14 days. Ignoring an invoice is no longer a viable strategy. Silence starts to cost you.

What this means for contractors and subs: Your right to be paid on a firm schedule is now baked into law. If an owner misses the 28-day window without issuing a notice of non-payment, that's a trigger for adjudication (more on that below).

The 7-Day "Deeming" Rule: The Clock Starts Whether You're Ready or Not

One of the most practical changes in the 2026 amendments is the new deeming provision under s. 6.1(2) of the Construction Act.

Here's how it works: when a contractor submits an invoice, the owner has 7 calendar days to deliver written notice of any deficiency — a missing document, a disputed amount, work that doesn't meet the contract. If the owner does nothing within those 7 days, the invoice is automatically deemed a proper invoice, and the full 28-day payment clock begins.

This is a significant shift. Previously, owners could delay payment by disputing whether an invoice was "proper" — sometimes for weeks. Now, that window is 7 days. Miss it, and the invoice is valid by operation of law.

Practical tip for homeowners: Review invoices promptly. If something is wrong — a line item you didn't authorize, a price that doesn't match the contract — you must put that objection in writing within 7 days. A verbal conversation is not enough.

Practical tip for contractors: Make sure your invoices are complete and clearly reference the contract. A well-prepared invoice that goes unchallenged for 7 days is automatically a proper invoice.

"Pay-When-Paid" Clauses: Still Unenforceable

Some construction contracts have historically included "pay-when-paid" language — essentially, a general contractor telling a subcontractor: "I'll pay you when the owner pays me." Under Ontario's *Construction Act*, these clauses are generally unenforceable when it comes to prompt payment obligations.

A GC cannot use an owner's delay as a reason to withhold payment from a subcontractor indefinitely. The 7-day downstream payment obligation runs regardless of whether the GC has received money from above.

This matters to homeowners indirectly: it means the subcontractors working in your home — the drywaller, the plumber, the electrician — have legal protection that keeps money flowing to them even when payment disputes happen higher up the chain. That reduces the risk of a lien being registered against your property by a sub who wasn't paid.

Mandatory Annual Holdback Release: A Big Change for Longer Projects

Holdback is the percentage of each payment that owners are legally required to retain during a project — a financial cushion against liens and deficiencies. Under the old rules, holdback could sit indefinitely after substantial completion. The 2026 amendments change that for longer projects.

Under the new mandatory annual holdback release rules:

When does this apply to your project?

For homeowners, this is most relevant on larger projects — a full home renovation, a major addition, or a new build — where the contract spans more than a year. If your project crosses an anniversary date, your contractor now has a legal right to have accrued holdback released on a schedule, not just at the end.

Faster Dispute Resolution: Expanded Adjudication

When payment disputes arise, Ontario's prompt payment regime has always included adjudication as a faster alternative to litigation. The 2026 amendments expand this further.

ODACC (Ontario Dispute Adjudication for Construction Contracts) remains the Authorized Nominating Authority under the *Construction Act* and Ontario Regulation 264/25. What's new is that parties can now also choose a private adjudicator from outside the ODACC roster, giving more flexibility in how disputes are resolved.

Adjudication is designed to be fast — typically resolved in 30 days — and the decision is binding unless overturned by a court or arbitration. It's meant to keep money moving while the underlying dispute is sorted out.

Early data from Q1 2026 suggests that many adjudication disputes have stemmed from missed notice windows — specifically, owners failing to issue a timely notice of non-payment — rather than genuine disagreements about the value of work done. In other words, procedural missteps, not substantive disputes, are driving a significant share of early cases.

The takeaway: Deadlines under this regime are hard. Missing a 7-day or 14-day notice window doesn't just create awkwardness — it can determine the outcome of a dispute before it even gets to an adjudicator.

What This Means When You're Hiring a Contractor

For homeowners planning a renovation or construction project, the 2026 changes create both protections and obligations:

Choosing a contractor who understands these rules — and operates transparently — matters more than ever. ProScore's Trust Index evaluates contractors across Ontario on reputation, verified credentials, customer sentiment, and business transparency. You can browse general contractors across Ontario or look up electricians, roofers, and plumbers to see how specific contractors score before you sign a contract.

Understanding how the Trust Index works can also help you interpret what a contractor's score reflects — and what questions to ask before work begins.

FAQ

What is the prompt payment rule in Ontario's Construction Act?

Under Ontario's prompt payment rules, owners must pay a proper contractor invoice within 28 calendar days, or issue a written notice of non-payment within 14 days. General contractors must then pay subcontractors within 7 days of receiving payment. These timelines have been in force since 2019 and were tightened further by the January 2026 amendments.

What happens if an owner ignores a contractor invoice in Ontario?

Under the 2026 deeming provision, if an owner fails to deliver written notice of a deficiency within 7 days of receiving an invoice, that invoice is automatically deemed a "proper invoice" and the 28-day payment clock starts running. Ignoring an invoice does not pause or reset the deadline — it accelerates it.

Does Ontario's prompt payment law apply to homeowner renovation contracts?

Yes. Ontario's *Construction Act* applies broadly to construction projects, including residential renovations. Homeowners acting as "owners" under the Act have the same prompt payment obligations as commercial owners. If you're hiring a contractor for a major renovation, the 28-day payment timeline and the 7-day deeming rule apply to your project.

For any renovation project — large or small — working with a contractor who understands their legal obligations is a good starting point. Browse all trade categories on ProScore to find scored contractors across Ontario, or visit the ProScore home page to search by trade and city.