25 March 2026
Canada: Top 5 significant legislative changes, regulatory developments or trends affecting the construction industry
The Province of British Columbia has been one of the last jurisdictions in Canada without prompt payment requirements in its provincial construction legislation. In late 2025, the B.C. Provincial Government introduced Bill 30 (Construction Prompt Payment Act) which provides key amendments to the B.C. Builders Lien Act. These amendments are not yet in force, and are pending approved regulations. Once in effect, the amendments to the existing legislation will include the following:
- Prompt Payment Requirements: Similar to other major jurisdictions in Canada, the proposed prompt payment provisions will require an owner to either pay a “proper invoice” within 28 days of receipt, or issue a notice of objection, which objection will be subject to a summary adjudication process. Contractors must, in turn, pay subcontractors by the earlier of 7 days of receipt of payment, or another time as determined by the subcontractor’s position in the contractual chain. The prompt payment provisions will incorporate “pay when paid” principles.
The adjudication process for payment disputes will be a summary process that will require a decision within 30 days of commencement and payment within 15 days of a decision.
- Shortened Holdback Period: The holdback period will be reduced from 55 to 46 days to better align with the 45 day lien period (which remains unchanged).
- Clarity on Lien Claims: The amendments make clear that demolition work is lienable, addressing a gap in the current definitions. The amendments will also abolish the “Shimco Lien”, a lien right that has existed only in B.C. as a result of the language of the Builders Lien Act, establishing a lien claim against a holdback. The Shimco Lien has historically caused problems for owners and head contractors seeking to resolve lien disputes as it is a lien right advanced against the holdback only and, for that reason, is regularly advanced by way of civil claim commenced after the expiry of the 45 day period to register a builders lien against title to the subject property.
These changes will bring the construction legislation in B.C. more in alignment with construction legislation in other Canadian jurisdictions.
In 2019, after extensive consultation, Ontario became the first province in Canada to introduce prompt payment and adjudication, following an example that was set by other jurisdictions around the world but settling on a Canadian compromise that allowed a robust construction lien regime to remain in place on a parallel track. The prompt payment and adjudication model has gradually taken hold in multiple Canadian provinces and for federal government projects as well (although construction liens are not available for federal projects).
However, it was always contemplated that a five-year review of the legislation would take place, providing the opportunity to make necessary amendments. Among other things, it had been noted in the industry that statutory adjudication did not have the level of uptake that was initially anticipated and that options for early statutory holdback release were still not satisfactory for suppliers and subcontractors who would often have to wait for the conclusion of increasingly lengthy and complex projects to be paid their holdback funds.
This review resulted in recommendations that culminated in significant amendments to Ontario’s Construction Act. While these revisions are numerous, two groups of changes in particular stand out as being noteworthy: (i) mandatory annual holdback release; and (ii) reforms to the adjudication process:
(i) Mandatory Annual Holdback Release
As is the case in many Canadian jurisdictions, the Province of Ontario prescribes a statutory holdback fund of ten percent that gets retained progressively from payments on construction contracts and design contracts. While there have been various mechanisms available for early and/or progressive holdback release, these options have required the agreement of the project owner and other project parties and, with respect to progressive holdback release, were required to be written into the underlying contract. The more typical scenario has therefore been that most or all holdback funds are retained until at least 60 days after the substantial performance of the relevant prime contract is achieved, provided that there are no preserved construction liens or, alternatively that any such liens are either vacated (through the posting of security with the court) or otherwise discharged.
As of January 1, 2026, this scenario has changed dramatically for multiyear projects. Subject to the Construction Act’s transition provisions, the ten percent statutory holdback fund will now be required to released annually on all contracts, with the process and timing for such release being governed by the Construction Act. Project owners will be required to publish a notice of annual holdback release within the prescribed time and, subject to any construction liens being addressed in accordance with the Act, contractors, subcontractors and suppliers will be paid annually for the portion of their holdback funds accrued in the preceding year.
It is thought that the benefits of these changes will include better pricing from subcontractors and suppliers, who will know that they will not effectively be financing their holdback receivable for an extended period of time. It is hoped that owners and prime contractors will in turn benefit from this improved pricing.
(ii) Adjudication Reforms
The principal changes to adjudication in Ontario are twofold.
First, there has been much debate since this regime was first introduced as to whether Ontario’s interim binding adjudication process was restricted to what are considered “payment disputes” or allowed for more expansive and complex construction disputes. The January 1 amendments have clarified this issue by writing into the Act’s regulations an expanded scope of matters that can be referred to adjudication which explicitly includes, among other things, “a request for an extension of time in the completion of work”. In other words, delay claims are now clearly captured.
Second, the legislation now allows for two streams of adjudicators. While “registry adjudicators” from the list maintained by the province’s Ontario Dispute Adjudication for Construction Contracts (ODAC) body remain in place, parties also now have the option of appointing private adjudicators who, while still ODACC-trained and certified, will not have the same limitations in respect of fees in particular. To the contrary, a floor has been prescribed by the regulations requiring private adjudicators to charge a minimum of CAD1,000/hour. It is hoped that the increase in options for adjudicators will give more options to parties on large, complex projects for referring their disputes to adjudication.
While there are numerous other changes to Ontario’s Construction Act, it is hoped by many in the industry that these substantive changes in particular will contribute to improved cashflow, a reduction in prolonged arbitration and litigation disputes and a greater willingness to use adjudication.
In August 2025, the B.C. Supreme Court released a significant decision on Aboriginal title in Cowichan Tribes v. Canada (Attorney General) 2025 BCSC 1490 wherein the court determined that the descendants of the Cowichan Nation hold Aboriginal title to certain lands located in Richmond, B.C. (near Vancouver) and which includes agricultural lands, residential properties, and lands held for the benefit of the Vancouver International Airport. The decision restricts the finding of Aboriginal title to ‘Crown lands’, meaning lands owned or vested in the federal or provincial government, not privately held lands. This decision upset the general understanding of title in B.C., whereby the Crown would acquire Aboriginal title and grant it to third parties. The decision is under appeal.
In February 2026, the Musqueam Indian Band and the Government of Canada signed an agreement recognizing Musqueam Aboriginal rights and title across their traditional territory, which includes most of the Metro Vancouver Area (and surrounding waterways). The agreement sets out a framework for recognition of the Musqueam’s Aboriginal rights in its traditional territory, including incremental implementation of the exercise of the Musqueam’s rights in decision-making over industry and developments within its traditional territory, jointly with existing government bodies. It remains to be seen how this process will impact industry and commercial development.
Many projects in Canada use the industry standard Canadian Construction Documents Committee (CCDCF) contracts. While there are other models and structures available and widely employed for a broad range of contracts, including bespoke agreements, the CCDC documents are a very well-known and commonly used suite of contracts. Parties who employ CCDC agreements are free to negotiate amendments to them through the use of Supplementary Conditions. However, these standard forms, whether they are used without modification or as revised through Supplementary Conditions, are often seen as a familiar foundation.
CCDC documents are also regularly updated as the construction industry and its projects and legislation evolves.
2025 was a significant year for CCDC contracts, as the updated forms included:
(i) the CCDC 5A Construction Management Contract – for Services;
(ii) the CCDC 5B Construction Management Contract – for Services and Construction (ie commonly known in the industry as the Construction Manager at Risk model);
(iii) the CCDC 17 Stipulated Price Contract for Trade Contractors on Construction Management Projects (ie trade contracts entered into directly with owners); and
(iv) the CCDC 30 Integrated Project Delivery (IPD) Contract, a model that has increasingly taken hold in Canada.
The myriad of changes introduced with these updated forms are extensive and beyond the scope of this update. However, they include the harmonization of these agreements with prompt payment legislation, the incorporation of the “Ready-for-Takeover” project milestone into more contract models (a concept intended to improve and clarify project handover), a clearer delineation of “pre-construction services” and related planning for construction management structures, termination for convenience for construction management contracts and the refinement of IPD contracts with respect to the operation of profit pools and numerous collaboration tools.
In short, the new CCDC agreements are reflective of the broad range of project delivery systems being employed in Canada, an increased emphasis on collaboration and planning and lessons learned from traditional construction contracts. Participants in the Canadian construction industry would be well-advised to study the extensive changes introduced by these models, how to prepare for them and how to take advantage of the opportunities they present.
In a significant policy initiative announced in August of 2025, the Canadian federal government launched a Major Projects Office (MPO), with a mandate that includes facilitating the more rapid construction of nation-building projects. In particular, the MPO is charged with “streamlining and accelerating regulatory approval processes”1 and assisting with the structuring and financing of such projects.
The establishment of the MPO was followed by the identification of lists of specific major projects to be considered for fast-tracking, with the first series of projects announced in September of 2025 and a second series of projects referred to the MPO in November of 2025.
The acceleration of such “National Interest Projects” and the streamlining of their regulatory approval is planned to be facilitated in part through the introduction of the Building Canada Act in June of 2025.
The group of projects either already referred to the MPO or under consideration thus far extend across the country and span a broad range of sectors including LNG, nuclear, industrial, electricity and transit.
As such projects continue to progress through regulatory approval processes, it is hoped that they will create significant opportunities within the construction industry.