Waiting on a General Contractor to Pay? Ontario Just Changed the Rules in Your Favour

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Every subcontractor knows the drill. You finish the drywall, the concrete, the electrical rough-in. You invoice. Then you wait. The general contractor says the owner hasn't paid yet. Then there's a "deficiency." Then the project wraps and your money is tangled up in someone else's dispute. Your crew, meanwhile, got paid every two weeks out of your line of credit.

The standard advice in the trades is to keep your head down, and register a lien only when things get truly ugly. That advice is backwards, and it has been since 2019. It leaves you quietly financing other people's projects. On January 1, 2026, Ontario amended the Construction Act in ways that make the faster route wider, and many Punjabi-Canadian trades and subcontractors in the GTA and Western Ontario haven't heard about it yet.

The clock has been on your side since 2019

Ontario's prompt payment rules have been in force since October 2019. Under section 6.4 of the Act , an owner must pay a "proper invoice" within 28 days of receiving it. Once the contractor is paid, section 6.5 gives them seven days to pay each subcontractor whose work was on that invoice. Withholding requires a formal notice of non-payment with reasons, not a shrug on the phone.

If the money still doesn't move, you have a statutory right to adjudication. You don't need the other side's consent. An adjudicator from the Ontario Dispute Adjudication for Construction Contracts (ODACC) roster must issue a binding written determination within 30 days of receiving your documents . If they order payment, it's due in ten days, and if it isn't paid you can suspend work. The determination is enforceable like a court order. Compare that to a lien action, which can take years.

What changed on January 1

Bills 216 and 60 brought in a package of amendments. Three matter most if you're downstream of a GC.

Your invoice is now "proper" unless they object within seven days. Under the old rules, a payer could sit on an invoice, then argue weeks later that it never met the "proper invoice" test, so the payment clock never started. Now an invoice is deemed proper unless written notice of a deficiency is given within seven days . Silence starts the clock.

You can still adjudicate after the job is done. Previously, the notice of adjudication generally had to be delivered before the contract was complete. That let a lot of claims die on the "it's too late now" excuse. The amendments give parties a 90-day window after completion, abandonment or termination to start one.

Holdback now comes back every year, and it can't be held hostage. Owners must now release accrued holdback annually. Within 14 days of each contract anniversary, the owner publishes a notice, then pays 60 to 74 days later . The GC has 14 days after receiving it to pass your share down. Section 27.1, which let a payer refuse to release holdback with a notice of non-payment, was repealed. One caveat: for contracts signed before 2026, the first annual release follows the second anniversary after January 1, 2026, so the cash-flow benefit lands in 2027 on most existing jobs.

The numbers say subcontractors are already using this

ODACC's most recent annual report covers August 2024 to July 2025. It shows 324 adjudications commenced, up 17% , and it specifically flags greater use by subcontractors and sub-subcontractors, plus growth in the ICI sector. The median amount claimed was $212,812 ; in residential it was $157,791. These aren't tower-crane disputes. They're the size of a framing contract on a custom build.

The cost side is more modest than most owners assume. The referral fee is $0 for claims under $50,000 and $600 above that. Seventy-four percent of certified adjudicators will work for a flat fee, with suggested rates from $1,100 to $3,300 for lower-value disputes. Of the 116 adjudications terminated before a determination last year, 43 ended because the parties settled. Filing the notice is often what finally gets the phone answered.

Where the honest caveats sit

Adjudication isn't magic. Only 61% of determinations came in within the statutory timeline last year, so budget for some slippage. A determination is binding on an interim basis; the dispute can still go to court or arbitration later. And yes, there's a relationship cost. A GC who gets adjudicated may not call you for the next job. Weigh that against a GC who is already using your working capital as their contingency fund. One of those relationships is worth protecting.

The bigger risk is paperwork. Adjudicators rule on documents. If your change orders live in text messages and you can't show when you delivered what, the 2026 rules won't save you. Four habits worth building now:

Invoice on the schedule your subcontract sets, with the items the Act's proper-invoice definition requires, and note the date received.

Get every change order confirmed in writing before the work, even a one-line email.

Diarize the 7-day, 28-day and anniversary dates on every contract.

Read your subcontract for any clause that tries to stretch payment terms, and ask about it before signing.

Key takeaways

Prompt payment and adjudication were built for the bottom of the construction pyramid, and the 2026 amendments closed the loopholes that made them easy to dodge. An unanswered invoice is a proper invoice after seven days. You have 90 days after the job ends to adjudicate. Holdback comes back annually and can't be withheld by notice. Filing costs are low, and a good share of cases settle once the notice lands. What you need is a paper trail, not a lawyer on retainer.

Payment risk in construction lands hardest on the smallest operators, and a lot of Punjabi-Canadian owners in Ontario are exactly that. If you'd like to compare notes with others in the sector, our Chamber's free membership gets you into the room. Join at no cost and come to the next monthly social.

This is general information, not legal or financial advice. Talk to a construction lawyer before you start an adjudication or change how you handle holdback.

Sources

Construction Act, R.S.O. 1990, c. C.30 (current consolidated version, sections 6.1, 6.4 and 6.5), ontario.ca

Osler, Hoskin & Harcourt LLP, "Ontario Construction Act amendments now in effect," March 2, 2026

WeirFoulds LLP, "Ontario's Construction Act Changes – What You Need to Know in 2026," February 11, 2026

Ontario Dispute Adjudication for Construction Contracts, 2025 Annual Report (fiscal year August 1, 2024 to July 31, 2025)