Canada: Construction & Planning

Starting in 2027, all Ontario project owners with contracts entered into on or after January 1, 2026, and most owners with contracts dating back to July 1, 2018, must start releasing statutory holdback to their contractors on an annual basis. This requirement is the latest in a series of construction payment reforms under Ontario’s Construction Act. It replaces the traditional model of retaining holdback until substantial performance. Owners and contractors who fail to comply with the notice and payment timelines face exposure to interest claims, payment disputes, and adjudication proceedings.

Corporate Disputes convened practitioners from Canada, Spain, the United Kingdom, Mexico, the United States, the United Arab Emirates and Switzerland to discuss how infrastructure disputes are changing.

Much has been said about Manitoba’s recent change to its basic limitation period for construction disputes, which generally reduced the time to start lawsuits from six years to two years. However, the passage of two years may not always be the end of the story for an unpaid contractor or subcontractor.