1. What is the current legal landscape for your practice area in your jurisdiction.

(A) Reforms in Legislation and Updates to Standard Form Contracts

The construction industry in Canada continues to be a major economic force.  While estimates vary, the industry employs approximately 1.6 million people in Canada, and contributes $151 billion to the Canadian economy on an annual basis, representing 7.4 percent of Canada’s GDP.  Moreover, the size and complexity of projects have grown dramatically this century, with numerous multibillion dollar projects, ranging from transit to energy to social infrastructure, at various stages of procurement and construction.

It is only fitting then, that despite a reputation in some corners for being a traditional industry that is slow to change, a range of reforms have been sweeping across the country over the last 5 to 7 years in particular, to adapt to industry demands.

While a focal point has been the adoption of prompt payment and adjudication legislation in numerous provinces and for federal projects, the industry is also continuing to adapt to growing complexity in projects and the objective of collaborative contracting through the updating of standard form contracts.

(I) Legislative Reforms

Jurisdictions in Canada began introducing legislative reforms to introduce prompt payment and adjudication legislation in 2019. The wave of legislative reforms to introduce and modify prompt payment and adjudication has continued in 2025.  While a detailed review of every province is beyond the scope of this update, it is notable that:

(1) following a lengthy pilot project, the Province of Québec has, on September 8, 2025 enacted its Regulation respecting prompt payments and the prompt settlement of disputes with regard to construction work providing for the application of a prompt payment and dispute settlement regime for larger public construction projects (equal to or more than $750,000 for building work or equal to or more thant $2,500,000 for civil engineering work), in conjunction with legislative changes that were introduced in 2022. Medium sized public construction projects (less than $750,000 but equal to or more than $75,000 for building work and less than $2,500,000 but equal to or more than $675,000 for civil engineering work) will be submitted to the regulation starting September 8, 2026 and all other construction projects from September 8, 2027 and onward;

(2) as elaborated upon below, the Province of British Columbia has now introduced prompt payment and adjudication requirements of its own; and

(3) the Province of Ontario, being the first Canadian jurisdiction to introduce prompt payment and adjudication back in 2019, introduced further reforms that took effect as of January 1, 2026, which are intended to improve the existing legislation.

The new reforms for British Columbia and Ontario are expanded upon below:

British Columbia

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:

(1) 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.

(2) 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).

(3) 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.

Once they come into force, the amendments to the B.C. Builders Lien Act will bring B.C. more in line with other Canadian jurisdictions. There is currently no known date for the coming in force of these amendments.

Ontario

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:

(1) 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.

(2) 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 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 (ODACC) 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 $1,000/hour.  It is anticipated 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.

(II) Standard Contract Updates and Other Contract Trends

Many projects in Canada use the industry standard Canadian Construction Documents Committee (“CCDC”) contracts. While there 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 updates to the CCDC contracts, including:

(I) the CCDC 5A Construction Management Contract – for Services;

(II) the CCDC 5B Construction Management Contract – for Services and Construction (i.e. 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 (i.e. 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 contractual mechanisms supporting collaboration.

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.

Meanwhile, particularly on complex infrastructure projects, the prevalence of collaborative contract models has seen a marked increase in Canada, with Progressive Design-Build and Alliance contracts continuing to gain traction. The growth of these models coincides with the potential for continuing major project opportunities in the years to come.

(B) Public Project Opportunities

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” 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.

Concurrently, Canadian case law and reforms have considered land rights applicable to major public projects.

(III) Recognition of Aboriginal Title

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. The Cowichan decision was released in advance of a decision by the New Brunswick Court of Appeal, J.D. Irving, Limited et al. v. Wolastoqey Nation, 2025 NBCA 129 released in December 2025. The New Brunswick Court of Appeal came to a different conclusion than the B.C. Supreme Court.

In the Wolastoqey Nation case, the New Brunswick Court of Appeal refused to declare Aboriginal title rights existed over land held by private landowners, finding that such a declaration would confer rights that cannot exist under the existing system of private land ownership. The New Brunswick Court of Appeal found that a declaration of Aboriginal title would result in the vesting of rights understood under Canada’s land title system to belong to the land title-holder, such as rights of exclusive possession, control and economic benefits in the Aboriginal group seeking title. As an alternative, to permitting the assertion and declaration of Aboriginal title, the Court of Appeal in Wolastoqey Nation found that the Wolastoqey First Nation could pursue claims against the Crown for damages and compensation where there was a finding that there was a valid claim to Aboriginal title over private lands.

As the Cowichan decision is currently under appeal, it remains to be seen how these differing decisions will be reconciled. It is anticipated that the Supreme Court of Canada will ultimately be required to resolve these competing reasons. Prior to such resolution, real estate developers in B.C. have already begun pointing to uncertainty around title interests as a cause and contributing factor to a decrease in construction activity. Anecdotal reports of concerns around title interests causing lenders, insurers, and developers to back out of or pivot from planned construction activities have become wide-spread in the legal community.

Against this backdrop of uncertainty, Canada continues to take steps to reconciling Aboriginal rights and title within its existing land titles and government systems. 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 across Canada.

2. What three essential pieces of advice would you give to clients involved in your practice area matters?

There is an industry that is perceived to be experiencing numerous dichotomies: (i) while the development of and funding for major infrastructure projects continues at a strong pace, the residential development sector is experiencing a slowdown in some jurisdictions on a scale that has not been seen in a long time; (ii) while great strides have been made to achieve legislative reform that will facilitate a culture of faster payments and more options for dispute resolution, many in the industry anecdotally report a more litigious environment; and (iii) the opportunity associated with increasingly large and complex projects in a collaborative contracting environment nonetheless corresponds to a rise in the magnitude of risk where issues arise.

These trends all support the following three pieces of advice:

(a) It is more critical than ever to ensure that the appropriate contract model and structure is being used for the nature of the project that is being built. With the plethora of common contract frameworks in use, parties should turn their minds to factors such as whether early design input from all parties would be beneficial, whether a fixed-price, costs-plus or hybrid pricing model best reflects the scope and stage of the project, whether collaborative contracting is an appropriate fit to mitigate against the risk of claims and, perhaps most importantly, whether specific categories of risk are being allocated to the parties who are best positioned to absorb them. The latter point is often critical to ensuring a successful project;

(b) Clear, professional and timely communications among project parties are essential to mitigate against the risk of disputes and to allow parties to have some control over the size of disputes that arise. Such communications include everything from complying with contractual notice requirements to regular reporting on scheduling and progress to maintaining consistent meeting minutes. The important goals that this approach will assist parties to achieve include both the avoidance of disputes that arise from misunderstandings and gaps in reporting and preparedness for handling disputes quickly and efficiently when they arise; and

(c) Follow the contract and the applicable payment legislation, as applicable, whether the matter at issue is processing a change order, advancing a contract claim, bringing everyone’s attention to a scheduling delay or seeking the resolution of a payment or other dispute. While parties have a natural tendency to defer such issues out of concern for their business relationships, the reality is that taking such steps facilitates the early resolution of claims and assists in avoiding, or at least better controlling, protracted, expensive dispute resolution proceedings.

3. What are the greatest threats and opportunities in your practice area law in the next 12 months?

In the context of the trends described above, together with fluctuations in material costs and economic changes, one of the overarching threats appears to be uncertainty. This uncertainty applies to available resources, pricing, project opportunities and even the potential for insolvencies. While the notion of uncertainty can also be attached to adapting to new legislation, we see that as a more of a net opportunity.

An acute current concern arises around the security of governmental and private owners’ land title rights, which are anticipated to be a continuing threat to construction activities within the province of British Columbia specifically.

On the other hand, there appears to be great opportunity in the Canadian construction industry as well.  The potential momentum for large infrastructure projects, described above, may continue to sustain a steady work flow for some sectors of the industry.  The innovation behind collaborative contracting may provide great support for minimizing project risks and dispute.  The increasing acceptance of payment legislation has the potential to contribute to confidence in payment security. Lastly, the creative approach to alternative methods of dispute resolution, including through the increasing prevalence of “in-project” dispute resolution proceedings for large projects may contribute to the earlier and more efficient resolution of disputes on discrete issues as they arise and before they “snowball” into large litigation and arbitration proceedings.

4. How do you ensure high client satisfaction levels are maintained by your practice?

Practicing construction law means working with our clients to support them towards successful contracting and successful completion of projects as negotiations, project issues, and disputes arise. The issues facing our clients are significant, and time-sensitive, and it is of the utmost importance that our clients have prompt, substantive responses to their questions, and that the advice provided is practical and made with a view to understanding the our clients’ goals and providing supporting in achieving them.

In an increasingly complex industry, this also means avoiding “cookie-cutter” advice, such as merely following the mechanical steps of a dispute resolution process.  It is always critical to think strategically, with a view to ensuring that the steps being taken and recommended are done in a purposive manner, with the end objectives in mind.

It is also a hallmark of the construction industry that, in the context of a fast-moving project, discussions are candid while also carefully considered. It is incumbent on construction lawyers to match these traits in the advice that we provide such that we are always striving to add value to a project.

5. What technological advancements are reshaping your practice area law and how can clients benefit from them?

There are many exciting examples of technological developments reshaping the construction industry and the construction law world. Like many industries in the current environment of course, the clearest example is that of AI.

Effective counsel are now able to carefully use AI tools to improve their efficiency in reviewing and assessing of contracts and project documents. When used properly (i.e. as a support tool), this contributes to more efficient and informed contract negotiations and drafting. These tools also allow lawyers to be more quickly equipped for providing advice when disputes arise during the course of construction. Should any dispute proceed to adjudication, mediation, arbitration or litigation, effective counsel are able to utilize AI tools embedded within document management and production software in order to assist in assessing documents for production and to identify key documents that inform a party’s position in any dispute.

When used for support, with a proper understanding of limitations, these tools facilitate more effective advocacy by improving the lawyer’s knowledge base and allowing even more of a focus on strategic judgment, thinking and recommendations.

Clients in the construction industry are also including AI tools at an increasing level in their daily construction activities. Uses of AI and other technology tools on construction projects has over recent years expanded from project management applications to include application to construction itself, such as:

• the use of drone technology and AI to provide up-to-date and detailed recordings of construction progress (which data can then be benchmarked and utilized to check against shop-drawings, and to investigate causes of otherwise unforeseen defects and deficiencies) as well as to provide real-time monitoring of construction activities for enforcement of safety policies and data for comparison of actual schedule progression against a modeled construction schedule; and
• the use of sensor technology to provide confirmation as to stability of poured concrete materials, resulting in less time required to test for concrete casting, and, to provide forecasts for equipment operations and to permit underlying issues of equipment defects and potential failures to be addressed immediately and prior to breakdowns.

Although the use of these technologies represents development of more efficient, and safe construction, the use also comes with specific challenges that must be carefully assessed, including but not limited to:

• data storage, and whether or not there are limitations or restrictions on cloud storage or privacy concerns that an owner or contractor requires to be implemented in connection with the use of new technologies;
• concerns around intellectual property ownership, and increased risks of potential intellectual property infringement (depending on the specific AI or technology tool utilized); and
• questions of liability and risk management relating to the use and implementation of any predictive technology.

As is the case with many other industries, these technological developments are likely still in their infancy and must be used carefully and with caution. At the same time, they present seemingly unlimited opportunities for improved advocacy, contract structuring and efficiency on the whole.