Effective January 1, 2026, Ontario’s Construction Act (the “Act”) underwent one of its most significant overhauls since the 2018 modernization of the former Construction Lien Act. One of the biggest changes was the introduction of a mandatory annual release of holdback regime.
Much has been written about this new annual release of holdback requirement. Law firms, industry organizations, and construction professionals have all published articles explaining the new rules and what they mean for Ontario’s construction industry. Even so, there remains a good deal of confusion as many owners, contractors, and subcontractors are unsure about when the annual release of holdback applies, how it works in practice, and whether it applies to their project. These questions continue to come up as the industry works through the implementation of these new requirements.
