On October 23, 2025, the Ontario government introduced Bill 60, the Fighting Delays, Building Faster Act (“Bill 60”), which, in part, refines and expands upon the significant amendments to the Construction Act first introduced under Bill 216, Building Ontario For You Act (“Bill 216”) in November 2024. The changes under Bill 60 will impact how holdback is managed and how contract terminations are handled on construction projects across the province.
Bill 60 represents a significant course correction from Bill 216. While Bill 216 introduced the concept of mandatory annual holdback release (a departure from traditional holdback practices), its implementation raised concerns about the practical implications of coupling annual holdback release with annual lien expiry. Industry stakeholders voiced concerns about the potential for reduced holdback pools to secure outstanding claims as projects progressed, particularly on multi-year infrastructure projects.
Bill 60 attempts to address these concerns by separating these two concepts (i.e. mandatory annual release of holdback and lien preservation), allowing holdback to flow more freely while maintaining the familiar lien preservation and expiry timelines that have governed the industry for years. This approach appears to reflect ongoing dialogue between government and industry stakeholders with respect to balancing cash flow improvements with lien preservation deadlines.
Most amendments under Schedule 2 of Bill 60 will come into force upon receiving Royal Assent. However, the amendments with respect to maintaining separation between annual holdback release and lien expiry, and the transitional provision with respect to P3 contracts will come into force on the later of:
- the day on which section 26 of Schedule 4 to Bill 216 comes into force (being when the annual holdback release requirements come into force); and
- the day Bill 60 receives Royal Assent.
Key amendments to the Construction Act introduced by Bill 60
Separating annual holdback release from lien preservation
Bill 60’s most significant change addresses the relationship between annual holdback release and lien expiry, two concepts that Bill 216 had sought to tie together. Bill 60 now aims to separate them.
Under Bill 216’s original scheme, annual holdback release was to be coupled with annual lien expiry, meaning that liens would expire annually as holdback was released. This original scheme contemplated under Bill 216 would be overly burdensome as annual lien expiry would have required parties to preserve and perfect liens multiple times throughout a project’s lifecycle, multiplying administrative costs and creating confusion about which holdback portions secured which claims.
The not-yet-in-force re-enacted version of section 26 is consequently amended to require the annual release of holdback without the expiry of liens.
The amendment:
Bill 60 walks back Bill 216’s proposed amendments to sections 26 and 31 of the Construction Act, which would have temporally linked annual release of holdback with lien preservation. Bill 60 now provides:
- Annual holdback release remains mandatory, but operates independently from lien timelines; and
- lien preservation, perfection, and expiry timelines revert to the Act’s current provisions, tied to publication of a certificate of substantial performance or project completion, abandonment and/or termination (with respect to contractors) rather than annual holdback notices.
The approach introduced by Bill 60 allows owners to release holdback annually, while maintaining the existing framework for lien rights that construction stakeholders understand and rely upon. Liens will continue to expire based on publication of a certificate of substantial performance or project completion, abandonment and/or termination of the contract (with respect to contractors), not on annual holdback releases.
These specific provisions regarding annual holdback release will only become operative once Bill 216 is proclaimed into force. Until that proclamation occurs, the existing holdback regime continues to apply.
Expanded application of holdback restrictions
Section 30 of the Construction Act currently restricts a payer from applying holdback toward obtaining substitute services or materials, or in payment of claims against a contractor or subcontractor where the contractor or subcontractor “defaults” in performance, but only until liens have expired, been satisfied, discharged, or otherwise provided for. However, section 30 does not currently address whether holdback funds can be applied in respect of contract abandonments and termination.
The amendment:
The revised section 30 introduced under Bill 60 extends this prohibition to situations where a contract or subcontract is “abandoned or terminated,” not just situations involving default. This amendment broadens the protection for potential lien claimants by ensuring holdback remains available to secure their claims whenever a contract ends prematurely, regardless of whether the departure technically constitutes a default, abandonment and/or termination.
This amendment recognizes the commercial reality that contracts end for many reasons beyond breach or default, mutual agreement, convenience terminations, force majeure, or simple abandonment. By extending holdback protections to all forms of contract cessation, Bill 60 ensures that parties who supplied labor or materials before termination maintain their security interest in holdback funds, even where the termination wasn’t triggered by default.
Enhanced notice requirements for contract termination
Bill 60 introduces new notice obligations under subsections 31(6) through 31(8) that will impact how parties manage contract terminations.
The amendment:
- Seven-day notice deadline: Either the owner or the contractor (or other person whose lien is subject to expiry) must publish a notice of termination no later than seven days after a contract is terminated.
- Notice of termination triggers lien preservation: If a notice of termination is published, the date of termination for determining lien preservation is deemed to be the date that the notice was published (or the date of the first notice if multiple notices are published).
- Validity not impacted: The amendments clarify that this deemed date does not prevent parties from contesting whether the termination was valid.
These provisions add clarity for determining when lien timelines begin to run following termination. Construction stakeholders must now monitor published notices carefully and ensure their own notices are published within the seven-day window. The deeming provision eliminates ambiguity with respect to the start date for lien preservation periods following termination, but parties retain the right to challenge the underlying validity of the termination itself.
This amendment is particularly significant for subcontractors and suppliers, who must now monitor termination notices diligently to ensure they preserve their lien rights within the applicable timelines.
Transitional provisions for P3 contracts
Bill 60 includes targeted amendments to the Construction Act’s transitional provisions relating to public-private partnership (P3) contracts.
Bill 216 introduced changes affecting how holdback operates under P3 agreements entered into under section 1.1 of the Construction Act (i.e. contracts between owners and special purpose entities for financing, designing, constructing, and operating public infrastructure).
The amendment:
Bill 60 adds subsection 87.4(5), which provides that if a P3 project agreement entered into before Bill 216 comes into force is prescribed by regulation, the previous version of section 26 continues to apply to that project agreement and the applicable agreement between the special purpose entity and the contractor.
This transitional provision recognizes that P3 contracts are long-term arrangements often negotiated years in advance. Allowing prescribed P3 contracts to continue operating under pre-Bill 216 amendments provides certainty and prevents mid-project disruption to existing contractual arrangements. Construction participants involved in P3 projects should monitor which projects, if any, are captured under this provision.
Conclusion
While Bill 60 addresses several practical concerns raised by Bill 216, the construction industry should remain engaged in ongoing dialogue as these reforms are implemented. The success of these amendments will ultimately depend on how effectively they balance the competing interests of cash flow, lien security, and administrative efficiency across Ontario’s diverse construction projects. Construction stakeholders are encouraged to seek legal advice on how these changes will impact their specific projects and contractual relationships.
For tailored advice on how Bill 60 may impact your construction projects, contractual risk, and lien rights, contact our Construction and Infrastructure team. Subscribe to our newsletters to stay current on evolving developments in Ontario construction and infrastructure law.
