Substantial Performance – What You Need to Know

November 5, 2019 | Matthew Irish

Under the Ontario Construction Lien Act[1] (the “Act”), a contract is considered substantially performed when the improvement, or a substantial part thereof, is ready for use, or is being used for the intended purposes, and when the improvement is capable of completion or, where there is a known defect, correction can be completed for less than the threshold monetary amount.

Significant amendments to the Act came into effect as of October 1, 2019. These included changes to the monetary threshold for correcting defects that had not been changed since 1983.

Under the amendments, the threshold for achieving substantial performance has been  increased. The threshold is now met when the cost to correct the defect is at a cost of no more than 3% of the first $1,000,000 of the contract price, 2% of the next $1,000,000 of the contract price, and 1% of the balance of the contract price.

Once a project is substantially completed, section 32 of the Act sets out the information to be included in the certificate for substantial performance. Among the requirements, all property identifier numbers (“PINs”) for the premises must be included.

In the recently decided case of Vestacon Ltd . v. ARC Productions Ltd. (“Vestacon”)[2] the Court affirmed the importance that the certificates of substantial performance contain the necessary information set out in the Act.

The project involved constructing a multi-story atrium, linking two separate buildings (located at 134 Peter Street and 364 Richmond Street in Toronto). Three certificates of substantial performance were published: one for each building and one for the full project.

Vestacon Ltd. registered a claim for a lien on June 6, 2016, and perfected the lien on July 19, 2016, for nearly $2 million. The lien was registered against the PIN for 134 Peter Street only.

In determining whether the certificates of substantial performance were valid, the court held that the “integrity of the system with respect to certificates of this nature must be protected,” and declared all three certificates of substantial performance invalid for omitting a proper legal description.[3] The court held that Vestacon Ltd. had thus been prejudiced, as it would have been aware of the correct PINs to register its lien. As a result, the court refused to declare the lien invalid.

The takeaway from the decision in Vestacon emphasizes the importance of including all the requirements of section 32 of the Act in the certificate of substantial performance, and highlights that increased attention should be given when these are completed.

[1] R.S.O 1990, c. C.30.

[2] 2018 ONSC 5366.

[3] Ibid at paras. 104 and 106.


This publication is provided as an information service and may include items reported from other sources. We do not warrant its accuracy. This information is not meant as legal opinion or advice.

Miller Thomson LLP uses your contact information to send you information electronically on legal topics, seminars, and firm events that may be of interest to you. If you have any questions about our information practices or obligations under Canada's anti-spam laws, please contact us at

© 2023 Miller Thomson LLP. This publication may be reproduced and distributed in its entirety provided no alterations are made to the form or content. Any other form of reproduction or distribution requires the prior written consent of Miller Thomson LLP which may be requested by contacting