I have not been paid on a construction project in Ontario — how does a construction lien and the holdback work?
Ontario's Construction Act gives contractors and suppliers lien rights against the improvement, backed by a mandatory 10% holdback, prompt payment timelines and adjudication — all governed by strict deadlines.
The Construction Act gives anyone who supplies services or materials to an improvement a lien against the owner's interest in the land. The owner must retain a 10% statutory holdback from each payment, and that holdback is the fund the lien attaches to in most cases.
The deadlines are the whole game. A lien must be preserved by registration within the statutory period running from the last supply, substantial performance or completion, and then perfected by starting an action and registering a certificate of action within a further period. Missing either step extinguishes the lien entirely, though the underlying breach of contract claim survives.
The Act also provides prompt payment — a proper invoice must be paid within the statutory timeline unless a notice of non-payment is delivered — and interim adjudication, which produces a binding determination quickly and is often the fastest route to cash.
Source: Construction Act, R.S.O. 1990, c. C.30
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