Understanding Bill 216: What Ontario’s Construction Industry Needs to Know

The Ontario construction landscape is about to undergo significant changes with the introduction of Bill 216, officially known as the Building Ontario for You Act (Budget Measures), 2024. This legislation, passed in November 2024 and expected to come into force by summer 2025, brings long-awaited updates to the Construction Act. Whether you're an owner, contractor, subcontractor, or design professional, these changes will affect how you operate—and how you get paid.

What Is Bill 216?

Bill 216 is the product of an expert review led by Duncan Glaholt, a respected voice in construction law. It aims to resolve persistent issues in Ontario’s construction payment framework, streamline lien processes, and expand the adjudication system to better support timely dispute resolution.

Key Changes You Need To Know

Mandatory Annual Release of Holdback

One of the most impactful changes is the mandatory annual release of the 10% holdback. Early trades like excavation and demolition have historically waited years to receive final payments. With Bill 216, no trade will wait more than 12 months for their holdback—bringing fairness and improved cash flow across the board.

Elimination of Phased Holdback & Notices of Non-Payment

Phased release of holdback was rarely used due to its complexity. Bill 216 removes it entirely. It also eliminates the owner's ability to dispute holdback payment via a notice of non-payment. The basic 10% holdback must now be paid annually without exception.

Expanded Lien Rights for Design Professionals

Under Bill 216, design professionals will have lien rights—even if the project never breaks ground—unless the owner proves the land wasn’t enhanced by the design services. This gives architects, engineers, and planners greater protection for their work.

Timely Termination Notices

Owners and contractors must now publish a notice of termination within 7 days of ending a contract. This starts the countdown for lien preservation, adding clarity and urgency to the process.

Proper Invoice Reform

Bill 216 defines what constitutes a “proper invoice” more clearly and introduces a new rule: unless the owner objects in writing within 7 days, all invoices are considered proper. This simplifies the process and supports the principles of Prompt Payment.

Adjudication Reforms

The time limit to initiate adjudication is extended to 90 days after contract completion—a vital change since most disputes arise post-completion.

Private adjudicators will now be allowed, offering parties more flexibility and choice.

The scope of adjudication will expand beyond the original seven categories, pending regulatory updates.

Transition Rules

Bill 216 will apply to most new and existing contracts, except those grandfathered under the old Construction Lien Act (i.e., contracts signed before June 30, 2018). The first annual release of holdback will occur on the second anniversary of any existing contract once the new section comes into effect.

Why This Matters

Bill 216 is a big win for fairness, predictability, and efficiency in Ontario's construction sector. From faster payments to broader adjudication rights, this legislation supports businesses of all sizes in navigating an increasingly complex industry.

Whether you're a small subcontractor or a large developer, understanding Bill 216 is essential for compliance and strategic planning. Make sure your contract templates, invoicing practices, and internal workflows are updated ahead of the rollout.

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