Last verified 2026-06-27
What the statutory holdback is
On a construction contract in Ontario, the payer keeps back a portion of every payment as security for the parties below. Under the Construction Act this basic holdback is 10% of the value of the services or materials supplied. The remaining 90% is the progress payment payable as the work moves forward. The holdback exists so that, if a lien is registered, there is money set aside to satisfy it.
When it gets released
The holdback is not released at completion. It is released after the 60-day lien period expires, measured from the earliest of last supply, substantial performance, completion, abandonment, or termination. Substantial performance is the common case. That 60-day window gives subcontractors and suppliers time to preserve a lien if they have not been paid. Once it passes with the holdback clear of liens, the money can be paid out.
Longer projects and phased release
Tying up 10% of a multi-year project for its full duration is hard on cash flow, so the Act provides for annual release of holdback on longer contracts. For contracts entered on or after January 1, 2026, that annual release of accrued holdback is generally required under the Bill 216 / Bill 60 amendments rather than optional. Completed phases can have their holdback released on a schedule rather than waiting for the entire job. How this is administered is set out in the contract.
What this tool leaves out
This is a planning estimate of the basic statutory holdback and its release date. It does not cover separate holdback for liens preserved or perfected, set-off, contract terms that vary the mechanics, or the detailed rules for substantial versus final completion. Use the figures as guidance, not legal advice, and confirm against the official Ontario Construction Act.