Annual Release of Holdback under the Ontario Construction Act - 2026 

As the industry prepares for a significant update to Ontario’s Construction Act, it’s essential for project owners, contractors, and consultants to understand how these changes will affect project cash flow and contract administration. The new mandatory annual release of holdback—effective January 1, 2026—introduces processes and timelines that all parties must be ready to implement.

In Ontario, the Construction Act, R.S.O. 1991, ch. C.30 applies to a property Owner and anyone who supplies services or materials to an improvement of the property. Under this Act and its predecessor (the Construction Lien Act), there is a requirement for the Owner to withhold 10% of any amounts to be paid to a contractor – the “holdback” – for the purpose of limiting the Owner’s liability for any liens that could be claimed against the property due to non-payment of subcontractors and suppliers of materials.

Until now, the holdback would be paid by the Owner to the Contractor after the lien preservation period has expired following the date of Substantial Performance of the work, provided no liens had been registered against the property as a result of the work.

Due to changes to the Construction Act that takes effect on 1st January 2026, it will now become mandatory for the Owner to release the accrued holdback after each annual anniversary of the date of execution of the construction contract, with the following milestones:

  • Within 14 calendar days after the contract anniversary date, the Owner (not the Contractor) is required to publish a notice of annual release of holdback in one of three construction trade websites; the notice must use a prescribed form and include the amount of holdback to be released
  • A 60-day lien preservation period runs from the time of posting of the Owner’s notice
  • Provided no liens have been preserved, perfected or otherwise discharged against the property, the Owner must pay to the Contractor the amount of the holdback accrued during the year prior to the contract anniversary date. This payment must be made within 14 days of the end of the lien preservation period.
 
 

While these changes apply to new construction contracts which are executed on or after the 1st January 2026, transition rules will also apply to contracts that were created prior to this date:

  • projects with a contract execution date prior to 1st January 2024 will commence the annual release on their next contract anniversary date after 1st January 2026
  • projects with a contract execution date after 31st December 2023 and before 1st January 2026 will commence the annual release on the 2nd anniversary of their contract date after 1st January 2026.

There is no change with respect to requirements for Substantial Performance nor to the release of the remaining holdback after the date of Substantial Performance, including the release of finishing holdbacks.

The required notice for release of holdback (Form 6) to be prepared by the Owner will be found on the Ontario Courts forms website https://ontariocourtforms.on.ca/en/ under the “Construction Acts Forms” section.

As this is a significant change to the management of holdbacks and their payment compared to prior decades, it can be expected that there will be some confusion in the industry, for owners, designers, contractors, subcontractors and vendors, on how these new requirements function. It can also be expected that there could be some unintended impact leading up to achieving Substantial Performance and final completion of the work.

 
 

Celebrating Our Dedicated Team Members at 10, 15, 20, 25, 30 and 50 Years!

Reaching these significant employment milestones is a great cause for celebration, and our colleagues who achieve these anniversaries deserve every spotlight! Their loyalty, dedication and growing expertise energize our culture and strengthen everything we do.

Each milestone marks years of innovation, teamwork and meaningful contributions that help HH Angus deliver standout results for our clients. These employees inspire those around them, share invaluable experience, and keep our momentum going strong. We’re proud to honour their achievements and grateful for the passion they bring to HH Angus every day.

Here’s to their continued success—and many more milestones ahead!

 

Turning Insights into Action 

The 2025 National Building Decarbonization Forum made one thing clear: we are no longer waiting for breakthrough technology. For developers, owners, and operators, the next decade won’t reward the most enthusiastic — it will reward the most prepared.

Mike Hassaballa, Lead Consultant - Energy Infrastructure at HH Angus, attended the conference and shares his key takeaways:

We are now in the phase where policy, data, and execution decide who moves first and who gets left behind. From our perspective as engineers and advisors, three themes really matter for building owners, operators, ESCOs, and developers.

Policy And Markets Are Now Design Inputs

A recurring pattern across the sessions was simple. A solution can be technically sound and financially attractive and still sit on the shelf until policy changes.

Once green standards tighten, performance thresholds become mandatory, or carbon costs are embedded in planning rules, those same solutions quickly become the obvious path.

What this means in practice:

  • For developers, the real driver is often policy timing and risk, not enthusiasm for new technology.
  • For owners and operators, the biggest exposure is policy instability. One election or change in market rules can materially shift long term asset value.
  • For projects, policy can no longer be a single line item. It needs to be treated as a scenario in the design process.

The more robust strategies are those that still make sense under stricter standards, softer standards, and delayed action. That framing lands well with boards and lenders, because it is about resilience, not ideology.

Data, Portfolios, And Buildings as Energy Assets

The Forum highlighted a growing consensus. Low carbon at scale is held back less by equipment and more by information.

Utilities, cities, and owners all described the same problems: inconsistent data formats;
limited access to historical consumption; and privacy concerns interpreted so conservatively that useful aggregation is blocked.  As a result, lenders and investors cannot compare buildings easily, and portfolio decisions take longer than they should.

At the same time, there is a clear shift in how leading players view buildings:

  • Buildings are starting to be treated as energy assets, not just loads, with on-site generation, storage, and flexible demand.
  • Thermal energy networks and district systems are moving from pilot projects toward core infrastructure in some municipalities.
  • High density and AI data centres are emerging as large, steady sources of recoverable heat, but only where planning for networks, grid capacity, and land use is aligned.

For owners and developers, the practical implications are:

  • Get your data house in order now. Standardized meters, building identifiers, and data structures are becoming as important as drawings and specifications.
  • In growth areas, design new buildings to be “network ready”, with low temperature hydronics and clear interfaces for future connection.
  • View decisions at portfolio level. The right answer for one building may be different when seen inside a larger group of assets with shared loads and infrastructure.

Retrofit Strategy, Capital Cycles, And the Story You Tell

The hardest questions at the Forum were not about technology. They were about timing, disruption, and communication. On retrofit depth, the broad message was:

  • For most existing commercial and institutional buildings that suffer from operational drift, targeting approximately a one-third reduction in energy use is often achievable and cost effective.
  • Pushing to very deep reductions can make sense, but usually only when aligned with major lifecycle events, such as recladding, change of use, or end of life replacement.
  • Envelope work is disruptive. Tenancy, leases, and the asset strategy must be part of the conversation, not just energy use per square metre.

On new construction, the message was blunt. It is almost always cheaper to build high performance once than to retrofit later.

Speakers also turned repeatedly to the importance of narrative. In several jurisdictions, strong technical cases for electrification and heat pumps have been overshadowed by misinformation or politicized debate. Policy frameworks have shifted quickly when they lost public support.

So, for major decarbonization projects, numbers are necessary but not sufficient. Owners and project teams also need a clear, simple story that explains:

  • Why this project makes financial sense over the life of the asset.
  • How it manages risk across different policy and market futures.
  • What it means for comfort, reliability, and long-term value.

That story needs to work for boards, tenants, and the public.

HH Angus' Energy Infrastructure and Digital Services teams have the expertise to help clients address many of the issues discussed in this article - if you would like to continue the conversation, reach out to Mike Hassaballa at the email address below.

Mike Hassaballa, P.Eng.
Lead Consultant, Energy Infrastructure
mike.hassaballa@hhangus.com

 

We’re excited to be among the sponsors of next week’s Canadian Centre for Healthcare Facilities (CCHF) conference on designing health spaces for children and youth | November 26 - 28, 2025 | Toronto


The event brings together healthcare leaders, designers, and engineers to explore how we can create more efficient, innovative, and compassionate spaces for pediatric care — especially as redevelopment costs continue to rise.

Megan Angus and Kim Spencer, VPs respectively for our Angus Connect and Healthcare divisions, will be at the conference, connecting with industry peers and sharing ideas that help shape the future of healthcare design.

The conference takes place at the ‘Peter Gilgan Centre for Research and Learning’, part of SickKids Hospital (recently recognized as the world’s best hospital for specialized pediatrics). We’re proud to have been part of the Centre’s design team, having provided mechanical and electrical engineering, as well as lighting, IT communications, and vertical transportation design to the project. And our Angus Connect team is currently serving as ICAT Advisor for SickKids’ Project Horizon.

 
Harry Angus
 

When Harry Angus joined HH Angus in 1974 after graduating from Queen’s University in mechanical engineering, he brought a powerful combination of vision and drive. Over the next five decades Harry helped the firm strengthen into one of Canada’s most respected engineering consultancies — an independent company defined by innovation, integrity, and a culture of empowering employees to contribute and grow.

Serving as President from 1985 to its centennial year in 2019, Harry steered the firm through a period of transformation, increasing its influence across Canada and into new industry sectors, from energy and health strategy, to digital innovation. During this period, HH Angus undertook many notable and technically challenging projects:

Rogers Centre (formerly SkyDome) – designing building systems for the world’s first stadium with a fully retractable motorized roof
Eastman Chemical’s PET plant – re-engineering the process by going back to first principles resulted in massive cost savings and reduced schedule
National Gallery of Canada – its unique architecture led our design team to air tunnel test mechanical system diffusers to achieve the required ventilation
CAMI Automotive - a greenfield facility over 1 km in length, providing all project management and services engineering
North Bay Regional Hospital – the first hospital in North America to provide 100% fresh air supply to all parts of the hospital, significantly reducing transmission of harmful  bacteria and  viruses
Centre hospitalier de l’Université de Montréal (CHUM) – among North America’s largest P3 hospital projects
Enwave – the largest district energy system in North America
BSL Level 4 labs – design and engineering for the highest level of biocontainment
Canary Wharf - the UK redevelopment in London showcased the firm’s technical ingenuity and collaborative spirit at a time when high-rise towers were almost unknown in the UK

Harry’s approach to leadership nurtured a culture where ideas are shared openly, mentorship flourishes, and people are empowered to grow. His belief that “management doesn’t have a patent on good ideas” continues to shape HH Angus’ inclusive and innovative workplace today.

Recognizing opportunities to enhance project effectiveness beyond the traditional design/bid/build model, Harry was an early supporter of Public-Private Partnerships in Canada. He helped to position HH Angus at the forefront of major infrastructure delivery, such as the firm’s award-winning work on Montréal’s CHUM mega-hospital, and participation in the soon-to-open Eglinton Crosstown Light Rail Transit system. This experience led to our work in a number of procurement models—from P3 and IPD to Progressive Design Build and Alliance—as the market continues to respond to changing economic drivers. Harry also championed portfolio diversification through new service areas such as ICAT and digital services, ensuring HH Angus remained resilient and forward-looking in a rapidly evolving industry. 

Harry’s influence continues to guide the firm’s values and vision. Beyond HH Angus, he has contributed significantly to the broader profession and community —as a past President of Professional Engineers Ontario, Chair of McMichael Art Gallery and world sailing championships, Yonge Street Mission, Queen’s University, working with Health Ontario and others to improve the public health delivery model, and establishing scholarships for aspiring engineers.

As HH Angus is about to embark on to its 107th year of engineering innovation, we celebrate Harry’s 50 years of vision, leadership and his lasting impact on the firm, its clients, and our profession.