Notice of Non-Payment Prompt Payment Control

Notice of Non-Payment Prompt Payment Control

Fast-Fact Summary

• Governing Agency: Ontario Ministry of the Attorney General / Construction Act framework
• Form, Bylaw, or Regulation: Prompt payment notice response; Construction Act, R.S.O. 1990, c. C.30
• Effective/Current Anchor: Ontario Construction Act amendments in force January 1, 2026 through Bill 216 and Bill 60
• Direct Portal or Source: https://www.ontario.ca/laws/statute/90c30

Mandatory Scope

This compliance control applies to all construction contracts in Ontario governed by the Construction Act, R.S.O. 1990, c. C.30. It mandates strict administrative protocols for owners, general contractors, subcontractors, and trades across all project values, worker counts, and licence categories. Any payer who disputes a proper invoice, or any contractor who receives a notice of non-payment and must pass that notice downstream to subcontractors, must track and execute these communication windows.

Deadlines & Administrative Windows

• 7-Day Invoicing Rule: Invoices are legally deemed proper unless the owner gives a formal written notice of deficiency within 7 days after receiving the invoice. Missing this 7-day notice window forfeits the right to dispute invoice form or structure and starts the 28-day prompt-payment timeline.
• Mandatory Annual Holdback: For contracts extending beyond one year, owners must publish a Notice of Annual Release of Holdback (Form 6) on an electronic construction trade news website within 14 days after each contract anniversary. Payment of the accrued basic holdback must occur no earlier than day 60 and no later than day 74 after publication, provided no liens are preserved.
• Repeal of Section 27.1: The former section 27.1 notice-of-non-payment mechanism for refusing holdback distribution due to deficient or incomplete work is repealed. Holdback use is restricted to formal contract abandonment or termination scenarios and preserved lien risk.
• Adjudication Extension: Parties have a strict 90-day window after contract completion, abandonment, or termination to initiate interim binding adjudication through ODACC or a qualified private adjudicator.

Financial & Legal Liability

• Non-Compliance Penalty: Late or incomplete notice administration can shift payment liability and escalate to adjudication. There is no verified statutory dollar amount specified in the source data for administrative non-compliance penalties; however, failing to issue notices within the mandated windows legally obligates the payer to pay the full invoiced amount.
• Average WSIB Premium Rate: $1.23 per $100 of insurable payroll, down from $1.25 per $100 of insurable payroll.
• G6 Non-Residential Construction Rate: $1.61 per $100 of insurable payroll.
• 2026 Maximum Insurable Earnings Ceiling: $121,700.

Step-by-Step Filing Instructions

• Step 1: Invoice Intake and Review: Upon receipt of an invoice, immediately review its structure. If any deficiencies exist, draft and deliver a formal written notice of deficiency to the contractor within 7 days of receipt.
• Step 2: Notice of Non-Payment Issuance: If disputing payment of a proper invoice, the owner must deliver a Notice of Non-Payment to the contractor within 14 days of receiving the proper invoice, detailing the amount disputed and the reasons for non-payment.
• Step 3: Downstream Notification: If a contractor receives a Notice of Non-Payment from an owner, they must refer to the downstream communication windows and issue their own Notice of Non-Payment to affected subcontractors within 7 days of receiving the owner's notice.
• Step 4: Holdback Administration: For multi-year contracts, track the contract anniversary. Publish Form 6 (Notice of Annual Release of Holdback) on an electronic construction trade news website within 14 days after the anniversary. Release the accrued basic holdback between day 60 and day 74, ensuring no liens are preserved. Do not attempt to use the repealed Section 27.1 mechanism to refuse holdback distribution for deficient work.
• Step 5: Dispute Resolution: If a payment dispute cannot be resolved, initiate interim binding adjudication through ODACC or a qualified private adjudicator within the strict 90-day window following contract completion, abandonment, or termination.

2026 Inspection Notes

For 2026 construction compliance context, pay close attention to working-at-heights training records, trenching and excavation controls, and training/competency documentation. Ensure all site personnel have verified training credentials readily accessible during any Ministry of Labour, Immigration, Training and Skills Development (MLITSD) field inspections.

Official Sources

• https://www.ontario.ca/laws/statute/90c30
• https://www.ontario.ca/laws/regulation/180304