When Ferrari & Associates’ Partner and Vice President of Construction insurance, Michael Di Pinto sent out an internal memo about Ontario’s Bill 216, which made changes to Ontario’s Construction Act and its regulations, we knew it was important and timely enough that we wrote a blog article about it!
New changes positively impact cash flow and project financing for contractors, designers, and others in the construction industry. Mike says that one of the most significant updates is the new requirement to release the 10% holdback—retained from payments within a project. This is released—annually instead of at the project’s completion. This amendment, effective in spring 2024, is a milestone that will also impact bonding requirements for contractors across the province.
Annual Holdback Release: A Game Changer for Contractors
The new regulations also require that an owner “must pay” the full holdback amount to the contractor within 14 days after the 60-day lien period expires. Contractors, in turn, are required to pass on holdback payments to their subcontractors within a similar timeframe. Talk about a win-win-win! This phased release of funds provides financial relief but also requires meticulous compliance to avoid disputes.
How does Bill 216 Ontario Construction Act Amendments Impact your Bonding Requirements?
According to Kari Davis, our Director of Surety, these legislative updates have significant implications for bonding. With holdback payments released annually, contractors must ensure they have the right bonding facilities in place to cover potential financial gaps that may arise due to delayed payments, disputes, or other unforeseen project risks.
Here’s the good thing: Ferrari & Associates specializes in helping contractors secure the right bonding solutions, including:
- Performance Bonds: Guarantee the project is completed according to contractual obligations, even if unexpected financial or operational difficulties arise.
- Labour & Material Payment Bonds: Protecting subcontractors and suppliers by ensuring they receive payment, particularly important under the revised holdback structure.
- Lien Bonds: Replacing cash holdbacks and freeing up working capital while ensuring compliance with lien rights under the updated Act.
- Bid Bonds: Strengthening competitive advantage in bidding processes and demonstrating financial security to project owners.

The elimination of phased holdback releases for multi-phased projects further underscores the need for bonding solutions that provide financial protection at key project milestones.
The Expanding Role of Adjudication
In addition to changes in holdback requirements, the scope of adjudication under the Construction Act is also broadening. Contractors now have access to a wider pool of private adjudicators beyond those registered through the Ontario Dispute Adjudication for Construction Contracts (ODACC). This adjustment will streamline dispute resolution and provide faster access to decisions on payment disputes, reducing financial strain and project delays.
With an increasing number of disputes arising over payment delays, lien claims, and contract obligations, having a well-structured bonding program in place can serve as a financial safeguard. Ferrari & Associates can assist contractors in preparing for these changes by ensuring their bonding facilities align with evolving legislative requirements and industry best practices.
What Contractors Should Do Now
To stay ahead of these regulatory updates, you should:
- Review your Bonding Facilities – Ensure you have the appropriate bonding solutions to protect against financial risks associated with delayed payments or holdback disputes.
- Update Payment Management Processes – Align internal payment structures with the new holdback release requirements to avoid compliance issues.
- Educate your teams – Attend industry seminars and workshops that explain how the new holdback regulations impact contracts, payments, and disputes.
- Consult with our surety experts – Work with our team to ensure your business is prepared for these legislative shifts.

Partner with Ferrari & Associates for expert surety solutions
As a leader in construction insurance and bonding, Ferrari & Associates commits to supporting contractors through these regulatory changes. Our team of experts understands the complexities of the Ontario Construction Act and can help you navigate these amendments with confidence.
To start the surety quote process, click here.
If you need assistance securing the right bonding solutions or want to discuss how these changes will impact your business, contact us today. Let us help you stay protected, compliant, and financially secure in an evolving construction landscape.
*The information provided on this page is for information purposes only and should not be taken as insurance advice. For actual insurance advice, please contact Ferrari & Associates at 1-888-467-8989