Ontario construction contracts: the owner's guide
Every contract decision an Ontario owner makes, in the order you make them: choosing the contract, writing your terms, paying on time, managing change, releasing holdback and resolving disputes. Each step links to a full guide.
1. Choose the contract
The contract decides who carries cost risk, who controls the design and how changes get priced. Most Ontario owners pick from the CCDC family: CCDC 2 for a stipulated price, CCDC 3 for cost plus, CCDC 5A and 5B for construction management, and CCDC 14 for design-build.
- CCDC 2 vs CCDC 5B, 5A and 3: which construction contract?
- Stipulated price vs cost-plus vs GMP
- Construction management at risk vs for fee
- Design-build: CCDC 14 and CCDC 15
- Academy: anatomy of a CCDC contract and what CCDC 2-2020 changed
2. Write your terms
Standard CCDC forms are a starting point. Owners shape risk through supplementary conditions, and every clause you add has a price in the bids you receive.
- CCDC 2 supplementary conditions: common owner amendments
- Cash allowances under CCDC 2
- Price escalation clauses
- Liquidated damages: setting an enforceable rate
- Bid, performance and labour and material bonds
3. Get approvals moving
Permit timing can set your start date before any contract is signed.
- Building Ontario Faster Act (Bill 140): what faster permits mean for owners
- Toronto commercial building permit timelines
4. Pay on time
Ontario's Construction Act runs payment on a fixed clock once a proper invoice arrives: a 14-day window to give notice of non-payment and 28 days to pay. Miss it and the contractor can go to adjudication.
- Ontario prompt payment rules for owners: the 7-14-28 day clock
- Free tool: prompt payment deadline calculator
5. Manage change
Under CCDC 2, a change order fixes agreed price and time, a change directive means work now and price later, and a site instruction changes neither. Using the wrong one is how budgets drift.
- Site instruction vs change directive vs change order
- Change directive vs change order: valuing and controlling directives
- How to manage construction change orders
6. Hold back and release
Holdback is 10% of the contract price under section 22 of the Construction Act, and since 2026 it must be released annually on a published schedule.
- Construction holdback in Ontario: 10% and the annual release rules
- Substantial performance in Ontario
7. Resolve disputes
Liens, adjudication and delay claims each run on their own deadlines. Knowing them is the cheapest protection an owner has.
- Construction liens in Ontario: the 60- and 90-day deadlines
- Ontario construction adjudication: what owners should expect
- Concurrent delay in Canada
- How to evaluate a construction delay claim
Frequently asked questions
Which construction contract do most Ontario owners use?
CCDC 2, the stipulated price contract, is the industry standard prime contract between an owner and a general contractor in Canada. The current edition is CCDC 2-2020.
What is the difference between CCDC 2 and CCDC 5B?
CCDC 2 sets one fixed price with a general contractor. CCDC 5B is a construction management contract where the construction manager is paid a fee and trade costs flow through, so the owner carries more cost risk and gets more control.
How much holdback does an Ontario owner keep?
10% of the value of work supplied, under section 22 of the Construction Act. Since 2026 it must be released annually rather than only at the end of the project.
How long does an owner have to pay a contractor in Ontario?
28 days after receiving a proper invoice, unless the owner gives a notice of non-payment within 14 days for the amount in dispute.
What is a change directive under CCDC 2?
An instruction to proceed with a change before the price and time are agreed. The work goes ahead now and the value is settled later, which is why owners need to track directives closely.