A basic holdback is the 10% every payer withholds on the value of work and materials as they are supplied under a contract; a finishing holdback is a second, separate 10% withheld only on the value of work supplied after substantial performance, tracked and released on its own timeline.
Ontario’s Construction Act runs the two side by side. As Treadstone Law explains it: “Ontario’s Construction Act distinguishes between substantial performance (the contract is essentially done, with only minor deficiencies remaining) and completion (the work is fully done and all deficiencies are corrected). The holdback for the finishing work is treated separately, and owners often need to track two holdback periods running concurrently: one for the bulk of the contract and one for the final 10 percent of the contract price representing the finishing work.” Each pool starts its own lien clock, too — the same 60-day preserve window applies to whichever supply of services or materials is the last one under each holdback, not just to the project as a whole.
British Columbia does not split holdback this way. Under the Builders Lien Act, s.4(1) sets one holdback — “10% of the greater of” the value of work supplied or payments made — running until the single holdback period in s.8 expires. A BC contractor tracks one 10% pool for the life of the contract, not two.
A $2,000,000 Ontario renovation contract reaches substantial performance once $1,700,000 of value has been supplied. The basic holdback on that portion is 10% × $1,700,000 = $170,000. The remaining $300,000 of finishing work then generates its own holdback: 10% × $300,000 = $30,000. Two pools, two clocks — the basic holdback releases once the lien period tied to the $1,700,000 milestone has run, and the finishing holdback releases once the lien period tied to the final $300,000 has run. Add them together and the payer has withheld $200,000 across the job — still 10% of the full $2,000,000 contract, just administered as two separate accounts instead of one.
See also: Preserving a lien vs perfecting one, Holdback release in Ontario: tracking the dates, Aging your holdback receivable
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