A statutory holdback is money a payer must withhold by law, not by choice — a fixed percentage of every payment, kept back for a period set by the applicable lien statute so it’s there if a subcontractor or supplier goes unpaid.
The percentage is remarkably consistent across English Canada — every payer must hold back ten per cent of the value of the work, and Alberta’s s.18(1) major lien fund and BC’s s.4(1) both land on the same 10%. What differs sharply is release timing. Ontario now requires accrued holdback to be released annually as of January 1, 2026, rather than at the payer’s option. Alberta releases the s.18 holdback 60 days after the date of a certificate of substantial performance (90 days for oil-and-gas or concrete work). BC’s Builders Lien Act runs longer still — the holdback period expires at the end of 55 days after the certificate of completion is issued (s.8(1)) — and BC additionally requires the money to sit in a dedicated holdback account at a savings institution, administered jointly by the owner and the contractor, not merely tracked on the books.
Québec is the outlier: it has no statutory holdback regime at all. Its equivalent protection is the legal hypothec of construction — a claim published against the property itself, not a percentage a payer withholds. Workers building a condo, Éducaloi explains, have “up to 30 days after the work is finished to publish a ‘legal hypothec’ on your condo.” A payer working under the Civil Code doesn’t hold anything back for this purpose; a claimant registers instead.
Ontario adds a further wrinkle once a project reaches substantial performance: the single 10% pool splits into two separately tracked holdbacks running on their own clocks, covered in finishing holdback vs basic holdback.
An Ontario general contractor certifies $340,000 of work in a progress period. Regardless of the contract’s monthly-payment schedule, the owner must retain $34,000 — 10% — and cannot release it until the statutory point (now an annual release date, or the substantial-performance/finishing-holdback triggers). If the identical $340,000 were certified on a BC project instead, the same $34,000 would have to be deposited into a dedicated holdback account under s.5(1) and would sit there until 55 days after the certificate of completion — a materially longer, and structurally different, hold than Ontario’s tracking-based approach.
See also: Finishing holdback vs basic holdback · What substantial performance actually means.
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