Construction holdback by province: a subcontractor's guide

The construction holdback is not one rule across Canada. The percentage withheld from every progress payment, and how long it is held before you get it back, are set by each province's lien legislation, so the same draw pays out differently depending on where the job is. Get the province wrong in your cash flow planning and you can be short by thousands on a single job, on money that was always yours.

If you invoice work in more than one province, this matters more than it looks. A 10% holdback held 45 days in British Columbia is a different cash flow cost than 7.5% held 40 days in Manitoba, and both are different again from Ontario, where the release rules changed in 2026. Here is what each province requires, and how to work out what it costs you. We deal with this on every draw at Quality Gypsum Services, our commercial drywall business in Calgary, Alberta, which is why we built a free tool to do the math.

What holdback is, briefly

A holdback is a percentage of every progress payment that the payer is legally required to retain rather than pay out. It is not a penalty and it is not discretionary. It sits as a fund that unpaid subcontractors and suppliers can claim against if someone up the chain fails to pay, and in most provinces the payer cannot waive it by contract. You earn the full value of the work now and collect the last slice of it after the lien period closes.

For the mechanics of how a draw with holdback is actually billed, including the GST timing that trips up so many subs, see our walkthrough on progress billing and holdback in Canada. This post is about the part that changes when you cross a provincial line: the rate and the clock.

Holdback rates and release periods by province

The percentage is fixed by legislation, so it does not change from project to project within a province. The release period is the number of days the holdback is normally retained after substantial performance before it becomes payable.

Two things to read off that table. First, 10% is the standard almost everywhere, and Manitoba at 7.5% is the notable exception. Second, the release clock is not uniform: Saskatchewan and Manitoba run shorter periods than Alberta and Ontario, which means the same holdback comes back to you sooner or later purely as a function of where the work is.

The details behind the table

Alberta retains 90 days rather than 60 on concrete work and on oil and gas work, so the trade and the sector can change the clock even inside one province. On very large Alberta contracts, those over $10 million running longer than a year, phased or progressive release is required instead of waiting until the end.

Ontario's Construction Act was amended effective January 1, 2026 to make annual holdback release mandatory on longer jobs, rather than leaving the accumulated holdback to sit untouched until substantial performance. If you run multi-year work in Ontario, that change is worth real money to your cash flow.

The tax treatment also shifts by province, because it follows the local GST or HST rate. Ontario applies 13% HST where Alberta, BC, Saskatchewan and Manitoba apply 5% GST, which changes the tax line on your draw even when the holdback percentage is identical.

The rest of Canada

The five provinces above are where most of our subs work, but the same system runs almost everywhere. The Atlantic provinces and the territories each have their own lien or builders' lien legislation, and the standard holdback is generally 10% of the value of work done, with release periods set by that province's act. The safe move when you take on a job in a province you do not usually work in is to check the specific act before you bid, because both the percentage and the clock are statutory and you cannot assume they match your home province.

Quebec is the real exception. It does not use a statutory holdback in the same form as the common-law provinces. Retention there is a matter of contract and the legal hypothec regime, so what gets held and for how long is driven by what you signed, not by a fixed provincial percentage. If you are pricing Quebec work, read the payment clause carefully rather than assuming a 10% statutory rule applies.

Why the release period matters as much as the rate

Subs fixate on the percentage and underweight the clock, but the clock is where the cash flow pain lives. On a $500,000 contract at 10%, you are financing $50,000 of the owner's risk for the length of the job plus the release period. Whether that period is 40 days or 90 days is the difference between money you can plan around and money that strands your working capital right when the next job needs mobilizing.

A holdback you cannot see is a holdback you cannot plan around. Track your accumulated holdback per job and know the release date for each one, so you are not discovering a five-figure receivable months after you could have been chasing it. The provinces that hold longer, and the trades and sectors with the 90-day rules, are exactly the ones where a missed release date hurts most.

Work out your own numbers

The rates and periods above are the inputs. The number you actually care about is what a given draw pays you today after holdback, and what your accumulated holdback will be worth when it releases. Rather than do that by hand for every province and every draw, run it through our free construction holdback calculator. It has Alberta, BC, Saskatchewan, Manitoba and Ontario rates built in, works out the holdback withheld, the GST or HST timing and the net payable, and exports a one-page draw summary as a PDF. It runs entirely in your browser, needs no signup, and nothing you type is uploaded or stored.

If you invoice retainage on jobs south of the border, the US equivalent works differently state by state, and our construction retainage calculator covers all fifty states plus DC.

For the statutory detail on the fastest-moving province, Alberta's prompt payment rules for the construction industry set out the payment clock the holdback sits on top of. None of this is legal advice, and the acts do get amended, so confirm the current rule for your province before you rely on it.

Where the numbers come from

The reason so many subs get holdback wrong is not that the rules are hard, it is that the inputs live in a spreadsheet that nobody updates until draw day. When your accumulated holdback, your approved change orders and your percent complete all come off your actual field data, the draw assembles itself and the release dates are already on the calendar. That is the loop we built into our progress billing tools, and you can see the rest of the system in our construction management features.

SubTrade starts at $299/month CAD with a 14-day free trial and no credit card required, but the holdback calculator is free to use right now, no account needed.

FAQ

How much is construction holdback in Canada?

Ten percent of the value of work done is the standard across most provinces, including Alberta, British Columbia, Saskatchewan and Ontario. Manitoba is the notable exception at 7.5%. The percentage is set by each province's lien legislation and does not change from project to project within a province.

Which province has a different holdback percentage?

Manitoba, at 7.5%, is the main exception to the 10% standard. Quebec is different in a bigger way: it does not use a statutory holdback in the same form, so retention there is governed by contract rather than a fixed provincial rate.

How long is holdback held before it is released?

It depends on the province. Alberta and Ontario are typically 60 days after substantial performance, British Columbia 45 days, and Saskatchewan and Manitoba 40 days. Alberta holds concrete and oil and gas work for 90 days.

Did Ontario's holdback rules change?

Yes. The Construction Act was amended effective January 1, 2026 to make annual holdback release mandatory on longer projects, rather than letting the accumulated holdback sit until substantial performance. This improves cash flow on multi-year Ontario work.

Do I charge GST on the holdback when I invoice?

Generally not at the time you invoice. Under the Excise Tax Act, GST or HST on a holdback is payable on the earlier of the day it is paid to you and the day the holdback period expires. Confirm the treatment with your accountant, since your contract wording can change it. Our free construction holdback calculator handles this timing for each of the five main provinces.