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Construction Subcontractor Agreement Template
A Construction Subcontractor Agreement (Subcontract) is the binding contract between a General Contractor (or Construction Manager) and a Trade Contractor / Subcontractor under which the Subcontractor performs trade-specific work on a construction project. Our free Canadian template is integrated with the post-1 January 2026 Ontario Construction Act prompt-payment regime, the Alberta PPCLA, the Saskatchewan Prompt Payment Construction Act, 2024, and the CCDC 17 — 2025 Stipulated Price Contract industry-standard framework released by the Canadian Construction Documents Committee in June 2025.
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CONSTRUCTION SUBCONTRACTOR AGREEMENT
180 Lake Shore Restaurant Build-out — Province Of Ontario, Canada
GENERAL CONTRACTOR
Maplewood Construction Group Inc.
4500 Dixie Road, Suite 600, Mississauga, ON L4W 4Y4
By: Diana Khaledi, President and Chief Executive Officer
SUBCONTRACTOR
Voltaire Electric Ltd.
850 Tapscott Road, Unit 12, Scarborough, ON M1X 1N4
Trade: Electrical (Class A Master Electrician licensed under Electrical Contractor Registration Agency of Ontario — ECRA #7000142)
Workplace Safety and Insurance Board (WSIB) clearance certificate account: WSIB Account 4567890
Trade: Electrical (Class A Master Electrician licensed under Electrical Contractor Registration Agency of Ontario — ECRA #7000142)
Workplace Safety and Insurance Board (WSIB) clearance certificate account: WSIB Account 4567890
By: Reza Farhadi, President
Project: 180 Lake Shore Restaurant Build-Out · Trade: Electrical (Class A Master Electrician licensed under Electrical Contractor Registration Agency of Ontario — ECRA #7000142)
Sum: 125,000.00 CAD · Statute: OBCA
THIS CONSTRUCTION SUBCONTRACTOR AGREEMENT (the "Subcontract") is made effective 2026-07-01 between Maplewood Construction Group Inc. (the "General Contractor") and Voltaire Electric Ltd. (the "Subcontractor"). The General Contractor is the general contractor for the 180 Lake Shore Restaurant Build-Out project located at 180 Lake Shore Boulevard East, Unit 100, Toronto, ON M5A 3X7, in the Province of Ontario, under a prime contract with 180 Lake Shore Holdings Ltd. (the "Owner") dated 2026-02-15 (the "Prime Contract"). The Subcontractor agrees to perform the trade work described below as a subcontractor to the General Contractor on the terms set out in this Subcontract, integrated with the prompt-payment cascade established by the Construction Act, R.S.O. 1990, c. C.30 (as substantially amended by Bills 216 and 60 with major changes in force from 1 January 2026).
1.
SCOPE OF SUBCONTRACT WORK
The Subcontractor shall furnish all labour, materials, equipment, supervision and other resources necessary to perform the following trade work (the "Subcontract Work"):
Complete electrical fit-out of the Restaurant Unit (approximately 4,200 sq.ft.) — supply, install, test, and commission all electrical systems in accordance with the Issued-For-Construction drawings issued by Brooks Architects Inc. dated 2026-03-10, the Ontario Electrical Safety Code (28th edition), and the prime contract.
Inclusions:
Main service upgrade to 600A / 600V 3-phase.
New distribution panels (one main + 3 sub-panels).
Kitchen equipment electrical hookups (24 connections — hood, ovens, ranges, refrigeration, dishwasher, etc.).
Dining-area lighting design and installation (architectural feature lighting + emergency egress).
Fire alarm system tie-in to building base system.
Low-voltage rough-in for AV, POS, and access-control systems (final connections by AV/IT specialty subcontractor).
Electrical Safety Authority inspection coordination and sign-off.
Exclusions:
Audio-visual final cabling and equipment (by separate AV/IT subcontract).
Kitchen exhaust hood and make-up air unit (by HVAC subcontractor).
Fire suppression / sprinkler system (by mechanical subcontractor).
Telecommunications service provider connection beyond the building entrance.
The Subcontract Work shall be performed in accordance with the drawings, specifications, applicable building codes (including the National Building Code of Canada as adopted in the Province of Ontario), the Prime Contract obligations applicable to the trade work, and good construction industry practice.
Complete electrical fit-out of the Restaurant Unit (approximately 4,200 sq.ft.) — supply, install, test, and commission all electrical systems in accordance with the Issued-For-Construction drawings issued by Brooks Architects Inc. dated 2026-03-10, the Ontario Electrical Safety Code (28th edition), and the prime contract.
Inclusions:
Main service upgrade to 600A / 600V 3-phase.
New distribution panels (one main + 3 sub-panels).
Kitchen equipment electrical hookups (24 connections — hood, ovens, ranges, refrigeration, dishwasher, etc.).
Dining-area lighting design and installation (architectural feature lighting + emergency egress).
Fire alarm system tie-in to building base system.
Low-voltage rough-in for AV, POS, and access-control systems (final connections by AV/IT specialty subcontractor).
Electrical Safety Authority inspection coordination and sign-off.
Exclusions:
Audio-visual final cabling and equipment (by separate AV/IT subcontract).
Kitchen exhaust hood and make-up air unit (by HVAC subcontractor).
Fire suppression / sprinkler system (by mechanical subcontractor).
Telecommunications service provider connection beyond the building entrance.
The Subcontract Work shall be performed in accordance with the drawings, specifications, applicable building codes (including the National Building Code of Canada as adopted in the Province of Ontario), the Prime Contract obligations applicable to the trade work, and good construction industry practice.
2.
SUBCONTRACT SUM AND PAYMENT BASIS
The Subcontract Sum is 125,000.00 CAD, payable on the following basis: pay-when-paid within 7 days of the General Contractor's receipt of payment from the Owner (subject to the statutory cascade in the applicable provincial Construction Act / Prompt Payment Act).
Progress billing. The Subcontractor shall submit Proper Invoices on a monthly basis, accompanied by a Schedule of Values, sworn Statutory Declarations of progress, and (where applicable) a current Workplace Safety and Insurance Board (WSIB) clearance certificate.
Holdback. A statutory holdback of 10% of the Subcontract Sum shall be withheld in accordance with the Construction Act, R.S.O. 1990, c. C.30 (as substantially amended by Bills 216 and 60 with major changes in force from 1 January 2026). The holdback is held in trust for the benefit of those entitled to it under the applicable provincial Construction Act / Lien Act and is released in accordance with the Act's prescribed timeline.
Progress billing. The Subcontractor shall submit Proper Invoices on a monthly basis, accompanied by a Schedule of Values, sworn Statutory Declarations of progress, and (where applicable) a current Workplace Safety and Insurance Board (WSIB) clearance certificate.
Holdback. A statutory holdback of 10% of the Subcontract Sum shall be withheld in accordance with the Construction Act, R.S.O. 1990, c. C.30 (as substantially amended by Bills 216 and 60 with major changes in force from 1 January 2026). The holdback is held in trust for the benefit of those entitled to it under the applicable provincial Construction Act / Lien Act and is released in accordance with the Act's prescribed timeline.
3.
SCHEDULE AND LIQUIDATED DAMAGES
The Subcontractor shall commence the Subcontract Work on or before 2026-07-01, achieve substantial performance no later than 2026-09-30, and achieve total completion no later than 2026-10-15, subject to extensions of time granted in writing by the General Contractor for delays caused by the General Contractor, the Owner, or force majeure events.
Liquidated damages. If the Subcontractor fails to achieve substantial performance by the date stated above (as extended in accordance with the preceding sentence), the Subcontractor shall pay the General Contractor liquidated damages of 500.00 CAD per calendar day of delay, calculated as a genuine pre-estimate of damages and not as a penalty.
Liquidated damages. If the Subcontractor fails to achieve substantial performance by the date stated above (as extended in accordance with the preceding sentence), the Subcontractor shall pay the General Contractor liquidated damages of 500.00 CAD per calendar day of delay, calculated as a genuine pre-estimate of damages and not as a penalty.
4.
WORKERS' COMPENSATION CLEARANCE AND INSURANCE BASELINE
Workers' compensation clearance. The Subcontractor shall maintain a valid Workplace Safety and Insurance Board (WSIB) clearance certificate for the duration of the Subcontract Work and shall provide a current clearance certificate / letter to the General Contractor on request (current account on file: WSIB Account 4567890). The General Contractor may withhold payment of any Proper Invoice if a current clearance is not on file.
Insurance baseline. The Subcontractor shall maintain at minimum: (a) Commercial General Liability insurance with limits of CAD 5,000,000 per occurrence; (b) Automobile Liability insurance with limits of CAD 2,000,000 combined single limit; and (c) Contractors' Equipment Floater insurance covering the Subcontractor's tools and equipment. The Subcontractor shall name the General Contractor and the Owner as additional insureds and shall deliver certificates of insurance before commencing the Subcontract Work.
Insurance baseline. The Subcontractor shall maintain at minimum: (a) Commercial General Liability insurance with limits of CAD 5,000,000 per occurrence; (b) Automobile Liability insurance with limits of CAD 2,000,000 combined single limit; and (c) Contractors' Equipment Floater insurance covering the Subcontractor's tools and equipment. The Subcontractor shall name the General Contractor and the Owner as additional insureds and shall deliver certificates of insurance before commencing the Subcontract Work.
5.
TERMINATION
The General Contractor may terminate this Subcontract for cause on 7 days' written notice if the Subcontractor: (a) fails to make sufficient progress to achieve substantial performance by the date stated in Article 3; (b) abandons the Subcontract Work; (c) becomes insolvent, files for bankruptcy or has a receiver appointed; (d) fails to maintain workers' compensation clearance or required insurance; or (e) commits any other material breach of this Subcontract that is not cured within 7 days of written notice. On termination, the General Contractor may complete the Subcontract Work at the Subcontractor's cost (set off against any unpaid Subcontract Sum) and may exercise all remedies under this Subcontract, the Prime Contract obligations applicable to the trade work, and the Construction Act, R.S.O. 1990, c. C.30 (as substantially amended by Bills 216 and 60 with major changes in force from 1 January 2026). The Subcontractor may terminate this Subcontract on 7 days' written notice if the General Contractor fails to pay any undisputed amount within the statutory cascade-payment window AND the General Contractor has not given a Notice of Non-Payment within the statutory 14-day window.
6.
PAY-WHEN-PAID CLARIFICATION AND DIRECT ADJUDICATION
Pay-when-paid clarification. Where Article 2 above provides that the Subcontractor is paid on a pay-when-paid basis, the General Contractor expressly acknowledges that: (a) the pay-when-paid mechanism applies only to TIMING of payment, not to the General Contractor's underlying obligation to pay the Subcontract Sum (any purported "pay-if-paid" interpretation is rejected); (b) the General Contractor will use good-faith efforts to collect payment from the Owner, including by giving timely Proper Invoices, defending against any Notice of Non-Payment from the Owner, and (where applicable) referring disputes to adjudication under the Construction Act, R.S.O. 1990, c. C.30 (as substantially amended by Bills 216 and 60 with major changes in force from 1 January 2026); (c) if the reason for non-payment from the Owner is attributable to the General Contractor's own conduct (defective work outside the Subcontract Work, prime-contract breach, etc.), the General Contractor may not rely on pay-when-paid to defer payment to the Subcontractor; and (d) under the post-2026 prompt-payment regime, the General Contractor must pay the Subcontractor within 7 days of receiving payment from the Owner under section 6.5 of the Ontario Construction Act (and the equivalent provincial provisions), or issue a written Notice of Non-Payment within the statutory window.
Specific good-faith collection commitments by General Contractor:
The General Contractor shall submit timely Proper Invoices to the Owner on the 1st business day of each month for the immediately preceding month's work, and shall defend against any Owner Notice of Non-Payment by reference to the agreed schedule of values and contemporaneous Project Manager incident logs.
Subcontractor's direct adjudication right. Where the General Contractor has not paid the Subcontractor any amount that the General Contractor has received from the Owner in respect of the Subcontract Work, the Subcontractor has a direct adjudication right under section 6.7 of the Ontario Construction Act (and the equivalent provincial provisions) to refer the dispute to the Ontario Dispute Adjudication for Construction Contracts (ODACC) — odacc.ca, bypassing the General Contractor's internal dispute-resolution mechanism. The General Contractor expressly consents to the Subcontractor's exercise of this direct adjudication right and waives any contractual restriction on that right.
Specific good-faith collection commitments by General Contractor:
The General Contractor shall submit timely Proper Invoices to the Owner on the 1st business day of each month for the immediately preceding month's work, and shall defend against any Owner Notice of Non-Payment by reference to the agreed schedule of values and contemporaneous Project Manager incident logs.
Subcontractor's direct adjudication right. Where the General Contractor has not paid the Subcontractor any amount that the General Contractor has received from the Owner in respect of the Subcontract Work, the Subcontractor has a direct adjudication right under section 6.7 of the Ontario Construction Act (and the equivalent provincial provisions) to refer the dispute to the Ontario Dispute Adjudication for Construction Contracts (ODACC) — odacc.ca, bypassing the General Contractor's internal dispute-resolution mechanism. The General Contractor expressly consents to the Subcontractor's exercise of this direct adjudication right and waives any contractual restriction on that right.
7.
CASCADING INSURANCE AND WAIVER OF SUBROGATION
Cascading insurance. The Subcontractor shall maintain, at minimum, the insurance coverages required by the Prime Contract applicable to the trade work, including without limitation: (a) Commercial General Liability insurance with limits of 5,000,000.00 CAD per occurrence (matching or exceeding the Prime Contract requirement); (b) Automobile Liability insurance with limits of CAD 2,000,000 combined single limit; (c) Contractors' Equipment Floater insurance; and (d) Professional Liability insurance where the Subcontract Work involves design or design-build services.
Builder's Risk / Course of Construction insurance. The Subcontractor shall be named as an additional insured under the Builder's Risk / Course of Construction policy maintained for the Project. The Subcontractor shall not maintain duplicate Builder's Risk coverage on the Subcontract Work that is covered by the Project policy.
Waiver of subrogation. Each Party hereby waives all rights of recovery against the other Party (and against the other Party's insurers) for any loss or damage to the extent covered by the policies maintained under this Subcontract. The Parties shall obtain endorsements from their respective insurers confirming the waiver of subrogation, and shall provide certificates evidencing those endorsements before commencing the Subcontract Work.
The Subcontractor shall provide certificates of insurance to the General Contractor before commencing the Subcontract Work and shall provide 30 days' written notice of cancellation or material change to any policy.
Builder's Risk / Course of Construction insurance. The Subcontractor shall be named as an additional insured under the Builder's Risk / Course of Construction policy maintained for the Project. The Subcontractor shall not maintain duplicate Builder's Risk coverage on the Subcontract Work that is covered by the Project policy.
Waiver of subrogation. Each Party hereby waives all rights of recovery against the other Party (and against the other Party's insurers) for any loss or damage to the extent covered by the policies maintained under this Subcontract. The Parties shall obtain endorsements from their respective insurers confirming the waiver of subrogation, and shall provide certificates evidencing those endorsements before commencing the Subcontract Work.
The Subcontractor shall provide certificates of insurance to the General Contractor before commencing the Subcontract Work and shall provide 30 days' written notice of cancellation or material change to any policy.
8.
STATUTORY TRUST AND LIEN PRESERVATION
Statutory trust. The General Contractor acknowledges that all amounts received from the Owner in respect of the Subcontract Work are impressed with a statutory trust in favour of the Subcontractor and all other persons supplying labour or materials to the Project, in accordance with sections 7 to 13 of the Ontario Construction Act (and the equivalent provincial provisions). The General Contractor shall hold those amounts in trust separately from its general funds, shall not appropriate them for any purpose inconsistent with the trust, and shall apply them in accordance with the statutory cascade-payment obligations. The Parties acknowledge that breach of the statutory trust by the General Contractor or its directors / officers exposes them to PERSONAL liability under the Construction Act.
Lien preservation reminder. The Subcontractor's right to preserve a construction lien under the Construction Act, R.S.O. 1990, c. C.30 (as substantially amended by Bills 216 and 60 with major changes in force from 1 January 2026) is subject to the statutory preservation window — 60 days in Ontario (post-2026) and Alberta; 45 days in British Columbia; 40 days in Saskatchewan and Manitoba — running from the earliest of (a) publication of the certificate of substantial performance; (b) completion, abandonment or termination of the contract; or (c) the date of last supply. The Subcontractor is responsible for preserving its own lien within the statutory window; the General Contractor does not waive any rights against any lien claim by the Subcontractor.
Director / officer personal liability acknowledgment. The Parties expressly acknowledge that, under section 13 of the Ontario Construction Act (and the equivalent provincial provisions), the directors and officers of a corporation that has received trust funds bear PERSONAL liability for any breach of the statutory trust — including any application of trust funds to purposes inconsistent with the cascade-payment obligations, any commingling of trust funds with general corporate funds, or any payment of trust funds to creditors of the corporation in preference to the beneficiaries of the trust. The bankruptcy or dissolution of the corporation does NOT extinguish the directors' and officers' personal liability. Each named signatory of this Subcontract is, by signing, individually on notice of this personal-liability exposure.
Lien preservation reminder. The Subcontractor's right to preserve a construction lien under the Construction Act, R.S.O. 1990, c. C.30 (as substantially amended by Bills 216 and 60 with major changes in force from 1 January 2026) is subject to the statutory preservation window — 60 days in Ontario (post-2026) and Alberta; 45 days in British Columbia; 40 days in Saskatchewan and Manitoba — running from the earliest of (a) publication of the certificate of substantial performance; (b) completion, abandonment or termination of the contract; or (c) the date of last supply. The Subcontractor is responsible for preserving its own lien within the statutory window; the General Contractor does not waive any rights against any lien claim by the Subcontractor.
Director / officer personal liability acknowledgment. The Parties expressly acknowledge that, under section 13 of the Ontario Construction Act (and the equivalent provincial provisions), the directors and officers of a corporation that has received trust funds bear PERSONAL liability for any breach of the statutory trust — including any application of trust funds to purposes inconsistent with the cascade-payment obligations, any commingling of trust funds with general corporate funds, or any payment of trust funds to creditors of the corporation in preference to the beneficiaries of the trust. The bankruptcy or dissolution of the corporation does NOT extinguish the directors' and officers' personal liability. Each named signatory of this Subcontract is, by signing, individually on notice of this personal-liability exposure.
9.
CHANGE ORDER MECHANISM AND BACKCHARGE PROTOCOL
Change order mechanism. Any change to the Subcontract Work — addition, deletion, modification, or substitution — that has a cost impact (positive or negative) of more than 5,000.00 CAD requires a written Change Order signed by the General Contractor BEFORE the change is implemented. A Change Order must specify: (a) the change to the scope; (b) the cost impact (lump sum or unit-rate basis); (c) the schedule impact (if any); and (d) any related adjustments to the Subcontract Sum. The Subcontractor shall not perform any work outside the Subcontract Work without a signed Change Order; work performed without a Change Order may be performed at the Subcontractor's sole risk and cost (subject to the General Contractor's obligation under the prompt-payment regime to pay for any work it has accepted in writing).
Backcharge protocol. The General Contractor may backcharge the Subcontractor for any cost incurred by the General Contractor that is properly attributable to the Subcontractor (defective work, schedule delay, additional supervision, cleanup, equipment damage, etc.), provided that the General Contractor: (a) gives written notice to the Subcontractor within 7 day(s) of incurring the cost; (b) particularises the cost item, the amount, and the rationale; and (c) gives the Subcontractor a reasonable opportunity to dispute the backcharge before deducting it from any Proper Invoice. Backcharges deducted without the prescribed notice and particularisation are subject to the Subcontractor's direct adjudication right under Article 6 above.
Backcharge protocol. The General Contractor may backcharge the Subcontractor for any cost incurred by the General Contractor that is properly attributable to the Subcontractor (defective work, schedule delay, additional supervision, cleanup, equipment damage, etc.), provided that the General Contractor: (a) gives written notice to the Subcontractor within 7 day(s) of incurring the cost; (b) particularises the cost item, the amount, and the rationale; and (c) gives the Subcontractor a reasonable opportunity to dispute the backcharge before deducting it from any Proper Invoice. Backcharges deducted without the prescribed notice and particularisation are subject to the Subcontractor's direct adjudication right under Article 6 above.
10.
GOVERNING LAW
This Subcontract shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein, including the Construction Act, R.S.O. 1990, c. C.30 (as substantially amended by Bills 216 and 60 with major changes in force from 1 January 2026). The Parties attorn to the exclusive jurisdiction of the courts of Ontario for all matters arising out of this Subcontract that are not within the jurisdiction of the adjudicator under the applicable prompt-payment regime.
11.
EXECUTION AND WITNESSING
This Subcontract may be signed in counterparts, including by electronic signature, each of which is deemed an original. The signatures of the Parties are witnessed by Hannah Reilly of 142 Cottingham Street, Toronto, ON M4V 1B9, who is not a Party to this Subcontract. The General Contractor confirms that this Subcontract is intended to integrate with the prompt-payment regime under the Construction Act, R.S.O. 1990, c. C.30 (as substantially amended by Bills 216 and 60 with major changes in force from 1 January 2026) and (where adopted) with the CCDC 17 — 2025 Stipulated Price Contract framework released by the Canadian Construction Documents Committee in June 2025.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date indicated.
GENERAL CONTRACTOR
Diana Khaledi
President and Chief Executive Officer
Maplewood Construction Group Inc.
Date: ____________________
SUBCONTRACTOR
Reza Farhadi
President
Voltaire Electric Ltd.
Date: ____________________
WITNESS
Hannah Reilly
Date: ____________________
Available as a print-ready PDF or an editable Microsoft Word (.docx) file.
What Is a Construction Subcontractor Agreement?
A Construction Subcontractor Agreement (Subcontract) is the contract under which a General Contractor (or Construction Manager) engages a Trade Contractor / Subcontractor to perform trade-specific work on a construction project. Typical trades include electrical, mechanical (HVAC, plumbing), structural steel, drywall, painting, flooring, masonry, roofing, glazing, millwork, and security / low-voltage. The Subcontract integrates with the prime contract between the Owner and the General Contractor and must satisfy the cascade-payment obligations under the applicable provincial Construction Act / Prompt Payment legislation.
In Ontario, the Construction Act was substantially amended by Bills 216 and 60 with major changes effective 1 January 2026. Under section 6.5 of the post-2026 regime, the General Contractor must pay the Subcontractor within 7 days of receiving payment from the Owner. Under section 6.7, the Subcontractor has a DIRECT adjudication right where the General Contractor has not paid amounts received from the Owner — the Subcontractor can refer the dispute directly to the Ontario Dispute Adjudication for Construction Contracts (ODACC) without going through the General Contractor's internal dispute mechanism.
The Canadian Construction Documents Committee (CCDC) released CCDC 17 — 2025 in June 2025, updating the Stipulated Price Contract for Trade Contractors on Construction Management Projects to align with the Ontario and Alberta prompt-payment regimes. The 2025 revision is the contemporary industry-standard template for trade subcontracts on construction-management projects in Canada.
What's Covered in This Template
Our Construction Subcontractor Agreement template covers every element a Canadian construction lawyer would expect.
General Contractor Identification
Legal name, address, incorporating Act (CBCA / OBCA / ABCA / BCBCA), signatory name and title.
Subcontractor Identification
Legal name, address, trade specialty + provincial trade licence (Master Electrician / Plumber / etc.), Workers' Compensation account (WSIB / WCB / WorkSafeBC / WorkSafeNB), signatory.
Project & Prime Contract
Project name, site address, governing province, Owner legal name, prime contract date.
Scope of Subcontract Work
Trade-specific scope summary + specific inclusions + specific exclusions (linked to the IFC drawings and the prime contract obligations applicable to the trade work).
Subcontract Sum + Payment Basis
Pay-when-paid (7-day cascade) / Unconditional 28-day / CCDC 17 — 2025 / Custom. Progress billing frequency (monthly / milestone / percentage). Statutory holdback (10% common-law-province standard).
Schedule + Liquidated Damages
Work start + substantial completion + total completion + liquidated damages per day of delay (genuine pre-estimate).
Workers' Compensation Clearance + Insurance Baseline
Province-specific WSIB / WCB / WorkSafeBC clearance + CGL (CAD 5,000,000 minimum) + Auto Liability + Contractors' Equipment Floater.
Termination + Witness
7-day termination for cause (GC and Sub both have termination rights linked to the statutory cascade and Notice of Non-Payment regime).
Pay-When-Paid Clarification + Direct Adjudication (Expert)
Pay-if-paid interpretation expressly rejected; GC must use good-faith collection efforts; Sub has direct adjudication right under ON s.6.7 / AB s.33 to ODACC / ARCANA.
Cascading Insurance + Waiver of Subrogation (Expert)
Insurance matching prime contract requirements + Builder's Risk / Course of Construction additional insured + mutual waiver of subrogation.
Statutory Trust + Lien Preservation + Personal Liability (Expert)
ON Construction Act ss.7-13 trust + province-specific 40-60 day lien preservation window + director / officer PERSONAL liability acknowledgment under s.13 (survives bankruptcy).
Change Order Mechanism + Backcharge Protocol (Expert)
Written Change Orders required above threshold + written backcharge notice within defined window with particularised cost items.
How to Create Your Construction Subcontractor Agreement
Follow these steps to draft a Subcontract that satisfies the prompt-payment cascade, protects both parties under the statutory trust, and minimises adjudication disputes.
- 1
Identify the GC, Sub, Project and Prime Contract
Legal names, trade specialty + provincial trade licence, Workers' Compensation account, governing province (which determines the applicable Construction Act / Prompt Payment Act).
- 2
Define the Scope of Subcontract Work Precisely
Trade-specific summary + specific inclusions + specific exclusions. Reference the IFC drawings by date and the prime contract obligations applicable to the trade. The single biggest source of subcontract disputes is ambiguous scope.
- 3
Pick the Payment Basis Carefully
Pay-when-paid is the Canadian default but is narrowed under the post-2026 prompt-payment regime — the GC must pay within 7 days of receiving from the Owner OR issue a written Notice of Non-Payment. Unconditional 28-day is strongest for the Sub. CCDC 17 — 2025 is the industry-standard framework for construction-management projects.
- 4
Set the Schedule + Liquidated Damages
Substantial completion date is the most important date — it triggers the 60-day lien preservation window (Ontario / Alberta) and the holdback release. Liquidated damages must be a genuine pre-estimate; penalties are unenforceable.
- 5
Add the Pay-When-Paid Clarification + Direct Adjudication (Expert)
Rejects pay-if-paid interpretation, requires GC good-faith collection efforts, and gives the Sub a direct ODACC / ARCANA referral right under ON s.6.7 / AB s.33.
- 6
Add Cascading Insurance + Waiver of Subrogation (Expert)
CGL (CAD 5,000,000 minimum) + Auto + Contractors' Equipment Floater + Builder's Risk additional insured + mutual waiver of subrogation. Without subrogation waiver, the Project insurer can recover from the Sub for losses covered by the Project policy.
- 7
Add Statutory Trust + Lien Preservation + Personal Liability (Expert)
Documents the ON Construction Act ss.7-13 trust framework and the 60-day lien window. The director / officer personal-liability acknowledgment under s.13 is particularly important for GC officers personally signing the Subcontract — the liability SURVIVES corporate bankruptcy.
- 8
Add Change Order + Backcharge Protocol (Expert)
Written Change Orders required above threshold (typically CAD 5,000). Written backcharge notice within 7 days with particularised cost items. Without this protocol, the GC can unilaterally deduct backcharges from Proper Invoices, exposing the GC to the Sub's direct adjudication right.
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Legal Considerations
Construction subcontracts are governed by the provincial Construction Act / Prompt Payment legislation, the common law of contract, the CCDC industry-standard contracts, and the federal Prompt Payment for Construction Work Act.
This template is for informational purposes only and does not constitute legal advice. Construction contracts have significant financial, lien-preservation and personal-liability consequences. Consult a qualified Canadian construction lawyer in your jurisdiction for advice specific to your situation, particularly where: the subcontract sum exceeds CAD 250,000; the project is in a regulated sector (public infrastructure, federal works); the Sub will perform design work in addition to construction; or the GC requires personal guarantees from the Sub's principals.
Reviewed for Canadian construction common-law-province requirements
Ontario Construction Act — Post-2026 Cascade
The Ontario Construction Act, R.S.O. 1990, c. C.30 was substantially amended by Bills 216 and 60 with major changes effective 1 January 2026. Section 6.5 establishes the General Contractor → Subcontractor cascade: the GC must pay the Sub within 7 days of receiving payment from the Owner under the Proper Invoice. Section 6.6 establishes the Subcontractor → Sub-Subcontractor cascade. Section 6.7 gives the Sub a DIRECT adjudication right where the GC has not paid amounts received from the Owner — bypassing the GC's internal dispute mechanism and going straight to ODACC. Sections 7 to 13 establish the statutory trust framework with PERSONAL liability for directors and officers of the trust corporation that breach the trust.
Alberta PPCLA — Cascade + ARCANA
The Alberta Prompt Payment and Construction Lien Act, R.S.A. 2000, c. P-26.4 (PPCLA) establishes a similar cascade-payment regime. Section 32 sets the 28 / 7 / 7-day cascade timeline. Section 33 provides for adjudication before ARCANA (the ADR Institute of Alberta's Adjudication Roster for Construction in Alberta). The AB regime is materially similar to the Ontario regime, with some procedural differences in the adjudication referral process.
Saskatchewan Prompt Payment Construction Act, 2024
The Saskatchewan Prompt Payment Construction Act, S.S. 2024, c. 22 came into force in 2025 and establishes a similar cascade-payment regime with 28-day Owner payment, 14-day Notice of Non-Payment, cascade payment obligations, and adjudication. The Saskatchewan regime applies to construction contracts entered into after the in-force date.
British Columbia — No Prompt-Payment Scheme
British Columbia has no enacted prompt-payment legislation as at June 2026. Subcontract payment is governed by the contractual rights of the parties under the Subcontract, the common law of contract (including the doctrines of set-off and abatement), and the BC Builders Lien Act, S.B.C. 1997, c. 45. BC introduced draft prompt-payment legislation in 2023 but it has not been enacted. Pay-when-paid clauses in BC subcontracts are subject to the common-law principles articulated in Timbro Developments v Grimsby Diesel Motors and Arnoldin Construction & Forms v Alta Surety Co (conflicting Ontario and Nova Scotia decisions).
CCDC 17 — 2025 Industry Standard
The Canadian Construction Documents Committee (CCDC) released CCDC 17 — 2025 Stipulated Price Contract for Trade Contractors on Construction Management Projects in June 2025. The 2025 revision aligns CCDC 17 with the Ontario and Alberta prompt-payment regimes (28-day Owner payment, cascade payment obligations), addresses early occupancy and Ready-for-Takeover, and updates the insurance and warranties provisions for owner-occupied areas. The 2025 revision is the contemporary industry-standard template for trade subcontracts on construction-management projects.
Pay-When-Paid vs Pay-If-Paid
Canadian courts have produced conflicting decisions on pay-when-paid clauses. In Timbro Developments Ltd v Grimsby Diesel Motors Inc., the Ontario Court of Appeal enforced a pay-when-paid clause (pre-prompt-payment). In Arnoldin Construction & Forms Ltd v Alta Surety Co, the Nova Scotia Court of Appeal refused to enforce a pay-when-paid clause. Under the post-2026 prompt-payment regime, contractors cannot rely on pay-when-paid to defeat the statutory cascade-payment obligations — the GC must either pay the Sub within 7 days of receiving payment from the Owner or issue a written Notice of Non-Payment within the statutory window. Pay-if-paid clauses (which purport to make the Sub an unsecured creditor of the Owner) are generally unenforceable as contrary to the statutory trust obligation. The Expert pay-when-paid clarification clause expressly rejects pay-if-paid interpretation.
Statutory Trust + Director Personal Liability
Under sections 7 to 13 of the Ontario Construction Act (and the equivalent provincial provisions), all amounts received by the GC from the Owner in respect of the Subcontract Work are impressed with a STATUTORY TRUST in favour of the Subcontractor and all other persons supplying labour or materials to the project. Section 13 imposes PERSONAL liability on the directors and officers of a corporation that has received trust funds, for any breach of the trust — including any application of trust funds to purposes inconsistent with the cascade-payment obligations. The personal liability SURVIVES the bankruptcy or dissolution of the corporation. The Expert statutory trust acknowledgment in this template puts each signatory on contemporaneous notice of this exposure.
Quebec — Excluded From This Template
Quebec is governed by the Civil Code of Québec and has no Construction Act equivalent. Quebec's construction-payment framework relies on legal hypothecs under CCQ articles 2724-2732 and a distinct procedural code. A separate Quebec-specific Subcontract template will follow in a future sprint.
Frequently Asked Questions
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Build a province-aware, prompt-payment-compliant Subcontract in minutes. The Free version produces a self-executing Subcontract with General Contractor + Subcontractor + Project & Prime Contract + Scope of Work + Subcontract Sum & Payment Basis (pay-when-paid / unconditional / CCDC 17 — 2025 / custom) + Schedule + Liquidated Damages + Workers' Compensation Clearance + Insurance Baseline + Termination. Upgrade to Expert to add the Pay-When-Paid Clarification + Subcontractor's direct adjudication right under ON s.6.7 / AB s.33 + Cascading Insurance + Builder's Risk + waiver of subrogation + Statutory Trust acknowledgment under ON Construction Act ss.7-13 + 40-60 day lien preservation reminder + director / officer personal-liability acknowledgment under s.13 + Change Order mechanism + Backcharge protocol.
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