Contractor deposits and lien holdbacks, province by province

A deposit is money you pay before the work starts. A holdback is money the law lets you keep after the work is done, until the lien period runs out. Homeowners mix the two up, and contractors who want half up front count on it.

By the LevelQuote reviewer, a Halifax lead carpenter turned facilities managerUpdated October 31, 2026

Deposits: what the law says, and what the trade does

In most of Canada there is no law capping the deposit a renovation contractor can ask for. The lien statutes below don't touch deposits at all. What exists is a trade norm and a handful of consumer-protection rules.

The trade norm is 10 to 25% up front, lower on big jobs, and nothing close to half. A contractor with supplier credit doesn't need your money to buy shingles. The deposit is a commitment, not a float. Special-order items (custom windows, cabinets, a specific tile) are the fair exception: paying the cost of that item when it's ordered is reasonable, and it should be a separate line that says so.

Where the law does speak, it mostly speaks about contracts signed in your home or sold at your door:

• Ontario. The provincial government's guidance on home renovations recommends a down payment of no more than 10%. A renovation contract of $50 or more signed in your home carries a 10-day cooling-off period under the Consumer Protection Act, and if an estimate is part of the contract the final price can't exceed it by more than 10% without your written agreement to new work. Contracts over $50 must be in writing.
• Alberta. A business that takes money before the work is finished on a home improvement, or sells the contract away from its own premises, needs a prepaid contracting licence from the province and has to post security to get it. You can look a contractor up in Alberta's licensed-business search before you pay a deposit.
• Quebec. Every renovation contractor must hold a Régie du bâtiment du Québec licence. Where the contract is sold by an itinerant merchant (at your home, not their place of business), the Consumer Protection Act bars them from taking a deposit during the 10-day cancellation period. The RBQ's own advice is to pay as small a deposit as possible before the work starts.
• British Columbia. Consumer Protection BC says the province's laws don't limit deposits on ordinary contracts, but on a direct sales (door-to-door) contract the down payment can't be more than $100 or 10% of the price, whichever is less.

Everywhere else, the deposit is whatever you agree to. Which is why it's worth agreeing to 10 to 15% and a schedule tied to finished stages.

Holdbacks: why they exist and how they work

Every province and territory except Quebec has a lien act (called a builders' lien, construction lien or mechanics' lien act depending on where you live). The idea is the same everywhere. A contractor, subcontractor or supplier who doesn't get paid for work on your house can register a lien against your property. To protect you from paying the contractor in full and then getting liened by a subcontractor the contractor didn't pay, the act tells you, the owner, to keep back a slice of every payment until the period for registering liens has passed. That slice is the holdback.

Three numbers matter: the percentage you hold back, the clock (how long you hold it, usually counted from substantial performance or completion), and the lien registration deadline that the clock is built around. When the clock runs out and no liens are registered, you pay the holdback out. If a lien is registered, the holdback is the pot that pays it, and your liability is generally capped at that pot.

Two practical points. First, in most provinces the holdback is a duty on the owner, not an option; an owner who doesn't hold it back can be liable to lien claimants for the amount they should have kept. Second, on a small residential job the whole thing is often ignored by both sides. That's a choice, and a fair contractor won't mind if you don't make it. The home page's deposit check is built on the Nova Scotia version; the table below has the rest.

The table: every province and territory

Figures as of October 31, 2026, taken from the statute text named in each row (links in the Sources). Lien deadlines are the general rule; most acts have variations for wages, materials, certificates of completion, and special categories like concrete. Where I couldn't confirm a figure from the statute or an official source, the cell says so.

The table is a summary of general rules for a homeowner's renovation contract. Each act has its own definitions of substantial performance and completion, separate deadlines for wages, materials and subcontracts, and special rules for public owners. Read the statute or ask a lawyer before you rely on a date.

Region by region

British Columbia

The Builders Lien Act requires the person primarily liable on a contract to retain a holdback of 10% of the greater of the value of the work provided and the payments made. The holdback period ends 55 days after the head contract is completed, abandoned or terminated (or 55 days after a certificate of completion is issued), and liens have to be filed within 45 days of the same trigger, so the 10-day gap gives you time to check title before paying out. The separate holdback-account rule in section 5 only applies to contracts of $100,000 or more, so a typical home renovation doesn't need a trust account, but the 10% holdback itself still applies. BC has been consulting on prompt payment legislation; as of October 2026 the 1997 Act still governs.

Alberta

Alberta replaced its Builders' Lien Act with the Prompt Payment and Construction Lien Act. The owner holds 10% of the value of work done and materials furnished (the "major lien fund") for 60 days from completion or from the certificate of substantial performance, and may pay it out after that if no lien has been registered. Liens must be registered within 60 days of completion or abandonment; concrete-related work gets 90 days on both counts. The Act also brought in prompt-payment timelines and adjudication, and it allows phased release of holdback on longer contracts. Separately, a contractor who takes a deposit for home improvement work needs the prepaid contracting licence described above.

Saskatchewan

The Builders' Lien Act sets a 10% holdback on the greater of the value of services and materials provided and the payments made. Where a certificate of substantial performance is given, the holdback can be paid 40 clear days after a copy is delivered; otherwise 40 clear days after completion or abandonment. Liens must be registered within 40 clear days. "Clear days" excludes the first and last day, so count carefully. The owner's holdback trust account rule doesn't apply to work on a house or to repairs and renovations on a four-plex or condominium unit, which covers most homeowners, but the holdback obligation does. Prompt payment and adjudication amendments came into force in 2022.

Manitoba

Manitoba's holdback is the lowest in the country at 7.5% of each payment (or of the contract price). The Builders' Liens Amendment Act (Prompt Payment) extended the lien timelines from 40 to 60 days, so the holdback is retained for 60 days after substantial performance or completion, and liens must be registered within 60 days. The consolidated Act on CanLII shows the current version in force since June 1, 2026. Manitoba also exempts an individual building or improving their own single-family home from some of the certificate-delivery rules below a prescribed contract value, but the holdback still applies.

Ontario

Under the Construction Act, each payer retains a 10% holdback of the price of services and materials as supplied, until all liens that may be claimed against it have expired or been dealt with. A lien expires 60 days after the triggering event (publication of a certificate of substantial performance, or completion, abandonment or termination of the contract). Owners of a residential renovation are "owners" under the Act; the "home buyer" exemption is for someone buying a new home from a builder, not for a homeowner hiring a renovator. Amendments passed in 2024 add mandatory annual release of accrued holdback on contracts that run more than a year; reports in October 2026 put the start of that rule in 2027, so confirm whether it applies to your contract. Ontario also has the consumer-protection rules on deposits and cooling-off described above.

Quebec

Quebec has no lien act and no statutory holdback. In its place the Civil Code gives architects, engineers, suppliers, workers, contractors and subcontractors a legal hypothec of construction on the property they worked on (article 2726). It exists without registration for 30 days after the end of the work; to keep it alive the creditor registers a notice within those 30 days and serves it on the owner, and then has six months from the end of the work to publish an action or a prior notice of exercise, after which it's extinguished (article 2727). Subcontractors and suppliers who didn't contract with you directly are only protected for work done after they give you written notice of their contract (article 2728), which is why a Quebec renovation contract should require the contractor to tell you who the subs are. Because there is no statutory holdback, Quebec owners protect themselves by contract: a retention clause, and payment of the final balance only against signed releases (quittances) from the contractor and every subcontractor and supplier who gave notice. Every renovation contractor in Quebec must hold an RBQ licence.

New Brunswick

The Construction Remedies Act replaced the old Mechanics' Lien Act in 2021 and cut the holdback from 15% to 10% of the contract price, retained as the work is supplied. The holdback period is 60 days after substantial performance (certificate or declaration), or 60 days after the contract is completed, abandoned or terminated; liens must be registered within 60 days. The holdback trust account sections were repealed in 2023. A prompt payment and adjudication act was passed in 2023 but had not been proclaimed in force as of the sources checked for this guide.

Nova Scotia

The Builders' Lien Act requires the person primarily liable on the contract to deduct and retain 10% of the value of the work, services and materials for 60 days after the contract is substantially performed. Contractors and subcontractors have 60 days after completion or abandonment to register a lien. The 2017 amendments added progressive release of holdback for finished subcontracts and a notice-of-substantial-performance requirement, with an exemption from the notice rules for single-family homeowners where the contract is $75,000 or less. Nova Scotia passed prompt payment amendments in 2019 that would rename the Act the Builders' Lien and Prompt Payment Act; as of October 2026 the CanLII consolidation still shows the version in force since June 30, 2017, so the 10% and 60 days above are the live rules. In practice almost no Halifax homeowner holds back 10% on a $20,000 roof. You're allowed to. A fair contractor won't flinch when you ask.

Prince Edward Island

PEI has the highest statutory holdback in the country. Under the Mechanics' Lien Act the owner retains 20% of the value of the work and materials for 60 days after completion or abandonment; where the value exceeds $15,000, the rate drops to 15% (but never less than the 20% that would apply at $15,000). Liens must be registered within 60 days. The consolidation on CanLII is dated 2009 and PEI has said it has no plans for prompt payment legislation, so these figures appear current, but check the Island's own legislation page before relying on them.

Newfoundland and Labrador

The Mechanics' Lien Act requires the person primarily liable to retain 10% of the value of work and materials for 30 days after completion or abandonment, the shortest clock on the mainland. Liens must be registered within 30 days. The Act has a separate large-contract holdback regime for contracts over $20 million that doesn't concern homeowners. The province consulted on prompt payment in 2024; the consolidated Act on CanLII shows a version in force from June 2, 2026, but the 10% and 30-day figures are unchanged.

Yukon

Yukon's Builders Lien Act is older and worded differently: the owner is "entitled" to retain 10% of the contract price for 30 days after completion, "in the absence of a stipulation to the contrary." That means your contract can waive it, so read the contract. Liens for work and materials must be registered within 30 days of completion; wage liens get up to 60 days from the last day worked.

Northwest Territories

The NWT's new Builders' Lien Act came into force September 1, 2025 and replaced the old Mechanics Lien Act. The holdback is defined as 10% of the value of services or materials, and it's now a requirement rather than an entitlement. The holdback is retained until liens that could be claimed against it have expired or been dealt with; a lien has to be preserved within 60 days of substantial completion, or of completion, termination or abandonment where there's no certificate. The Act brought in prompt-payment rules but not adjudication.

Nunavut

Nunavut still runs on the Mechanics Lien Act it inherited from the NWT. Like Yukon's, it says the owner is "entitled" to retain 10% of the price for 45 days after completion, in the absence of a stipulation to the contrary. Liens must be registered within 45 days of completion, termination or abandonment.

Putting it on a payment schedule

Take a $20,000 renovation in Nova Scotia. A fair schedule looks like this: 15% deposit on signing ($3,000); a draw at a visible milestone such as rough-in complete ($7,000); a second draw at drywall or finishes ($8,000); and the balance ($2,000, which is the 10% holdback) 60 days after substantial performance, once you've confirmed nothing is registered against the property. Change orders are priced and signed before the work, and added to the draw they belong to.

The contractor who says "nobody does that" is partly right. Most homeowners don't. But the law in your province is written so you can, and the contractors who object the loudest are the ones whose subs aren't getting paid. Ask the question on paper, before you sign. That's the whole method.