Canadian Trades Glossary
Plain-English definitions of the construction law and tax terms every Canadian trades contractor needs to know: electricians, plumbers, HVAC techs, and the crews who run real jobs.
- Proper InvoiceAn invoice that meets the requirements of section 6.1 of the Ontario Construction Act. The trigger for the 28-day payment clock.
- Statutory HoldbackA mandatory percentage (10% in Ontario, BC, and Alberta) of each progress payment that must be retained until lien rights expire.
- Construction Lien DeadlineThe last date a contractor can preserve a lien on a property. 60 days in Ontario, 45 days in BC, 60 days in Alberta. Miss it and the right is gone permanently.
- HST Input Tax Credit (ITC)The mechanism that lets GST/HST-registered businesses recover the tax they paid on business purchases, reducing their net remittance to CRA.
- T5018A CRA information return required for every subcontractor paid more than $500 in a year when construction is your primary business.
- Prompt PaymentThe statutory rule that a payer must pay a proper invoice within a set number of days. 28 days from owner to GC in Ontario; 7-day downstream passthrough to subs.
- Construction AdjudicationFast-track statutory dispute process for payment disagreements under prompt payment legislation. Binding on an interim basis, decided in 30 to 50 days.
- Notice of Non-PaymentThe formal document a payer must issue within 14 days to withhold any part of a proper invoice. Without it, the full invoice must be paid on the 28-day clock.
- ODACCThe Ontario Dispute Adjudication Centre for Construction. Administers all adjudications under Part II.1 of the Ontario Construction Act.
- Ontario Construction ActThe Ontario statute governing construction contracts, prompt payment, holdback, and liens. Renamed from the Construction Lien Act in 2018; major amendments effective 2026.
- Builders' LienThe statutory claim a contractor or supplier can register against real property to secure unpaid construction work. Called 'construction lien' in Ontario, 'mechanics' lien' in the Atlantic provinces, 'legal hypothec' in Quebec.
- Lien PerfectionThe court action and Certificate of Action that must follow lien preservation within a fixed window (90 days in Ontario). Without perfection, a preserved lien expires.
- WSIB Clearance CertificateProof that an Ontario contractor's WSIB premiums are paid up to date. Required by owners and GCs before releasing final payment under principal-and-contractor liability rules.
- Substantial PerformanceThe point at which an Ontario contract is ready for use and only minor work remains (3%/2%/1% cost-to-complete test). Publishing the certificate starts the holdback release and lien clocks.
- Small SupplierA business under $30,000 in taxable sales over four consecutive quarters, not required to register for GST/HST. Cross the line and registration is mandatory.
- GST/HST InstalmentsQuarterly payments annual GST/HST filers must make toward next year when prior-year net tax was $3,000 or more, instead of paying the full amount at filing.
- GST/HST Return Working PaperThe period-scoped summary of lines 101, 103/105, 106/108, and 109 that a contractor or bookkeeper copies into the CRA GST34 return.
- Progress DrawA partial payment invoiced at an agreed stage of a job. Each draw carries its own proper-invoice requirements, payment clock, and 10% holdback where statutory.
- Statutory DeclarationA sworn statement (usually CCDC 9A or 9B) that subs and suppliers have been paid, commonly required before progress draws and holdback release.
Looking for the full Construction Act guide? The pillar page covers the 28-day payment rule, proper-invoice requirements, and what to do when a customer does not pay.
Ontario Construction Act guide