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Canadian Construction Projects: Federal & Provincial Law

Kristin Alford February 25, 2026

Lien on Funds Bond Claim

Canadian Construction Projects: Federal & Provincial Law

Key Payment Rights and Regulations

Canadian projects are classified as Private, Provincial Crown, or Federal Crown
Provincial projects may require a Labour & Material (payment) Bond
If no bond exists, claimants may file a Public Works Act Claim (public improvement lien) within strict provincial deadlines
Federal projects are often bonded
Deadlines are short and vary by province — timely action is critical to preserve payment rights

Canadian Construction Project Types

If you are furnishing to a construction project in Canada, you follow steps to secure mechanic’s lien or bond claim rights, much like you would when furnishing to a project in the United States. Construction projects in Canada will likely fall in to one of three categories: private, provincial crown/government, or federal crown/government.

Private: improvement contracted by a private entity, e.g., a person, company, or corporation
Provincial Crown: improvement of public works or building under formal contract made by Provincial government
Federal Crown: a contract for construction, alteration, or repair of any public building or public work of the Canadian government

What is a Provincial Project?

A provincial project is the improvement of public works or building under formal contract made by the provincial government. The provincial government is the equivalent to state government in the U.S.; where the U.S. has 50 states, Canada has 13 provinces.

Labour & Material Payment Bond

Often, construction claims on provincial projects are recovered via a Labour & Material Bond, which is a payment bond.

Labour & Material Bond: A surety bond, particularly on public projects, issued as assurance of payment to certain parties should the principal of the bond breach their construction contract.

Currently, only 2 provinces have payment bond requirements for provincial projects: New Brunswick and Ontario.

New Brunswick: On Crown Construction contracts of $500,000.00 or more, a bid bond and a payment bond will be required. On Crown Construction contracts less than $500,000.00, a bid bond and a payment bond may be required.
Ontario: generally, payment bonds are required for general contracts of $500,000.00 or more.

No Payment Bond? File a Public Works Act Claim

Different than a bond claim, a Public Works Act Claim (public improvement lien) is a claim served upon the provincial crown, in which the public entity may pay the claimant directly from funds owed to the prime contractor. The public improvement lien is available in the following provinces:

Alberta: file the lien on funds within 45 days from last furnishing
Manitoba: file the lien on funds within 40 days from last furnishing
New Brunswick: file the lien on funds within 60 days from the date debt became due
Newfoundland: file the lien on funds within 30 days from last furnishing
Nova Scotia: file the lien on funds as soon as possible to trap funds
Ontario: file the lien on funds within 60 days from last furnishing
Saskatchewan: file the lien on funds within 40 days from certificate of substantial performance or completion

Case Example: Bankruptcy & Public Works Act Claim

In his article, Doing Work on a Provincial Project? Protect Yourself with a Public Works Act Claim, author Anthony Burden reviewed a recent case before the Alberta Bankruptcy Court. You can read his article in full for the details, but ultimately the bankruptcy court declared a claimant’s Public Works Act claim took priority over unsecured claims and the claimant received payment in full.

“The Court lifted the automatic stay to allow funds to be paid out of Court to… its sub-subcontractors, in the amount of their proven claims. This was done without a formal Order approving the BIA Proposal by [debtor]. Despite [debtor’s] insolvency, its sub-subcontractors were able to receive full payment for their debt claims and were not required to share pro-rata.”

Projects Under the Federal Crown

If you are furnishing to a project under the Canadian government, you may proceed with a bond claim. While there is no statutory provision requiring a payment bond on a Crown project, the projects are often bonded. At the start of any project, we recommend you investigate to determine whether the project is bonded and attempt to obtain a copy of the bond.

Federal Crown Project Process

Notice: generally there is no required notice, serving a non-statutory notice is recommended.

Bond Claim: serve the bond claim in accordance with the terms and conditions of the payment bond; frequently a bond claim notice is required within 120 days from last furnishing materials or services.

Suit to Enforce Claim: file suit in accordance with the terms and conditions of the bond; frequently, suit is required within 1 year from last furnishing materials or services.

NCS Can Help

If you have any questions about bond claims in Canada, please contact us! In addition to our network of attorneys in the U.S., NCS has a well-established network of attorneys in Canada who are prepared to assist with your claim.

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