Change Orders in Ontario Construction Contracts

A change order is simply a written record of a change to the deal — a change in scope (adding, removing, or altering work), a change in price, a change in schedule, or some mix of all three. On almost every construction project of any size, the work actually performed ends up differing at least a little from the original drawings and specifications, whether that is because the owner wants an upgrade, an unexpected condition turns up behind a wall, or a supply issue forces a substitution. The change order is the mechanism that keeps the contract matching reality.

In practice, a change order is usually a short document that describes the change, sets out the price adjustment (an increase, a decrease, or sometimes a credit), notes any effect on the schedule, and is signed by both the owner (or an authorized representative, like a general contractor or payment certifier) and the contractor performing the work. Once signed, it generally becomes part of the contract, adjusting the original contract price going forward.

For background on how the underlying agreement is usually structured before any changes come up, see our overview of construction contracts in Ontario.

It is tempting, especially on a fast-moving job site, to treat a scope change as a quick conversation rather than paperwork. The owner asks for an extra outlet, the contractor says sure, and both move on. The trouble is that “sure” does not say what the extra outlet costs, whether it affects the schedule, or who is responsible if it turns out to be more complicated than expected once the wall is opened up.

Documenting a change in writing, even briefly, does three things. First, it fixes the price before the work is done, rather than leaving it to be negotiated after the fact when neither side has much leverage to disagree. Second, it creates a record that can be checked against the final invoice, the project schedule, and — if it ever comes to this — a lien claim or a court proceeding. Third, it protects both sides: the contractor is protected against doing free work it never gets paid for, and the owner is protected against being billed for work it never actually authorized.

Most well-run projects follow a broadly similar sequence once a potential change comes up. Someone — often the contractor, but sometimes the owner, an architect, or a consultant — identifies that the work needs to differ from what was originally agreed. That person prepares a written description of the proposed change along with a price and schedule estimate, sometimes called a change order request or a proposed change notice.

The owner (or its representative) then reviews the proposed change and either approves it, rejects it, or asks for a revised price. Once both sides agree on the terms, the change order is signed, and the changed work is authorized to proceed on those terms. Many standard-form contracts require this approval before the contractor is obligated to perform the extra work, which gives the contractor a reasonable basis to pause rather than start on a change that has not yet been priced.

On larger or public projects, this process is often formalized with numbered change order logs, so both sides can track every change against the original contract price and see, at a glance, how far the total price has moved from the original number.

Timing also matters. A change order agreed before the changed work starts gives both sides a clear baseline to work from, while one negotiated after the work is already done tends to involve more friction, since the contractor has less incentive to accept a lower price once the work is complete and the owner has less incentive to pay more than it expected. Where circumstances genuinely require work to start before pricing is finalized — an urgent repair, for instance — many contracts allow the owner to issue a change directive authorizing the work to proceed while price and schedule impacts are worked out shortly afterward, rather than leaving the instruction entirely informal.

Ontario’s Construction Act, 2019 ties several important deadlines and obligations to the contract price, which makes accurate documentation of changes more than just good bookkeeping. Holdback — generally 10% of the value of services or materials supplied — is calculated against the price of the contract as it stands, so if extras are left undocumented, it can become genuinely unclear what number the holdback should be based on. For a closer look at how holdback actually works, see our guide to holdback requirements in Ontario.

Lien rights are also affected. A lien claim is generally limited to the value of the services or materials actually supplied and unpaid for, and unrecorded extra work can make it harder for a contractor to establish the amount it is entitled to claim if a dispute ends up at the registry. For background on how liens work more generally, including the preservation and perfection deadlines under the Act, see our guide to construction liens in Ontario.

Properly documented change orders also matter for the prompt payment and adjudication regime introduced by the Act, since a proper invoice generally needs to reflect the agreed contract price, including authorized changes, in order to start the clock on payment deadlines. See our overview of prompt payment in Ontario for more detail.

For the contractor, performing work on a verbal instruction alone carries a real risk of not getting paid for it, or getting paid less than expected. If the owner later disputes that the instruction was given, disputes the scope of what was asked for, or disputes the price, the contractor is left trying to prove an oral conversation rather than pointing to a signed document. Even where a court is ultimately persuaded that work was requested and performed, pursuing that claim takes time, cost, and uncertainty that a signed change order would have avoided entirely.

For the owner, the risk runs the other way. A string of verbal “just do it” approvals can add up to a significant increase in the final price with no clear record of what was agreed to at each step. This is a common source of frustration on residential renovation projects in particular, where an owner says yes to small changes one at a time without tracking the cumulative cost, only to be surprised by the final invoice.

Both risks point the same direction: a quick written confirmation, even an informal one, protects whoever is relying on it. Neither party benefits, over the life of a project, from leaving scope changes undocumented.

When a disagreement about extra work does come up, the first practical step is usually to gather whatever record exists — emails, texts, site meeting notes, photographs of the work, and any partial documentation — even if a formal change order was never signed. This record often ends up being the main evidence of what was actually agreed, so it is worth assembling it carefully rather than relying on memory.

Many change order disputes get resolved through direct negotiation once both sides lay out their documentation side by side. Where that does not resolve things, options generally include adjudication under the Construction Act for payment disputes on an eligible contract (see our guide to construction adjudication in Ontario), a lien claim if the amount owing relates to unpaid services or materials, or a claim in Small Claims Court or the Superior Court of Justice depending on the amount involved.

This article provides general information about how change orders generally work in Ontario construction projects and is not legal advice about any specific project or dispute. Our tools and contact page may be useful starting points for further research.