Construction Closeout in Ontario: Substantial Performance, Occupancy Permit & P.Eng General Review Final Certificate

Substantial Performance Under the Construction Act

The Ontario Construction Act defines substantial performance (SP) using a statutory test tied to whether the improvement is ready for its intended use and whether the remaining work falls within the Act's threshold for completion or correction costs.

Because that test has direct implications for lien timing, holdback release, and project closeout disputes, parties should confirm the current statutory definition and project-specific application before declaring SP on a live file.

Holdback Release Timeline

The Construction Act requires the owner to maintain statutory holdback from each progress payment. After substantial performance, holdback release depends on publication of the certificate of substantial performance, expiration of the applicable lien period, and whether any lien claims remain outstanding.

1. The contractor or other proper person publishes a Certificate of Substantial Performance (CSP) in the approved publication
2. The lien period then runs under the current Construction Act rules
3. If no liens are registered, or all liens are vacated or otherwise resolved, the owner may release the holdback in accordance with the Act
4. Because prompt-payment and holdback-release timing are statutory, parties should confirm the current release rules before paying out retained funds

CCDC 2 Contract Closeout Requirements

CCDC 2 contract closeout obligations before final payment is released include:

• Deficiency completion: All items on the architect/engineer's deficiency list completed, inspected, and accepted — the architect issues a written confirmation of deficiency clearance
• As-built drawings: Contractor submits marked-up as-built drawings or reproducibles for all disciplines, including structural, confirming actual installed conditions. Many Ontario municipalities require as-built drawings before issuing the final occupancy permit.
• Maintenance and operating manuals: Manuals for structural systems that have maintenance requirements (post-tensioned slabs with future re-stressing requirements, expansion joint assemblies, structural glazing systems)
• Consent to assignment of warranties: Confirmation that all sub-contractor and material warranties are transferable to the owner
• Statutory declarations: Statutory declarations from the contractor and (in most cases) major subcontractors confirming all obligations to labor and material suppliers have been paid — required for owner protection against lien liability before holdback release

OBC Occupancy Permit Process

The Ontario Building Code requires a permit for occupancy of any new building or any addition. The occupancy permit process in Ontario:

1. Contractor notifies the building department when the building is ready for the final occupancy inspection
2. Building inspector (Chief Building Official or designated inspector) conducts a final inspection of the building for structural, fire safety, and life safety compliance
3. The CBO also collects all required professional General Review field review and final letters — for structural engineering, this is the Schedule 2 Division C letter from the structural P.Eng
4. All outstanding structural deficiencies identified in previous building inspections must be addressed before the final inspection
5. The CBO issues the occupancy permit (final or conditional) when satisfied that the building meets OBC requirements for occupancy

In Toronto and other Ontario municipalities practising risk-based inspection, the CBO relies heavily on the General Review engineers to confirm OBC compliance — the engineer's Schedule 2 letter is the CBO's assurance that a qualified professional has monitored and confirmed structural conformance throughout construction.

P.Eng General Review Schedule 2 Letter

OBC Division C Schedule 2 (Part 1, Section 1.3) requires the engineer to provide a letter to the CBO confirming that:

"To the best of my knowledge and based on periodic field reviews, the construction of ... the work described above has been carried out, in general conformance with the Ontario Building Code, the general review work required of me as above, the design drawings, and the specifications."

Key elements of the P.Eng General Review final letter:

• Identifies the specific work covered (structural systems, specific elements)
• References the drawings and specifications reviewed on the project
• States the basis of opinion — periodic field reviews, testing and inspection reports, material test reports
• The qualification "to the best of my knowledge" and "in general conformance" are standard professional qualifications — not a guarantee that every element of the structure was seen or is perfect

Managing Structural Deficiencies at Closeout

Structural deficiencies identified during General Review field visits are tracked in a formal deficiency log. Closeout requires that each deficiency is either:

• Corrected per design: The contractor corrects the deficiency in conformance with the original design — confirmed by the engineer's inspection
• Accepted by field design revision: Where the as-built condition deviates from design but can be shown by analysis to still meet code requirements, the engineer prepares a revised calculation and revised stamped drawing accepting the as-built condition
• Formally documented as a design change: A Supplemental Instruction or Change Order documents the change from the original design, the basis, and the engineer's approval

No structural deficiency affecting structural safety can be accepted "as-is" without engineering analysis confirming adequacy. The deficiency log should be closed only when all items are confirmed resolved.

As-Built Drawings and Record Documents

As-built structural drawings are the record of what was actually built — deviations from the permit drawings, changes in member sizes, connection details, or reinforcement discovered during construction. Key points for Ontario engineering practice:

• The structural engineer of record should review and accept (not stamp) contractor-prepared as-built markups before declaring the as-built record complete
• Where design changes were made during construction (field design revisions, change orders), the engineer should issue updated stamped drawings reflecting the as-built design
• As-built record drawings are critical for future building work — renovations, additions, facade changes — where the engineer for the future work must understand the existing structural conditions