If a bank error delays my mortgage funds by a day, am I in default on my purchase?

Yes, in the sense that your obligation to complete the purchase on the scheduled date generally does not depend on whose fault a delay was. Ontario Agreements of Purchase and Sale are typically strict about the closing date, so if your mortgage funds are not available in your lawyer's trust account in time, you can technically be in default even though the delay was your bank's error rather than yours.

In practice, sellers and their lawyers are sometimes willing to grant a short accommodation, such as agreeing to a next-day closing or a brief gap closing, particularly where the delay is clearly a bank processing issue rather than any real problem with your ability to pay. This is a negotiated courtesy, though, not something you are automatically entitled to, and it usually comes with conditions such as per diem interest for the extra days. Because the seller has no obligation to be flexible, contact your lawyer the moment you learn of the delay so they can start working with the seller's side immediately rather than after the closing time has already passed.