What is a trust claim under the Construction Act and how does it differ from a lien in Ontario?

The Construction Act creates statutory trusts over money received in connection with a construction project - for example, funds an owner pays to a contractor, or a contractor receives from an owner, are impressed with a trust in favour of the subcontractors and suppliers who are owed money for that work, meaning the funds generally can't be used for other purposes, like general business expenses or other projects, until those parties are paid. A trust claim targets that money and, in appropriate cases, the individuals who controlled and improperly diverted it, rather than the property itself.

This is meaningfully different from a lien, which secures a claim against the property regardless of what happened to any money. A trust claim can potentially reach directors or officers personally if they knowingly used trust funds for another purpose, which a lien generally cannot do, and a trust claim isn't subject to the same short preservation and perfection deadlines that liens are, though its own limitation period still applies. Because trust and lien claims can both arise from the same unpaid invoice, pursuing both together is common where a contractor has both diverted trust funds and left a lienable claim unresolved.