Edward Betts, a partner with Gowling WLG, says in a
commentary that the key legislative provisions yet to be
proclaimed include “prompt payment, adjudication,
changes in the lien preservation and perfection periods,
mandatory payment of holdback, trust accounting rules
and so on.”
He writes that it is likely that the balance of the act
provisions “will be proclaimed fairly early into 2018.”
“For prompt payment and adjudication these will be in
force when proclaimed after finalizing the related
regulations and multiple prescribed forms,” Betts writes.
“In addition, the adjudication nominating authority needs
to be set up and then adjudicators certified before the
prompt payment and adjudication can work, so we may
see these provisions proclaimed but then delayed further
until all that administration is taken care of.”
“Various groups have asked for a long transition and
education period,” he writes. “So we really do not know
the timing yet unfortunately. The Attorney General’s
Office has stated that it will make a clarifying
announcement on timing in January 2018.”
Betts writes that the Construction Act includes:
• Long overdue updates to 35 year old legislation that
includes payment protection throughout the
construction pyramid;
• Contractors and sub-contracts now have security and
assurance regarding timelines for payment;
• Mandatory performance and payment bonds on
publicly funded projects over a threshold contract price
(similar to the Miller Act in the United States);
• The adjudication process will now provide an
opportunity for resolution of construction disputes
without disruption of project schedules and will assist
in avoiding costly legal battles;
• No-exceptions rule to hold-back release deadlines
means a no-exceptions rule to when contractors and
sub-contractors get paid; and
• Mandatory prompt payment for sub-trades.
However, there are many challenges to be resolved in
the regulations and scheduling, including ensuring there
are an adequate supply of qualified adjudicators. As well,
the legislation provides “contracting out” opportunities
for some key provisions, which may weaken the
effectiveness of the Prompt Payment requirements, but
which will protect general contractors from being caught
between a rock and a hard place in situations where they
truly haven’t been paid by the owners. (Conversely,
however, sub-trades will be able to walk off the job if they
don’t receive their payments on schedule.)
As an example of the issues yet to be resolved, the
previous Construction Lien Act includes wording that
requires Certificates of Substantial Performance to be
published in a “Construction Trade Newspaper”, further
defined to be a daily publication – which effectively
requires these notices to be published only in the Daily
Commercial News (DCN), effectively granting that
publication a legislative monopoly.
“References in the Act to publication in a construction
trade newspaper are replaced with requirements to
publish in the manner set out in the regulations,” the
Construction Act’s legislative synopsis says. But we still
need to wait for the new regulations to see how things
will change, if at all.
www.threadsoflife.ca 6 – Winter 2018 — The Canadian Design and Construction Report