New Ontario
Construction Act takes shape
Prompt payment, adjudication and lien reform
among 98 recommendations accepted by
provicial government, says Bruce Reynolds
Canadian Design and Construction Report staff writer
Ontario’s new Construction Act, which will update con-
struction lien legislation and set out adjudication and
prompt payment rules, should be introduced this spring
and, if all goes according to plan, become law by the end
of the year, says Bruce Reynolds.

Reynolds, with Sharon Vogel, conducted a thorough re-
view of the Construction Lien Act on retainer of the provin-
cial government, providing his report to the provincial
attorney general last May. Speaking at a panel discussion
at the Ontario General Contractors’ Association (OGCA)
Symposium in early April, he said the government agreed
to implement 98 of his report’s 101 recommendations, and
then retained him to assist the legislative drafters in creat-
ing the new law.

He was asked by the government to consult with the in-
dustry on replacing the Construction Lien Act after an al-
liance of trade contractors and associations sought to
introduce provincial prompt payment legislation, pushing a
private member’s bill (Bill 69) through the legislative
process until other stakeholders stepped in and encour-
aged the government to drop that legislation.

The new legislation will mandate prompt payment, set-
ting out interest payment requirements for delayed pay-
ments. As well, it will “focus on the modernization of the
(Construction Lien) act that hasn’t been looked at in a holis-
tic way since the early 1980s,” Reynolds said. A third com-
ponent of the legislation will include considering the
“efficiency or lack thereof of dispute resolution” in the con-
struction industry.

“Our instructions included adopting an approach that
was transparent, inclusive, and which was aimed at being
collaborative,” he said.

Vogel and Reynolds identified 60 stakeholder groups, es-
sentially recognizing “if anyone identified themselves as a
stakeholder, they were a stakeholder.”
The reviewers identified more than 80 issues and ad-
dressed 60 of them in the package, and then held further
consultations, including “40 face to face meetings” to make
a total of 101 recommendations, 100 numbered and one
not (the name of the legislation: “Construction Act: An Act
Respecting Security of Payment and Efficient Dispute Res-
olution in the Construction Industry.”
In an interview, Reynolds said the three recommenda-
tions that the government decided not to include in the law
included: • allowing individual lots in subdivisions to be the defin-
ing point for construction lien actions (Reynolds said
certain stakeholder interests were strong enough to
have this provision removed from the draft legislation.);
• a proposal for common elements in condominium
buildings to be required to have a single PIN to which
liens could attach, and the interests of all unit owners
would be subject to this lien (he said that the province
had recently revised the Condominium Act and didn’t
want to revisit the condo law at this time); and
• the introduction of a pilot project for project trust ac-
counts “utilizing a representative number of projects in
the public sector.”
He said “we are now on draft 10 of what will be part of
the ultimate amending legislation,” with a review of its key
elements of modernization, prompt payment and adjudica-
tion. “We think we’re getting there, with legislation both with
consistency for regulations and that will balance fairly the
interests of the various segment of the industry,” he said.

“We’re hopeful that the bill will get first reading before
the end of the session, go to committee, and in the fall,
have second and third reading,” Reynolds said. He urged
stakeholders to “support the project in committee” before
the legislation receives final reading and is proclaimed into
law. The Canadian Design and Construction Report — June 2017 – 7