Bill 142 to amend Ontario’s Construction Lien Act passes second reading, moves to committee

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An image from the Prompt Payment Ontario campaign to seek legislation to speed up construction industry payment rules

Legislation to amend Ontario’s Construction Lien Act and create a system to allow for prompt payment and faster adjuration of construction disputes has passed second reading, moving one step closer to the goal of receiving Royal Assent by the end of the year.

However, while associations representing subtrades are happy with the progress, representatives of the homebuilding and residential construction industry say they want changes to be made with the legislation, introduced in the spring, and look forward to presenting their arguments at the committee stage.

The bill’s second reading received unanimous approval on Oct. 4.

Some in the industry had been concerned that the legislation could have been delayed far enough that it could fail to become law before an upcoming provincial election next spring. These fears have been allayed, says Prompt Payment Ontario (PPO), which has been pushing for the legislation for several years.

“We are looking for support from all parties in making sure this bill passes into law,” said Ron Johnson, a PPO director. “Over 400,000 workers in Ontario’s construction sector will benefit from this bill being passed and Minister Naqvi has shown he supports the sector by ensuring it moves forward quickly.”

Bill 142 will make significant changes to the Ontario legislative framework for construction, including changes to the Construction Lien Act, introducing new prompt payment and adjudication measures that will significantly reduce payment delays, which have been identified as the biggest barrier to investment, improved productivity, and increased employment in the construction industry.

“Trade contractors have seen instances of delayed payments and length of delays rise unabated since the 2008, abetted by the low interest environment. This legislation could not have been introduced at a better time, as higher interest rates will make delayed payment unbearable,” said Johnson.

“The government is taking this issue seriously and, with the help of many concerned stakeholders, and has put together a bill that will help increase employment, increase investments in capital, training of apprentices, all while making projects more affordable to owners.”

However, the residential contracting community isn’t happy with the legislation as it is currently drafted.

“The Ontario Home Builders Association (OHBA) has requested the opportunity to make a deputation at the Standing Committee at the Legislative Assembly,” the Greater Ottawa Home Builders’ Association (GOHBA) said in a memo to its members. “They will also be advancing amendments to the Act that are more consistent with the contractual realities of residential construction.”

“OHBA has been active responding to this file over the past several years. Recently, OHBA and RESCON (The Residential Construction Council of Ontario) submitted a technical response to the legislation outlining several concerns with the legislation.

“That response outlines why residential construction’s contractual environment is substantially different than larger institutional, commercial and industrial contracts,,” the GOHBA reported. “The new prompt payment timelines, reporting requirements, and adjudication systems will be a significant strain on smaller builders and contractors who will have to cope with new administrative and legal obligations.”

“The OHBA submission also challenges the Attorney General to explain how this proposed system would work on top of numerous collective agreements in the sector which outline different payment obligations, timelines and dispute resolution that are different than those in the Act.”


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