New Amendments to the Construction Act

By November 22, 2018 news

Ministry of the Attorney General Office

We are writing to advise you that as part of Bill 57, Restoring Trust, Transparency and Accountability Act, 2018, introduced on November 15, 2018, the government has proposed a series of technical amendments to the Construction Act (the “Act”), which are set out in Schedule 8:

https://www.ola.org/en/legislative-business/bills/parliament-42/session-1/bill-57.

The amendments would, if passed, support the changes previously enacted and ensure that they work effectively.

Proposed Amendments

Bill 142, Construction Lien Amendment Act, 2017 was enacted in December 2017. It amended the Act to:

 

  • Modernize the construction lien and holdback rules (effective July 1, 2018); and
  • Establish prompt payment and adjudication processes (scheduled to take effect on October 1, 2019).

The Ministry of the Attorney General worked closely with construction experts Bruce Reynolds and Sharon Vogel, as well as an Advisory Group made up of experts in key industry sectors, to develop the previous amending legislation and related regulations.

The ministry has continued to communicate with stakeholders and the experts as the construction industry prepares for the full implementation of the amended Act. During recent consultations with Mr. Reynolds, Ms. Vogel, and the expert Advisory Group, the experts recommended a number of additional amendments to address technical gaps, provide clarity, and ensure that the benefits of the new processes under the Act are realized.

Based on these recommendations, Schedule 8 to the Restoring Trust, Transparency and Accountability Act, 2018 would, if passed, amend the Construction Act to:

 

  • Revise and clarify the transition rules, including (but not limited to):

o   Clarifying that if an improvement is subject to the “old” (pre-July 1, 2018) Act, it is also subject to the old regulations, including forms;

o   Changing the current transition rule related to leasehold interests by providing that the existence of a leasehold interest is not relevant to the transition rules, subject to a narrow exception;

o   Setting out a specific transition rule for the amendments related to liens against municipalities;

o   Ensuring that the transition rule for prompt payment and adjudication addresses the commencement of a procurement process;

  • Revise and clarify the procedural rules for adjudication;
  • Clarify the fees that may be charged by the Authorized Nominating Authority; and
  • Make other technical and housekeeping amendments.

Please review the full text of Schedule 8 for complete details of the proposed amendments to the transition rules, as well as the other proposed amendments.

If the proposed amendments are passed, their implementation would be tied to the existing implementation timelines for the previous amendments. Therefore, the amendments related to the “modernization” changes to the Act would come into force upon Royal Assent, since the modernization amendments took effect on July 1, 2018. The amendments related to prompt payment, adjudication and liens against municipalities would come into force when the previous amendments to which they relate come into force (scheduled for October 1, 2019).

Bill 57, Restoring Trust, Transparency and Accountability Act, 2018 will proceed through the normal course, with an opportunity for debate and a vote by members of the House.

The ministry would like to acknowledge and thank Mr. Reynolds, Ms. Vogel, and the Advisory Group, whose expert feedback and recommendations were critical to the development of the proposed amendments.

Ministry of the Attorney General

attorneygeneral@ontario.ca