The Attorney General, Yasir Naqvi, announced that the balance of Bill 142, the Construction Lien Act Amendment Act, 2017 (Ontario), which received Royal Assent on December 12, 2017 but has not been fully proclaimed, will be proclaimed and come into force in two stages:
- all of the substantive changes, regulations and forms, other than those relating to prompt payment and adjudication, will be proclaimed and come into force on July 1, 2018; and
- the prompt payment and adjudication provisions, regulations and forms will be proclaimed and come into force on October 1, 2019 in order to allow sufficient time for the Authorized Nominating Authority to be established, to develop a regime for the certification of adjudicators, and to certify adjudicators.
The Attorney General also announced the release of four draft regulations to support the amendments to the Act.
- Procedures for Actions under Part VIII;
- General (e.g. monetary thresholds for surety bonding and holdback and notice requirements); and
- Adjudications under Part II.1 of the Act.
Consultation drafts of the regulations have been posted on Ontario’s Regulatory Registry and are available online at Construction Lien Act: Proposed Regulations, or you can send an email to Gowling WLG’s Head of Infrastructure and Construction, Ted Betts.
The regulations will be posted for a period of 30 days, during which time the public will have an opportunity to provide feedback. The ministry will review your comments during the posting period and will make revisions to the proposed regulations, as necessary, on an ongoing basis. Should the decision be made to proceed with the regulations following the 30-day posting period, the proposed regulations will be finalized, submitted for approval and filed.
As we have noted previously, in an amendment to Bill 142 introduced at Third Reading, the Act will now grant grandfathering of existing projects/improvements/contracts. In new section 87.3, the current Construction Lien Act continues to apply with respect to an improvement if:
- a contract for the improvement was entered into before that day, regardless of when any subcontract under the contract was entered into;
- a procurement process, if any, for the improvement was commenced before that day by the owner of the premises (including the making of a request for qualifications, a request for proposals or a call for tenders); or
- the premises is subject to a leasehold interest, and the lease was first entered into before that day.
- Parts I.1 (Prompt Payment) and II.1 (Adjudication) apply in respect of contracts entered into on or after the day subsection 11 (1) of the Construction Lien Amendment Act, 2017 (i.e. the adjudication provisions) comes into force, and in respect of subcontracts made under those contracts.
Gowling WLG has been deeply immersed in the reform process. We have held several events and published several articles since the first reading of Bill 142, and will continue to monitor its progress as it becomes the new Construction Act.
We are planning several educational events and workshops, and additional analysis of the impact of the amendments introduced by Bill 142 over the coming months to help educate and inform the construction industry about these changes. This includes specific programs on the impact of the amendments on real estate and development, on municipalities and the public sector, and on lenders. If you are a part of an organization that would like to have us provide an in-house program, please contact our Head of Infrastructure and Construction, Ted Betts.