On April 25, 2018, the Province of Ontario announced that it had made 4 new Regulations to support and implement the amendments to the Construction Act. These regulations had been published in February in draft for comment by the public and are now in final form.
The Regulations include:
1. Forms (each form is available online);
2. Procedures for Actions under Part VIII;
3. General (including relevant thresholds); and
4. Adjudications under Part II.1 of the Act.
Effective Dates and Transition
The new Regulations will take effect at the same time as the amendments they support:
Amendments and Regulations
Amendments to modernize the construction lien and holdback rules, and related regulations
July 1, 2018
Amendments related to prompt payment, adjudication and liens against municipalities, and related regulations
October 1, 2019
In accordance with the transition rules set out in subsection 87.3 of Bill 142, the Construction Lien Act Amendment Act, 2017, existing projects will be effectively grandfathered. As the Province stated in announcing the new Regulations and effective dates: "To ensure predictability and certainty for the industry's contractual arrangements, the transition rule follows the long-standing presumption of statutory interpretation that legislation is not given retroactive effect, unless made so expressly."
Accordingly, existing rules under the existing legislation (i.e. prior to the amendments) will apply to an improvement if:
- a contract for the improvement is entered into before the date the amendments come into effect (regardless of when any subcontract under the contract is entered into);
- a procurement process for the improvement (including a request for qualifications, a request for proposals, or a call for tenders) is commenced by the owner of the premises before the date the amendments come into effect; or
- the premises is subject to a leasehold interest, and the lease is first entered into before the date the amendments come into effect.
The amended legislation will apply to contracts entered into and procurement processes commenced on, or after, the date the applicable amendments come into effect. This means, for example, that the prompt payment and adjudication scheme will only apply to contracts entered into and procurement processes commenced on, or after, the date the relevant amendments take effect on October 1, 2019, as well as to subcontracts under those contracts.
To assist the industry in preparing for the upcoming amended Construction Act, the Ministry of the Attorney General is currently developing informational materials to describe what will change when the amendments to modernize the construction lien and holdback rules come into force on July 1, 2018. Gowling WLG has also published several articles on the coming amendments and their impacts on the construction sector. We are also hosting several programs to help educate and inform the industry.
The government is also in the process of establishing the body that will act as the Authorized Nominating Authority (ANA) which will certify adjudicators and have oversight over the adjudication process. The MAG currently anticipates that the ANA will be administered in fall 2018 and be ready to begin regular operations on October 1, 2019. The ANA will develop and oversee training and qualification for adjudicators, maintain a registry of qualified adjudicators, and perform other functions set out in the Act and new adjudication regulation.
How Gowling WLG can help
Gowling WLG has been deeply immersed in the reform process for the last 4 years. 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 parties about these changes to our industry. This includes a work shop program on adjudication at which some of our UK partners will discuss the UK experience with adjudication.
We would be happy to meet with you or your organization to discuss your questions and concerns about Bill 142 and the Construction Act.
Please visit our Construction Lien Act Reform website "hub" for the announcement of proclamation, and for information and dates about all of our events and activities.