- On May 30, 2018, the Quebec National Assembly unanimously adopted Bill 162, An Act to amend the Building Act and other legislative provisions mainly to give effect to certain Charbonneau Commission recommendations.
- The legislative changes in Bill 162 come into force on September 4, 2018.
- The Bill gives effect to certain recommendations contained in the Report of the Charbonneau Commission – a commission of inquiry created by the Quebec Government to investigate certain practices in the construction industry – that focus on the Building Act.
- Specifically, the legislative changes give the Régie du bâtiment du Québec ("RBQ") – the Quebec agency that regulates the construction industry – the latitude to fully participate in the fight to prevent and eliminate fraudulent practices and corruption in the construction industry.
The following are some of the most significant changes that participants in the industry will notice:
- A strengthening of the conditions for issuing and maintaining a contractor's licence:
- The notion of "officer" now includes any shareholder (person or corporation) holding 10% or more of the voting rights attached to the shares;
- Refusal to issue a licence within five years of either a conviction or the expiry of a term of imprisonment of the applicant, one of its officers or shareholders, with respect to certain offences or indictable offences covered by tax legislation, the Competition Act, the Controlled Drugs and Substances Act and the Criminal Code (i.e. offences or indictable offences related to traffic, production or importation of drugs, money laundering, conspiracy, bid-rigging, fraud, etc.);
- Similarly, cancellation of a licence already granted when its holder or one of its officers has been convicted of an offence or indictable offence referred to in the Building Act after having already been convicted of any such offence or indictable offence in the five years preceding the new conviction;
- The RBQ will now require by regulation a performance bond or a bond for pledges, materials and services from any contractor in order to ensure the continuation of the work and the payment of creditors in the event of cancellation or suspension of a licence.
- A new penal offence for acting as a nominee (i.e. “prête-nom”), calling on or using a nominee or having an officer who is a nominee when applying for a licence or at any time during the licence’s term of validity is introduced: penalties vary between $11,047 and $82,844 for an individual and between $33,138 and $165,687 for legal persons.
- The extension of the limitation period applicable in penal matters to 3 years (rather than the current 1 year) from the date on which the prosecutor becomes aware of the commission of the offence (to a maximum of 7 years after the offence was committed).
In addition to the above, provisions are also included to expand the RBQ’s audit, control and investigation powers. Finally, certain “whistleblower” provisions protect persons who communicate information to the RBQ concerning possible violations of the lawBuilding Act or related regulations.
Reaction to the Changes
The Act has generally been well received by the construction industry, with the exception of the new financial guarantees required by the Act. Some industry players believe that the bonding requirement is likely to prevent access to the industry by some small and medium-sized enterprises that will not be able to meet such an obligation. Only time will tell whether the bonding requirement does have this type of effect.
Since the Act modifies the conditions for obtaining a licence, new forms for contractor licence applications will be available on the RBQ website. Contractor licence application forms for corporations and partnerships not processed by the RBQ by September 4, 2018 will be returned to applicants. The forms for persons will still be valid. Where necessary, the RBQ will send a request for additional information.