Ontario Modernizing Construction Laws to Support Industry Growth
Province to Propose Updates to the Construction Lien Act
Ontario is supporting the growth of the province's construction sector and the more than 400,000 people who work in it by modernizing Ontario's construction laws.
Over the past 18 months, construction law experts Bruce Reynolds and Sharon Vogel of Borden Ladner Gervais LLP, have led a thorough and comprehensive review of the Construction Lien Act. Their findings and recommendations can be found in their report, Striking the Balance: Expert Review of Ontario's Construction Lien Act.
Ontario's construction industry is a driving force of the provincial economy. Ontario proposes to introduce legislation in spring 2017 to better support workers and the industry based on the main principles found throughout the report:
- Modernizing the construction lien and holdback rules
- Introducing rules around prompt payment
- Creating a new process to speed up dispute resolution
To ensure the proposed legislation is fair, balanced and reflects diverse opinions, the Attorney General will gather feedback on the recommendations in the report through meetings with industry and stakeholder groups throughout fall 2016.
Modernizing Ontario's construction laws is part of the government's economic plan to build Ontario up and deliver on its number-one priority to grow the economy and create jobs. The four-part plan includes helping more people get and create the jobs of the future by expanding access to high-quality college and university education. The plan is making the largest infrastructure investment in hospitals, schools, roads, bridges and transit in Ontario's history and is investing in a low-carbon economy driven by innovative, high-growth, export-oriented businesses. The plan is also helping working Ontarians achieve a more secure retirement.
- In 2015, the construction industry accounted for 6.7 per cent of Ontario’s GDP. This compares to 6.5 per cent in 2013 and 6.4 per cent in 2014. Ontario’s Construction Lien Act establishes financial protection to those who supply services or materials to a construction project.
- Ontario commissioned a review of the Construction Lien Act in February 2015 in response to stakeholder concerns related to prompt payment and effective dispute resolution in the province’s construction industry, such as the need to encourage timely payment for services and materials, and making sure payment risk is distributed fairly.
- As part of the review process, Mr. Reynolds and Ms. Vogel received 77 written submissions and held 30 stakeholder meetings, involving more than 60 key construction industry groups.
- Mr. Reynolds and Ms. Vogel also created an advisory group of qualified subject matter experts with expertise in different areas of the construction industry. The group met throughout winter and spring 2016 to address the diversity of stakeholder opinions and industry issues, and to refine the recommendations that were heard during consultations.
“Ontario’s construction industry is a driving force of Ontario’s economy, and modernizing our construction laws will support the more than 400,000 people who work in the industry through a new prompt payment system. Mr. Reynolds’ and Ms. Vogel’s report is a fair and thoughtful assessment of the complex challenges faced by today’s construction industry. I would like to thank them for their work, and I look forward to working with industry groups as we draft legislation that reflects their needs.”
“We are pleased to deliver a report that strikes a balance between the diverse opinions we’ve heard throughout our stakeholder consultations, and between a number of mutually supportive payment, payment security, and dispute resolution strategies. We believe our recommendations will address the key concerns of the many people who work in the construction industry, many of whom have contributed to our work, and will help to modernize this important sector.”