Construction Lien Act

The Construction Lien Act was drafted in 1983.  Minor changes were made in 2010.  The Ministry of the Attorney General undertook a consultation on the CLA in 2013 but ultimately the exercise was lip service to the construction industry that was pushing hard for reform. 

Construction Lien Act Review

On March 28, 2014 the then minority Liberal government first announced its intention to convene a comprehensive review of the Construction Lien Act.  This announcement was the government’s way to conveniently put an end to Bill 69, Prompt Payment Act 2013

A general election was called for June 12, 2014 and it wasn’t until February 11, 2015 that the Attorney General in the new majority Liberal government announced that Bruce Reynolds and Sharon Vogel, construction specialist lawyers with Borden Ladner Gervais LLP, had been appointed as Counsel and Co-counsel to lead the review.  They were mandated to study the effectiveness of the Construction Lien Act, to assess the effectiveness of dispute resolution under the Act and to consider the issues of delayed payment that arose during the Bill 69 hearings.  

Their review was originally scheduled to be completed at the end of 2015 (it has subsequently received two extensions, first to the end of March 2016 and then to the end of April 2016.)  On March 4, 2015 representatives of COCA’s Construction Lien Act Task Force met with Reynolds and Vogel to discuss the scope of their engagement and the process they would follow in the course of their work.   On July 15th Reynolds and Vogel published a detailed 72 page consultation paper and COCA’s Construction Lien Act Task Force sprang into action.  The Task Force held a series of lengthy conferences to consider the consultation paper clause by clause and to develop a comprehensive set of recommendations.   The Task Force’s work was approved by COCA’s Executive Committee and submitted to Reynolds and Vogel.  (The submission was subsequently approved by COCA’s Board of Directors.)

Highlights of the submission included the following: 

  1. That prompt payment legislation is COCA’s very highest priority
  2. That holdback must be deposited into a separate trust account
  3. That funds for projects that have a value in excess of $5M must be deposited into a dedicated project specific trust account; to reduce the administrative burden for small contracts, funds for projects with a value of less than $5M should be deposited into a mixed trust account dedicated for all projects of that size
  4. That there must be provision for the mandatory early release of holdback at the request of the sub
  5. That lien claimants must be given priority of over mortgagees

 

On November 14, 2015 representatives of the Task Force met again with Reynolds and Vogel to discuss our submissions and to deliberate on a number of the challenging issues confronting the review leaders. 

 Reynolds and  Vogel then  published a list of 27 new issues that they identified as they reviewed stakeholders’ written submissions and held meetings with stakeholders.  Stakeholders were given until January 29th to submit their written responses to the newly identified issues.   COCA Construction Lien Act Task Force sprang into action, convened a teleconference and addressed all the outstanding issues and submitted a supplementary submission before the deadline. 

In order to convene the final panel meetings, Reynolds and Vogel were granted another one-month extension from the end of March until the end of April.  Reynolds and Vogel submitted their approximately 400-page report with its 100 recommendations to the government on May 2nd.

The report wasn’t made public until September 26th.  Coincidentally COCA was hosting an MPP reception at Queen’s Park that evening with Attorney General Yasir Naqvi as the keynote speaker.  In his remarks, Naqvi stated that his then recently issued mandate letter from Premier Wynne directed him to introduce legislation pursuant to the Reynolds/Vogel Report in the Spring 2017 session of the Legislature and he expressed optimism that that legislation could be passed into law before the end of the Fall 2017 session.

The report has been characterised as representing a sensible compromise among all the competing stakeholder interests.  That said, it was generally aligned with COCA’s long-held positions on Lien Act reform that contractors should either have release of their holdback or they should have lien rights. 

Upon the release of the report the Task Force met again and sent Minister Naqvi a letter in which the following four points were made:

  1.  that the recommendations in the Reynolds/Vogel Report be considered as a system and not cherry picked
  2. that Reynolds and Vogel be retained by the government to provide advice as their report is translated into legislation and moves through the legislative process
  3. that the expertise of the Advisory Group be retained
  4. that legislation be introduced in the Spring 2017 session as promised. 

Representatives of the Task Force met with Minister Naqvi and senior officials from his office on October 24th at Queen’s Park to press those points and to discuss the way forward. Minister Naqvi noted that he is developing a legislative framework to present to cabinet and seek approval to proceed to draft legislation.  He invited COCA to provide further advice with regard to the Reynolds/Vogel Report within six weeks so that he is in a position to draft legislation

The Task Force collaborated yet again in the development of a more detailed response to the Reynolds/Vogel Report addressing various gaps, “what-ifs” and submitted their advice to Minister Naqvi prior to the deadline.    

COCA’ Position

Latest Activity

The  report of the Construction Lien Act Review will be submitted to the Attorney General on at the end of April, 2016 and is expected to be made public promptly thereafter.  A COCA Construction Lien Act Task Force meeting is being scheduled for early May to review the Report. 

COCA’s Advocacy Role

  • COCA’s  Construction Lien Act Review Task Force was extremely active providing advice that helped shape the direction of the Reynolds/Vogel Report on Construction Lien Act reform in a very significant way.  Many long held COCA positions on Lien Act reform found their way into the Reynolds/Vogel Report as a result of the Task Force's efforts.  
  • The Reynolds/Vogel Report also recommended a payment regime to ensure general and trade contractors are paid in a fair and timely way for work completed without dispute.  COCA has been advocating for such a solution to delayed payments through the construction payments chain since 2011. 
  • COCA has been advocating for CLA reform for almost two decades; we have been consistently making the case for amendments that would see contractors either receiving their holdback payment or retaining their lien rights for completed work
  • In 2015, COCA’s was extremely active making substantive submissions the Review of the Construction Lien Act.
  • The efforts of COCA and our industry partners resulted in the first changes to the Construction Lien Act in 20 years, included in Bill 68, Open for Business Act, 2010
  • COCA successfully advocated for a consultation on further substantive reforms to the Construction Lien Act by the Attorney General’s office, and participated in Opposition hearings on the Act, convened as a result of COCA’s advocacy efforts and those of our partners
  • In 1983, COCA convinced all parties to pass a new Construction Lien Act