The COVID-19 pandemic has affected industries across the globe, and the construction industry is no exception. This update addresses recent events that have impacted the construction industry in Ontario.
After declaring an emergency under the Emergency Management and Civil Protection Act, the Ontario government made an Order retroactively (as at March 16, 2020) suspending limitation periods and procedural time periods in Ontario proceedings (the “Suspension Order”). The Suspension Order provides:
- Any provision of any statute, regulation, rule, by-law or order of the Government of Ontario establishing any limitation period shall be suspended for the duration of the emergency, and the suspension shall be retroactive to Monday, March 16, 2020.
- Any provision of any statute, regulation, rule, by-law or order of the Government of Ontario establishing any period of time within which any step must be taken in any proceeding in Ontario, including any intended proceeding, shall, subject to the discretion of the court, tribunal or other decision-maker responsible for the proceeding, be suspended for the duration of the emergency, and the suspension shall be retroactive to Monday, March 16, 2020.
As discussed below, the Suspension Order could impact key time periods under Ontario’s Construction Act (the “Act”), including time periods for liens and holdback release.
The Ontario government then made an Order requiring all but “essential businesses” to close for at least 14 days (this has been extended until at least April 13, 2020, with likely extensions to follow). Initially, the majority of construction projects were classified as “essential” businesses, and most worksites were allowed to remain open across Ontario.
However, on April 3, 2020, the Ontario government revised the Order to significantly narrow the list of “essential businesses” (the “Closure Order”). As at April 4, 2020 at 11:59pm, only the following construction projects are allowed to remain open in the province:
- Construction projects and services associated with the healthcare sector, including new facilities, expansions, renovations and conversion of spaces that could be repurposed for health care space.
- Construction projects and services required to ensure safe and reliable operations of, or to provide new capacity in, critical provincial infrastructure, including transit, transportation, energy and justice sectors beyond the day-to-day maintenance.
- Critical industrial construction activities required for:
- the maintenance and operations of petrochemical plants and refineries;
- significant industrial petrochemical projects where preliminary work has already commenced; or
- industrial construction and modifications to existing industrial structures limited solely to work necessary for the production, maintenance, and/or enhancement of Personal Protective Equipment, medical devices (such as ventilators), and other identified products directly related to combatting the COVID-19 pandemic.
- Residential construction projects where:
- a footing permit has been granted for single family, semi-detached and townhomes;
- an above grade structural permit has been granted for condominiums, mixed use and other buildings; or
- the project involves renovations to residential properties and construction work was started before April 4, 2020.
- Construction and maintenance activities necessary to temporarily close construction sites that have paused or are not active and to ensure ongoing public safety.
For any construction projects that do not fit into the list of “essential” businesses, the Closure Order permits temporary access to the project for the purposes of, among other things, security services, inspections/maintenance/repairs, and performing work to comply with any applicable law.
For any construction projects that fit into the list of “essential” businesses, the Closure Order requires the person responsible for a project to ensure that it operates in accordance with all applicable laws, including the Occupational Health and Safety Act. In addition, the person responsible for a project must operate in compliance with the advice, recommendations and instructions of public health officials, including any advice, recommendations or instructions on physical distancing, cleaning or disinfecting.
Impact of the Suspension Order and Closure Order
Although there has been significant debate on this issue, there seems to be a general consensus in the legal community and construction industry that the Suspension Order suspends (as at March 16, 2020) the deadlines for the preservation and perfection of liens set out in sections 31 and 36 of the Act. 1
The suspension of deadlines to preserve a lien also impacts the release of statutory holdback, as provided for in the Act, which could seriously impact the flow of funds through the construction pyramid.
With the ongoing effects of the Suspension Order and the recent changes to the list of “essential” businesses under the Closure Order, it is anticipated that parties will continue to preserve and perfect liens within the deadlines set out in the Act. It is also anticipated that until the COVID-19 emergency is resolved, the release of statutory holdback will continue to be impacted.
Goodmans understands that certain trade groups and legal associations are seeking direction from the Ontario government about the effect of the Suspension Order on construction projects, including whether modifications need to be made to the Suspension Order to allow timelines under the Act to be reinstated, in whole or in part.
Goodmans will continue to monitor developments, and will provide further updates as information becomes known.
1 The debate surrounds whether the Suspension Order effectively operates to suspend limitation periods (under paragraph 1) or time periods in an Ontario proceeding (under paragraph 2).
CleantechOn July 2, 2020, the federal government published a discussion paper entitled Carbon Pollution Pricing: Considerations for Protocol Development in the Federal Greenhouse Offset System (the “Proposal…
EnvironmentalThe Province of Ontario recently announced that the implementation of the new Excess Soil Regulation, O. Reg 406/19: On-Site and Excess Soil Management (O. Reg 406/19), would be delayed as a result of…
Construction and InfrastructureAn overview of two significant developments regarding limitation periods and procedural time periods, and the expansion construction projects considered "essential…
Construction and InfrastructureThe COVID-19 pandemic has affected industries across the globe, and the construction industry is no exception. This update addresses recent events that have impacted the construction industry in…
Construction and InfrastructureHoward Wise, is a co-author of Construction, Builders’ and Mechanics’ Liens in Canada, 8th Edition.Ontario’s Construction regime has gone through several significant changes, beginning in July…
Construction and InfrastructureThe new Construction Act changed the requirements for publishing certificates of Substantial Performance in Ontario. This change will likely impact how all members of the construction industry…
Construction and InfrastructureGoodmans LLP acted for HB Construction Co. in respect of the construction of a mine in New Brunswick. The litigation relates to a claim in respect of the installation of mechanical and electrical…
Construction and InfrastructureGoodmans LLP is acting for North America Construction (“NAC”) in its lawsuit against Utilities Kingdom where NAC claims Utilities Kingston owes it and its workers $29 million after its contract was…
RioCan REIT, Allied Properties REIT and Diamondcorp Acquisition and Subsequent Redevelopment of 'The Well'Goodmans LLP acted as counsel for RioCan REIT, Allied Properties REIT and Diamondcorp in connection with acquisition and development of “The Well” mixed use commercial/residential development and in…
Real EstateGoodmans LLP acted for Canada Mortgage and Housing Corporation (“CMHC”), in connection with CMHC’s Rental Construction Financing Initiative (“RCFi”), providing first mortgage construction financing to…
HospitalityGoodmans LLP acted for the Ontario Lottery and Gaming Corporation (OLG) in connection with structuring, procurement strategy and transaction documents, including the project agreements and transition…
Mergers and AcquisitionsGoodmans LLP represented Miller McAshphalt Group in the completion of its acquisition by Colas Canada. The Miller McAsphalt Group is a major player in road construction and bitumen distribution…
News & Events
Banking and Financial ServicesWe are pleased to announce Goodmans LLP has once again received top tier recognition from The Legal 500 Canada in their 2023 Guide released today. Recognition from The Legal 500 is based on…
Banking and Financial ServicesWe are proud to announce Goodmans continues to be recognized by IFLR1000 in its annual guide. Recognition in IFLR1000 is based on a combination of in-depth qualitative research and…
Construction and InfrastructureWe are delighted to announce that the Lexpert Special Edition: Infrastructure has once again recognized Goodmans LLP, with 7 Goodmans partners recognized named among Canada's top-ranked…