The 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 publish, search for, and locate certificates of Substantial Performance for construction projects across the province.
Under the Construction Act, two elements must be satisfied for a project to achieve Substantial Performance:
- When the [project] or a substantial part thereof is ready for use or is being used for the purposes intended; and
- When the [project] is capable of completion or, where there is a known defect, correction at a cost of not more than:
- 3 per cent of the first $1,000,000 of the contract price,
- 2 per cent of the next $1,000,000 of the contract price, and
- 1 per cent of the balance of the contract price.
After the contractor applies for Substantial Performance on a project, the payment certifier will determine whether those two elements have been satisfied. If they have, the payment certifier will certify Substantial Performance by signing a certificate in the prescribed form (the “Certificate”). If there is no payment certifier, the owner and contractor will make the determination jointly and will both sign the Certificate.
Publishing Certificates of Substantial Performance
A Certificate has no effect until a copy is published in a “construction trade newspaper”. This is an important step, as lien periods under the Construction Act are tied to the date on which a Certificate is published.
Under the previous Construction Lien Act, the definition of “construction trade newspaper” was fairly strict. It was limited to printed newspapers with frequent publication across Ontario:
“construction trade newspaper” means a newspaper having circulation generally throughout Ontario, that is published no less frequently than on all days except Saturdays and holidays, and in which calls for tender on construction contracts are customarily published, and that is primarily devoted to the publication of matters of concern to the construction industry.
As a result, Certificates were published in the Daily Commercial News, which was one of the only newspapers in Ontario that met the strict criteria. This gave all members of the construction industry a reliable source to search for Certificates issued across the province.
Under the new Construction Act, the definition of “construction trade newspaper” has been expanded to include newspapers in electronic format:
“construction trade newspaper” means a newspaper,
- that is published either in paper format with circulation generally throughout Ontario or in electronic format in Ontario,
- that is published at least daily on all days other than Saturdays and holidays,
- which calls for tender on construction contracts are customarily published, and
- that is primarily devoted to the publication of matters of concern to the construction industry
Over the past month, Goodmans has noticed that web-based companies are now publishing Certificates online. These companies are alternatives to the Daily Commercial News. They are advertising to lawyers and members of the construction industry alike, and offer certain “add-on” services once the Certificate is posted.
The impact of the new definition of “construction trade newspaper” is apparent. Owners, contractors, subcontractors, and lawyers will likely need to check multiple sources – not just the Daily Commercial News – to determine whether a Certificate has been published for a given project.
As such, members of the construction industry will need to implement a more rigorous approach to searching for Certificates to ensure that lien rights are not lost or compromised.
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…