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Ontario’s Construction Lien Act: Special Client Update

The Ministry of the Attorney General has just released the expert report of Bruce Reynolds and Sharon Vogel based on their comprehensive review of Ontario's Construction Lien Act. The Report, entitled Striking the Balance: Expert Review of Ontario's Construction Lien Act (the "Report"), can be found online.

The Report was produced following extensive research and consultation with over 60 stakeholders from across Ontario's construction industry. Mr. Reynolds and Ms. Vogel invited and received over 70 written submissions from industry groups and held extensive stakeholder consultations over the course of three months.

In addition, Mr. Reynolds, Ms. Vogel and their team at BLG consulted with construction law experts from around the world about their experiences. The recommendations take into account the nature of Ontario's construction industry and legal landscape, and the recommendations drew upon the foundational knowledge and experience of other countries including the United States, the United Kingdom, Australia, Singapore, Malaysia, and Hong Kong.

An advisory group of subject matter experts was also invited to participate in five meetings with Mr. Reynolds and Ms. Vogel for the purpose of obtaining input in respect of the issues and working to achieve consensus on certain fundamental issues.

The proposed legislation would address the following key elements of reform identified in the report:

  • Modernization of the construction lien/holdback regime;
  • Promptness of payment; and
  • Modernization of construction dispute resolution including through the use of adjudication.

A summary of the recommendations can be found in Chapter 13 of the report.

After careful consideration of the report and recommendations, Attorney General Yasir Naqvi has said that:

"Mr. Reynolds' and Ms. Vogel's report is a fair and thoughtful assessment of the complex challenges faced by today's construction industry. It provides balanced recommendations based on diverse stakeholder opinions. I would like to thank them for their work. I look forward to working with industry groups as we draft legislation that reflects their needs."

To ensure the proposed legislation is fair, balanced and reflective of diverse stakeholder opinions, the Attorney General and his Ministry has committed to a process to gather feedback on the Report's recommendations by meeting with industry groups throughout the fall of 2016.

The implications of the Report's recommendations to Ontario's construction industry are significant. Moreover, other Canadian provinces await these significant developments in Ontario. Should you have any questions in relation to the Report or the recommendations, please do not hesitate to contact us.