Construction Lien Act review: Bruce Reynolds requests and receives extension to March 31 for his report as he meets with trade association representatives

Bruce Reynolds

Construction Lien Act reviewers Bruce Reynolds and co-council Sharon Vogel have been meeting with representatives of different construction associations and interest groups as they gather input into their recommendations for the provincial government.

Reynolds says he has requested and received the go-ahead from the government to extend the date for delivery of his report by three months until March 31, 2016.

Some of the key associations have asked for additional time in order to “develop a consensus position to communicate to us,” and the number of issues to be reviewed has increased beyond what he anticipated when he started the review earlier in the year, he said. “My assessment is there are now more than 70 issues on the table,” reflecting the complexities of reviewing legislation that last was significantly updated in the 1980s. He said he is about two-thirds through the stakeholder consultation process and as he meets with associations reflecting different interest groups, he discovers other issues that need to be added to the list.

The Council of Construction Associations of Ontario (COCA) said in its weekly newsletter that a delegation from the COCA CLA task force met the reviewers on Nov. 9 to discuss the recommendations in a report submitted in October.

COCA said in a newsletter report that highlights of its submissions are:

  • That prompt payment legislation is COCA’s very highest priority;
  • That holdback must be deposited into a separate trust account;
  • That funds for projects that have a value in excess of $5 million 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
  • That there must be provision for the mandatory early release of holdback at the request of the sub; and
  • That lien claimants must be given priority of over mortgagees

Ted Dryer, Grand Valley Construction Association board member and construction lawyer with Kitchener-based Marodin Snyder LLP, led the preparation of COCA’s report.

Prompt Payment Ontario (PPO) also has reported on its consultation with the CLA reviewers. “We had a four hour meeting with Bruce Reynolds and Sharon Vogel to discuss the key issues they identified in the information package, and some identified by PPO, such as the impact on benefit/pension plans,” said PPO spokesperson Sandra Skivsky. ‘It was an informal and free ranging discussion on how the various elements for Payment Security would work with Prompt Payment principles.”

Skivsky said: “The point was made that, first of all it is PPO’s position that without a legislated prompt payment system in Ontario any changes to the Lien Act will not be sufficient to ‘fix’ the issues that are plaguing the construction industry. The problem we are focused on is moving the money through the construction pyramid in a transparent and timely manner with an equitable distribution of risk. We believe that prompt payment legislation will reduce the reliance on the CLA as a remedy for payment issues, something the CLA was not designed to address. Getting paid promptly for work that has been certified as compete is our number one priority.

“Secondly, the reason we brought Bill 69 forward as stand-alone prompt payment legislation is that PPO does realize that the CLA needs to be revamped, however we also believe that doing that is a far more complex and time consuming initiative,” she said.

“And the trade contractors cannot wait years to have their cash flow issues addressed. Therefore we would like to see prompt payment addressed first, perhaps as a part of the CLA, but as a separate section, or in some other manner. The current payment situation in the industry is untenable and has far reaching socio-economic implication downstream of the trade contractor and the need for it is immediate.

“That said, it is my opinion that meeting went very well with a positive exchange of information. We will be updating the group in more detail in the coming weeks.”


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