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Ontario lien act review experts welcomed by industry

0 418 Government

by Lindsey Cole

No matter where industry leaders fall on prompt payment legislation, they are encouraged by the province’s announcement of an expert review of the Construction Lien Act, which will include the examination of payment issues.
Ontario lien act review experts welcomed by industry

"We've been pushing for a lien act review for something like 15 years, and it is a payment act," says Clive Thurston, president of the Ontario General Contractors Association (OGCA). "The attorney general's office made that very clear."

For Eryl Roberts, president of the newly-formed Prompt Payment Ontario (PPO) organization, it's a chance to discuss all the issues.

"PPO has always believed that the issue of prompt payment should be dealt with separately from the lien act, but the review...with its emphasis on timely payment, fair distribution of risk and dispute resolution is a step in the right direction," he says.

"The fundamental objective of PPO is to get the government to enact prompt payment for Ontario's construction industry. There are many forms it could take."

Bruce Reynolds has been selected as counsel to conduct the review, along with partner and co-counsel Sharon Vogel and a legal team from Borden Ladner Gervais (BLG) LLP Construction Law Group.

Reynolds is a senior partner at BLG and a leading expert in construction law, representing various participants in the construction industry. He was chosen because of his in-depth experience and "scholarship in the field."

"I'm fully confident in the abilities of Mr. Reynolds and his team," adds Thurston.

"They know the industry and they know this issue, so we're very optimistic that we can get this done. We look forward to working with him to resolve the many issues affecting consultants, subtrades, generals and owners when it comes to fair and equal payment conditions that respect everyone's right to be paid for their work in a timely manner."

The review was launched in response to stakeholder concerns related to prompt payment and "effective dispute resolution in Ontario's construction industry, such as encouraging timely payment for services and materials, and making sure payment risk is distributed fairly," states the province.

The idea of a review largely stems from Bill 69, the Prompt Payment Act, which was referred to the Standing Committee on Regulations and Private Bills and set aside in April 2014, not making it to the legislature for third reading. From there, questions swirled in the industry about whether prompt payment should be kept separate from a lien act review or included in the mix.

"When Bill 69 died in committee...the government very rightly recognized that having two payment acts was going to be ridiculous and it wouldn't work," explains Thurston.

"So the best answer was to do the lien act review with serious consideration being given to issues that had been raised during the prompt payment discussions. OGCA definitely feels that is the best way to go."

The review will likely be complete by December 2015 and will involve consultation with the industry, followed by a report to the province, which will include the results of the process, advice and recommendations from Reynolds.

"The government made it very very clear that this is a payment act and I think logic tells anyone, that if you're going to have a payment act you can only have one," states Thurston. "There's no way you can have two. It's redundant."

However, Roberts says there may be many avenues this review could take.

"One of the questions the review should ask is whether there is a need for separate treatment of prompt payment. PPO believes there should be," he explains.

"The concern with incorporating prompt payment into the lien act itself is the history of previous failures at amending the CLA (Construction Lien Act). We do not want to have prompt payment mired in that same swamp."

Ian Cunningham, president of the Council of Ontario Construction Associations (COCA), shares a similar view.

"Clearly prompt payment is front and centre in this review," he says.

"This review was promised almost a year ago. This is a piece of encouragement for sure. We're concerned obviously that general and trade contractors aren't being paid in a fair and timely way. The announcement talks about extensive consultations, we'll certainly be involved in that. Prompt payment aside, COCA has been advocating an overhaul of the construction lien act...for about 20 years. This is long overdue."

Cunningham, Roberts and Thurston all agree participation in this process is vital in order to get the industry's voice across.

"PPO will participate fully in the review on its own behalf, co-ordinating its members' submissions and consulting with other stakeholder groups," Roberts states.

"The key now is for the industry to come together, put aside their differences, and work together collaboratively to make this work," adds Thurston.

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