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Changes are Coming to the Construction Lien Act
Posted: Jan 09, 2018

Changes are Coming to the Construction Lien Act


The Sault Ste. Marie Construction Association is pleased with recent provincial government action to address a problematic issue plaguing the construction industry, late payments.


Delinquent payments are a significant barrier to growth that leads to lower levels of employment, less investment in projects and ultimately a higher cost of doing business.


Bill 142, also known as the Construction Lien Amendment Act, was unanimously approved at Queen’s Park in December.


The Construction Lien Amendment Act assists in the resolution of payment delays by streamlining the process to ensure the flow of money from owners to general contractors to sub-contractors moves in a timely manner.


Additionally, the act simplifies the adjudication process, which can be complex and time consuming.


The original Construction Lien Act was introduced in 1983 and 34 years later it has undergone a significant modernization.


The new law is the first of its kind in Canada. It became a reality thanks in part to consultation with the Council of Ontario Construction Associations (COCA) and its members, such as the Sault Ste. Marie Construction Association (SSMCA).


“We are pleased with the action taken by the province on an issue I hear about frequently from my membership,” said Adam Pinder, Sault Ste. Marie Construction Association Executive Director.


“Industry experts needed to play a significant role in this process and I’m glad our voices were heard. Effectively communicating the views and concerns of our membership is a crucial aspect of our role as a construction association.”


COCA and its members like the SSMCA have advocated for prompt payment legislation for a number of years. Advocacy work included providing advice for a report on Construction Lien Act reform, formulating submissions for a review of the act and taking advantage of Queen’s Park lobby days to voice concerns about this issue to the provincial government.


For further details, please contact:
Adam Pinder
Sault Ste. Marie Construction Association, Executive Director or (705) 255-3712


Construction Lien Amendment Act – Questions and Answers

How much of your members’ time is spent dealing with payment issues? 

Pinder: Issues in receiving payment, within the terms set out in the contract, is the most significant issue I hear from the members of the Sault Ste. Marie Construction Association on a regular basis.  It’s a huge problem faced by everyone from General Contractors, to sub-trades, and to suppliers. Between 2002 and 2013, the average collection period in construction rose from 57 to 71 days.

What triggers the start of the prompt payment process?

Pinder: Under the new legislation, an owner is obligated to pay the general contractor within 28 days of receiving the invoice.  The general contractor is required to pay the subcontractor within 7 days after receiving payment from the owner.  The subcontractor is required to pay other subcontractors within 7 days. The 7 day period continues until all parties involved in supplying services or materials for the project are paid.

Should any member of this chain not be paid under the prescribed timelines, it will allow them to begin other processes to secure the money that is rightfully owed to them.  This includes an adjudication process, which will allow for expedited resolutions to disputes in an attempt to avoid going though costly and lengthy litigation.  The timeline to file a lien on a property has also been extended to 60 days to provide a contractor or supplier with adequate time to file once they realize there is a potential problem with payment.

What impact will this legislation have on the enforcement mechanism, the adjudication process?

Pinder: We are hopeful that the adjudication process will provide a mechanism for legitimate disputes to be settled in an efficient timeline that provides minimal disruption for all parties involved.  The adjudication process has proven to be successful in other jurisdictions, such as the United Kingdom and Australia, in significantly reducing the number of cases that go to litigation.

Where does this issue go from here?

Pinder: The supporting regulations to back the Construction Lien Amendment Act still need to be completed and there will need to be appropriate timelines made to completely implement these changes.  There is still a lot of work to do across the province for our industry, but the passing of this act is a giant step in the right direction for the entire construction community.