Construction lawyers attending a recent seminar previewing the implementation of Ontario’s new Construction Act were told they’d better be prepared for long days and sleepless nights as the full implications of the sweeping legislative changes become better understood.
With many of the measures due to come into force in less than two months, the construction sector, including its lawyers, are not prepared, the 150 delegates attending an Osgoode Professional Development session in Toronto and via webinar April 30 were told.
Three panel members representing project owners praised the sector-wide collaboration that led to Construction Lien Act reforms and said the new measures will bring more stability and fairness to the sector. But at this point, with much of the legislation due to take effect July 1, their peers need to roll up their sleeves and ensure staffers and project partners understand what will change, they said.
The Construction Act implementing lien and holdback reforms and introducing a prompt payment regime and a dispute-resolution mechanism was approved by the Ontario legislature last December.
“It is a fast ramp-up,” commented panel member Eric Tilley, senior vice-president of legal services at Infrastructure Ontario. “It is going to be trial by fire for everybody and it is going to get interesting.
“Will there be a learning curve? Absolutely. What I think you’ll hear from all three of us, the key thing keeping us up at night, is how are we going to implement…the changes we have seen through the act in the time frame available.”
Most of the new lien and holdback provisions will become law in July while prompt payment, linked with the new adjudication system that will resolve payment and other disputes, will be implemented Oct. 1, 2019.
We are going out to our members again but nobody is paying any attention
— Clive Thurston
Ontario General Contractors Association
Tilley and fellow panellists Glenn Clarke, controller of plant at the Simcoe Muskoka Catholic District School Board, and Jerry Paglia, director of the procurement office at the Regional Municipality of York, highlighted such problems as monitoring two streams of contracts during the transition period from the old system to the new, ensuring team members were keeping track of new countdown periods for payment obligations and adjudication notices, obtaining approvals throughout large ownership entities, undertaking complete revisions of major components of contracts, dealing with contracts in multiple jurisdictions and many more.
“Even with a legal background some of these things are quite complex,” commented Paglia, who said York Region does not currently have a prescribed payment timeline.
“People are used to doing the things they are used to doing. If lawyers are having trouble figuring things out and adapting, there will be difficulty going down the chain of command.”
Ontario General Contractors Association (OGCA) president Clive Thurston attended the session and said his members did not seem prepared.
“It has been flying under the radar,” he said. “The OGCA has been putting out bulletin after bulletin, and we did a webinar but only 80 people signed up. These changes are coming into play in two months. We are going out to our members again but nobody is paying any attention.
“There are some key things, the trust provisions, that is a major, major change to how we have to manage our projects. But if people don’t listen, come July 1, they are going to be wondering what the hell happened.”
The three owner representatives stressed the need for more integrated contract administration inside and outside their organizations. Even new definitions of such terms as substantial performance, direct costs and an “improvement” will have to be understood and communicated.
“We are going to have multiple forms of contracts and different regimes applying at the same time, so from my team’s perspective we need to have the right tools in place to address two different types of contracts for the two timelines and more importantly be able to explain to our delivery teams and our consulting teams why they are different, how they apply, over multiple years,” Tilley said.
Commented Paglia, “We are still all figuring this out. We won’t know how this all looks put together until this actually happens.”
More staff might be needed, he said.
“What all of this means is we need to be more agile and react more quickly. We will probably need more staff. We could need more staff. The idea is more hands on deck to deal with these issues as they arise.”
Thurston was critical of that approach.
“I get really concerned when I hear, ‘let’s hire more staff,’ ” he said. “The key is better training, better co-operation with the industry, better upfront preparation.”
Tilley commented, “We are going to have to have a mind shift in addressing things we see happening during a construction period. It is going to have to involve more real-time reporting and developing materials.
“I don’t want to have a client come to me and say, ‘we’ve got this issue, we need all the paper on that and we need it in four days.’ ”