TORONTO — Bill 142, the Construction Lien Amendment Act, was approved in third reading in the Ontario legislature today (Dec. 5), meaning that with royal assent, Ontario will have a new Construction Act that includes a prompt payment regime.
The other two components of reform are modernization of construction lien and holdback rules and the introduction of an adjudication system.
The new prompt payment system will create payment timelines for a construction project. Once they receive an invoice, owners would be required to pay general contractors within 28 days.
Bill 142 was introduced in May. Second reading approval came in October.
Construction lawyers Bruce Reynolds and Sharon Vogel had been commissioned by the Ontario government to consult with stakeholders and their report, submitted in September 2016 and titled Striking the Balance: Expert Review of Ontario’s Construction Lien Act, formed the basis for much of the Bill 142 reforms.
Advocacy group Prompt Payment Ontario (PPO) said in a media statement the milestone “marks a pivotal moment wherein the rights and securities of Ontario’s workers will now be held to a much higher standard.”
PPO said the bill’s adjudication measures will significantly reduce payment delays, which have been identified as the biggest barrier to investment, improved productivity and increased employment in the construction industry.
“This legislation could not have been introduced at a better time, as higher interest rates will make delayed payment unbearable. We hope that this groundbreaking piece of legislation will set the stage for change across the country.” said Ron Johnson, director of PPO, in the statement. “We would like to thank the government for taking this issue seriously and hope that we will see the immediate proclamation of this important piece of legislation.”
The bill received unanimous support in third reading.
Reynolds commented at the recent Construct Canada conference in Toronto that once Bill 142 was passed, the next step for legislators would be to create regulations under the new law, a process that could begin in the new year.
Reynolds said the modernization component of the legislation would come into force six months after the cabinet issues an order in council and the prompt payment and adjudication sections would come into force a year after the order in council.