Ontario Carves out Construction Act from Limitation Period Suspension

Ontario’s Construction Act is Carved Out from Limitation Period Suspension

On March 20, 2020, Ontario passed regulation 73/20 under the Emergency Management and Civil Protection Act to suspend all statutory limitations periods and time periods to take procedural steps. The suspension was retroactive to March 16, 2020 and was intended to preserve limitations periods that would have otherwise been impacted by the COVID-19 pandemic.

The wording of the regulation as of April 8, 2020 read as follows:

  1. Any provision of any statute, regulation, rule, by-law or order of the Government of Ontario establishing any limitation period shall be suspended for the duration of the emergency, and the suspension shall be retroactive to Monday, March 16, 2020.
  2. Any provision of any statute, regulation, rule, by-law or order of the Government of Ontario establishing any period of time within which any step must be taken in any proceeding in Ontario, including any intended proceeding, shall, subject to the discretion of the court, tribunal or other decision-maker responsible for the proceeding, be suspended for the duration of the emergency, and the suspension shall be retroactive to Monday, March 16, 2020.

On April 9, 2020 the Attorney General (“AG”) of Ontario clarified that as of April 16, 2020, the Construction Act is carved out from the province’s suspension of statutory limitation periods and procedural steps, and amended O. Reg. 73/20 accordingly.

The AG’s Order in Council amended Ontario Regulation 73/20 to explicitly exempt both the Construction Act and the Niagara Escarpment Planning and Development Act from having their statutory limitations periods and procedural timelines suspended.

The Order reads as follows:

Construction Act

  1. On and after April 16, 2020, sections 1 and 2 do not apply to provisions of the Construction Act or of the regulations made under it if the provisions establish a limitation period or period of time within which any step must be taken in a proceeding, including an intended proceeding. 

This change is the AG’s answer to the construction industry’s concern that the suspension of limitations periods and procedural deadlines applied to lien deadlines. The extension of lien deadlines in turn arguably suspended the deadline to pay holdback on construction projects across Ontario.

In a letter dated April 9, 2020, AG Doug Downey confirmed the intentions of the regulation and the problem it was designed to fix:

The emergency order has been amended to lift the suspension of limitation periods and procedural time periods under the Construction Act. This will allow for the release of holdback payments to contractors and subcontractors in the normal course, helping to resolve a potentially significant cash flow problem as a result of the order for the construction industry. The suspension will be lifted on April 16, 2020, to give the industry time to prepare for these changes. Once lifted, parties will have the same amount of time to meet a deadline that had been remaining before the suspension began on March 16, 2020.

Construction industry stakeholders across Ontario now have until April 16, 2020 to prepare for the regulation to come into effect.

Published by

Ivan Merrow

Construction Lawyer | JD MBA | Let's talk about new tech, construction, strategy and law | Personal opinions only, not legal advice

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