Canada: Construction Lien Act Review

Last Updated: May 5 2016
Article by Edward G. (Ted) Betts

Most Read Contributor in Canada, October 2018

The long, 32 year wait to reform Ontario's Construction Lien Act may soon be over. The Province's independent expert review of the Act is expected to submit its final report and recommendations in early May.

When the Act first became law, it was seen as a compromise evolution of the former Mechanics' Lien Act. Since enacted in 1983, the Act has not been significantly amended or updated, despite several attempts to "modernize" it.

In 2015, the Ontario government launched a review of the Act, and we have been monitoring and providing commentary on this CLA reform process. The process of that review and reform is now winding up and Gowling WLG invites you to join us at the Spring Construction Law Program on June 7th, 2016 where we and other industry professionals will be discussing the recommendations of the Expert Review and the reform of the Construction Lien Act.

Background of Expert Review

In February 2015, the Ontario Ministry of the Attorney General and the Ministry of Economic Development, Employment and Infrastructure initiated an independent expert review of the Act. The expert review would be conducted by one of the elder statesmen of the construction sector, Bruce Reynolds, and co-chaired by his partner Sharon Vogel.

The objective of the Expert Review was to examine the effectiveness of the Act in achieving its policy objectives within the modern context, and in particular addressing the issue of promptness of payment and the effectiveness of dispute resolution under the Act.

In the July 2015, the Expert Review issued the "Expert Review of Ontario's Construction Lien Act Information Package" which summarized their process of review, and provided a comprehensive list of issues and provisions of the Act that they proposed reviewing. They also set up a website here to provide public transparency and easy access to the Information Package, and all documents published by them.

Throughout the summer and fall of 2015, the Expert Review consulted with a very broad spectrum of industry stakeholders, including the Construction and Infrastructure Law Section of the Ontario Bar Association, industry associations, municipalities, school boards, unions, and many many other public and private organizations in soliciting views and comments on the Act and possible areas of review, reform and modernization for the Review to consider in preparing its recommendations to the Ministries. The Expert Review received written submissions from, and conducted consultation interviews with, over 40 representative organizations. The submissions and summaries of the consultation interviews are publicly accessible through the Expert Review website.

The Expert Review established an advisory group of senior and experienced legal and industry professionals to assist in its examination of the needs of the industry and how best to address them. They have also twice gone back out with additional issues for consideration, which to us indicates just how thorough their review is going to be.

The next and last stage of this part of the reform process will be the formal recommendation which are anticipated to be submitted by the end of April 2016. This will also be made public and posted on the website.

Issues Addressed

The review of the Act appears to have been very thorough and comprehensive, indicative of the seriousness to which the Expert Review has taken up its task, as well as, hopefully, the government's intent to modernize the Act.

At this point in time, we do not know what recommendations will be made. Nor do we know what recommendations the Ministries will eventually enact in law.

However, some aspects of the recommendations appear to be clear. I think it is fairly safe to predict that we can expect to see specific recommendation for the following reforms:

  1. Prompt payment

This was the initial impetus that drove the push for reforming the Act, and launching the expert review. In 2014, a private member's bill – Bill 69, the Prompt Payment Act – was introduced and eventually made it to third reading before different stakeholders started to pay attention and challenged many technical and substantive aspects of the Bill.

When the Government decided to shelve Bill 69 (and it eventually died on the order paper when the election was called), the Ministries committed to consider prompt payment reform in a broader context of reforming the Construction Lien Act more broadly. That commitment was confirmed with the launch of the Expert Review process. I do not expect that the recommendations, or any legislation or amendments that come out of the recommendations, will look anything like Bill 69, but many of the issues from Bill 69 will be addressed.

  1. Adjudication

A longstanding and growing problem with the Act is the process for dispute resolution and a longstanding and growing demand from our sector is for an efficient, effective, timely, and relatively inexpensive process for resolving disputes. It is simply too costly, too lengthy and too complicated a process to resolve disputes. This has led to a proliferation of mediation and arbitration dispute resolution processes, but these too fall short of a full solution for adjudicants.

There are many alternative adjudication processes employed outside of Ontario, and the Expert Review has thoroughly examined many of these. I am confident that the Expert Review will recommend Ontario follow the alternatives from one or more of these other jurisdictions. They may even go as far as making specific proposal for an alternative dispute resolution procedure.

  1. Updating for modern project structures

The Act clearly does not fit very well for a whole host of different types of projects and project structures that were never contemplated in 1983. The Act needs to be updated to address the unique issues raised by P3 and other project finance structures, and very large projects, for example. It equally does not work well for the smallest projects and home renovations, to which it nevertheless applies.

I think we will see at the very least some tweaking to make the Act more responsive to today's projects, if not revamping of how the Act applies to some types of projects and full exemptions for others. The Act needs to be more flexible for existing and future project developments.

  1. Plumbing

The Act has not been amended in any significant way since it was first enacted. Much of the Act was originally drafted to address issues which are not of the same concern today or which have been addressed in different ways through court decisions. A lot of the processes and basic plumbing of the Act needs to be modernized to catch up with present day realities and case law over the last 3 decades, and how the Act interrelates with other statutory regimes like bankruptcy and insolvency law. We will certainly see many technical reforms recommended by the Expert Review.

Next Steps

The Expert Review's recommendations are only the first step in the reform process. Ultimately, there will be legislation that needs to be passed by the Ontario Legislature. As with every piece of legislation, there will be many more stages to go through, of course, including readings in the legislature, legislative committee reviews, and public consultations.

Very soon, we could be facing a brand new construction world.

The recommendations of the Expert Review and the reform of the Construction Lien Act will be the subject of the Gowling WLG Spring Construction Law Program on June 7, 2016. If you are interested in hearing an analysis of the recommendations from industry and Gowling WLG professionals, and in participating in a robust discussion about the proposed reforms, please join us for breakfast and sign up for our the program.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions