Ontario Construction Act Exempt from Suspension of Limitation and Procedural Time Periods

On April 9, 2020, the Attorney General of Ontario amended the Order in Council made under s. 7.1 of the Emergency Management and Civil Protection Act (the “EMCPA”) that had suspended statutory limitation periods and procedural timelines effective as of March 16, 2020, such that the suspension will no longer apply to the Construction Act. The regulation amending the Order, can be found in full here, with the relevant section reading: 

Construction Act
4. 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.

Section 7.1(6) Of the EMCPA sets out how to treat a limitation period or procedural timeline once the suspension period ends. The section reads, in part, that “…the limitation period or period of time resumes running on the date on which the temporary suspension ends and the temporary suspension period shall not be counted.” So, once the suspension of the limitation period and timelines are lifted on April 16th, parties will have the same amount of time to meet a deadline that had been remaining before the suspension began on March 16, 2020.

For the month that the suspension was in effect, the deadlines to preserve and perfect construction liens were suspended, which had the knock-on effect of preventing owners from releasing statutory holdback as long as the lien period remained unexpired. The suspension order, coupled with certain construction projects being deemed essential services, may have had the unintended consequence of creating cash flow issues within the industry. The Ontario government has recognized that issue, and the amendment to exempt the Construction Act is designed to permit cash to flow through the construction pyramids on projects again. With lien periods no longer being suspended, note that all steps required to preserve and perfect a lien can be done remotely – see our previous blog here.

For the latest information, please visit our COVID-19 hub, or if you have questions about the impact of COVID-19 on your business, please contact your McCarthy Tétrault trusted advisor or one of the authors.

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