COVID-19: Deadlines Under Ontario's Construction Act Reinstated Effective April 16 | Practical Law

COVID-19: Deadlines Under Ontario's Construction Act Reinstated Effective April 16 | Practical Law

The Ontario government has announced that effective April 16, 2020, the Construction Act will be exempted from the suspension of limitation periods and procedural deadlines.

COVID-19: Deadlines Under Ontario's Construction Act Reinstated Effective April 16

Practical Law Canada Legal Update w-024-9747 (Approx. 4 pages)

COVID-19: Deadlines Under Ontario's Construction Act Reinstated Effective April 16

by Practical Law Canada Corporate & Commercial Litigation
Published on 13 Apr 2020 • Canada (Common Law)
The Ontario government has announced that effective April 16, 2020, the Construction Act will be exempted from the suspension of limitation periods and procedural deadlines.
On March 20, 2020, the Ontario government made an order under section 7.1(2) of the Emergency Management and Civil Protection Act, R.S.O. 1990, c. E.9 (EMCPA) temporarily suspending limitation periods and procedural deadlines for the duration of the 2019 novel coronavirus disease (COVID-19) pandemic emergency. The suspension was made retroactive to March 16, 2020. Practical Law Canada previously covered this development in Legal Update, COVID-19: Ontario Limitation Periods and Procedural Deadlines Suspended.
On April 9, the Ontario government announced that the Construction Act, R.S.O. 1990, c. C.30 would be exempted from the suspension of limitation periods and procedural deadlines. The deadlines will start running again, effective April 16, 2020.
For deadlines that had begun to count down prior to the suspension, they will have as much time remaining as they had when the suspension went into effect on March 16. Effectively, this means that those deadlines are extended by 31 days.

Key Takeaways

The exemption of the Construction Act from the suspension of limitation periods and deadlines means:
  • Deadlines to preserve and perfect lien claims will be reinstated. Given the strict nature of these deadlines, counsel will have to be extremely diligent to make sure that key filing dates are not missed. The failure to preserve or perfect in a timely manner can be fatal to lien rights. Given the closure of many offices and restricted courthouse access, lawyers will have to be particularly diligent during the period of the pandemic.
  • Payment of holdbacks can resume. Holdbacks can only be paid out after all lien claims have expired or been provided for. Liens could not expire as long as the clock had been paused. This was an unintended consequence of the suspension of all limitation periods, and the specific harm that the carve-out for the Construction Act was meant to address. This change will help mitigate some of the cashflow problems that COVID-19 is causing in the construction industry.
  • Procedural deadlines in the Construction Act must be met. Courts are continuing to operate at a reduced capacity. Claimant's counsel will have to watch these deadlines carefully and take steps to move the action forward, particularly if the two-year deadline to set the action down for trial is approaching.
For more on construction lien litigation and deadlines under the Construction Act, see Practice Notes, Construction Lien Litigation: Overview (ON) and Time Periods Under the Construction Act (ON).
For regularly updated information on how legislatures and courts across Canada are responding to the COVID-19 pandemic, see COVID-19: Canada Litigation Updates Checklist.