Background

The Construction Act plays a critical role in Ontario’s economic development, increasing housing supply and building infrastructure projects such as public transportation and hospitals. As of 2022, there were 588,000 people employed in Ontario’s construction industry, comprising 7.6% of Ontario’s total workforce. That year, the construction industry contributed $57 billion (7.4%) to Ontario’s GDP.

Ontario has always been a leader in the modernization of construction lien legislation. The first Canadian lien acts came into force in Ontario and Manitoba in 1873 and Ontario’s statute has undergone regular improvement ever since, keeping pace with the increasing size, complexity, and sophistication of the construction industry in this province.

The Act has several purposes. Its primary purpose is to prevent an owner of lands, whatever the owner’s estate, from improving land without paying for it. Lien legislation is remedial in nature. It is in derogation of common law. Importantly, however, as the Supreme Court of Canada has long recognized, modern lien legislation must also protect owners. The protection of owners is at the heart of the holdback scheme for example. Owners must always be able to disencumber their land and know the precise extent of their obligations to non-privies.

The Act encourages fair and honest dealing. These values are at the heart of Part II.1 of the Act and the province’s successful prompt payment and the interim adjudication regime. The Act must enable statutory rights to be enforced at the least possible expense and in as summary a fashion as is possible.