What Ontario Construction Workers Need to Know About Bill 216 Changes

• Ontario’s Building Ontario For You Act (Bill 216) has introduced important updates to the Construction Act. These changes are designed to make the industry fairer and more efficient for everyone – from site workers to subcontractors and project managers. Key modifications included:

1. Definition Updates

Clearer Rules on Pricing

The definition of “price” now allows for regulations to specify a price for a contract or subcontractor other than the actual market value of supplied services or materials, in cases where the parties don’t agree to a different price. For instance, if you’re a subcontractor providing materials or services and can’t agree on a price with the general contractor, regulations can step in to determine a fair market price.

Written Notice of a Lien

This definition has been expanded to include a copy of a claim for lien registered or given under specified clauses.

2. Proper Invoice Requirements

Geeting paid on time has also become easier, as a payee of an invoice must now notify payor in writing if an invoice doesn’t meet proper requirements, and if they do not the invoice is considered valid. This means less change of payment delays due to minor invoice mistakes.

Section 6.1 of the Construction Act has been revised to adjust the criteria for what constitutes a proper invoice under Part I.1 (Prompt Payment) of the Construction Act. Notably, an invoice that doesn’t meet these requirements will be deemed proper unless the owner notifies the contractor in writing of the deficiency and what is required to address it within a specified time.

Upon receipt of an invoice, it is incumbent on the payee to duly note any issues with the invoice and to promptly bring these issues to the payor’s attention.

3. Adjudication Process Enhancements

Several changes have been made to Part II.1 (Construction Dispute Interim Adjudication) of the Construction Act. Resolving payment dispute promptly has been streamlined in order to provide broader options with adjudication.

• Private Adjudicators – Parties can now opt for a private adjudicator instead of one from the Authorized Nominating Authority’s Registry, with fees agreed upon by the adjudicator and the parties.
• Scope of Adjudication – The list of matters eligible for adjudication will be specified by regulations, which may also allow for adjudication between parties to different contracts or subcontracts related to the same improvement.
• Consolidation of Adjudication – Any party involved can now require the consolidation of multiple related adjudications, broadening the previous provision that allowed only contractors to do so.
• Jurisdictional Objections – A new section provides a mechanism for parties to object to an adjudicator’s jurisdiction or to claims that the adjudicator has exceeded their jurisdiction.
• Determination Corrections – Another new section allows for corrections to an adjudicator’s determination after it has been communicated to the parties.

4. Holdback Payment Reforms

Holdback payments have new rules too, with the general principle that holdback payments are to be paid annually, removing the older rules that allowed holdback payments to be skipped. For instance, waiting for your holdback payments until the end of a multi-year project is no longer an option. Sections 26 to 26.2 of the Construction Act have been repealed and replaced with new holdback payments rules:

• Annual Holdback Payments – The re-enacted section 26 of the Construction Act mandates annual payment of the holdback, following specified rules and restrictions.
• Non-Annual Holdback Payments – The section also addresses scenarios where holdback isn’t paid or payable on an annual basis.
• Repeal of Non-Payment Provisions – Section 27.1 of the Construction Act, which permitted non-payment of holdback in certain circumstances, has been repealed without replacement.

Section 87.4 of the Construction Act outlines the application of these amendments to ongoing and future improvements, ensuring a smooth transition to the updated legal framework. These amendments reflect Ontario’s commitment to modernize the Construction Act, aiming to streamline processes and promote equitable practices within the construction sector, while bringing clarity as to when one is to be paid.

These updates mean more clarity on predictable paydays and faster dispute resolution, making your job less stressful and more secure. The amendments brought by Bill 216 (Ontario’s Building Ontario For You Act) aim to project hard work, as well as to promote fairer and more efficient processes for everyone.

If you have any questions about how these changes will impact your work or your project, it would be our pleasure to answer your questions and to assist you.