Notice To Reader:

Please be advised that, subsequent to the publication of this On-demand Webinar on April 14, 2020, the Province of Ontario has issued additional orders that impact the construction industry - including lifting the suspension of limitation periods. The impact of the suspended limitation periods set out here are no longer current, and we refer you to our article titled: " COVID-19: Construction Updates on Ontario's Response". Other elements of this On-demand Webinar, including perfecting liens with limited court access and COVID-19's impact on interim adjudication, may still be relevant to the reader.

For ongoing updates relating to COVID-19 and responses from government, please visit our COVID-19 Resource Centre.

On March 23, 2020, the Province of Ontario declared the construction industry as an "essential workplace" and on the other hand increasing restrictions are being put in place on mass gatherings both by governments and private entities. As the spread of the virus begins to have a ripple effect on the construction industry, and the Province considers additional, escalated actions – this is raising challenging questions and issues for owners, contractors and trades in the construction industry across the Country.

In light of these challenging economic realities, it is now imperative to understand how to protect your payment rights and investments made to construction projects. To help our clients navigate this challenging time, Gowling WLG compiled this webinar designed to give clarity on a range of complex issues arising as a result.

Topics include:

  • Suspension of limitation periods in the Province of Ontario
  • Impact on preserving and perfecting construction liens
  • Limited access to the Ontario Superior Court of Justice on vacating construction liens
  • Impact on payment holdbacks
  • Impact on prompt payment and adjudication
  • Construction projects as an "essential workplace".

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On-demand webinar

Transcript

COVID-19 THE IMPACT OF SUSPENDED LIMITATION PERIODS ON ONTARIO CONSTRUCTION PROJECTS.

Ted: Thank you everybody for joining this webinar from Gowling WLG. We are very happy to have everybody join us. Looks like we've got about 400 signed up for this webinar. Clearly a lot of interest. As we all know our world has been rocked by the spread of COVID-19 pandemic. Governments everywhere, including in Ontario, have taken very strong actions to try to slow the spread and flatten the curve of the disease. Today we are going to look at some very specific and direct impacts of some of the Ontario government's actions on construction work and projects in the Province. We have a lot to discuss today. We're going to focus specifically on the suspension of limitations, restricting access to courts and the impacts this has on lien periods, release of holdback, vacating liens, payment and adjudication, as well as looking at the new updated and severely restrictive list of what is an essential workplace in Ontario and how that impacts construction work in the Province.

We have a lot to discuss and I'm sure you have a lot of questions relating to your specific circumstances. There will be time for some questions. We do ask you to submit your questions using the Q&A feature that is at the bottom of the screen of the Zoom webinar. During the presentation we will try to address your questions, if they aren't being addressed in the presentation itself. If you are not able to we invite you to contact us directly. The webinar itself, the slides that you are going to see and the Q&A, including our answers, will be available in a day or two after the presentation. Shannon, can you move to the next slide?

We are providing as much helpful information as we can but the presentation today is not intended as legal advice and is not intended to address specific individual legal situations. This is a high level overview. It's impossible to cover all of the details of everybody's circumstance. So we would recommend, and strongly consider, contacting your legal counsel, whether that is somebody at Gowling WLG or elsewhere, to discuss your available rights and remedies which will depend on the unique facts of your situation, your contract or subcontract, and the nature of your project. For specific advice, as I said, please contact a qualified legal counsel, in-house or elsewhere. This is of particular importance as every Province and Territory has different legal regimes and it is changing constantly. The situation with the COVID-19 is extremely fluid, changing on a daily basis, and has different Provincial, Federal and Municipal guidelines and laws that are changing all the time. As the situation evolves your best course of action is to consult your specific situations, specifically, and we also have additional resources at our resource center. The link is on the screen right now. You can also go to our website at gowlingwlg.com. We have some excellent construction speakers ahead of you. Their contact information is in the slides and, as I said, these will be available including contact information when it's posted on our website.

To start us off I'll introduce Sahil Shoor. Thank you.

Sahil: Thank you, Ted. Hi, good afternoon everyone. My name is Sahil Shoor. I'm an associate practicing construction and infrastructure law, both solicitor and litigation side, out of the Waterloo region office. I'm going to be speaking to you about the suspension of the limitation periods and the impacts of the suspension order on the preservation and perfection of the construction liens. So Shannon, may I get the next slide, please. On March 20th, 2020, an emergency order was made, suspending the limitation period, for any statute, regulation, bylaw or an order of the Government of Ontario, and this suspension was retroactive to Monday, March 16th, 2020. Paragraph 2 of the order states that any provision of any statute, regulation, rule, bylaw or an order of the government establishing any period of time within which any step must be taken in any proceeding in Ontario, including intended proceeding, shall be subjected to the discretion of the court. There is no definition of the work proceeding and, another important point to note is, the discretion for intended proceedings, or any steps that needs to be taken within a proceeding which is left at the discretion of the court. Next slide, please. That's the order. So the question that I'm going to be looking at does the order extend development deadlines under the Construction Act relating to the lien periods and actions. While I take you through the next several slides looking at both the old regime, prior to July 1, 2018, and the regime after July 1, 2018. I expect the participants in our webinar today, the later rights are the rights which are brought under the Construction Act that provides you rights to both preserve and perfect the lien. I've given you some basic information that when you receive this slide deck you are aware, and just a refresher onto what those lien rights. How do you preserve and perfect those lien rights, depending on whether you are pre-July 1, 2018, or post-July 1, 2018, you will have different dates in order to preserve and perfect your lien, it is 45, 45 pre-July 1, 2018 and 60 and 60, post-July 1, 2018. In order to perfect your claim for a lien you need to commence an action and have a certificate of action issued. Next slide, please.

How do you preserve a lien when an order suspending the timelines has been declared as an emergency, that we looked at on March 20, 2020, retroactive to March 16, 2020. While the plain reading of the order would suggest that the limitation periods may have been put on hold for the time being, like another limitation period, parties and you in particular, should closely monitor the duration of the order suspension and the calculation of the dates and procedural deadlines that will come with it. For example, if you're looking at preserving your claim for a lien, even though an argument can be made that the limitation and the associated timeline has been suspended for some time, in order for you to preserve your claim for the lien, except if it's for a Provincial or Federal government, crown or municipality or premises, you can register your claim for a lien now through the Land Registry Office, which is done electronically, unless the owner is a crown, municipality or a premises, is a railway right of way. To deal with the COVID-19 emergency, what most of the Provincial and Federal governments are now aligned the documents to be served by alternative methods. I've given you the email address and the items you need to include when you are serving the Provincial or Federal crown with your claim for a lien. Next slide, please.

How do you perfect a claim for a lien with limited resources? So the next step, once you've preserved your claim for lien it to perfect a lien, it is done by commencing a statement of claim and a certificate of action. As a result of the suspension order, litigants are now able to issue certificate of action, electronically, and to commence claims electronically as well. While the order may provide for relief for any missed timelines, it is again very, very important to be vigilant of the applicable perfection timelines to avoid losing your lien rights. Next slide, please.

There is some debate in terms of the suspension order and how it impacts the limitation period. Limitation issue in terms of the expiration of the lien. Some would argue that it is not tied to a proceeding, and that because it preserves registration against the title, it can be preserved without court processes and is not affected. Others may argue that section 31 of the Construction Act strictly applies to extinguishing their rights that they preserved, thus creating a limitation period that is now extended. Next slide, please.

What are some of our takeaways in terms of preservation and perfection of your lien rights? Our review of the limitations legislation and case law suggests, while reading with the suspension order, that there is an argument that construction lien, the timelines to preserve, perfect and enforce constructions liens may be considered a limitation periods, whether old or new regime applies. Secondly, even if they're not limitation periods, in our view there is also the intermediate steps for proceeding, or intending proceeding, which are similar to a suspension order. Thus, this suspension is subject to the dismissal order. Lastly, however, until further clarification is obtained on this point, I strongly recommend that you take the cautious approach and you continue to preserve, perfect and enforce your lien rights without reliance on any potential extension due to the suspension order. I will leave it there and give it to my colleague, Jaqueline Armstrong-Gates, who will speak to you about vacating construction liens.

Jaqueline: Thank you, Sahil, I appreciate that. Good afternoon, all. I am Jaqueline Armstrong-Gates. I am a litigation lawyer in the Kitchener office and one of the areas that I practice is construction litigation. My topic, as you can see, is called vacating construction liens. Next slide, please. So, normally getting liens vacated haven't been too challenging. There's a process under the respective Act, there's a motion hearing, original signed fiats, original endorsed bonds or letters of credit, and you obtain your vacating order. Next slide, please.

However, the challenge we've had is that Chief Justice Morawetz issued a notice to the profession, for criminal, family and civil matters, on March 15th, it became effective on March 17th and they suspended regular operations for the Ontario Superior Court of Justice, due to the COVID-19, until further notice. Except for limited urgent civil, family and criminal matters. Right now only urgent matters are being heard, although the scope of events has been expanded effective today, and we'll come to that shortly. In the interim, on March 31st, 2020, to assist the construction bar, two Masters, Masters Wiebe and Robinson, changed the required process for vacating motions. It's on an interim basis but it's been accepted by the accountant. Next slide, please.

The positive is vacating motions can be heard remotely. Which aligns with staying home and working remotely. However, you have to satisfy the conditions set out in the notice of profession. The first notice to profession, as I said, came into effect March 17th. There is a link at the bottom of this slide that speaks about the notice where you should be looking to for future reference. It does highlight various items including how you're going to file your urgent motion documents, what you're supposed to put in the urgent documents, how you get a hearing scheduled and the hearing itself. You have to comply with that aspect of things from the first notice. You also have to comply with the second notice which also talks about filings and, as Sahil highlighted, they're now accepting email. You have a specific email address, which is indicated in the regions notice to the profession. So the April 2nd notice that came out by our Chief Justice, Justice Morawetz, in additional all the regional Senior Justices also sent notices for their specific region. So around Ontario. There is an actual address. Again, still only urgent motions have been identified and you can deliver your materials to the court by email, but you have to undertake to file the materials, in paper format, pay the requisite filing fee at the court counter when the regular court operations resume. In addition is, as Sahil highlighted, you can send your materials by email as well. That's what I mean by satisfy the conditions, both for the March 17th and the April 6th one. Please, next slide.

Okay. I said you have to satisfy the notice of profession conditions. What else do you have to do in order to get your vacating motion to be successful? I've highlighted the bullet points so you need a consent from the lien claimant, and if applicable, any other effective lien claimants. You need a copy of your security be posted for lien bond, letters of credit and this will include all schedules, visible signatures, identification of authorized signing officers and any corporate seals. It is recommended that you have a quality scan of the original security. Try to consider having colour because you want all the details to show up. You're going to have a completed fiat in the usual form and a draft order. Now, the fiat, you'll note that we had a proposed form on slide 19, and I will highlight verbally what it is. We are posting this particular presentation on our website and there you'll have a much PDF version. But effectively the fiat's going to have the name of the claimant, plaintiff, honour defendant. It's going to talk about the person paying the money into court. It's going to talk about the methodology, lien bond, letter of credit, certified cheque. It's going to talk about the amount and it's going to have a date and a place for the Master to sign. So pretty standard with respect to the fiat. Let's think about the draft order. Again, we have a draft in that regard. Here's the key, the draft order does have the usual who are the parties, what's their relief, what the court is reading, but the draft order takes into account the necessary directions, right now, the current directions to the accountant, the current pre-conditions to vacating the order, posting security, service of the accounts received. So I commend you to take a look at that because there's really four key orders and directions to allow you to get to this stage, given this new methodology at this state. Next slide, please.

So we've talked about what you have to have in your fiat, what you have to have in your order and so here's how it actually works. Upon approval of security the fiat, that we referenced, it's going to be signed. The signed order, that we referenced, so the signed order plus the endorsed bond or letter of credit, plus the signed fiat, they're going to be emailed to the lawyer for the moving party. The order then gets issued and entered using a printed version of the electronic order before going to the accountant. Now I highlight the issue in entering because many of you will say, "Well, in the updated profession it does suggest that issued and entered formal orders require physical attendance and it's not recommended." In this case there is an exemption because there's a requirement that you get an issued and entered order, but there's also the process outlined as to how to get the issue and entered order. So you do have to have it issued and entered. Then the next step is we have the original security, a copy of the endorsed copy of the security, for the bond or letter of credit, so that's the two things, the copy of the signed fiat, again, and the issued and entered order and they go to the accountant. The accountant will post the original, approve the copy of the security and issue a receipt in the usual way. You then have a vacating order, it gets served with the accountants receipt and you get to register it with a subject lien attaches to the premise. Right now, all the LRO's are accepting such registration. Okay. So that's the process. I wish you luck with getting your urgent motions vacated. But I do highlight you to take a look at the website reference, with respect to the notice of profession and take a look at the PDF versions that we will have posted for slides 20 and then 21. Thank you so much. I wish everyone stay safe. And now I'd like to turn the over to my colleague, Mark.

Mark: Hello everybody. Apologies about the light. I am Mark Giavedoni. I'm a partner in the Hamilton office. I deal with real estate development and construction projects. I'm speaking about the impact on release of construction holdbacks. Next slide, please. The key holdback provisions in the Act are there for you, for your review, in section 22 and 26. Because there was, as Sahil has pointed out, there is still a debate whether the expiration of a lien is a limitation period, particularly when we are able to register preservation of a lien in a registry system, land title system. Just to confirm, again, that each payer shall retain a holdback until all liens that may be claimed against the holdback have expired, or have been satisfied, discharged or otherwise provided for under the Act. Next slide.

It is also important to keep in mind that the holdback is a trust for the benefit of contractors and sub-contractors. There are extensive provisions in the Construction Act under Part II that details the trust obligations of maintaining that holdback until that time has been specified. Next slide.

The question now turns to whether the owner has released the holdback. If the owner has not released a holdback you should question is it because of a limitation period argument, you're unsure as to whether it applies? Are there deficiencies still outstanding in the actual construction? Is a lender restricting advances, preventing the owner from making advances against the holdback? Did the owner publish a notice of non-payment of holdback under subsection 27.1(1) using the right form, in this case Form 6. The owner needs to do that within 40 days of publication of substantial performance. Has the contractor spoken with the owner about options in order to release the holdback? We'll get into that a little bit later. There are some options and dialogue and negotiations that could unfold to give the owner some comfort. If the owner has not released the holdback, has the contractor initiated or contemplated to initiate an adjudication, or taken steps to actually register its own lien? Where an owner has released the holdback questions would be what did the contractor provide the owner with in order to allow that release? Did the contractor inadvertently misrepresent something in the standard declaration with respect to the payment of all subtrades or are there other details in the standard declaration? Then the other question would be then should the contractor, having received the holdback from the owner, continue the payment down the chain? Next slide, please.

Where the owner has refused to release the holdback, contractors may consider taking some of these steps. The first would be to communicate and negotiate with the owner to understand the owner's reasons for refusing to release the holdback. Getting clarity there may be able to alleviate those concerns in the first instance, it may be because of a misunderstanding. Can the contractor provide a waiver in release of claim to the date of the holdback release? If the contractor has a means of verifying this amongst it's subtrades, and that they might not lien the project, this may actually be a more effective way to give the owner some comfort that there are no liens that will rise. The contractor could commence an adjudication process to compel the owner to release the holdback, in the regular course. In this way an adjudicator could provide a order that the parties could then rely upon in order to exercise the release of the holdback. Again, the contractor could always file and register it's own lien to preserve that prior to the expiration of the statutory period. Another option is to trigger the provisions in section 22, which are relatively new to the new amendments. Negotiate a replacement of the holdback cash with either a letter of credit or a demand order to holdback the payment bond in the prescribed forms, being Forms 4 and Forms 5, respectively. These are new provisions and it's important to investigate whether those are actually applicable, or feasible, in your particular project. If the contractor receives the holdback from the owner, the contractor can pay it out in a regular course to its subtrades, in which case the contractor would want to do something similar. Insist on a properly executed statutory declaration requiring payment down the line. Get the subtrades to sign a waiver and release of claim on the project and obtain all the deliverables, close out documents and other documentation, as applicable. Next slide.

The contractor receives the holdback, but doesn't want to pay it out, it could face liens from subtrades that it would have to then turn bond off or vacate in accordance with the contract. It would likely face a potential adjudication for non-payment of the holdback. At all times should always be mindful of it's ongoing trust obligations to continue maintaining that holdback and not to inadvertently use it in appropriately. With that, I thank you and I'll turn it over to my colleague, Louis-Pierre Gregoire.

LP: Good afternoon. Thank you, Mark, for your views on the suspension order on holdbacks. I'm now going to discuss the impact of the suspension order of March 20 on the regimes of prompt payment and adjudication. My name is Louis-Pierre Gregoire and I'm better known simply as LP. There we go. Now we can see my face. I am a partner in the Gowling WLG Ottawa office. I am a civil engineer who became a lawyer in 2002. So I've been practicing construction law for the last 18 years. Next slide, please.

As we've heard from Sahil and saw in slide number 7, on March 20 the Province, through it's suspension order, suspended limitation periods for the duration of the COVID-19 state of emergency. The suspension is not to exceed 90 days but that can be renewed by the Province. Prior to getting into the specifics of the prompt payment, reading the suspension order on slide 7, we can see from the first paragraph that neither prompt payment or adjudication fit in the mold of what's a limitation period. So we're not going to look at paragraph 1. We're going to focus on paragraph number 2 and in paragraph number 2 there are four conditions that really trigger that suspension. But it's really the last two, well, the first two are establishment of any time period within which any step must be taken. So, the time period and any step are kind of broad. They'll capture everything. It's really the next two conditions that need to be looked at, and that is, any step must be taken in any proceeding in Ontario, including an intended proceeding but shall, subject to the discretion of the court. Those two components, any proceeding and subject to the discretion of the court, are what we need to overlay the concept of prompt payment and adjudication.

Let's look at prompt payment first. You have the slide on the screen that has two of the big operators for the prompt payment regime, and before we dive into that, a quick refresher on prompt payment is in order. Prompt payment is applicable to construction contracts entered into and any procurement processes commenced, on or after October 1, 2019. Prompt payment regime is mandatory and under the prompt payment regime owners have 28 days to pay a contractor after the delivery of a proper invoice. So that's it in a nutshell the first paragraph, section 6.4(1) on your screen says. An owner who disputes a proper invoice may refuse to pay provided that the owner delivers a notice of non-payment within 14 days. And that's what that second section on your screen says. General contractors will have 7 days to pay a subcontractor after receiving payment from the owner and subcontractors have 7 days after that to pay sub subcontractors. Thus, ideally, all parties to the construction pyramid are paid within about 42 days. Next slide, please.

So now let's apply the suspension order to the prompt payment regime. As I identified earlier, the key for the application to prompt payment in the suspension order is found at the second paragraph of the order, and is the application of any proceeding and subject to the discretion of the court. By now, I think, we can readily see that prompt payment is a regime, or payment obligation. It's not a proceeding. We're familiar with the proceeding, like a court proceeding, where there is specific steps that must be abided by. I do recognize here that the word proceeding is not defined in the order and so we're just left in that state. But it is still obvious that the prompt payment timelines, as not being a proceeding, are not suspended. So let's look at the last condition because that helps us as well. When the balance of the clause is read, that last condition, subject to the discretion of the court, tribunal or other decision maker responsible for the proceeding. In the prompt payment regime there's no court tribunal or other decision maker monitoring the prompt payment regimes. So that's also not applicable. It's therefore safe to say that those two last conditions in the second paragraph of the suspension order are not triggered. So, the prompt payment regime, per se, is not suspended. The parties to the contract, subject to prompt regime, must remain vigilant in adhering to the process set out in the Act, in order to protect their rights. They should be keeping detailed records of any missed or delayed payments. So then we get into, well, how do you enforce that regime, if somebody's not abiding by the timelines? That's our segue to look at adjudication. As you know, adjudication is the mechanism that can be used to enforce the prompt payment regime. Next slide, please.

So let's quickly review the new Provincial adjudication regime. Adjudication applies to construction contracts entered into and procurement processes on or after October 1, 2019. Interim adjudication is available as a less expensive and quick method of contract dispute resolution. Any party to a construction contract is entitled to refer disputes which flow from a proper invoice, so the prompt payment regime, to adjudication at any time during the life of a contract by starting the process by issuing a notice of adjudication. Other matters, which can also be adjudicated, include, for example, the valuation of services or materials provided under the contract, payment of holdbacks and notices of non-payment. An adjudication may be commenced anytime before the contract is completed or the delivery of a court decision or arbitration. That outer limit of project completed is a limitation period by which a proceeding must be commenced, but since it's the end of the process, arguably what I'm going to say, is that it gets suspended. So this would mean that any issue on a project would still be subject to commencing an adjudication. Even if the project is completed, and that would be for the timeframe after March 26, but subject to that 90 day time period where the suspension order may lapse. Of course, unless it's renewed. If it's renewed then we're into another 90 days or the duration of the COVID-19 emergency. Let's state it another way. The suspension order has no immediate impact on a commencement of an adjudication. The adjudication must be started at the discretion of a party and the end time when that adjudication process can be started is suspended. Also, the balance of the timeline, or the deadlines in the adjudication, they are also suspended from the suspension order. But remember that the last condition of that second paragraph, from the suspension order, slide number 7, if you're looking at these slides afterwards, that is subject to the discretion of the decision maker, of the adjudicator. So we'll get to that in a second. Next slide, please.

This slide lists some of the deadlines of steps of the adjudication proceeding and the next slide will show them visually. I'll use that slide to describe the process. The timelines are subject to the discretion of adjudicator. How would this play out? The claimant starts an adjudication by delivering a notice of adjudication to the respondent, the adjudicator and the authorized nominating authority. That's the body that governs adjudications. The respondent has to agree, or not agree but assuming he agrees to the proposed adjudicator, within that same 4 days the adjudicator has to confirm his appointment. He could be unavailable or conflicted. So there's the 4 days, the first step there, a timeline, that becomes suspended unless that adjudicator exercises his discretion. I'm just going to go quickly over the top core, that's where there's an agreement because we have limited time. So the flow of an adjudication if the parties agree to the proposed adjudicator is in that top core. So what happens after that delivery of the notice of adjudication, then within 5 days the claimant must deliver documents to the adjudicator and that triggers two things. The adjudicator has 30 days to deliver a written determination, and the adjudicator will also have to instruct the respondents to deliver it's documents well within a certain amount of time, and that time obviously has to be within the 30 days by which the adjudicator has to deliver his decision. Adjudications of proceeding, much like an arbitration, and all of the timelines for these steps, now I've just gone through the top core where there's agreement, but there would be a similar analysis at the bottom, all of those timelines are in effect suspended, subject to the discretion of the adjudicator. Given that the adjudicator is involved from the moment he receives the notice of adjudication it would be necessary, from the perspective of the one starting the adjudication, to request that the adjudicator exercises discretion. Otherwise if the adjudicator doesn't exercise that the whole process is suspended. It would be prudent, from the respondent's perspective, that the respondent would be prejudiced from the adjudication unfolding during COVID-19, that the respondent explain his prejudice and object that the adjudicator exercises discretion. Now let's assume the parties have no objection to the adjudication and the adjudicator and the matter moves along. Let's assume, for example, that the adjudicator then makes a determination within his 30 days, he determines in writing that the owner pay a $100,000.00. What happens then, on the far right of the flow chart, the party ordered to pay has 10 days to make that payment and that sum must be paid. If it's not paid the claimant can enforce the determination, much like an arbitration award, and obtain, for example, a garnishment order. Now, once the party has that determination from the adjudicator and goes to court to get the garnishment order, now that party is outside of the jurisdiction of the adjudicator and those timelines that now apply to the garnishment proceeding, those suspended the matter. So although the adjudication process can unfold and, subject to the discretion of the adjudicator, there is likely a problem when you get to the enforcement of those orders by the traditional court processes. The determination by the adjudicator to pay is effectively suspended until the emergency is over, the 90 days expire. Now, I'm going to ask, when adjudication being used to determine issues of non-payment, not of non-payment suggest contested entitlement to change, then subject to the adjudicator's discretion this may be more effective adjudication to trigger during this COVID-19 emergency. Next slide, please.

So this last slide is a summary. In the first box a claimant has the power to start the adjudication at it's discretion. So that's one takeaway. The second takeaway is in the second box where the timelines for the steps in an adjudication are suspended, unless the adjudicator exercises his or her discretion. The third box is simply because the process of adjudication is managed by the ANA, the Authorized Nominating Authority, and we've reached out to them and the continue to support public health recommendations to reduce the spread of COVIDd-19, they've implemented video hearings through Zoom and the likes, much like how we're doing this webinar today, and most adjudicators are prepared to work by electronic submissions and that process is still there, available by stakeholders to the construction industry. Therefore, by way of recap, prompt payment timelines are not suspended by the suspension order of March 20. However, enforcement may be a challenge or may come with a delay. The second summary, adjudication timelines are suspended by the order of March 20, but the application of that suspension has to be lifted by the discretion of the adjudicator, and again, enforcement of that through the court process may be challenging. So I thank you for your attention and I now pass the mic over to my colleague, Cindy Kou, on the topic of essential services.

Cindy: Thanks, LP. Hi everybody. My Cindy Kou and I'm one of the construction associates in our Toronto office. Next slide, please, Shannon. I thought we would take 10 minutes and run through some FAQ's regarding the essential workplace list that was published recently. Next slide, please, Shannon. As Sahil mentioned at the beginning of the presentation, the Province has been issuing various orders under the Emergency Management and Civil Protection Act, or the EMCPA. Today we're going to be talking about the one that was issued on Friday, that was effective as of midnight on Saturday, and I'll just note here that the actual order, and by that I mean the legal document underpinning the list that's on the website, is not yet publicly available. The Government has a few days to post that, and there may be some additional details that are in that order once it becomes available, and we'll provide updates as they become available. Next slide, please, Shannon.

Okay, second question, who in construction can stay open? Generally, the essential workplaces list applies to all businesses, whether for profit or not for profit, and is subject to some narrow exceptions that we will get into later. There is a construction specific section of that list and that includes the health care sector, critical Provincial infrastructure, such as transit and transportation. If you are in the petro-chemical industry look at that list carefully because there is some construction scope in there that is considered essential. If you are in critical industrial construction activities regarding the production of PPE, medical devices or other products that the Province has identified as necessary to combat COVID-19, that's been considered essential. There are some select residential projects, mostly residential projects that have footing permits or above grade structural permits, as well as some residential renovations that started prior to April 4. On top of all of that the activities that you need to be doing to temporarily close your sites, or to ensure ongoing public safety, are considered essential under this new list as well. Next slide, please. Thanks, Shannon.

In addition to the construction specific scope on the list, there are other items on the list of essential workplaces that may have some construction scope, so we encourage everybody to read that list very carefully for themselves. Those might include maintenance and repair for essential operation of building. If you are doing maintenance and repair of roads, dams bridges or other critical infrastructure, or if you are in the environmental management business, we'll also note that there are some construction ancillary businesses such as suppliers and manufacturers that are largely still considered essential, and government services, including those providing licences and permits, are still considered essential. We'll also note that this list is meant to allow only those parts of your business that are considered essential to continue operating. If 10% of your business falls under one of the categories that are allowed to remain open, but 90% does not, then you're allowed to continue operating that 10% of your business. Next slide, please.

Question three. You might be wondering about exceptions. All tele-working is permitted. Online work, work over the phone, that's okay. We talked about how site security services, to ensure ongoing public safety concerns, that's okay too. We'll note that the first order on essential workplaces had additional exceptions, such as for government and to allow temporary access to work places. Because we haven't seen the actual order of the second iteration of the essential workplaces list, we don't know yet, but check back with us and we'll have updates. Next slide, please.

I'm sure this is all clear as mud. If you have questions about the list, the government has set up a Stop the Spread Business Information Hotline. If you wanted to go and ask questions about your business or your employment. You are also welcome to have us call on a no names basis on your behalf. In our experience with the first list, the wait times were very varied and initially were very long, but we were able to get through. Next slide, please.

If your workplace is now a non-essential workplace, it's probably time to pull up your contract again. You've got to read your contract in full but take a look in particular for provisions such as force majeure, delay, suspension or termination. If you're looking to get to see each parties rights and obligations are in response to this essential workplaces list. If you don't have a contract, or if you don't have some of those provisions in your contract you might have to rely on some common doctrines, such as the doctrine of frustration, and we've got lots of articles about frustration on your website that might be able to help you. Just as a practical piece of advice, we've been suggesting to clients to document and communicate very openly during this time, so that when the dust settles there's a clear record of who decided what and communicated what when. Next slide, please.

So, if your workplace is still considered essential, this is a PSA that all applicable law still apply to you, especially noting that advice, recommendations and instructions of public health officials are considered part of that applicable and that's specifically set out on the list of essential workplaces website. Note that there are other orders under the EMCPA that may apply to you. Two other areas where there are lots of new orders related to COVID-19, that also carry penalties, which we'll get to in a second, are at the Federal level including under the Quarantine Act and municipal bylaws. Check in to see what is applicable to you at your local level for your project and it's specific context. We'll also note that our employment colleagues have been recommending and drafting what we're calling safe passage letters to facilitate essential workplaces being able to operate smoothly and we'd be happy to connect anybody that's interested with our employment colleagues for what those safe passage letters mean. Next slide, please.

So there are penalties for not complying with the EMCPA. The short of the long is that it could be very expensive and there could be jail time, ranging from $100,000.00 to $10,000,000.00, that's per day of an offense, and judges can increase those amounts. There is also a new enforcement order under the EMCPA that allows Provincial Offenses Officers, and that includes municipal bylaw officers who have reasonable and probable cause, to require an individual provide his or her name, date of birth and address. There are additionally fines for failure to comply with an order in around the neighbourhood of $750.00, plus victim fine surcharges, and anybody found obstructing an order, or the implementation of an order, could be subject to a fine of $1,000.00, plus victim fine surcharges. Next slide, please.

So, how are the penalties enforced? There appears to be two avenues. Under the EMCPA certain individuals can make an application without notice to a judge of the Superior Court of Justice to get a court order to enforce one of the EMCPA orders. There's also an avenue under the Provincial Offenses Act that allows Provincial Offenses Officers to either issue tickets, fines or summons to enforce an EMCPA order. Next slide, please.

What has enforcement been like to date? Taking a step back, the list that we are talking about today is 2 days old, so there's not a whole lot of information available just yet about the enforcement under this list. But what we do know is there are lots of eyes on the construction sector. On Friday, Premier Ford announced that Ontario hired 60 new inspectors to survey construction sites. As of last week there were reports of over 100 inspectors checking sites in Toronto. About a dozen summons were already written in late March and we know that 5 sites have already been shutdown. What we saw under the first list of essential services was that there was a graduated approach that local police departments were taking, and we have every reason to believe that this graduated approach would continue, especially for businesses that are making best efforts to comply with applicable laws and orders. But just be aware that there are those strong enforcement mechanisms that we talked about earlier. Okay, last slide, please.

How long will this last? I wish I had a firm answer for everybody but mostly this slide is meant to say that EMCPA orders are drafted to be temporary in nature. Generally, they can only last 14 days unless they are earlier revoked or they are extended by another order. That's all to say that this is very fluid situation. Check in with us often. We want to hear from you about your experiences in your projects under this new order. And with that I will turn it back over to Ted for the FAQ.

Ted: Thank you, Cindy, and thank you to all of our presenters. A copy of the webinar, as I said, including the slides and the Q&A which is ongoing still, will be available afterwards on our website. We do have some time now to address some questions before the hour is up. I know, as I said, we've been looking at the questions listed in the Q&A so we ask anybody with additional questions to respond there. We'll keep the Q&A open for a few minutes after the webinar is done so that people can follow up on some of the questions if we don't get to them in the next 10 minutes. We did have one question on critical infrastructure. "Does critical Provincial infrastructure mean critical infrastructure owned, operated, controlled, directly/indirectly by the Province of Ontario or is it broader critical to the functioning of the Province regardless of owned, operated, controlled?" Cindy, or Craig, or Adam, do you have a comment on that response?

Cindy: So, I'm seeing that Craig and Adam have not jumped in so my initial thought is that based on the way the list is drafted, there's no requirement that the infrastructure has to be owned, controlled or operated by the Province. It just has to be in one of the critical sectors. But I'm still waiting for that new order to come out and we would be happy to check back.

Ted: While we were on the phone the order did come out so we will have a quick look at that for sure. Thank you, Cindy. Another question we have is for LP. "If an adjudicator orders the payment of a holdback are you relieved from your holdback obligations with respect to that holdback?" You're on mute.

LP: Thank you, Ted. Sorry. Can you repeat the question?

Ted: "If an adjudicator orders the payment of a holdback are you relieved from your holdback obligations with respect to that holdback?"

LP: As I identified earlier, the problem's going to be how do you enforce that determination from the adjudicator. So the party's going to want to go to court to get an order to garnish the account of the owner. Then they're going to run into practical problems. So that'll just be deferred into the future. Until either the suspension order lapses or expires or is revoked. If it's renewed, well, then it goes on for another 90 days. So ultimately there's a defacto suspension of that order from the adjudicator.

Ted: Another adjudicator question we have here. Since we have you can you let them know, "Could the adjudicator say you don't have to pay within 10 days, in other words, their discretion is to extend the time period for paying after their determination?"

LP: I think so, yes. I think that's within the adjudicator's discretion to vary the timelines.

Ted: Okay. Thank you. So, just reading through here. This will be for our essential services team. "Do you take section 28 of Ontario Regulation 119/20, Provincial Infrastructure, to include municipal projects, which include transit, transportation, energy and justice sectors? Provincial being a location, not specifically the Crown, in Ontario." Cindy, Adam or Craig, do you want to respond to that, please?

Cindy: So, unless Craig wants to jump in, I think he was having some issues with his camera. I think the question is, where did it go? Sorry, do you mind repeating the question? I seem to have lost it.

Ted: It's in the answered section because we're answering it live. "Do you take section 28, Ontario Regulation 119/20, Provincial Infrastructure, to include municipal projects, which include transit, transportation, energy and justice sectors? Provincial being a location, not specifically the Crown, in Ontario."

Cindy: Thank you. Based on the wording of the list of essential workplaces, that was released on Friday, I understand Provincial to mean location, not specifically the Crown, because it does allow for those general sectors. Not specifying whether it is in respect of the Crown or not.

Craig: And Ted, just to jump. I agree with Cindy's interpretation there. I believe when they're talking about critical Provincial infrastructure the government is speaking to infrastructure projects that are within the Province of Ontario. We haven't seen any specific guidance to suggest otherwise. Now, we do need to keep in mind that the list is being more constrictively viewed as we continue along with the COVID-19 pandemic so we do need to exercise some caution there. But in terms of this particular provision we do take that broad interpretation to mean critical infrastructure projects within the Province of Ontario.

Ted: Great. And while we have you, Craig, a lot of these questions relate to essential services and some of them are getting fairly narrow and specific to specific organizations. So we may not be able to get to all of them but, here's one we're all interested in because we want to know how our food is being supplied. "Would a construction project on a grocery store be deemed essential? Also construction projects underway on logistics warehouses and facilities? Finally, when can we expect more direction on this from the Government?"

Craig: The last question, that's a very good question. We really don't know. We are playing this day by day and trying to get the best clarification we can on these items. In terms of the construction warehousing or distribution centers or grocery stores, it doesn't seem to be specifically identified. I'm just looking at our list here that the Government issued. It doesn't seem to be specifically identified within the construction category. I think there could be an argument that these activities are services that are necessary to support those activities. We might be looking at a supply chain type argument there. But in terms of how that feeds in I think it's a bit uncertain at this point in time. But I see how if these popped up they might take a different view.

Mark: It's not a different view but if you can sit in that particular construction project under the agriculture and food production tied into the processes and the food delivery pipeline then may be it could be deemed essential that way and the project could go on.

Ted: Thank you both. Sort of a related question. I mean the bigger question on that, and this will be our last question, "Is any construction allowed just because the business that is asking for the construction to be carried on, essential?" Is that a carte blanche for any construction on a project site if the underlying business is essential? I think the answer's going to be more nuanced in that. I don't think it is a carte blanche. I think you really have to look at what's essential to the ongoing operations of the facility and really fit within the specific bands and categories set out in the list. I'll let Craig follow up on the details on that.

Craig: That's absolutely the case simply because a business falls within one of the categories of essential workplaces does not necessarily mean that all of the activities engaged in by that business are essential. And I do think that we need to take a cautious approach, that is consistent with the public health messaging, that we're receiving locally and at the Provincial and Federal levels. I think to ignore that would be to do so at an organizations peril. I agree entirely with Ted's comments that we do need to take a more precise view of the activities and whether or not they truly are essential, or critical, for that organization's delivery of those essential services when we're trying to tie into one of those categories. Absolutely.

Ted: Great. Okay. Thank you, Craig. I know we all have tons and tons of questions. A lot of them specific to our organizations. The people I'm talking to, everybody's struggling to do the right thing here. I think that's going to help you guide yourselves in finding the right answer to those essential services questions. If you're not sure, as I said, you're more than welcome to reach out to one of us and we will try to help you through the specifics of the services that you're providing and the specifics of the organization that you're providing it to. If you're still uncertain the helpline, as Cindy mentioned, is available to call. The Province has set up and is answering those kinds of questions as well. And then many people finding it useful just to have a conversation with the inspector as they struggle and try to figure out what can continue and what cannot. This is a very fluid situation obviously. It's evolving everyday. The current shutdown order, under the Emergency Measures Act lasts for 14 days. So in 14 days we'll likely be seeing further announcements. Whether that's extending the existing restrictions, further reducing the number of activities or opening it up, we don't know yet. But we will keep monitoring and we encourage everybody to continue to monitor. In addition to the Provincial measures, as I've mentioned at the outset, be aware and pay close attention to the local municipality bylaws and health inspectors. They're also imposing rules and guidelines and it would be good to follow those and be aware of those as well. I hope you got a lot of this. We are monitoring the evolving and escalating situation by the hour. Feel free to reach out to our website, or anyone of us. Our website is updated regularly with articles and webinars in construction, specifically, but also more broadly in all areas of business and market. We've got a lot of amazing materials up there and further webinars everyday coming out. As I said the webinar today will be up on our website in due course. Usually it takes about a day including a transcript of the Q&A. Thank you for joining us. We will wind up the webinar right now although we will keep it live for a few more minutes as we get through the final 11 questions as best we can and allow everybody a chance to read those. Thank you very much. Stay safe.

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