Reynolds Report calls for prompt payment in Ontario

It’s been a long time coming, but it appears as though Ontario’s review of the Construction Lien Act was worth the wait.

The provincial government released Bruce Reynolds’ and Sharon Vogel’s report, Striking the Balance: Expert Review of Ontario’s Construction Lien Act on September 26. The document is a comprehensive and detailed study of the act. Its findings and recommendations support, among other things, the need for a prompt payment regime in Ontario.

As a result, the provincial Ministry of the Attorney General has proposed to introduce legislation in spring 2017 that addresses three main provisions in the document:

modernizing the construction lien and holdback rules
introducing rules around prompt payment
creating a new process to speed up dispute resolution

"Ontario’s construction industry is a driving force of Ontario’s economy, and modernizing our construction laws will support the more than 400,000 people who work in the industry through a new prompt payment system," said Attorney General Yasir Naqvi. "Mr. Reynolds’ and Ms. Vogel’s report is a fair and thoughtful assessment of the complex challenges faced by today’s construction industry. I would like to thank them for their work, and I look forward to working with industry groups as we draft legislation that reflects their needs."

Early reaction to the news has been positive. Prompt Payment Ontario, a coalition of contractor associations, unions, suppliers, general contractors and other stakeholders, congratulated the government on the release of the report.

"Late payment is one of the biggest risks to trade contractors, their employees and suppliers," said a PPO release. "We are glad to see the report’s recommendation to legislate a prompt payment regime for the public and private sectors. Putting this legislation in place will ensure that we can build Ontario. Prompt payment is simply doing the right thing."

Precisely what shape Ontario’s prompt payment laws and lien act reforms will take is yet to be seen. The Attorney General’s office plans to launch a new series of consultations with industry and stakeholder groups this fall to gather input into any proposed legislation.