Construction and projects in Canada: overview

A Q&A guide to construction and projects law in Canada.

The Q&A gives a high level overview of the main trends and significant deals; procurement arrangements; transaction structures and corporate vehicles; financing projects; security and contractual protections that funders require; standard forms of contracts; risk allocation; excluding liability, including caps and force majeure; contractual provisions covering material delays and variations; appointing and paying contractors; subcontractors; licences and consents; projects insurance; labour laws; health and safety; environmental issues; corrupt business practices and bribery; bankruptcy/insolvency; public private partnerships (PPPs); dispute resolution; tax and mitigating tax liability; and proposals for reform.

To compare answers across multiple jurisdictions, visit the construction and projects Country Q&A tool.

This Q&A is part of the global guide to construction and projects law. For a full list of jurisdictional Q&As visit www.practicallaw.com/construction-guide.

Contents

Overview of the construction and projects sector

1. What are the main trends in the local construction and projects market? What are the most significant deals?

Main trends

The construction industry continues to be a leader of the Canadian economy. According to the Canadian Construction Association, in 2015, employment in the construction industry remained constant over the previous year's level which has increased for six consecutive years. The number of building permits issued also remained strong. While institutional and industrial building levels decreased slightly, the number of residential and commercial building permits issued increased.

Approximately 50 public private partnership projects (P3s) are currently under construction, with a further 25 projects at various pre-construction phases. These projects include significant health care, transportation and infrastructure expenditures.

The Government of Canada has announced over Can$120 billion infrastructure funding plan for projects nationwide over the next ten years (www.infrastructure.gc.ca/plan/index-eng.html), for projects that are "shovel ready" (where the planning and engineering is advanced enough that with sufficient funding, construction can begin within a very short period of time), to be spread equally between public transit, green infrastructure and social infrastructure projects. Similar investments in infrastructure are being made by Canada's Provinces, including Ontario (ON), which has announced that it plans to invest Can$137 billion into infrastructure initiatives and projects over the next ten years (www.fin.gov.on.ca/en/budget/ontariobudgets/2016/bk2.html).

Major projects

For ON and Quebec (QC), major projects include:

  • Highway 407 East, ON.

  • Gordie Howe International Bridge between Windsor, ON and Detroit, Michigan.

  • Eglinton Crosstown LRT in Toronto, ON.

  • Scarborough subway extension in Scarborough, ON.

  • Ottawa LRT in Ottawa, ON.

  • Toronto-York Spadina subway extension in Toronto, ON.

  • Darlington nuclear power generation plant refurbishment in Bowmansville, ON.

  • Frederick G. Gardiner Expressway rehabilitation in Toronto, ON.

  • Hurontario LRT in Mississauga, ON.

  • Confederation Line subway or LRT project in Ottawa, ON.

  • ION Light Rail Rapid Transit project in Waterloo, ON.

  • New Champlain Bridge corridor in Montreal, QC.

  • Roman River hydroelectric complex, QC.

  • Turcott interchange in Montreal, QC.

For Newfoundland and Labrador (Nfld), New Brunswick (NB), Nova Scotia (NS) and Prince Edward Island (PEI), major projects include the:

  • Lower Churchill hydro electric project at Muskrat Falls, NB.

  • Maritime Link transmission line (Nfld, NB, NS, and PEI).

For British Columbia (BC), Alberta (Alta), Saskatchewan (Sask), and Manitoba (MB) major projects include:

  • Southwest Ring Road in Calgary, Alta.

  • Greenline Southeast Transitway in Calgary, Alta.

  • Calgary International Airport Development Calgary, Alta.

  • Great Spirit Power natural gas power plant Parkland, Alta.

  • Northeast Anthony Henday freeway in Edmonton, Alta.

  • Edmonton LRT expansion in Edmonton, Alta.

  • Fort McMurray West Transmission Line in For MacMurray, Alta.

  • Greenline Southeast Transitway in Calgary, Alta.

  • Evergreen Skytrain line in Metro Vancouver, BC.

  • George Massey Tunnel replacement in Vancouver, BC.

  • Peace River Hydroelectric Earthfill Dam in Peace River, BC.

  • Robert Bank Counter Terminal in Delta, BC.

  • Regina Bypass in Regina, Sask.

  • Keeyask Hydroelectric power station in Lower Nelson River, MB.

 

Procurement arrangements

2. Which are the most common procurement arrangements if the main parties are local? Are these arrangements different if some or all of the main parties are international contractors or consultants?

Procurement arrangements in Canada apply equally to domestic and international contractors.

Competitive tendering is required for government projects (whether federal, provincial or municipal) for the acquisition of goods and services alike. For government, government-funded, or other public sector projects, there are often guidelines stating the rules to be followed for competitive tendering, such as:

  • Agreement on Internal Trade (AIT).

  • Ontario Broader Sector Procurement (BPS) Directive.

At the municipal level, there are typically procurement bye-laws to be followed.

Increasingly, tendering authorities are using electronic tendering processes to solicit bids.

For private sector owners, there are no similar guidelines. However, all competitive bids are subject to the common law that has developed in Canada. The 1981 Supreme Court of Canada decision in R v Ron Engineering established that an enforceable contract could be created at the bidding stage, before the award of a contract. Over time, that decision has been revisited on several occasions, most recently affirmed by the Supreme Court of Canada (Tercon Contractors Ltd. British Columbia (Transportation and Highways) [2010] 1 SCR 69, 2010 SCC 4).

Any bidder to a Canadian project must be familiar with the principles of the Ron Engineering line of cases and must be aware that competitive bids in Canada can attract liability and are not viewed simply as invitations to treat as is the case for many other jurisdictions, including the US.

Owners, including government, government-funded and private sector owners, often use requests for proposals (RFPs). Whether these are binding or non-binding procurement processes depends on the substance of the terms, and not the title of the document.

 

Transaction structures

3. What transaction structures and corporate vehicles are most commonly used in both local and international projects?

Local projects

Foreign companies can establish business operations in Canada using any one of the business forms described below:

  • Branch plant operation. A foreign corporation can register as an extra-provincial corporation in the province where it conducts business by obtaining an extra-provincial licence. As no new entity needs to be created, start-up costs are minimal.

  • Canadian affiliate subsidiary corporation. A foreign company can choose to incorporate a Canadian affiliate subsidiary to conduct all its Canadian business. However, incorporation can be expensive and requires consideration of the local and foreign tax laws and, depending on the province, the possible requirement that a certain number of the corporate directors be Canadian.

  • Partnership. A partnership is a provincially-legislated contractual relationship between two or more corporations or individuals. There are two types of partnerships:

    • a general partnership, which is not a distinct legal entity from its constituent partners. The partners are jointly and severally liable for all partnership obligations;

    • a limited partnership, in which there must be a general partner, but the liability of the limited partners is limited to the extent of their investment.

  • Joint venture. A joint venture refers to any means by which two or more economic entities share in a common venture. Unlike some jurisdictions outside of Canada, no legislation exists to establish joint ventures as distinct legal entities and they are not separate legal entities under Canadian law. A joint venture is a form of business organisation based on a contract. Each party maintains a significant degree of independence in conducting its business for a single, identified, common purpose. The individual legal entities in joint ventures remain jointly and severally liable for the obligations of the joint venture.

  • Single purpose corporation. Single purpose corporations are common for owners and are often used by condominium developers in Canada.

International projects

Subject to the laws of the applicable contract or project jurisdiction, the corporate vehicles are essentially the same for international and local projects.

 

Finance

4. How are projects financed? How do arrangements differ for major international projects?

The financing of domestic construction projects varies based on the project itself. The factors influencing the form and venue of financing relate to the:

  • Size.

  • Scale.

  • Purpose.

  • Financial position of the financing party (usually the owner).

Public infrastructure projects are funded by the municipal, provincial, or federal governments, sometimes jointly.

Private sector projects are typically funded through traditional lending structures, including:

  • Commercial bank loans (secured or unsecured).

  • Construction loans.

  • Permanent term loans.

  • Bridge loans.

  • Working capital facilities.

  • Derivative instruments.

  • Institutional debt providers (pension funds and university endowment funds).

  • Capital market bonds.

International construction projects are typically financed by a combination of:

  • Appropriation of tax revenues or special government bonds for public infrastructure projects.

  • "On-balance sheet" financing, where a sponsor accesses corporate debt or equity to meet the principal financing requirements of an enterprise.

  • "Off-balance sheet" financing using debt or equity financing from sources outside the sponsor.

 

Security and contractual protections

5. What forms of security and contractual protections do funders typically require to protect their investments?

Security

Security over the investments of construction project funders generally takes the form of a mortgage over the project land. Additional options include:

  • Letters of credit or bank guarantees.

  • Surety bonds.

  • Parent-company guarantees.

Contractual

The investor can also negotiate:

  • A general security agreement.

  • Corporate and personal guarantees from the borrower.

  • Various assignment rights.

The loan agreement between the lender and borrower can also include:

  • Assignment of revenues of the project.

  • Possible appointment of a receiver to manage the company or property.

  • Foreclosure.

 

Standard forms of contracts

6. What standard forms of contracts are used for both local and international projects? Which organisations publish them?

Local projects

The most common standard forms of contracts used on construction projects are published by the:

International projects

The parties must determine the form of contract that they would like to use. There is no set standard form for international construction contracts for use in Canada. Parties can use the CCDC contracts that most construction parties are familiar with or other forms. Some projects use the FIDIC (The International Federation of Consulting Engineers) contracts (http://fidic.org/themes/fidic-contracts) and others adopt the AIA (American Institute of Architects) forms (www.aia.org/contractdocs) from the US. Alternatively, parties often negotiate their own customised contracts specific to the project.

 

Contractual issues

Contractors' risks

7. What risks are typically allocated to the contractor? How are these risks offset or managed?

Parties to construction contracts allocate and take on risk under the terms of the project contract. A general duty to act honestly and in good faith in the performance of contractual duties was recently affirmed by the Supreme Court of Canada in the case of Bhasin v Hrynew, which appears to have been confirmed to apply in the construction context.

The most common form of contract used for construction projects in Canada is a stipulated fixed price or lump sum contract between the project owner and the contractor, which allocates the majority of risk to the contractor with respect to:

  • Price.

  • Schedule.

  • Performance of the construction and related work.

Generally, risks associated with any changes or unexpected conditions fall on the owner. These risks are typically addressed by the contract's change order process. This allows contractors to receive compensation beyond the contract fixed price and extensions to the time for performance of the contract when project scope changes or delays occur as a result of causes beyond the contractor's control.

This approach to risk allocation appears to be common to both local and international projects, although the form of contract or specific negotiated terms often alter the allocation of risk.

Excluding liability

8. How can liability be excluded or restricted under local law?

Liability can be excluded for certain breaches of contract and defaults, through exclusion of liability clauses. These provisions are common in construction contracts and procurement documents in Canada.

A typical construction contract exclusion is for consequential damages.

Generally, the courts apply a plain and literal reading of the terms of an exclusion of liability clause and enforce the clause based on its wording.

In 2010, the Supreme Court of Canada ruled on the enforcement of exclusion of liability clauses in Tercon Contractors Ltd. v British Columbia (Transportation and Highways) [2010] 1 SCR 69, 2010 SCC 4. The court enumerated a three-part test outlining the applicability of exclusion of liability clauses, where the court:

  • Looks to the language of the clause to see if it applies to the specific circumstances at hand.

  • Assesses whether or not the clause is "unconscionable".

  • Considers whether there is an "overriding public policy" reason or concern to justify ignoring or not applying the clause.

Following the Tercon decision, owners tend to include broadly worded exclusion of liability provisions in their procurement documents and contracts, in an effort to shield themselves from liability.

Caps on liability

9. Do the parties usually agree to a cap on liability? If yes, how is this usually fixed? What liabilities, if any, are typically not capped?

In some contracts, the parties can agree to a cap or limitation on liability. Caps on liability are most typically found in design consultant service agreements (such as those involving architects and engineers). Such provisions are not as common in contracts between owners and contractors for domestic building projects, although they are common on international projects, particularly common in EPC (engineering, procurement and construction) and EPCM (engineering, procurement and construction management) contracts.

Where there is a cap on liability, the limit can be tied to one or more of:

  • The price for the services.

  • A percentage of the price of the services.

  • The amount of the insurance coverage prescribed by the contract.

It is also common for specific types of loss to be excluded from the application of the cap on liability. For example, it is common for losses resulting from an injury or death of a worker to be excluded from the cap on liability. Also, damages from fraud and wilful misconduct are typically excluded.

Force majeure

10. Are force majeure exclusions available and enforceable?

Force majeure exclusions are available and enforceable in Canada. They are almost always included in construction contracts.

Force majeure clauses are interpreted based on a plain reading of their language and meaning. The intention of the clause and the circumstances covered should be clearly stated and enumerated. Contractors will often seek to expand the ambit of force majeure clauses, while owners will seek to limit the clause to extraordinary circumstances, outside the control or contemplation of the parties. Some extraordinary circumstances commonly covered include:

  • Acts of God, including landslides, lightning, earthquakes, typhoons and floods.

  • Fire.

  • Mass labour strikes or work stoppages, or civil disturbances of a political nature.

  • Wars or hostilities, invasions or acts of foreign enemies.

  • Acts of terrorism, bioterrorism, or cyber-terrorism.

  • Munitions of war, explosive materials, ionising radiation or contamination by radio-activity.

Material delays

11. What contractual provisions are typically negotiated to cover material delays to the project?

For both local and international projects, there are three types of material delays that must be considered when negotiating a construction contract:

  • Contractor-caused material delays.

  • Owner-caused material delays.

  • Excusable material delays (force majeure events).

For each of these types of material delays, the parties must consider the impact on:

  • The project schedule.

  • The cost of the work/contract price.

  • Other losses that may result from the delay.

Contractor-caused delays

This includes failure to coordinate the work or delivery of materials or failure to properly staff the project in terms of resources or qualifications. The following factors must be taken into account:

  • Project schedule. The owner may or may not grant a time extension to complete the project. Where the project is under a strict schedule for completion, the contract should provide that the contractor will contribute additional resources to make up the lost time.

  • Contract price. The owner is typically able to set-off or deduct from the contract price any damages it suffers on account of the contractor-caused delay, and liquidated damages are often specified in contract documents.

  • Length of the delay. In some cases, the contract provides for an option for the owner to terminate the contract where the delay has surpassed a certain threshold.

  • Damages. The owner is typically able to claim against the contractor for any losses suffered on account of the delay, including liquidated damages. However, some contracts exclude certain heads of damages (for example, consequential, indirect or special damages).

Owner-caused delays

These can arise from changes authorised by the owner that increase scope of the work, late delivery of owner-supplied materials or services and design errors by the owner's consultants. The following factors must be taken into account:

  • Project schedule. The contractor is typically entitled to an extension of the time to complete the project. However, in some cases, the contractor is required to provide the owner with notice of an owner-caused delay, failing which the contractor could be barred from obtaining an extension to the project schedule.

  • Contract price. In some cases, the contractor is entitled to an increase in the contract price. This is most typically the case where the owner has requested a change to the scope of the project that impacts the schedule. The onus is typically on the contractor to provide the owner with notice of the increase in advance of incurring the costs.

  • Length of the delay. Some contracts provide the contractor with the right to terminate the contract or suspend its services if the owner-caused delay extends beyond a specified duration..

  • Damages. Most contracts try to limit the ability of contractors to claim for compensation for owner-caused delays other than the contractor's direct provable costs associated with the additional time required to complete the project. Most contracts preclude contractors from claiming for lost profits, consequential, indirect and special damages.

Excusable material delays or force majeure

These are unforeseeable external events that have the effect of delaying a project (such as weather events, strikes, fire, acts of war and acts of government) for which the following factors must be taken into account:

  • Project schedule. The contractor is typically entitled to an extension of time to complete the project but no additional costs. Typically, the contractor must provide notice to the owner, within a specified time of the commencement of the excusable delay event, so that the owner is aware of the impact of the delay event.

  • Contract price. Only in the rarest of circumstances will a contractor be entitled to an increase in the contract price on account of an excusable delay.

  • Length of the delay. Some contracts provide for a mutual termination of the contract when an excusable delay event lasts for a specified length of time.

  • Damages. As with the contract price, the contractor is typically not permitted to claim against the owner for any damages suffered on account of the excusable delay, except for an extension of the contract time.

Concurrent delay

It is possible for two or more of the above types of delay to occur at the same time. This is referred to as concurrent delay, which is commonly used as a defence when one party asserts a claim for damages for delay. The response from the other party is that the claiming party (or force majeure) caused or contributed to the delay, such that the delay would have occurred in any event.

Material variations

12. What contractual provisions are typically negotiated to cover variations to the works?

Variations to the works during the performance of the contract (also known as "changes") are usually made under a change order or a change directive. Both change orders and change directives authorise the contractor to make the specified changes to the works. The key difference is the terms on which the changes are made.

Change orders

These are written documents issued by the owner or the contract consultant that direct the contractor to make a change in the works and records the agreed terms of that change. This includes agreement on whether the change increases or decreases the scope of the works and, correspondingly, the contract price and contract time.

Change directives

These are written documents issued by the owner or the contract consultant that direct the contractor to perform a change in the work before there is any agreement to a change in contract price or time. Changes to the contract price or time are determined after the fact by:

  • A pre-established criterion in the contract.

  • A negotiated settlement.

  • A finding of the consultant as to the expenditure or savings realised on the change.

  • The contractual dispute resolution process.

Change directives reflect the owner's inherent need to keep a project moving forward, despite disagreement on certain (usually) minor changes.

Other negotiated provisions

13. What other contractual provisions are usually heavily negotiated by the parties?

As well as the provisions discussed in Questions 8 to 12, the following contractual provisions are also often heavily negotiated by the parties to the contract:

  • Payment (quantum and timing).

  • Date of project completion.

  • Holdbacks and retention (where not prescribed by statute).

  • Responsibility for site safety.

  • Warranties (scope and length).

  • Encumbrances.

  • Rights to terminate or suspend the works.

  • Insurance.

  • Exclusion of liability.

  • Limits on liability.

  • Liquidated damages and bonuses.

  • Contract security.

  • Indemnity and waiver of claims.

  • Permitting and licensing.

  • Responsibility for unknown conditions.

  • Choice of law and choice of forum provisions, particularly in international projects.

  • Dispute resolution mechanisms.

 

Architects, engineers and construction professionals

14. How are construction professionals usually selected? Following selection, how are they then formally appointed?

Design professionals and other owner-engaged consultants are typically retained through either a competitive tender process or single-sourcing by the owner. In some cases, where the entity retaining the construction professional is the government or a government funded entity then there may be a legal requirement for a competitive procurement process to be used. This is the case in Ontario, where under the Broader Public Sector Procurement Directive 2011, engagements involving the use of public funds for goods and services, including professional design services over a threshold sum must be acquired through a competitive, open, fair and transparent process.

Depending on the scale of the project, this selection process can occur several years before the construction contractor is selected. However, in the case of a design-build or EPC/M contracts, the design professional is usually part of a joint venture or partnership with the contractor and is engaged at the time that the contract is awarded for both the design and construction of the project.

 
15. What provisions of construction professionals' appointments are most heavily negotiated? Are liabilities commonly limited or capped in construction professionals' appointments?

Negotiated provisions

The following contractual provisions are often the subject of negotiations between the owners and construction professionals:

  • Price.

  • Performance standards or outcomes.

  • Commitment of key individuals.

  • Limitations on liability.

  • Exclusions of liability.

  • Insurance.

  • Indemnities.

  • Reliance on information provided by the owner.

  • Intellectual property rights.

  • Termination.

Liability

Typically, construction professionals seek to limit their liability to one or more of:

  • A specified capped amount.

  • The total fee payable under the contract.

  • The maximum amount of insurance coverage prescribed under the contract.

 

Payment for construction work

16. What are the usual methods of payment for construction work? Are there ways for the contractor and consultants to secure payment or mitigate risks of non-payment under local law?

Methods of payment

Construction contractors are typically paid through periodic "progress draws" based on the stage and completion of the project and the terms of the contract between the parties. A contractor submits a progress draw for a certain amount of completed work, and a third party contract "payment certifier" or "consultant" (often the owner's design architect or engineer, in the case of the Canadian Construction Documents Committee (CCDC) contract forms) verifies that the progress invoice represents the value of the work performed or supplied. In Ontario and the other common law provinces, there is statutory lien legislation (which, depending on the province, may be referred to as "Builders", "Construction" or "Mechanics" lien legislation) that requires owners to retain a percentage of the earned fee on account of "holdback" for the benefit of the subcontractors and suppliers to the contractor. The statutorily required holdback is held until the contract reaches substantial completion performance, following which it is released to the contractor provided there are no liens against the project.

Securing payment

Contractors can advance construction liens for any work that provides a "benefit" to a property. The construction lien is typically initiated by registration against the project lands, thereby securing payment against the holdback.

In most provinces, liens are governed by a statutory lien regime, such as:

In Ontario, Alberta and British Columbia, among other provinces, subcontractor claimants must register or preserve liens within a prescribed period from the date that they last supplied work to the project (or in Ontario, from the earlier of the date of last supply, or the publication of a certificate of substantial performance of the prime contract).

Labour and material payment bonds are also common on Canadian construction projects. These are issued by the contractor's surety, who usually also provides a performance bond on the general contractor's work in favour of the owner. Labour and material payment bonds typically provide security for the first tier of subcontractors who perform work and supply materials directly to the general contractor. On federal and some other projects, the labour and material payment bond may extend to sub-subcontractors and suppliers who do not have direct privity of contract with the general contractor. Recovery under these bonds are available to unpaid subcontractors and suppliers, in addition to their statutory lien remedies.

In Canada's common law provinces, the lien statutes may also include trust rights, as an additional remedy for unpaid accounts. For example, in Ontario, the Construction Lien Act permits trust claims against not only the contractor corporation, but also against the officers, directors and others who are found to be in control of the contractor corporation. This statutory remedy permits subcontractors to essentially pierce the contractor corporation's corporate veil. Contractors doing business in Canada are well advised to check the applicable provincial lien legislation and to be aware that individuals within the contractor company could be personally liable for breaches of trust amounting to misappropriating project funds for purposes other than paying subcontractors or suppliers on the project.

Apart from these legislative protections, contractors can try to negotiate terms for prompt payment of invoices over the course of a project. Some terms that may be included are:

  • Requiring payment to be made by the owner within a specified time following an application for payment.

  • Requirement for the owner to pay interest on late payments.

  • Right of the contractor to suspend performance of the contract where the owner has defaulted on making payments.

In Ontario, prompt payment is an issue that is currently being considered in the context of reform of the provincial lien legislation.

 

Subcontractors

17. How do the parties typically manage their relationships with subcontractors?

Owners and contractors typically manage their relationships with subcontractors through the use of written subcontract agreements. These can either be the contractor's customised form or a standard form, such as those published by the Canadian Construction Documents Committee (CCDC). It is not common for owners to prescribe the form of subcontract to be used by contractors, outside of construction management arrangements where the owner remains directly liable to certain trade contractors.

The following are typical provisions in subcontracts.

Back-to-back obligations

Subcontracts can stipulate that all of the obligations required of the contractor in its contract with the owner, flow down to the subcontractor to the extent of the scope of their work on the project. For this to be effective, however, there must be clear language and an acknowledgement from the subcontractor that it has received and reviewed the "prime" construction contract between the contractor and owner.

Pay when or if paid

"Pay when paid" or "pay if paid" provisions link the timing of payment to the subcontractor to payment from the owner to the contractor. Depending on the province, such provisions may or may not be enforceable.

Bonds

Owners can require contractors to carry labour and material payment bonds as part of the contract security for a project. These bonds not only provide security to the subcontractors, in the event of a default by the contractor, but can assist owners in getting subcontractors to continue with their work. Depending on the size and complexity of the project, contractors can also require certain subcontractors to provide their own performance bonds as security for the performance of the subcontract.

Subguard

Subguard is a relatively new insurance product that provides general contractors with protection from the costs and delays that may arise when a subcontractor or supplier defaults. From an owner's perspective, subguard may not be a substitute for a surety performance bond, since subguard does not protect the owner against the contractor's default, but subguard does protect against the bankruptcy or default of major project subcontractors.

Applications for payment

To protect against the non-payment by subcontractors to their sub-subcontractors, suppliers and other creditors, contractors can request certain documents from their subcontractors as part of their applications for payment, including:

  • A statutory declaration or a release certifying that all sub-subcontractors and suppliers below the subcontractor have been paid up to date.

  • Certificates, declarations or other evidence of payment of government fees and contributions.

  • A release of any claims the subcontractor may have against the contractor, owner, consultant or project funder.

In Ontario, in the absence of privity of contract, an owner is typically only liable to a subcontractor for the 10% holdback pursuant to the requirements of the provincial lien legislation. The holdback must be withheld by the owner until the expiry of the time for all subcontractors and suppliers to register liens against the project.

Some lien statutes (such as Ontario's statute) also provide a mechanism for subcontracts to be separately certified as complete, so that the subcontractor's share of the holdback retained by the owner from the contractor can be released prior to the contractor attaining substantial performance of the entire contract scope of work. This mechanism may be appropriate in circumstances involving long duration contracts, where the subcontractors performing the earliest project work would otherwise have to wait until the substantial completion of the project to receive their share of the holdback.

 

Licensing

18. What licences and other consents must contractors and construction professionals have to carry out local construction work? Are there any specific licensing requirements for international contractors and construction professionals?

Architects, engineers, plumbers and electricians must be licensed by their respective professional organisation. Typically these organisations operate on the provincial level. General contractors are not typically required to be licensed.

Municipalities can require business licences. Contractors intending to perform work on municipal projects should check with the relevant municipality to determine the business licensing requirements. See Question 19 for more information.

There are no specific licensing requirements for international contractors.

General contractors must be registered under the applicable workers compensation regimes, which is a mandatory publicly funded insurance programme in each of the Canadian Provinces. The applicable workers compensation legislation for Alberta, British Columbia, Ontario and Quebec can be found at the links below:

 
19. What licences and other consents must a project obtain?

Canadian municipalities may require a municipal business licence for anyone carrying on a trade, calling or business within the boundaries of the municipality (see Question 18).

Before commencing a project, local land use planning and zoning permissions must be obtained. Environmental approvals may be required in certain circumstances before construction can commence. Federal licences or permits may be required for federal government properties or for projects within federal jurisdiction. Building permits are typically required by municipalities, and construction must generally conform with provincial building code legislation.

Inspections are required throughout construction, either by:

  • Approval authorities.

  • The professional staff engaged for the project.

Municipal authorities typically require approval for final occupancy permits to be issued. This includes building code compliance and safety system approval, such as water sprinklers and fire safety necessities. The professional staff engaged to oversee the project are also required to certify progress and completion of various aspects.

 

Projects insurance

20. What types of insurance must be maintained by law? Are other non-compulsory types of insurance maintained under contract?

Compulsory insurance

The industry benchmark insurance policy forms are provided by the Insurance Bureau of Canada (IBC). The IBC forms are developed by technical committees comprised of member insurance companies.

Any party employing workers in Canada must participate in the workers' compensation plans, which are governed by the provincial governments.

The Canadian Construction Documents Committee (CCDC) 2 2008 Stipulated Price Contract (the most common form used on construction projects) prescribes the following basic insurance requirements for projects:

  • General liability insurance in the name of the contractor.

  • Automobile liability insurance.

  • Aircraft and watercraft liability insurance.

  • "Broad form" property insurance.

  • Boiler and machinery insurance.

The particulars of the required insurance limits and coverage are often the subject of negotiation between the owner and contractor.

Provincial workers compensation and insurance regimes

Most businesses, including nearly all businesses in the construction industry, need to register with the mandatory provincially operated workers' compensation regime.

Non-compulsory insurance

There are a variety of vehicles available to adequately insure construction projects. Below are some of the commonly used forms of non-compulsory insurance:

  • Builders' risk policies and other property policies.

  • Commercial general liability policies and other liability policies.

  • Professional liability policies.

  • Pollution insurance.

  • Default insurance.

  • Marine transit policies.

  • Riggers liability insurance.

  • Delayed completion, force majeure and liquidated damages insurance.

  • Political risk insurance.

The owner can stipulate that certain non-compulsory insurance policies must be maintained under the contract, for example, errors and omissions, insurance for design professionals.

In addition, depending on the size of the project, the owner may utilise an owner-controlled insurance programme, to ensure that there is adequate coverage in place, without gaps, for all project participants.

 

Employment laws

21. What are the main requirements for hiring local and foreign workers?

Local workers

Generally, there are no labour law requirements relating to the hiring of local workers for a construction project. However, the workers do need to have the requisite government qualification certification for the specific job being performed.

If a project is taking place in a territory held by the Canadian First Nations peoples, the agreement reached for use of the land will almost always include a requirement that First Nations peoples must be employed on the project.

A foreign party seeking to commence a Canadian construction project may wish to engage a local firm to conduct certain aspects of the work. For example, engineering work can be subcontracted to a Canadian engineering firm to ensure compliance with all necessary licensing and qualification requirements. However, if the foreign entity wishes to perform some of the engineering aspects, further licensing requirements must be taken into account.

Foreign workers

A foreign worker can only work in Canada as either:

  • A permanent resident.

  • A "temporary foreign worker".

The Temporary Foreign Worker Program (www.esdc.gc.ca/eng/jobs/foreign_workers//index.shtml) in Canada has recently come under review and certain changes have been implemented in relation to the policy.

The Temporary Foreign Worker Program allows Canadian employers to hire foreign nationals to fill temporary labour and skill shortages when qualified Canadians are not available. Employers require a labour market opinion from Human Resources and Skills Development Canada to hire a foreign worker. However, certain categories of workers do not require a labour market opinion under trade agreements, such as North American Free Trade Agreement (NAFTA). Once obtained, the worker must apply for a work permit. If approved, the employer is then responsible for ensuring that the Workers' Compensation benefits and medical coverage are in place.

Changes to the Temporary Foreign Worker Program process in 2015 may negatively impact the construction sector in Canada. The Canadian Construction Association estimates a need to recruit 250,000 new workers in the construction industry by 2021 to keep pace with both demand and also the retirement of skilled workers. The government has suspended the accelerated labour market opinion process, which previously enabled employers to seek foreign skilled workers on an expedited basis to meet the needs of a project. Employers are now required to spend more time looking domestically for skilled workers before seeking a labour market opinion, and the construction industry fears this will slow development and work on projects.

Licensing requirements must also be considered when seeking to employ temporary foreign workers for a construction project.

 
22. Which employment laws are relevant to projects?

There are no labour laws that address construction projects specifically. Labour and employment law is a matter of provincial jurisdiction, and as such, all the governing labour legislation is in the province in question. It is mandatory that all employers participate in the provincial Workers' Compensation programme.

The relevant provincial legislation for Ontario, Alberta and British Columbia is as follows:

The legislation also imposes standards that must be met and governs issues ranging from maximum working hours to termination notice and pay.

In Quebec (which is a civil law jurisdiction), the Civil Code of Quebec is the governing legislation.

 
23. Must an employer pay statutory redundancy or other payments at the end of a project? Are all employees eligible?

Statutory redundancy and other payments depend on provincial legislation and any applicable collective agreements. Many provinces, including Ontario, exempt construction workers from legislated entitlements to termination pay. A "construction worker" is a defined term in the legislation that does not necessarily include all employees engaged in the project. Certain off-site employees may still be entitled to termination pay.

 

Health and safety

24. Which health and safety laws apply to projects?

Each province and territory has enacted occupational health and safety statutes and regulations applicable to the construction industry. These laws generally apply, and in some cases, are specific to the construction sector. Worker health and safety is generally a very high priority.

In Ontario, the relevant legislation is the Occupational Health and Safety Act (OHSA) (www.e-laws.gov.on.ca/html/statutes/english/elaws_statutes_90o01_e.htm). Any party that qualifies as a "constructor" under the OHSA is responsible for ensuring that everyone on site, whether or not they are the constructor's employee, is provided with a safe workplace and complies with the requirements of the OHSA. The constructor is also responsible for providing appropriate notices to the Ministry of Labour, including notice of on-site accidents. A joint occupational health and safety committee may need be established and governed in accordance with the OHSA.

The OHSA Regulation for Construction Projects (www.e-laws.gov.on.ca/html/regs/english/elaws_regs_910213_e.htm) contains comprehensive and specific guidelines for ensuring the safety of all workers on a construction site. Constructors are responsible for ensuring that the work site is managed in accordance with these guidelines.

Corporations that fail to abide by the requirements of the OHSA face fines of up to US$500,000 per contravention. Individuals that violate the provisions of the OHSA face fines of up to US$25,000 or up to 12 months imprisonment. The Ministry of Labour advocates for the Provincial Crown Counsel to seek high fines and jail time for repeat offenders and in the event of a workplace fatality.

 

Environmental issues

25. Which local laws regulate projects' effects on the environment?

The general rule is that the environmental laws in the province or territory where a project is located apply unless no provincial environmental law exists. The exception to the rule is for projects on federal lands or matters within federal jurisdiction, such as:

  • Federal undertakings.

  • Projects involving or in close proximity to navigable waters.

  • Nuclear facilities.

  • Interprovincial or international pipelines.

Applicable federal legislation includes the Canadian Environmental Protection Act and Canadian Environmental Assessment Act. Each provincial regime is generally similar.

Air

Air emissions into the air are regulated by the provincial governments. Approvals are required to release contaminants into the air.

Water

Water regulation includes:

  • Federal jurisdiction (the Fisheries Act).

  • Provincial law that governs water quality.

  • Municipal law that includes provisions for source water protection.

Permission is required to release contaminants into the water.

Waste

Waste is primarily regulated by provincial governments. Federal law applies to cross-border transportation of waste. Regulations are expected to come into effect in the near future under the Environmental Protection Act that will regulate the movement of waste across international boundaries.

Environmental impact assessments (EIAs)

Federal and provincial governments sometimes require environmental assessments, typically applicable to public projects, with some exception for large scale infrastructure projects (that is, waste management or nuclear facilities).

Many building codes incorporate performance standards that must be demonstrated prior to occupancy. Municipal regulations should be carefully reviewed. For example, the City of Toronto in Ontario has introduced a tiered Green Standard that requires all new construction to meet a Tier I standard, with a voluntary Tier II standard that comes with certain tax incentives. The City of Vancouver in British Columbia also has specific green building regulations in place.

 
26. Do new buildings need to meet carbon emissions or climate change targets?

There are currently no requirements for buildings to meet carbon emission or climate change targets unless it is a facility (for example, a power plant) that emits a significant volume of greenhouse gases. In these cases, regulations under the Canadian Environmental Protection Act or similar provincial environmental protection statutes apply (several provinces have legislation similar to the Canadian Environmental Protection Act). Some provinces impose reporting requirements, but only relating to facilities generating sizeable emissions. This area is evolving and the city of Vancouver is working towards regulating and legislating carbon neutrality by 2020. It is expected that many municipal governments will attempt to introduce similar regulations.

 

Prohibiting corrupt practices

27. Are there any rules prohibiting corrupt business practices and bribery (particularly any rules targeting the projects sector)? What are the applicable civil or criminal penalties?

Rules

Canada strengthened its legislation governing corrupt business practices and bribery of its officials in 2013. The government extended the reach of the:

These Acts seek to combat corruption of officials in the domestic market, as well as attempts at corruption or bribery of foreign officials by Canadians involved in projects.

Canada also recently passed the Proceeds of Crime (Money Laundering and Terrorist Financing Act (www.fintrac-canafe.gc.ca/publications/brochure/05-2003/3-eng.asp), which was established to fight money laundering and terrorist financing both domestically and internationally. Certain industries are required to report to the body in charge of enforcing this legislation and are required to "know their clients" by requesting identification.

In addition to common safeguards, the amended legislation has created offences for the following acts, if they are deemed to be for the purpose of bribery or to hide bribery:

  • Maintaining false accounts.

  • Failing to record or adequately identify transactions.

  • Record non-existed expenditures.

Government contracts frequently include a list of prohibited activities for all those parties interested in bidding.

Quebec passed the Anti-Corruption Act (www2.publicationsduquebec.gouv.qc.ca/dynamicSearch/telecharge.php?type=2&file=%2F%2FL_6_1%2FL6_1_A.htm) in 2011 to deal with rampant corruption in the construction industry, particularly relating to the awarding of various public sector contracts. The Act established an Anti-Corruption Commissioner empowered to receive, record and investigate any wrongdoing and to recommend appropriate sanctions.

Penalties

The penalties associated with the various offences related to procuring a construction contract or obtaining a benefit in the bidding and execution of a project include:

  • Loss of contract.

  • Significant financial penalties of up to five years imprisonment for bribery of a public official.

 

Bankruptcy/insolvency

28. What rights do the client and funder have on the contractor's bankruptcy or insolvency?

In most construction contracts, the owner and contractor usually agree that the contractor's bankruptcy or insolvency is a ground for termination. This clause is found in most standard construction contracts, including the Canadian Construction Documents Committee (CCDC) 2 2008 Stipulated Price Contract.

However, if a company is restructured under the Bankruptcy and Insolvency Act (http://laws-lois.justice.gc.ca/eng/acts/B-3) or the Companies Creditors Arrangement Act (http://laws-lois.justice.gc.ca/eng/acts/C-36), construction contracts can be assigned to a trustee and this termination right is typically suspended or stayed. In certain cases, lien rights can be affected as well.

Owners often also use the following rights in the event of the contractor's insolvency:

  • An owner-imposed holdback on a contractor's progress payment request, which can typically represent as much as 10% of the value of the work performed up to the date of default.

  • Enforcement of the contractor's performance bond and a labour material payment bond (each of which will be at least 50% of the contract price).

 

PPPs

29. Are public private partnerships (PPPs) common in local construction projects? If so, which sectors commonly use PPPs?

The Canadian public-private partnership (P3) market is among the most stable, sophisticated and robust markets in the world. Governments at all levels across Canada are committing considerable resources and embracing the P3 project delivery model to close the infrastructure gap and deliver crucial public infrastructure, particularly in the areas of social, health, education and transportation infrastructure. All the provinces are expanding the sectors in which the P3 delivery method is being employed.

Significant projects in the resource development sector have attracted global participants from the construction, design and lenders sectors. Where federal funding is available, there has been significant interest in P3 projects at the municipal level, most recently in the area of transportation upgrades.

The Canadian Council of Private Public Partnerships tracks all ongoing P3 project in Canada. There are currently approximately 50 P3 projects under construction, with a further 25 projects in various stages of pre-construction (www.pppcouncil.ca).

 
30. What local laws apply to PPPs?

There is no specific enabling legislation required at federal or provincial levels for Canadian PPP (P3) projects. The laws that govern P3 projects are the same laws applicable to other regional and multi-jurisdictional construction projects within Canada. In lieu of legislation, specialised federal and provincial government agencies have been established to promote the use of P3 project delivery. The following government agencies exist to oversee and facilitate P3 projects:

  • PPP Canada (federal).

  • P3 Canada Fund (federal).

  • Infrastructure Ontario (ON).

  • Partnerships BC (BC).

  • Alternative Capital Financing (AB).

  • Infrastructure Quebec (QB).

  • Partnerships New Brunswick(NB).

  • Nova Scotia Ministry of Infrastructure and Transportation (NS).

 
31. What is the typical procurement/tender process in a PPP transaction? Does the government or another body publish standard forms of PPP project agreement and related contracts?

The procurement process for a typical PPP transaction is as follows:

  • A federal, provincial or municipal government authority, or a combination of these, selects a design team to create the output specifications and preliminary design for the project, for use during the competitive stages of the procurement process.

  • The government authority issues a request for qualification (RFQ) to prospective bidders. This is a request for any prospective bidder to demonstrate it possesses the qualifications to perform the work described in the output specifications and preliminary design and that it can obtain the financial backing necessary for the project.

  • In response to the RFQ, any prospective bidder delivers information about its design team, construction and maintenance teams, and its ability to obtain financial backing for the project.

  • From the group of bidders that respond to the RFQ, the authority issues a request for proposal (RFP) to those bidders found to satisfy the basic requirements listed in the RFQ. The RFP provides detailed information to the bidders about the project and outlines the rules of engagement for the balance of the competitive bidding process, including the requisite submissions and how the bids (or proposals) will be evaluated.

  • The authority also typically appoints a "fairness monitor" to oversee the balance of the competitive process. This role is usually filled by an accounting or professional engineering firm.

  • During the RFP stage, each bidder will typically:

    • obtain and demonstrate financing approval for the project;

    • prepare construction designs, procurement and construction schedules, as well as maintenance plans;

    • develop and submit to the authority any additional information requested in the RFP;

    • participate in commercial confidential meetings to gain insight into the requirements of the project and how best to formulate its bid;

    • submit questions or requests for information on the terms of the proposed agreement between the bidder and the authority;

    • finalise the key terms of the agreements between its team members.

  • At the conclusion of the RFP stage, the authority selects one of the bidders based on the criteria established in the RFP.

  • Following selection of the successful bidder, a closing date for the contractual and financial transaction is set.

  • The authority finalises its agreement with the contractor (project agreement) and the team members finalise their respective agreements. An example of the project agreement for the Pan/Parapan American Games' Athletes' Village in Toronto is available online (www.infrastructureontario.ca/What-We-Do/Projects/Project-Profiles/Pan-Am-Athletes--Village).

Once the financing of the successful bidder is secured, the parties (the authority, the successful bidder and each of the successful bidder's team members) execute all the necessary agreements and complete any other outstanding requirements. At that point, the transaction closes and work on the project starts.

 

Dispute resolution

32. Which are the most common formal dispute resolution methods used? Which courts and arbitration organisations deal with construction disputes?

Formal dispute resolution methods

Dispute resolution in construction matters is most commonly addressed through:

  • Litigation in the courts.

  • Mediation (pre-litigation mediation being on the rise).

  • Arbitration.

Dispute resolution boards and project mediators are also used on some larger projects.

Although arbitration has long been a common clause in standard form construction contracts used throughout the industry, the courts have typically been the venue of choice for Canadian domestic construction projects. However, arbitration is becoming a more regularly used dispute resolution option, particularly on larger projects and projects involving international participants.

Courts and arbitration organisations

Nationally, there are a wide range of arbitration organisations and institutions used for the resolution of construction disputes in Canada, but no one organisation or institution is viewed as the dominant organisation. However, it is not uncommon in construction arbitrations for reference to be made to international rules, such as those of the International Chamber of Commerce (ICC).

In Toronto, Ontario, there is a specialised construction lien court, presided over by case management masters (provincially appointed judicial officers). These masters have the authority to adjudicate construction lien actions and trials by way of a reference order from a judge of the Ontario Superior Court. However, their jurisdiction does not extend to projects beyond Toronto’s borders. Administration of construction litigation varies from province to province, and even region to region within the provinces.

Arbitration proceedings are provincially mandated and are subject to the arbitration legislation enacted in each province and territory.

Typical arbitration rules that the parties can agree to prior to entering into arbitration are provided by the ADR Institute of Canada, Inc., which can be found at: http://adrcanada.ca/resources/PubUploadFiles/Website/ADRIC_Arbitration_Rules.pdf. The Canadian Arbitration Association also provides suggested rules for arbitration proceedings (http://canadianarbitrationassociation.ca/?page_id=55).

 
33. What are the most commonly used alternative dispute resolution (ADR) methods?

Perhaps the most widely used alternative dispute resolution method in Canada is neutral, non-binding mediation, which is a well-established cost-effective manner and successful means of settling disputes that can be utilised during construction, after project completion, before the commencement of formal action or arbitration, or after the commencement of formal action or arbitration, but prior to trial. Mediation is also included in, and sometimes mandated by, standard form contracts as a precursor to litigation or arbitration. For example, mediation is expressly included in the commonly used Canadian Construction Documents Committee (CCDC) 2 2008 Stipulated Price Contract. Mediation of litigation disputes is also mandated in a number of jurisdictions. In Ontario, the provincial court rules mandate mediation prior to trial for all actions commenced in Toronto, Ottawa, and the Windsor area.

Arbitration is increasingly being used in larger construction disputes, either on narrow issues or in lieu of litigation.

Although not yet common in Canada, dispute resolution boards (DRBs) are gaining attention as a potentially cost-saving method of dispute resolution during construction. A DRB is essentially a panel of independent experts or individuals appointed at the outset of a project, whose purpose is to regularly attend the project site and be available to mediate or otherwise address project disputes as they occur.

Project mediators and project arbitrators are contemplated under some standard form contracts, but rarely appointed prior to disputes arising on the project.

 

Tax

34. What are the main tax issues arising on projects?

Income tax

Generally, a person's liability for income tax depends on its residency. Persons who are resident within the meaning of the Income Tax Act (Canada) (the Tax Act) (http://laws.justice.gc.ca/eng/acts/I-3.3) are liable for tax on their worldwide income. A person that is a non-resident is subject to Canadian tax on income or gains from a Canadian source, which includes a business carried on in Canada. The amount of tax payable might be reduced or eliminated via a tax treaty that Canada has entered into with the person's country of residence. Generally, under Canada's tax treaties, only business profits earned by a non-resident that are attributable to a "permanent establishment" situated in Canada are subject to Canadian tax. For these purposes, a permanent establishment is generally defined to include a construction project in Canada that lasts 12 months or more.

Taxpayers are generally subject to income tax at both the federal and provincial level. Depending on the province, the top marginal tax rate is:

  • For an individual, 39% to 50%.

  • For a corporation, 25% to 31% on active business income.

In addition, a branch tax of 25% (subject to reduction under a tax treaty) is generally levied on the after-tax business profits of a non-resident corporation that carries on business in Canada directly through a branch.

Non-residents are generally subject to Canadian income tax on gains from the disposition of "taxable Canadian property", including Canadian real estate and shares of corporations that derive their value principally from Canadian real estate. A buyer may be required to withhold and remit a portion of the purchase price otherwise payable to a non-resident seller unless the seller has obtained a clearance certificate from the Canada Revenue Agency (CRA).

Non-resident withholding tax

The Tax Act generally requires every person, including a non-resident, to withhold and remit 15% of each payment to a non-resident person in respect of services physically performed in Canada on account of the service provider's Canadian income tax liability. A waiver from this withholding tax is available in some cases. A non-resident can generally claim a refund of any excess of the amount withheld over its ultimate tax liability by filing an income tax return.

A resident is also required to withhold and remit to the CRA 25% of the gross amount of certain payments to a non-resident, subject to tax treaty relief. The principal payments that might attract withholding tax include:

  • Dividends.

  • Interest that is:

    • a "participating debt interest";

    • paid by a Canadian borrower that does not deal at arm's length with the non-resident lender.

  • Rent and royalties.

  • Management and administrative fees.

Transfer taxes

The federal government levies a VAT-like 5% goods and services tax (GST). Several provinces have combined the GST and their respective provincial retail sales tax to form a harmonised sales tax (HST) with combined GST or HST rates ranging from 13% to 15%. GST or HST is charged on the:

  • Sale of commercial and new residential buildings.

  • Rent payable on a commercial lease (but not a residential lease).

Generally, businesses can claim input tax credits to recover the GST or HST paid on goods and services that were acquired in the course of their commercial activities.

Most of the "non-HST" provinces impose a retail sales tax (ranging from 5% to 8%) on personal property and certain services purchased for consumption.

Some provinces and municipalities impose a land transfer tax on a purchaser of real estate at graduated rates, based on the value of the consideration paid.

 
35. Are any methods commonly used to mitigate tax liability on projects? Are there any tax incentives to carry out regeneration projects?

The choice of entity structure can be a critical factor affecting the tax efficiency of a project. Common ownership structures include:

  • Corporations.

  • Partnerships.

  • Trusts.

Non-residents must also decide whether to carry on Canadian activities directly or through a Canadian entity. Each structure has its own relative benefits and costs that must be evaluated, taking into account relevant non-Canadian tax considerations. The mix of debt and equity used to finance a project can also play a key role in managing tax liability.

Federal, provincial and municipal governments grant tax incentives to taxpayers that undertake certain types of projects, or projects in certain regions. These include:

  • Reduced tax rates.

  • Accelerated rates of depreciation.

  • Tax credits.

  • Subsidies.

 

Other requirements for international contractors

36. Are there any specific requirements that international contractors or construction professionals must comply with?

There is no specific requirement that a party seeking to engage in a construction project in Canada be a member of a certain organisation in Canada. However, all the requirements associated with Canadian labour laws and tax laws must be considered.

In the Province of Québec, parties that will be competing in a call for tenders or an awards process for contracts and subcontracts with the Québec government and Québec municipalities must obtain an authorisation from the Autorité des Marchés Financiers if the value of the contract exceeds certain thresholds. For contracts with the Province of Québec, the threshold is set at expenditures equal or greater than Can$5 million. For contracts with the city of Montréal, the threshold is set at expenditures equal or greater than Can$100,000.

It is recommended that a foreign party have a representative on the ground to ensure compliance with the legislation, as well as Canada's specific requirements for each construction professional or subcontractor particular to the job being performed (for example, an electrician).

Engaging local counsel with expertise in construction projects is encouraged, to ensure compliance with all local laws.

 

Reform

37. Are there any proposals to reform construction and projects law?

Reform proposals

The Ontario Construction Lien Act establishes a system of lien and holdback rights, and trust provisions to provide financial protection to those who supply services or materials to a construction project. Following a recently completed independent review commissioned by the Province of Ontario, significant changes are expected to be made to Ontario's Construction Lien Act for the first time in over 30 years. In addition to changes to requirements for prompt payment and a new adjudication process for disputes, the authors anticipate that there will also be changes to address some of the unique issues that arise on Canadian PPP (P3) projects, and other alternative project financing models, that were not considered when the Construction Lien Act was first created.

Trends

P3 projects continue be a popular approach to major infrastructure projects in Canada. Across the country, large scale infrastructure projects are underway. Despite an economic slowdown in recent years, the construction industry in Canada continues to grow and evolve. P3 projects have been used for over a decade in Canada. While the first projects mainly involved hospitals and other social infrastructure, P3s are now being used for a variety of projects, including highway construction.

In 2014, a section of scaffolding on a Toronto high-rise condominium project collapsed, resulting in the death of a construction worker. Recently, the Ontario Ministry of Labour, in conjunction with the Workplace Safety and Insurance Board (WSIB), appointed an expert advisory panel to review the safety requirements for construction workings operating at heights. The panel created a new mandatory health and safety awareness training programme, and developed a new "Working-at-Heights Training Program Standard" which took effect on 1 April 2015.

 

Main construction organisations

Canadian Construction Association (CCA)

Main activities. The CCA's mission is to be the national voice for the Canadian construction industry. Members gain access to standard construction documents, guides, and regular updates on government policy and regulatory guidelines. The CCA has over 17,000 members and works to give a voice to the construction industry in public policy and the development of legal and professional standards.

W www.cca-acc.com/

Canadian Construction Documents Committee (CCDC)

Main activities. The CCDC is a national committee that undertakes the development, production and review of Canadian construction contracts, forms and guides in an effort to standardise construction documents. The CCDC is made up of owner representatives from the public and private sectors, including members appointed from the Association of Consulting Engineering Companies-Canada, the CCA, Construction Specifications Canada, and the Royal Architecture Institute of Canada.

W www.ccdc.org/

Royal Architectural Institute of Canada (RAIC)

Main activities. RAIC's mission is to "promote excellence in the built environment and to advocate for responsible architecture". RAIC is the national voice for architects and architecture in Canada, with 5,000 members. RAIC creates standardised architectural documents, working in conjunction with the CCDC.

W www.raic.org/

Association of Consulting Engineering Companies-Canada (ACEC)

Main activities. The ACEC represents the interests of businesses that provide professional engineering services to the public and private sector. The ACEC offers planning, designing, and implementing services to its members for a variety of engineering projects. ACEC's members can also provide advice and expertise in a variety of engineering-related fields.

W www.acec.ca/

Construction Specifications Canada (CSC)

Main activities. CSC is a national organisation that focuses on the development and delivery of educational programmes, publications, and services to improve the Canadian construction community. CSC "pursues the study of systems and procedures which will improve the coordination and dissemination of documentation relevant to the construction process", to enhance the efficiency and effectiveness of the Canadian construction industry as a whole.

W www.csc-dcc.ca/



Online resources

Canadian Legal Information Institute

W www.canlii.org/en/

Description. The website of the Canadian Legal Information Institute provides access to court judgments, tribunal decisions, statutes and regulations from all Canadian jurisdictions.



Contributor profiles

Matthew R Alter, Partner

Cassels Brock & Blackwell LLP

T +1 416 860 6764
F +1 416 640 3083
E malter@casselsbrock.com
W www.casselsbrock.com

Professional qualifications. Member of the Law Society of Upper Canada (Ontario) since 1987; Martindale-Hubble AV Preeminent Peer Review Rating; listed among leading construction lawyers in Chambers Global Guide, The Best Lawyers in Canada, Legal Media Group Guide: Best of the Best (Global), Who' s Who Legal, and The Canadian Legal Lexpert Directory.

Areas of practice. Construction; infrastructure; procurement; land development; litigation; mining; renewable energy & clean technology. Head of Cassels Brock & Blackwell LLP's Construction Law Group.

Professional associations/memberships.

  • Canadian College of Construction Lawyers, Fellow and Officer (elected Treasurer May 2015).
  • American Bar Association (ABA), Past Chair of Forum on Construction Law's International Division.
  • Law Society of Upper Canada.
  • Ontario Bar Association, Construction & Infrastructure Law section.
  • Member of Canadian Council of Private Public Partnerships.

Publications

  • Editor: Journal of the Canadian College of Construction Lawyers (2012-2015).

  • Co–Author: Kirsh and Alter: A Guide to Construction Liens in Ontario.

  • Co–Author: Securing Payment and Performance on International Projects chapter. in American Bar Association text, International Construction Law: A Guide for Cross-Border Transactions and Legal Disputes.

Todd Robinson, Associate

Cassels Brock & Blackwell LLP

T +1 416 860 6506
F +1 416 642 7160
E trobinson@casselsbrock.com
W www.casselsbrock.com

Professional qualifications. Member of the Law Society of Upper Canada (Ontario), 2008

Areas of practice. Construction; infrastructure; land development; litigation.

Jordan R Fletcher, Associate

Cassels Brock & Blackwell LLP

T +1 416 869 5402
F +1 416 642 7146
E jfletcher@casselsbrock.com
W www.casselsbrock.com

Professional qualifications. Member of the Law Society of Upper Canada (Ontario), 2010

Areas of practice. Construction; infrastructure; land development; litigation; mining.

Mark St Cyr, Associate

Cassels Brock & Blackwell LLP

T +1 416 869 5462
F +1 416 640 3209
E mstcyr@casselsbrock.com
W www.casselsbrock.com

Professional qualifications. Member of the Law Society of Upper Canada (Ontario), 2012

Areas of practice. Construction; infrastructure; litigation.

David Ward, Partner

Cassels Brock & Blackwell LLP

T +1 416 869 5960
F +1 416 640 3154
E edward@casselsbrock.com
W www.casselsbrock.com

Professional qualifications. Member of the Law Society of Upper Canada (Ontario), 1992

Areas of practice. Restructuring and insolvency; construction; financial services; litigation.

Laurie Jessome, Partner

Cassels Brock & Blackwell LLP

T +1 416 642 7474
F +1 416 642 7149
E ljessome@casselsbrock.com
W www.casselsbrock.com

Professional qualifications. Member of the Law Society of Upper Canada (Ontario), 2003

Areas of practice. Employment and labour; litigation.

Raivo Uukkivi, Partner

Cassels Brock & Blackwell LLP

T +1 416 860 6613
F +1 416 640 3110
E ruukkivi@casselsbrock.com
W www.casselsbrock.com

Professional qualifications. Member of the Law Society of Upper Canada (Ontario), 2004

Areas of practice. Construction; land development; municipal; planning and environmental; real estate and development; aboriginal.


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