Government releases rules on lifting COVID-19 holdback suspension

Ontario Construction News staff writer

The text of the regulation that exempts the Construction Act from the suspension of limitation periods has been released and is in force, says MacMillan lawyer Glenn Grenier, who designed the work-around to the province’s emergency regulations that threatened to tie up holdback releases indefinitely.

The text is as follows:

Construction Act

4. On and after April 16, 2020, sections 1 and 2 do not apply to provisions of the Construction Actor of the regulations made under it if the provisions establish a limitation period or period of time within which any step must be taken in a proceeding, including an intended proceeding. O. Reg. 137/20, s. 3.

“What is not immediately clear from the new regulation is the treatment of transitional matters, being liens and other limitations that expired during the suspension period or immediately after April 16, 2020,” Grenier writes.

In the announcement from the Attorney General’s Office on April 9, 2020, it was stated:

The suspension will be lifted on April 16, 2020, to give the industry time to prepare for these changes. Once lifted, parties will have the same amount of time to meet a deadline that had been remaining before the suspension began on March 16, 2020. [emphasis added]

“This intention does not immediately reveal itself in the wording of the new regulation. However, with emphasis on the words “On and after April 16, 2020….” it can reasonably be argued that limitation periods under the Construction Act were suspended but are no longer suspended and limitation clocks continue to tick after April 16, 2020,” he wrote.

“That interpretation would be consistent with the Announcement and would allow parties to take the time needed to accomplish those steps. A safer course of action would be to simply assume no steps were suspended and meet the deadlines as they ordinarily would have arisen and not have to rely upon an uncertain interpretation and application of the suspension and the lifting of the suspension. But if that is not possible, then it can still be argued the limitation clock stopped ticking for 30 days.”