The Construction Lien Amendment Act, Bill 142, recently passed after an 87-0 vote in the Ontario Legislature. The bill brings about long expected improvements for the Ontario construction industry. The new legislation is limited to Ontario, but there is potential for a national impact. Other provinces continue to update their lien acts, which includes dealing with prompt payment.

Therefore, the new legislation presents a big opportunity for brokers. Brokers can assist their clients in understanding the new legislation, and how it might affect their business.

Basic rundown of Bill 142

  • Much-needed updates to 35 year-old legislation includes payment protection throughout the construction pyramid.
  • Contractors and sub-contracts now have security and assurance about timelines for payment.
  • Mandatory performance and payment bonds on public funded projects over a threshold contract price (like the Miller Act in the USA).
  • The judgement process will provide a chance for resolution of construction disputes without disrupting project schedules. Furthermore, it will assist in avoiding costly legal battles.
  • No exceptions rule to hold-back release deadlines means a no exceptions rule to when contractors and sub-contractors are paid.
  • Mandatory payment protection for sub-trades.

Brokers have a chance to lead the discussion with their current clients on how Bill 142 will impact their business. Moreover, a new group of contractors will be reaching out for support and advice. In particular, contractors will need help preparing to provide bonds they may not have needed before. This is a long-term opportunity with the potential to increase the Ontario surety premium pool in a material way.

Canadian Centre for Economic Analysis (CANCEA)

Early in the lien act review process, The Surety Association of Canada ordered a report from The Canadian Centre for Economic Analysis (CANCEA). The report yielded an fair look at the value of surety bonds in Canada. The findings strongly supported the economic value of surety bonds in protecting the construction process and the wider economy.

The CANCEA report was useful in proving the value of our industry’s primary product. Trisura has taken part in discussion and development about surety bonds and their role in the lien act review. We’re excited at the results and look forward to further progress. The regulations are a key point of interest. All of the details about the new act will be held within the regulations.

The construction landscape continues to shift. Trisura continues to innovate with new offerings, like our e-bond platform. Trisura e-bonds launched in 2017. The goal is to provide Trisura brokers and contractors access to a free online platform to procure electronic bonds. Furthermore, the Contractors Bond Program (CBP) has also been developed. The CBP provides brokers with the ability to obtain modest surety credit for their clients through a quick online process.

As always, Trisura remains intent on helping our broker partners, and the Canadian construction industry. We look forward to helping brokers and contractors through this transition.

Valuable Links

Looking for more information on the Construction Lien Amendment Act review and Trisura products? Click on any of the following links: