On March 20, 2020 the Ontario government enacted a regulation pursuant to the Emergency Management and Civil Protection Act (the “Regulation”). Section 1 of the Regulation suspends any “limitation period” for the duration of the emergency, while section 2 of the Regulation suspends, subject to the discretion of the court, any period of time within which any step must be taken in any proceeding in Ontario, including any intended proceeding. This Regulation may affect lien rights in Ontario, namely the timing of the preservation of a lien.
Ontario courts have held that the time periods to preserve and perfect construction liens are not “limitation periods”. Accordingly, it is unlikely that the time periods to preserve and perfect construction liens have been extended by section 1 of the Regulation. However, it may be possible for a lien claimant to rely on section 2 of the Regulation to argue that the period to preserve and perfect liens has been extended. There is no case law or other legal guidance available at this time that would confirm this interpretation.
Until the Ontario government and∕or the courts confirm that the time periods to preserve and perfect liens have been extended, trades should preserve and perfect liens in accordance with the applicable deadlines set out in the Construction Act.
A final word of caution: on April 3, 2020, the Government of Ontario has reduced the list of construction businesses that constitute “essential workplaces”, which are permitted to remain open. Some construction businesses will be required to cease physical operations which may trigger the running of the clock on the lien preservation period. Given the uncertain applicability of the Regulation to lien rights, it is advisable to seek legal advice, and where appropriate, preserve lien rights during the pandemic.