COVID-19 Construction Law Update

Construction as an essential service

 On April 3, 2020, the Ontario government removed most construction work from the list of essential services. As of April 4, 2020 at 11:59 PM, the only essential construction activities allowed to continue are those required for:

1. Healthcare sector;
2. Critical provincial infrastructure;
3. Maintenance and operations of petrochemical plants and refineries;
4. Significant petrochemical projects where preliminary work has already started;
5. Construction and modification of industrial structures necessary to produce, maintain, or enhance personal protective equipment or medical devices related to combatting COVID-19; and
6. Certain residential construction projects that have already started.

Companies will also be permitted to continue to engage in activities to close construction sites to ensure public safety.

Delay notice requirements

Parties should assume they are required to perform their contractual obligations in the absence of a clear provision to the contrary, or unless the other party has released them from their obligations.

If a contractor or subcontractor needs extra time to complete their work, they must satisfy any notice requirements in their contract. For example, a standard CCDC-2 contract allows a contractor to obtain an extension of the schedule if they are delayed by something beyond their control, provided they give the owner timely written notice shortly after the delay event. A delay notice must be specific about the cause of the delay so the owner can mitigate any fallout. Parties should carefully review their contracts and speak to their lawyers before exercising such a provision.

In the absence of a contractual provision, parties should consult a lawyer to discuss their rights and obligations under the common law.