Construction Law Update – Suspension Period Lifted for
Construction Liens and the Release of Holdback
On March 20, 2020, the Province of Ontario filed an order in
council under the Emergency Management and Civil Protection Act
effectively suspending until further notice all statutory
limitation periods, including the limitation periods to preserve
and perfect construction liens retroactive to March 16, 2020.
However, the inclusion of construction liens in the suspension
order proved highly problematic. Under the Construction Act,
statutory holdback cannot be released until the time to preserve
liens has expired. Thus, construction industry stakeholders soon
concluded that statutory holdbacks could not be paid out during the
suspension period. This was a likely unintended consequence of the
suspension order, one which threatened the survival of many
businesses facing an indeterminate delay to the payment of earned
holdback.
