British Columbia Law Institute releases Consultation Paper on the BC Builders Lien Act

The British Columbia Law Institute (“BCLI”) recently released its Consultation Paper on the Builders Lien Act on September 27, 2019. Helmut Johannsen of Singleton Reynolds was a member of the Builders Lien Act Reform Committee.

The Builders Lien Act is the key form of security of payment legislation in British Columbia as it is intended to protect contractors, material suppliers, and individual workers on construction projects against the failure of others to pay for work, services, or materials.

The current Builders Lien Act was passed in 1997 and introduced changes that were generally seen as improvements. Since then, however, the construction and development industries have continued to evolve giving rise to new issues and uncertainty.  The BCLI has produced a report which recommends reform of the Act based on the deliberations of a volunteer committee.

The Consultation Paper proposes eighty (80) “tentative” recommendations and invites responses from interested stakeholders. The tentative changes are far-reaching and include: modifications to the minimum amount of a claim for lien and simplifying the process for preserving lien rights, reducing the number of separate events that are capable of triggering the start of the 45-day countdown between substantial completion and the end of the lien filing period, abolishing the Shimco lien, and adopting a simpler form of claim for lien. The Consultation Paper also proposes changes to key definitions and clarifies what amounts to lienable work or supply of material under the statute. Interestingly, the Consultation Paper does not include a recommendation on whether the province should retain or repeal the Builders Lien Act altogether, yet invites stakeholders to provide their views on the subject.

Despite recognizing growing support for prompt payment and adjudication legislation across Canada, the Consultation Paper does not address implementing similar legislation in British Columbia. According to the Consultation Paper, this is because payment delay in the construction industry is “not exclusively related to the Builders Lien Act.”

Bruce Reynolds and Sharon Vogel of Singleton Urquhart Reynolds Vogel LLP played leading role in the modernization of Ontario’s Construction Act. The new Construction Act contains modernization provisions which came into force in July 2018 and included changes to: lienability, alternative financing and procurement projects, a new extended lien period, holdback and substantial performance, notice of non-payment, construction trusts, and mandatory surety bonds.

In the coming weeks, Singleton Urquhart Reynolds Vogel LLP’s Construction and Infrastructure Group will have further comments on the Consultation Paper.