The Emergencies Act and the Construction Industry

Less than a week ago, the threat of COVID-19 seemed remote. Today, it no longer feels that way. The governments of British Columbia and Ontario have each declared a state of emergency and ordered dramatic measures aimed at slowing the virus. The Federal Government has ordered travel restrictions and is preparing a massive relief package (currently noted to be over $80 billion). It has also embarked on an “extraordinary procurement” process.[1] However, the Federal Government has so far not employed the most potent weapon in its arsenal: the Emergencies Act.

If the COVID-19 crisis deepens, Canadians may have an opportunity to experience this powerful legislation. Below, we consider how the Emergencies Act operates in the context of a pandemic, and describe how it could impact the construction industry.

The Emergencies Act

The Emergencies Act is the successor of the War Measures Act, famously invoked during the October Crisis of 1970. The Act sets out four types of emergencies in which it can be invoked, and defines the types of powers which are afforded to the Federal Government in each of those emergencies. For our purposes, the relevant emergency considered under the Act is the “public welfare emergency” which is defined as follows:

public welfare emergency means an emergency that is caused by a real or imminent

(a) fire, flood, drought, storm, earthquake or other natural phenomenon,

(b) disease in human beings, animals or plants, or

(c) accident or pollution

and that results or may result in a danger to life or property, social disruption or a breakdown in the flow of essential goods, services or resources, so serious as to be a national emergency.[2]

The qualification that the public welfare emergency constitute a “national emergency” is an important one. A “national emergency” is also defined in the Act:

For the purposes of this Act, a national emergency is an urgent and critical situation of a temporary nature that

(a) seriously endangers the lives, health or safety of Canadians and is of such proportions or nature as to exceed the capacity or authority of a province to deal with it, or

(b) seriously threatens the ability of the Government of Canada to preserve the sovereignty, security and territorial integrity of Canada

and that cannot be effectively dealt with under any other law of Canada.[3]

It is beyond the scope of this article to explore whether the COVID-19 pandemic meets these requirements and our intent is not to speculate.

A public welfare emergency affecting more than one province may be declared by the “Governor in Council” (the Governor General). In practice, this means that the federal Cabinet has the power to make such a declaration. In any event, prior to making that declaration, the Governor in Council must “consult” about the proposed actions with the “lieutenant governor in council of each province in which the direct effects of the emergency occur.”[4] Nothing in the Act, however, appears to give the lieutenant governor(s) a veto; they merely need to be consulted. The state of emergency expires after 90 days, unless it is renewed or discontinued before its expiry.[5]

What are the Federal Government’s Powers in a Public Welfare Emergency?

When a “public welfare emergency” is declared, section 8 of the Act sets out the powers available to the Federal Government:

8 (1) While a declaration of a public welfare emergency is in effect, the Governor in Council may make such orders or regulations with respect to the following matters as the Governor in Council believes, on reasonable grounds, are necessary for dealing with the emergency:

(a) the regulation or prohibition of travel to, from or within any specified area, where necessary for the protection of the health or safety of individuals;

(b) the evacuation of persons and the removal of personal property from any specified area and the making of arrangements for the adequate care and protection of the persons and property;

(c) the requisition, use or disposition of property;

(d) the authorization of or direction to any person, or any person of a class of persons, to render essential services of a type that that person, or a person of that class, is competent to provide and the provision of reasonable compensation in respect of services so rendered;

(e) the regulation of the distribution and availability of essential goods, services and resources;

(f) the authorization and making of emergency payments;

(g) the establishment of emergency shelters and hospitals;

(h) the assessment of damage to any works or undertakings and the repair, replacement or restoration thereof;

(i) the assessment of damage to the environment and the elimination or alleviation of the damage; […]

Clearly, these powers are very broad, and several have obvious implications for construction industry participants.

The word “essential” appears in sections 8(d) and (e). Specifically, section 8(d) allows the government to direct any person to render “essential services”, and section 8(e) refers to “essential goods, services and resources”. The word “essential” is not defined in the Act, however section 5 refers to a “breakdown in the flow of essential goods, services or resources, so serious as to be a national emergency.” It is submitted that “essential” could reasonably be interpreted to mean essential to the lives, health and safety of Canadians, or to the ability of the government to preserve the sovereignty, security, and territorial integrity of Canada.

Implications for Construction Industry Participants

Significant emergencies often require new infrastructure, changed supply chains, and manpower to effectively address the emergency. Given the nature of the threat posed by COVID-19, we can foresee the following possible implications for construction industry participants if a public welfare emergency were to be declared:

• Per section 8(1)(c), the property of a contractor or owner – including real property and construction equipment – may be requisitioned for use in responding to COVID-19;
• Per sections 8(1)(c) and (d), machine shops or other production facilities may be ordered to re-tool in order to produce essential healthcare equipment, such as beds, masks and ventilator parts;
• Per sections 8(1)(d) and (g), contractors and construction workers may be required to build new infrastructure, for example hospitals, other medical facilities, and laboratories as well as other necessary facilities. If the situation becomes substantially worse, this could include erecting temporary structures for housing patients and/or bodies;
• Per sections 8(1)(d) and (h), contractors and construction workers may be required to repair hospitals or other public works which are important for responding to COVID-19; and/or
• Per section 8(1)(c) and/or (e), if a construction industry participant is using chemicals which are “essential”, the use and sale of these chemicals may be restricted so that they can be redirected against COVID-19. By way of example, some solvents and distillates have healthcare applications which may eventually be required by the healthcare system.

A failure to comply with an order or regulation made under section 8 can result in a fine or 5 years of imprisonment.[6]

Finally, it should be noted that the Federal Government “shall award reasonable compensation to any person who suffers loss, injury or damage as a result of any thing done, or purported to be done” in relation to an order or regulation made pursuant to section 8 of the Act.[7] However, the quantum and conditions for receiving that compensation appear to be entirely within the discretion of the Federal Government. It is possible that “reasonable compensation” for property damage, expropriations, or compelled service may not reflect fair market value, although it is to be hoped that market value would be the benchmark utilized.

Conclusion

The Emergencies Act is a significant piece of legislation with similarly significant consequences if invoked. While a declaration of a public welfare emergency would be unprecedented in Canada, these are unusual times. A pandemic of this scale has not been seen since 1918. COVID-19 has already caused the United States to invoke that country’s Defence Production Act.

If the Act is invoked, construction industry participants will undoubtedly fulfil their civic duty and rapidly comply with the orders and regulations made under the Act.

[1] Federal Government Press Briefing with Deputy Prime Minister Freeland, March 19, 2020.

[2] Emergencies Act, RSC 1985, c 22 (4^th Supp) [“Emergencies Act“], s 5.

[3] Emergencies Act, s 3.

[4] Emergencies Act, s 14.

[5] Emergencies Act, s 7.

[6] Emergencies Act, s 8(1)(j).

[7] Emergencies Act, s 48.

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