The Council of Ontario Construction Associations (COCA) has sent a letter to Premier Doug Ford and several senior cabinet ministers calling for the Ontario government to protect construction employers from the long-term effects of the COVID-19 pandemic.

The letter calls for legislation to be drafted that protects contractors and subcontractors from any liability for project delays caused by the pandemic and by companies’ response measures.

“As you know, the construction industry is already dealing with a shortage of skilled workers. It is entirely foreseeable that additional disruptions in the workforce will result in project delays,” wrote COCA president Ian Cunningham.

“Contractors and subcontractors are typically bound by contract to complete work according to fixed deadlines. Missing a contractual deadline usually results in legal liabilities, with substantial financial damages, for contractors and subcontractors. Owners can claim compensation, for example, for lost rent, the cost of alternative accommodations for tenants, lost profit, increased financing costs, increased insurance and bonding costs, and increased salary expenses, among other damages. Delay claims by owners against contractors and by contractors against subcontractors usually exceed the price of the contract or subcontract in issue. These losses are typically uninsured.”

The letter goes on to explain that most contractors and subcontractors are small businesses that cannot afford additional financial burdens placed on them as a result of widespread delay claims. COCA also expresses concerns about the potential for owners to withhold payments to contractors until such time as a court rules on whether workforce disruptions relating to the pandemic are considered to be beyond a contractor’s control.

Such a ruling, says the letter, “will likely take years.”

“If they do not go insolvent in the meantime, many contractors and subcontractors will need to scale back on their operations pending the outcome of the litigation because their working capital will be limited by these legal actions.”

Many ICI sector contracts, including those in the CCDC2 –2008 contract, include provisions for extending contract deadlines in cases in which contractors are delayed by forced beyond their control.

“If the government does not act, the economic impact of the pandemic will fall by default upon the shoulders of Ontario’s construction employers,” said Cunningham. “We suggest that this will have a long-term negative effect on Ontario’s economy and employment. We urge the government to act now to avoid that outcome."