COCA advocates for delay claims issue during pandemic

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The Council of Ontario Construction Associations (COCA) has asked members of its participating associations to participate in a letter-writing campaign to Queens Park to address concerns about delay claims because of the COVID-19 pandemic.

While one issue concerning the industry – the hold-up on paying holdbacks because of the emergency regulations – has been resolved, the delay claims issue remains unresolved, according to COCA president Ian Cunningham.

In a September 6 letter to Premier Doug Ford and other cabinet leaders, Cunningham wrote that “we need legislation or a regulation that exempts contractors and subcontractors from liability for project delays to the extent that they are caused by the pandemic.”

“Non-essential construction projects have now shut down entirely by the government causing delays,” he wrote. “Even essential construction projects will be delayed because supply chains have been disrupted, workforces have been depleted, and productivity has been reduced as workers observe social distancing and other required health protocols.

“Financing costs, insurance costs, bonding costs, and equipment rental costs are just a few of the expenses that will continue to accrue even as projects sit idle or are delayed. None of these costs were anticipated when the projects were bid and there will have to be a further discussion on how they will be addressed so that bankruptcies do not sky rocket. Many contracts and subcontracts do not include force majeure clauses that exempt the contractor or subcontractor from liabilities resulting from delays caused by the pandemic.

“Without remedial action by the Province to insulate contractors and subcontractors from liability for delays caused by the pandemic, these contractors and subcontractors will likely be bankrupt by the time work is ready to resume. Furthermore, the industry needs certainty. The industry cannot recover from this emergency if it has to spend the next five years in court fighting about who will bear these losses.

“Therefore, the first part of the solution is legislation or a regulation that exempts contractors and subcontractors from liability for delays caused by the pandemic. The second part of the solution is giving relief to construction owners. Owners are our customers. We will need construction owners to be in good economic health so construction can bounce back after the crisis has passed.

“Therefore, we encourage the Province to work with the federal government to grant construction owners relief from financing and other costs resulting from the pandemic.

“COCA applauds the performance of the government in this crisis so far,” Cunningham wrote. “The decisive measures taken by your government at the early stages of this crisis will save lives in the weeks and months to come. I suggest that your government needs to act with similar foresight to lay the groundwork now for a vigorous economic recovery once the public health crisis has eased.

“We also support the decision of the Workplace Safety and Insurance Board (WSIB) to allocate the costs of approved COVID19 claims for Schedule 1 employers across all Schedule 1 employers and the same for Schedule 2. Employers of workers in essential businesses who go to work every day and risk infection and their lives for the benefit of the broader society truly deserve this treatment. The infections these workers suffer will have been acquired in the line of their duties ensuring that vital services are available in order to keep Ontario functioning. These workers and their employers are the heroes of this crisis.”

Because of industry lobbying, the provincial government amended regulations to ensure holdbacks can be paid when there isn’t a dispute – but the delay claims issue remains unresolved.

“We need your help to build the response rate for our digital advocacy campaign,” COCA operations manager Martin Benson wrote to members through associations such as the Barrie Construction Assocition. “The campaign seeks relief for contractors from delay claims resulting from the COVID19 pandemic. This relief will ensure that the industry is positioned to help resuscitate the economy once the virus has been defeated.”

“COCA is seeking relief for contractors like you from delay claims that have been caused by the COVID19 pandemic,” Benson wrote. Because their usual methods of lobbying have been curtailed as a result of the pandemic, COCA has turned to a digital advocacy tool.

The digital letter, designed to be sent to individual MPPs in support of COCA’s message, is “dead simple and takes about 30 seconds of your time, Benson wrote. “I encourage you in the strongest way possible to participate. And after you do, forward this message to your work colleagues, your workers and everyone you know in the industry. Please help out. The more people from our industry that participate, the much greater is the chance of securing the relief our industry needs. Many thanks for your help.”

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