On January 12, 2021, the Government of Ontario (Government) declared a second state of emergency since the onset of the COVID-19 pandemic (Pandemic). The emergency was declared pursuant to section 7.0.1 of the Emergency Management and Civil Protection Act.

Effective as of January 14, 2021 at 12:01 a.m., a stay-at-home order will be in force throughout the province, together with additional public health measures that restrict business operations across a wide range of industries.

In addition, the Government has amended O.Reg 82/20 under the Reopening Ontario (A Flexible Response to COVID-19) Act, 2020 thereby amending the list of essential business that are able to operate (Order).

The construction industry, which has in large part been able to continue operating due to its status as an “essential” service or activity (although subject to additional health and safety measures during the Pandemic) will also be impacted by the new Order. Only those projects, activities and related services that are deemed essential will be able to operate, though the list of projects deemed essential is broad and very much similar to the list from the spring of 2020. Given the “short fuse” between the announcement and the effective date, industry will need to cooperate in order to safely and securely demobilize and secure those sites that will be shut down.

The list of essential projects, activities, and related services (including land surveying and demolition services) is set out below.

Healthcare and infrastructure

• Construction projects and services associated with the healthcare sector and long-term care, including new facilities, expansions, renovations and conversion of spaces that could be repurposed for health care space.
• Construction projects and services required to ensure safe and reliable operations of, or to provide new capacity in, provincial infrastructure, including transit, transportation, energy, mining and justice sectors beyond day-to-day maintenance.
• support the operations of, or provide new capacity in, electricity generation, transmission, distribution and storage, natural gas distribution, transmission and storage or in the supply of resources.Construction projects and services that support the operations of, and provide new capacity in schools, colleges, universities, municipal infrastructure and child care centres within the meaning of the Child Care and Early Years Act, 2014.
• Construction projects under the Investing in Canada Infrastructure Program;
• Construction projects and services that support the operations of broadband internet and cellular technologies and services.

Critical industrial

Critical industrial construction activities required for:

• The maintenance and operations of petrochemical plants and refineries.
• Significant industrial petrochemical projects where preliminary work has commenced before January 12, 2021.
• Industrial construction and modifications to existing industrial structures limited solely to work necessary for the production, maintenance, and/or enhancement of Personal Protective Equipment, medical devices (such as ventilators), and other identified products directly related to combatting the COVID-19 pandemic.

Manufacturing and logistics

• Construction projects that that would provide additional capacity in the production, processing, manufacturing or distribution of food, beverages or agricultural products.
• Construction projects that were commenced before January 12, 2021 and that would provide additional capacity for businesses that provide logistical support, distribution services, warehousing, storage or shipping and delivery services, or provide additional capacity in the operation and delivery of Information Technology (IT) services or telecommunications services.

Residential construction, affordable housing, and Government projects

Residential construction projects are deemed essential where:

• A building  permit has been granted for single-family, semi-detached and townhomes;
• The project is a condominium, mixed-use or other residential building; or
• The project involves renovations to residential properties and construction work was started before January 12, 2021.
• Below-grade multi-unit residential construction projects, such as apartments and condominiums.

Additionally, projects intended to provide affordable housing, shelters, or supports for vulnerable persons are deemed essential.

Any project funded, in whole or in part by, or being undertaken by, any of the following is deemed essential:

• The Crown in the right of Canada or in the right of Ontario;
• An agency of the Crown in right of Canada or in right of Ontario;
• A Municipality;
• A service manager as defined in the Housing Service Act;
• A Registered charity or not for profit corporation within the meaning of the Income Tax Act (Canada); or
• A not-for-profit corporation.

Site preparation/Site closure

• Construction to prepare a site for an institutional, commercial, industrial or residential development, including any necessary excavation, grading, roads or utilities infrastructure.
• Construction and maintenance activities necessary to temporarily close construction sites that have paused or are not active and to ensure ongoing public safety.

Takeaways

The Government has indicated that there will be additional enforcement to ensure compliance. Based on the list, the shut down will have particular impact on commercial projects that do not fit into one of the specified exemptions (for example, tenant-fit-out projects, office renovations, new buildings for “non-essential” industries). In addition to the impact that the shut down will have on project schedules, potential critical path delays, potential material shortages and additional costs of demobilization and remobilization (once the restrictions are eventually lifted), parties may disagree or be unsure of whether a particular project fits within the categories of projects, activities, and related services deemed essential.  As we have previously written, it is imperative that owners, contractors, and sub-contractors review their contractual notice provisions in order to preserve potential claims for delay and to ensure proper record keeping during the shut down in order to be able to “prove” the impacts arising from the shutdown and additional health measures.

Dentons is continuing to monitor for developments related to the construction industry. For more information, please contact Karen Groulx, Dragana Bukejlovic, or another member of Dentons Construction group.