The Ontario Construction Act (the “Ontario Act”) introduced construction adjudications in late 2019. Since then, there has been an increasing uptake of adjudications in Ottawa, and across Ontario.  Between 2022 and 2023, the number of construction adjudications commenced in Ontario more than doubled, with 269 adjudications being commenced in 2023, compared to just 121 in 2022. In Ottawa, the number of completed adjudications tripled, going from 4 in 2022 to 12 in 2023.

We can expect this trend to continue with the Federal Prompt Payment for Construction Work Act (the “Federal Act”), which came into force on December 9, 2023. The Federal Act allows for disputes related to construction projects on federal lands to be sent to adjudication. Prior to the Federal Act coming into force, projects on federal lands were not subject to prompt payment and adjudication regimes.

Considering the large amount of construction projects that occur on federal lands in Ottawa, the availability of adjudication for these projects will likely increase the number of adjudications in the city. As such, it is important for stakeholders in the Ottawa construction industry to familiarize themselves with the adjudication regimes contained in both the Federal Act and the Ontario Act.

Generally, most disputes in Ontario will proceed under the adjudication process prescribed by the Ontario Act, as Ontario is a “designated province” under section 6(1) of the Federal Act. Section 6(2) of the Federal Act states that the adjudication process under the Federal Act does not apply to disputes between a general contractor and subcontractor on federal projects located entirely within a designated province. In other words, the Federal Act requires subcontractors to continue to follow the Ontario Act adjudication process, even for projects on federal lands.

However, the Federal Act will apply to disputes between a general contractor and the federal government as owner. In theory, this means that there could be two separate adjudication proceedings on the same project, occurring under the Ontario Act and Federal Act.

Under both acts, the timelines for adjudication are demanding. The process begins with the complainant providing a Notice of Adjudication. Once a Notice of Adjudication is delivered, the entire process, which includes the selection or appointment of an adjudicator; the exchange of documents relevant to the dispute; and the rendering of a final decision by the adjudicator, is typically completed in around six weeks.

The speed of this process promotes real time dispute resolution.  However, there are significant complementary risks, as it can be difficult to comply with the short timelines, particularly for complex disputes.

For the party initiating the adjudication, you have a strategic advantage in being able to prepare your case and materials before you even deliver the Notice of Adjudication. Potential respondents can mitigate their adjudication risks by maintaining organized project records, so that information relevant to a dispute can be collected and distilled quickly to file responding materials.

In short, the prevalence of adjudication is increasing. Stakeholders in the construction industry should prepare for this reality by familiarizing themselves with the process and being prepared to use (or respond to) adjudication as a dispute resolution tool.