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Do you need to obtain a WSIB Clearance Certificate from your construction contractor?  The short answer is "yes" unless the contractor is performing "exempt home renovation work."

Section 141.1 of the Ontario Workplace Safety and Insurance Act, 1997 requires anyone who hires a contractor to perform construction work to ensure that the contactor has registered with the WSIB and paid its premiums. An owner who obtains a WSIB Clearance Certificate has complied with its obligations pursuant to section 141.1 of the Act.  A "Clearance Certificate" is issued free of charge to owners, contractors, and subcontractors by the Workplace Safety Insurance Board (the "WSIB").  The Clearance Certificate shows that the contractor or subcontractor is in good standing with the WSIB.  An owner who fails to obtain a Clearance Certificate may be liable for the contractor's payment obligations to the WSIB, including outstanding WSIB premiums. 

However, contractors performing "exempt home renovation work" are exempt from section 141.1 of the Act.   An owner for whom a contractor is performing "exempt home renovation work" does not need to obtain a Clearance Certificate and has no potential liability for the contractor's payment obligations to the WSIB. 

The definition of "exempt home renovation work" is set out at section 12.2 (10) of the Act as follows: 

“exempt home renovation work” means construction work that is performed,

 

1. by an independent operator, a sole proprietor, a partner in a partnership or an executive officer of a corporation, and
2. on an existing private residence that is occupied or to be occupied by the person who directly retains the independent operator, sole proprietor, partnership or corporation, or by a member of the person’s family;

“member of the person’s family” means,

1. the person’s spouse,
2. the person’s child or grandchild,
3. the person’s parent, grandparent, father-in-law or mother-in-law,
4. the person’s sibling, or
5. anyone whose relationship to the person is a “step” relationship corresponding to one mentioned in clause (b), (c) or (d); (“membre de sa famille”)

“private residence” includes,

1. a private residence that is used seasonally or for recreational purposes, and
2. structures that are,

            (i)normally incidental or subordinate to the private residence,
            (ii)situated on the same site, and
            (iii)used exclusively for non-commercial purposes.

The bottom line is that an owner who hires a contractor to perform construction work should obtain a WSIB Clearance Certificate unless the contractor is performing "exempt home renovation work".  If you have questions about what qualifies as "exempt home renovation work" you can contact the Workplace Safety Insurance Board at 1-800-387-0750.

The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice. Readers are advised to seek specific legal advice in relation to any decision or course of action contemplated.

An estimate may give rise to a fixed price contract, which is binding upon a contractor subject to variations in the contract price. But the case of 413784 Ontario Inc. v. Adams[1] illustrates that an estimate may also have a limiting effect on the amount charged by a contractor where the contract price is either time and material or cost plus.

In 413784 Ontario Inc. v. Adams a contractor gave the owner of a vacant lot an estimate of $57,000 to build a custom house. Relying on the estimate, the owner entered into a contract with the contractor to build a custom home for cost plus 10% for overhead and 5% profit. Things did not go as planned. The contractor billed the owner $89,000 before the house was completed. The owner realized that he could not afford to complete the home. He sold the home and took a loss of $68,000. The contractor brought a claim against the owner for a further $11,500. The court found that the actual price for the construction of a custom home should not exceed an estimate by more than 10 or 20 per cent. The Court wrote:

17. I consider that the difference between the estimated cost and the actual cost to finish the house is far too much and the Defendants are entitled to expect that the house would have been built for something within reasonable range of the estimated cost and certainly no more than 10% or 20%.

The Court concluded that the estimate given by the contractor to the owner was negligent because the actual cost of construction exceeded the estimate by 100%. The Court dismissed the contractor’s claim against the owner.

The outcome in 413784 Ontario Inc. v. Adams may have been different if the owner had asked the contractor to perform expensive extras, if the contractor was confronted with unforeseen site conditions, if the owner was more sophisticated, if the estimate was qualified, or if the type of work involved was more difficult to estimate accurately. Nevertheless, 413784 Ontario Inc. v. Adams illustrates that a contractor needs to exercise care if it gives an estimate even if it does not intend to commit to a fixed price.

Ted Dreyer is a construction and insurance lawyer at Madorin, Snyder LLP. Madorin, Snyder LLP is a full service law firm serving Kitchener, Waterloo, Cambridge, Guelph and the surrounding area. Please visit our construction law page.

[1] 413784 Ontario Inc. v. Adams, 1983 CarswellOnt 2939

With the exception of the excavator, the work of a subcontractor will usually build upon work done by other subcontractors.  Furthermore, the performance of any given subcontractor's work will usually depend upon the proper performance of work by other subcontractors.  Can a subcontractor be held responsible for the failure of its work if the failure is caused by deficiencies in the preparatory work performed by others?

It depends.  It is an implied term of any construction contract that the work will be done in a workmanlike manner.  Performing work in a workmanlike manner requires, among other things, that a subcontractor refuse to do work which he knows or ought to know cannot be performed correctly because the preparatory work is deficient. 

Stavely Community Centre c.o.b. Stavely Community Association v. L & D Masonry Enterprises Ltd.[1] is a case that considered the problem.  A community centre hired a masonry contractor to build a wall.  The plans called for metal dowels to be installed in the foundation wall.  The wall was to be installed upon the dowels.  It was the responsibility of others to install the dowels.  When the masonry contractor came to perform its work, the dowels had not been installed.  The mason installed the wall anyway.  The wall was damaged by wind.  The absence of the dowels was a contributing cause of the damage.  The Court said that the mason ought to have refused to proceed with the work unless and until the dowels were installed as called for in the plans.  The mason was ordered to pay for the damage to the wall. 

Performing work in a workmanlike manner does not mean that a subcontractor is the guarantor of the performance of work done by others.  The key to the Stavely case is that the deficiency in the work done by others was obvious.  A reasonable mason ought to have recognized that the dowels were missing.  The outcome of the Stavely case would likely have been different if the deficiencies in the work done by others was not reasonably apparent to the mason upon an inspection of the work.   

Ted Dreyer is a construction lawyer at Madorin, Snyder LLP. Madorin, Snyder LLP is a full service law firm serving Kitchener, Waterloo, Cambridge, Guelph and the surrounding area.  Please visit our construction law page.

The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice. Readers are advised to seek specific legal advice in relation to any decision or course of action contemplated.

[1] Stavely Community Centre c.o.b. Stavely Community Association v. L & D Masonry Enterprises Ltd (1983) 2 CLR 46