1.877.829.2550 info@wallworks.com www.wallworks.com VANCOUVER – CALGARY – EDMONTON – WINNIPEG – TORONTO – OTTAWA – MONTREAL We offer the followingAcoustic and Decorative Solutions: FABRI-LOK Stretch Fabric Systems, Panels, Baffles BARRISOL Stretch Vinyl Ceilings Acoustiblok Sound Blocking & Absorbing Technology Rulon International Acoustic Wood Walls & Ceilings Richter Wood & Stone Veneer Acoustic Panels Tavapan SA Acoustic Wood Products Bruag Custom Designed Wood Partitions SOUND SEAL Noise Controlling Panels & Barriers ® ® ® ® ® ® ® ® WALLWORKSACOUSTICARCHITECTURALPRODUCTSInc. Acoustic and Architectural Products, Custom Engineered Acoustical Solutions PRESIDENT'S MESSAGE Put another way, as a consequence of BC Human Rights v. Schrenk, employers will now be accountable for harassment by their managers and workers against, literally, everyone in the workplace. As most of you well know, I am not a lawyer. This neophyte, however, thinks the Schrenk decision is particularly unfair in an industry where everybody yells at everybody for everything. More to the point, despite my abhorrence of discriminatory harassment, I am genu- inely concerned about fairness when it comes to how BC Human Rights Tribunal v. Edward Schrenk will impact construction industry employers. But let’s move on. Most Canadian construction industry employers have by now heard about Royal Bank of Canada v. Atlas Block. For those of you who are not familiar with the Atlas Block decision, the gist of it is that the Supreme Court of Canada has ruled that if and when a generalcontractorgoesbankrupt,money distributed by the owner post-insolvency will be distributed without regard to the trust provisions of the Construction Lien Act (CLA). Ontario’s CLA, as is the case in the CLAs for all common law provinces in Canada, has a section (in Ontario’s case, Section 8) whereby monies that flow to a general contractor post-insolvency are held in trust for its subcontractors and suppliers. Simply put, the Atlas Block decision sees the money flow first to secured creditors like the banks and treats the subcontractors and suppliers who actually performed the improve- ment as unsecured creditors. That means that the distribution priorities that were created by Section 8 and have historically applied to bankruptcy proceedings are now gone in favour of new distribution priorities that move subcontractors and suppliers to the back of the bus. In the unlikely event that I have not made my opinion clear, I think the RBC v. Atlas Block decision makes absolutely no sense for the Canadian construction industry and appropriately ought to result in an amendment to the federal Bankruptcy and Insolvency Act. And yes, we are trying on your behalf to advocate for this much-needed reform. There was after all a very good reason for Section 8 of the Ontario CLA and this decision will, beyond any question of a doubt, nega- tively impact the enduring economic prosperity of our industry. The Bank of Montreal v. Kappeler case that was heard in Ontario by the Superior Court of Justice in late 2017 is a perfect example of how the Atlas Block decision potentially impacts subcontractors and suppliers. The receiver for Kappeler, a masonry contractor now bankrupt, sought direction from the court for the remaining monies owed to BMO, who was a secured creditor. Hargest, a supplier of block and ready-mix concrete to Kappeler for various projects, opposed the distribution, arguing that the balance it was owed was protected by the deemed trust provisions in the Ontario Construction Lien Act. Had the language in the CLA or the Receiver’s Order required the segregation of so-called trust funds, the outcome might have been very different. That of course was not the case, and the bottom line is that BMO was paid. Enough about Supreme Court rulings and more than enough about politics and economics. I have other concerns that need our urgent attention before I can confidently predict sunshine in my industry forecast. It is clear, for example, that government regulators have not looked nearly closely enough at the construction workplace safety impacts of legalized marijuana. We have issues with reprisal bidding clauses (penalizing a prospective bidder on the grounds of an unrelated dispute elsewhere) and social procurement (using the procure- ment of construction services to advance unrelated community benefits). Sadly, the list is long and the impact severe. Bottom line: mostly cloudy is my forecast despite all our good work on Bill 142. My apologies for the pessimism. John G. Mollenhauer 6 | Builders' Digest Quarter 4 2017