Oliver · TTC Infrastructure · Group F

I. The Floor on Crown Projects

The Ontario Construction Act applies to every improvement to a premises in Ontario. The Scarborough Subway Extension is an improvement. The Act applies. But Crown projects have a critical modification: the Province of Ontario, Metrolinx, and Infrastructure Ontario cannot be liened — they benefit from Crown immunity. The lien attaches to the project funds held by STC, not to the Crown's real property.

The Crown Immunity Rule

A lien cannot attach to land owned by the Crown or a Crown agency. But it can attach to the holdback fund and to the premises if the interest is registrable.

Practical consequence: subcontractors and suppliers on SSE-SRS cannot register a lien against the TTC's subway lands. Their remedy is against the holdback trust maintained by STC as the prime contractor. This actually strengthens the holdback trust as the real security mechanism.

II. The Holdback Trust at Infrastructure Scale

Every owner must hold back 10% of each progress payment as a statutory trust under s. 22 of the Construction Act. On a $10B project, this holdback fund can reach $1B before final completion. STC holds holdback from Metrolinx; STC's subcontractors hold holdback from their sub-subcontractors. This is a chain of trust obligations running through every tier of the project.

Who holds the money: STC holds Metrolinx's 10%. Each subcontractor holds the sub-subcontractor's 10%.
Who it belongs to: The holdback is not STC's money. It is held in trust for those with lien rights.
When it releases: 45 days after substantial performance of the contract (the Certificate of Substantial Performance triggers the clock).
The wrongful use: Using holdback funds for other purposes is not just a breach — it is a breach of trust, with personal liability for the corporate officers who authorized it.

III. Substantial Performance on a Subway Project

Substantial performance under the Act is defined by a formula: the work is substantially performed when the improvement is ready for use and the cost to complete is less than 3% of the first $500K plus 2% of the balance. On a $10B project, this means the work could be substantially performed with tens of millions of dollars of work still remaining.

The Certificate of Substantial Performance (CSP) is the document that triggers the holdback release clock. On SSE-SRS, there will likely be separate CSPs for each station and for the rail/systems package. Oliver's advice: track each CSP separately — the lien and holdback timelines run from each one independently.

IV. First-Spade-in-Ground — Priority of Liens

First-Spade Rule (s. 78)

All liens on a project have the same priority, dating back to the first-spade-in-ground — the first day anyone provided services or materials to the project.

This means a supplier who provides materials in year 4 of the SSE project has a lien that ranks equally with a contractor who has been on site since year 1. There is no priority between lienholders based on when they arrived. This protects late-stage suppliers and trades on a multi-year project.

V. The Wage Super-Priority

Worker wages have super-priority over all other lien claims under s. 81. On a unionized construction project like SSE-SRS, unpaid wages move to the front of every distribution. This is the floor that the Act has always protected — labour is paid before materials, before subcontractors, before anyone else.

The practical consequence for STC: WSIB premiums and worker wages from every tier of subcontract must be verified clean before any holdback is released. One unresolved wage claim can block the entire holdback release.

VI. Oliver's Principle for the SSE Project

The common law floor doesn't get smaller because the project is bigger. Every rule that applies to a $50K residential renovation applies here — the holdback trust, the 60-day preservation deadline, the first-spade priority, the wage super-priority. The scale changes the dollar amounts. The floor does not move.