[1] Forestry Workers Lien for Wages Act, R.S.O. 1990, c.F.28 [FWLWA or the Act].

[2] Under the Act, the phrase “forestry workers” refers to loggers who harvest timber and deliver it to the mill for processing. In this Report, we also use the more common term “loggers” or “logging contractors” to describe these individuals. Unlike some other jurisdictions, the Act does not apply to mill workers.

[3] The original Act was the Woodman’s Lien for Wages Act, S.O. 1891, 54 Vict., c.22 [original Act].

[4] Ontario’s logging industry is one sector of the forest industry which encompasses logging, forestry services such as silviculture and forest management, lumber processing and pulp production. Logging involves harvesting trees and transporting them to a mill for processing. It is the first step in a chain of value that leads to manufactured wood products.

[5] Buchanan Forest Products Ltd. (Re) (2009), 58 C.B.R. (5th) 184 (Ont.S.C.J.) [Buchanan]; additional reasons (2010), 68 C.B.R. (5th) 220 (Ont. S.C.J.).

[6] Buchanan, note 5. The lien claims in Buchanan arose out of somewhat unique circumstances. Some have argued that the Buchanan insolvency was caused by questionable business practices and is not representative of the industry generally. Whether or not that is the case, it is noteworthy that no other lien claims seem to have been litigated during what was a lengthy industry-wide recession.

[7] A more detailed survey of woodworker lien claims was carried out by the Law Reform Commission of British Columbia (LRCBC) in their review of BC’s Woodworker Lien Act, now R.S.B.C. 1996, c.491 [WLA]. That survey also revealed relatively few claims being filed, although apparently more than in Ontario: LRCBC, Working Paper on Liens for Logging Work (Victoria: Ministry of the Attorney General, 1992) [1992 Working Paper], online: http://bcli.org/sites/default/files/LRC-CP68-Liens_for_Logging_Work.pdf.

[8] In 1896, Ontario’s original Act was expanded to protect logging contractors as well as employees. However, the new provision applied only to contractors working “for any licencee of the Crown”: 1896, 59 Vict. c.36, s.4 [1896 Admendment]. By 1914, the words “for any licencee of the Crown” had been  omitted from the provision, giving rise to the possibility that the Act also protected subcontractors.  This broader interpretation was rejected in Keenan Bros. v. Langdon, [1928] S.C.R. 203, 206.

[9] FWLWA, note 1, s.3.

[10] Confusion about the scope of the Act is not solely a modern problem: Edward P. Raymond, “Woodmen’s Lien Law in New Brunswick” (1906) 26 Can. L. Times 249.

[11] FWLWA, note 1, s.1. Although blacksmiths are no longer used in logging operations, there are a few logging camps still in existence and these may employ cooks.

[12] FWLWA, note 1, s.1.

[13] In Buchanan, note 5, the Court held that the definition of “logs or timber” includes woodchips. Biomass is the residual wood fibre remaining on the forest floor after harvesting has taken place. Biomass is increasingly being marketed as a renewable source of bioenergy that may be used in generating electricity.

[14] Although this is not explicit in the Act, it can be inferred from the closed definition of “logs or timber” as well as ss.13(d) which contemplates a lien claimant filing an application for attachment where “logs or timber are about to be cut into lumber or other timber so that the logs or timber cannot be identified”.

[15] FWLWA, note 1, ss. 5(4).

[16] FWLWA, note 1, ss. 5(3).

[17] FWLWA, note 1, ss. 8(1).

[18] FWLWA, note 1, ss. 9(3).

[19] The Rules of the Ontario Small Claims Court require parties to exchange the documents on which they rely for their claims: Rules 7.01 and 9.01, O. Reg. 258/98, Courts of Justice Act, R.S.O. 1990, c.C43.  However, this rule may not always be strictly enforced: Michael Rappaport, “Major Changes Coming to Ontario’s Small Claims Courts”,  The Lawyer’s Weekly (December 11, 2009), online: http://www.lawyersweekly.ca/index.php?section=article&articleid=1058. In contrast, the Superior Court of Justice Rules provide for a variety of forms of discovery including oral discovery: Rules 29.1-33, Rules of Civil Procedure, R.R.O. 1990, Reg. 194, Courts of Justice Act, R.S.O. 1990, c.C43.

[20] Several of the forestry worker claims in  the Buchanan proceeding amounted to hundreds of thousands of dollars and one claim was just under one million dollars: In re Terrace Bay Pulp Inc., Approval and Vesting Order, September 13, 2010 (Ont. Sup. Ct., Commercial List), Schedule “A”, Summary of Lien Claimants [Summary of Lien Claimants], online: http://documentcentre.eycan.com/eycm_library/Project%20Pick%5CEnglish%5CCCAA%202009%5CCourt%20Orders%5CApproval%20&%20Vesting%20Order%20of%20Justice%20Morawetz,%20dated%20September%2013,%202010.pdf.

[21] FWLWA, note 1, ss. 13, 14.

[22] FWLWA, note 1, s. 18.

[23] FWLWA, note 1, ss. 3(1).

[24] FWLWA, note 1, s. 7.

[25] In the costs proceeding following the Buchanan decision, Senior Regional Justice Pierce held that these cost caps do not apply to a common issues hearing: (2010), 68 C.B.R. (5th) 220 (Ont.S.J.) at para.7.

[26] FWLWA, note 1, s. 25. In Small Claims Court proceedings, costs are capped at $5 for contested claims and $2 for uncontested claims.

[27] Lakes and Rivers Improvement Act, R.S.O. 1990, L.3. Section 24 provides for the removal of log jams to further the purposes of the Act. However, there is no mention of the separation of logs or timber.

[28] FWLWA, note 1, s. 2.

[29] “Logging in the Ottawa Valley – The Ottawa River and the Lumber Industry” in A Background Study for Nomination of the Ottawa River Under the Canadian Heritage Rivers System, Ottawa River Heritage Designation Committee (2005) 89, 98, online: http://www.ottawariver.org/pdf/0-ORHDC.pdf

[30] Ian Radforth, Bushworkers and Bosses: Logging in Northern Ontario 1900-1980 (Toronto: University of Toronto Press, 1987) 13 [Radforth, Bushworkers].

[31] Radforth, Bushworkers, note 30, 97.

[32] Radforth,  “The Shantymen”, in Labouring Lives: Work and Workers in Nineteenth Century-Ontario (Toronto: University of Toronto Press, 1995), 221 [Radforth, “Shantymen”].

[33] Radforth, Bushworkers, note 30, 66.

[34] Workmen’s Compensation Act, S.O. 1914, c.25. The previous statute required injured employees to sue their employer in court: Workmen’s Compensation for Injuries Act, S.O. 1886, 49 Vict., c. 28.

[35] Radforth, Bushworkers, note 30, 42.

[36] In some cases, woodworkers would be required to pay a bribe in order to be hired on: Radforth, Bushworkers, note 30, 35.

[37] Radforth, Bushworkers, note 30, 4.

[38] Radforth, Bushworkers, note 30, 107-108.

[39] Radforth, “Shantymen”, note 32, 237-239. Lumber companies owning mills would set up logging operations in the bush and hire foremen to run these operations. The foreman was typically responsible for recruiting a complement of loggers each season.

[40] Radforth, “Shantymen”, note 32, 249.

[41] Jeremy Webber, “Labour and the Law” in Paul Craven, ed., Labouring Lives: Work and Workers in Nineteenth Century-Ontario (Toronto: University of Toronto Press, 1995) 126; Radforth, Bushworkers, note 30, 41.

[42] Radforth, “Shantymen”, note 32, 250-251.

[43] Radforth, “Shantymen”, note 32, 251.

[44] See, for example, David Lee, Lumber Kings and Shantymen: Logging, Lumber and Timber in the Ottawa Valley (Toronto: James Lorimer & Company Ltd., 2006) 200-202.

[45] George B. Engberg, “Lumber and Labor in the Lake States” (March 1959) 36 Minnesota History 153, 165, online: http://collections.mnhs.org/MNHistoryMagazine/articles/36/v36i05p153-166.pdf.

[46] James Willard Hurst, Law and Economic Growth: The Legal History of the Lumber Industry in Wisconsin 1836 – 1915 (Cambridge: The Belknap Press of Harvard University Press, 1964) 391.

[47] See McDonnell v. Cook (1845), 1 U.C.Q.B. 542 for an example of workers holding a third party owner to account for their unpaid wages. Also see R.C.B. Risk, “The Golden Age: The Law About the Market in Nineteenth Century Ontario” (1976) 3 U.T.L.J. 307, 309. Other cases regarding early liens are collected at footnote 163 in Webber, note 41.

[48] Buchanan, note 5.

[49] Ontario Legislative Assembly, Newspaper Hansard (4 April 1891), referring to the Mechanics Lien Act, R.S.O. 1887, c. 126.

[50] Brooks-Sanford Co. v. Theodore Telier Construction Co. (1910), 22 O.L.R. 176 (C.A.) at para. 5.

[51] Ontario Legislative Assembly, Newspaper Hansard (14 April 1891). “Jobbers” were contractors retained by lumber companies (often located in Michigan) to run Ontario logging operations on their behalf: personal communication with Ian Radforth (February 7, 2013).

[52] Ontario Legislative Assumbly, Newspaper Hansard (25 April 1891).

[53] FWLWA, note 1, s.32.

[54] Radforth, “Shantymen”, note 32, 211.

[55] This provision was first passed in 1898: HV Nelles, “The Manufacturing Condition” in The Politics of Development: Forests, Mines and Hydro-Electric Power in Ontario, 1849-1941, 2d. ed., McGill-Queen’s University Press, 2005) 48, 65-87. It remains in force today: Crown Forest Sustainability Act, 1994, S.O. 1994, c. 25, s.30 [CFSA].

[56] See Hurst, note 46. The Wisconsin legislation was first introduced in 1849, predating the Ontario legislation by over 40 years. Industry conditions in the two jurisdictions were similar and it seems reasonable to assume that similar policy considerations underlay both acts. Certainly, the Ontario legislature was aware of lien legislation elsewhere as indicated by its reference to Michigan’s version of the statute during debates.

[57] Carpenter v. Bayfield Western R. Co., 83 N.W. 764 (Wis. 1900), quoted in Hurst, note 46, 408.

[58] Hurst, note 46, 409, citing Winslow v. Urquhart, 44 Wis. 197 (Wis. 1878).

[59] Ontario practice is that local timber is processed in Ontario mills unless there is no local market for it. Less than 4% of timber is shipped to mills outside Ontario: Ontario Ministry of Natural Resources (MNR), Strengthening Forestry’s Future: Forest Tenure Modernization in Ontario, 12, online: http://www.mnr.gov.on.ca/stdprodconsume/groups/lr/@mnr/@forests/documents/document/stdprod_092158.pdf.

[60] Logging plays a significant role in the economies of other Canadian provinces to varying degrees. British Columbia and Quebec are the two top producers of forest products with Ontario a close third. British Columbia’s industry is the largest by a significant margin. It is divided into two distinct regions – coastal logging and interior logging. It has also established a complex regulatory regime including, for example, more than eight different types of forest licences.

[61] Canadian Forest Service, The State of Canada’s Forests, 2012 Annual Report (Natural Resources Canada) 14, online: http://cfs.nrcan.gc.ca/pubwarehouse/pdfs/34055.pdf.

[62] Canadian Forest Service, note 61; Ontario Ministry of Natural Resources, State of Ontario’s Forests, 2011, Indicator Report, 5.2.2, Trends in Forest-related Employment, 3, online: http://www.web2.mnr.gov.on.ca/mnr/forests/public/publications/SOF_2011/indicators/522.pdf. The forest industry includes logging, pulp and paper manufacturing, wood product manufacturing, furniture manufacturing as well as support activities such as silviculture, forest management.

[63] Ontario Ministry of Natural Resources, State of Ontario’s Forests, 2011, Indicator Report, 6.2.1, Resilience of Forest-based Communities, 7, online: http://www.web2.mnr.gov.on.ca/mnr/forests/public/publications/SOF_2011/indicators/621.pdf.

[64] Jake Wilson and John Graham, Relationships Between First Nations and the Forest Industry: The Legal and Policy Context, Report for the National Aboriginal Forestry Association (Institute on Governance, 2005) 53, online: http://iog.ca/wp-content/uploads/2012/12/2005_March_prov_forestry.pdf.

[65] Radforth, Bushworkers, note 30, 203-204.

[66] Radforth, Bushworkers, note 30, 207, 263.

[67] Radforth, Bushworkers, note 30, 214-215. Also see Patricia Marchak, “Labour in a Staples Economy” (1979) 2 Studies in Political Economy 7, 15.

[68] For some important differences remaining between mechanized logging work and factory work, see Richard A. Rajala, “The Forest as Factory: Technological Change and Worker Control in the West Coast Logging Industry, 1880-1930” (1993) 32 Labour/Le Travail 73, 80-81.

[69] Radforth, Bushworkers, note 30, 220. According to Statistics Canada, there were 7,321 loggers in Ontario in 2006. This number steadily decreased to 3,674 loggers in 2010 but rose slightly to 4,228 loggers in 2011: Statistics Canada, Table 301-0007, “Logging industries, principal statistics by North American Industry Classification System (NAICS) annual”, CANSIM (database). Also see Gregg Delcourt and Bill Wilson, “Forest Industry Employment: A Jurisdictional Comparison” (1998) 24 Canadian Public Policy S11, S19 and S23.

[70] For a case study of the changing circumstances of an individual logger over 30 years in Newfoundland’s logging industry, see Peter R. Sinclar, Martha MacDonald and Barbara Neis, “The Changing World of Andy Gibson: Restructuring Forestry on Newfoundland’s Great Northern Peninsula” (2006) 78 Studies in Political Economy 177. At 187, the article identifies the following key events affecting loggers: “logging camps run by mills were replaced by locally based, mobile crews hired by logging contractors; unionization of the labour force decreased; piecework became predominant; mechanical harvesters replaced many loggers, changed the labour process, and reduced demand for labour; servicing personnel became more important; loggers increasingly bore the costs of their equipment; and wood supply became a vital issue.”

[71] Radforth, Bushworkers, note 30, 230-231.

[72] Radforth, Bushworkers, note 30, 234.

[73] Radforth, Bushworkers, note 30, 235.

[74] A U.S. study found that 74 per cent of logging contractors operating in the Northwest states operated with five employees or fewer: Travis T. Allen, Han-Sup Han, Steven R. Shook, “A Structural Assessment of the Contract Logging Sector in the Inland Northwest” (2008) 58 Forest Products Journal 27.

[75] Statistic quoted by an industry stakeholder during consultations. This distinguishes modern logging contractors from the early contractors covered by the Act who may have owned a saw or a team of horses but contracted primarily for their labour.

[76] All trees harvested in Ontario must be manufactured within Canada: CFSA, note 55, s.30.

[77] Ontario Ministry of Natural Resources (MNR), State of Ontario’s Forests, 2011, 18, online: http://www.mnr.gov.on.ca/stdprodconsume/groups/lr/@mnr/@forests/documents/document/stdprod_101907.pdf.

[78] MNR, note 77, 57-60; also see the accompanying Indicator Reports, notes 62 and 63.

[79] Canadian Forest Service, note 61, 42.

[80] The LCO heard in consultations that modern quality standards require that mills process wood rapidly. Logs begin to deteriorate after approximately one month.

[81] In Buchanan, lien claimants were able to assert liens over specific logs only because the mill went bankrupt. As a result, processing suddenly ceased and harvested logs remained sitting in the bush or in the mill yard: Buchanan, note 5.

[82] Buchanan, note 5, para. 43.

[83] 671122 Ontario Ltd. v. Sagaz Industries Canada Inc., 2001 SCC 59.

[84] Summary of Lien Claimants, note 20.

[85] Etienne St-Jean and Luc LeBel, “The Influence of Decisional Autonomy on Performance and Strategic Choices – The Case of Subcontracting SMEs in Logging Operations” in Okia Clement Akais, ed., Global Perspectives on Sustainable Forest Management (InTech, 2012) 59, 60, online: http://www.intechopen.com/books/global-perspectives-on-sustainable-forest-management/the-influence-of-decisional-autonomy-on-performance-and-strategic-choices-the-case-of-sub-contra.

[86] When mills that have historically employed loggers decide to contract out logging operations, it is typical for some of their logging employees to be transferred to the new contractor. In cases where these employees are unionized, some have been able to retain their collective bargaining rights as part of the transfer. But this practice is gradually dying out.

[87] Andrew F. Egan, “Uniting an Independent and Isolated Workforce: The Logger Association Phenomenon in the United States” (2002) 15 Society & Natural Resources: An International Journal 541.

[88] W. Scott Prudham, “Downsizing Nature: Managing Risk and Knowledge Economies Through Production Subcontracting in the Oregon Logging Sector” (2002) 34 Environment and Planning 145, 148.

[89] Regulation Review Team, Review of the Timber Harvesting Contract and Subcontract Regulation: Stakeholder Input (B.C. Ministry of Forests, November 2001) 6, online: http://www.for.gov.bc.ca/hth/timber-tenures/contract-subcontract.htm.

[90] Marchak, note 67, 16.

[91] Email from a logger (January 17, 2013).

[92] A similar mix of business relationships seems to exist in Quebec where a 2010 study found that 20 per cent of small forestry enterprises were genuine entrepreneurs and less likely to be dependent on the large firms hiring them: Etienne St-Jean, Luc LeBel and Josée Audet, “Entrepreneurial Orientation in the Forest Industry: A Population Ecology Perspective” (2010) 17 Journal of Small Business and Enterprise Development 204.

[93] It has been suggested that small logging contractors in B.C. do not have sufficient bargaining power to refuse to do unsafe work and that this has contributed to record high injury rates: John Heaney, “If You Go Down To The Woods Today, Are You In For A Big Surprise?” (2007) 12 Appeal 39, 44.

[94] Ronald C.C. Cuming, “The Spreading Influences of PPSA Concepts: The Uniform Liens Act” (1999-2000) 15 B.F.L.R. 1.

[95] LRCBC, note 7, 15. It appears to have been significant to the Commission’s reasoning that (unlike in Ontario) the existing B.C. Act applied only to wage earners rather than contractors. The repeal option was not addressed in the Commission’s 1994 Final Report.

[96] Another 9 per cent of Ontario forests, primarily in southern Ontario, are privately owned. Many of these are also commercially harvested: MNR, note 59.

[97] Radforth, “Shantymen”, note 32, 209-210.

[98] The Crown retains ownership of the logs until the stumpage fees are paid: CFSA, note 55, s.33. Even though a licence isn’t a property interest in common law, the licencee has a property interest in the harvested logs: Saulnier v. Royal Bank of Canada, 2008 SCC 58.

[99]CFSA, note 55, s.26. SFLs grant the holder the right to harvest and the corresponding responsibility to protect the resource by carrying out renewal and maintenance activities. The holder must pay licence (stumpage) fees in addition to managing the sustainability of the forest. Section 27 of the CFSA also provides for Forest Resource Licenses (FRLs) that  only last up to five years and are more limited in scope. FRLs are granted within the context of an existing SFL.

[100] MNR, note 59, 12.

[101] The Forest Tenure Modernization Act, 2011, S.O. 2011, c. 10, was enacted to make the wood allocation system more competitive by inserting more distance between mill owners and forest management responsibilities. The intent of the Act is to create Local Forest Management Corporations (LFMCs) with responsibility to manage the forest and market and sell the timber. These are to be Crown agencies run by a local manager. The Crown will appoint local board members. The goal is to have 2 LFMCs established by 2016: MNR, note 59, 7. The first LFMC, Nawiinginokiima Forest Management Corporation, was created by O. Reg. 111/12.

[102] An example is Lakehead Forest which is managed under an SFL held by Greenmantle Forest Inc. Greenmantle is wholly owned by Superior North Loggers Inc., a cooperative made up exclusively of 31 small logging contractors. All of the 31 loggers except for the haulers are family-owned and operated.

[103] To complicate matters further, it is not always clear who actually owns logs or timber at different stages of the harvesting process. A typical SFL provides that, subject to conditions, the company “shall be entitled to harvest and utilize through its shareholders, the full available harvest described in the Forest Management Plan”. However, as noted above, the licencee does not receive ownership of the wood until Crown charges (stumpage fees) are paid to the Ministry: CFSA, note 55, s.33.

[104] “Multi-shareholder SFLs: Pros & Cons”, The Working Forest, June 26, 2007, online: http://www.workingforest.com/legacy/multi-shareholder-sfls-pros-cons/.

[105] Most recently, the Crown seems to have backed off its original policy of removing forest product companies from forest management altogether. It now acknowledges that forest product companies may participate as shareholders in cooperative-held licences.

[106] Timber Harvesting Contract and Subcontract Regulation, B.C. Reg. 22/96, as amended by B.C. Reg. 278/2004, promulgated under ss. 152 to 161 of the Forest Act, R.S.B.C. 1996, c.157 [BC Timber Reg].

[107] Hayes Forest Services Ltd. v. Pacific Forest Products Ltd., 2000 BCCA 66, quoting from John Forstrom, “Forestry Law – 1997 Update: Drafting Contracts to Comply with “Bill 13”, Continuing Legal Education Conference (May 1997), 2.1.01-2.1.02.

[108] BC Timber Reg, note 106.

[109] The LRCBC found that B.C.’s woodworker lien legislation was similarly beyond repair: LRCBC, Report on the Woodworker Lien Act (Victoria: Ministry of the Attorney General, 1994) 9-10, online: http://bcli.org/sites/default/files/LRC137-Woodworker_Lien_Act.pdf [1994  Final Report].

[110] It is not uncommon for historic legislation to fall out of step with modern social conditions, particularly in the labour context. One example brought before the courts was section 44 of the Unemployment Insurance Act, 1971, S.C. 1970-71-72, c. 48, s.44, which prohibited individuals who financed labour disruptions from claiming benefits under the Act. In Hill v. Canada (Attorney General), [1988] 1 S.C.R. 513, the Supreme Court of Canada found that “the original rationale on which the legislation … was predicated ha[d] lost most of its relevance through the intervening years due to the evolution in Canadian labour relations, the labour movement, and the social and economic conditions of Canadian society” (para. 55). The majority of the Court interpreted the word “financing” in light of its ordinary meaning when the Act was introduced and held that the payment of union dues in modern times did not amount to financing for the purpose of the provision. Also see Ruth Sullivan, Sullivan on the Construction of Statutes, 5th ed. (LexisNexis Canada, 2008), 158-161.

[111] In Canadian Imperial Bank of Commerce v. Levesque Lumber (Hearst) Ltd. (1994), 22 C.L.R. (2d) 225 (Ont. Gen. Div.) [Levesque], the Court held that an individual who maintained logging roads was excluded from the Act. In Buchanan, the Court took a broader approach and held that contractors engaged in opening and maintaining logging roads were covered by the Act: see note 5. In Keown v. Clear Lake Lumber Co., [1947] 1 D.L.R. 654 (Ont.C.A.), the Court held that a trucker who picked up a load of logs along the highway and transported it to the mill was not entitled to a lien under the Act. Again, in Buchanan, this decision was distinguished on its facts and the scope of the Act interpreted more broadly. In spite of the liberal approach taken in Buchanan, it seems clear that the Act’s wording does not extend to contractors more tangentially connected to the harvesting process such as equipment suppliers for example.

[112] Small to medium enterprises supplying moulds to Ontario’s automotive parts industry are required to accept lower prices due to the greater financial power of the Big Three automakers and their first-tier suppliers. As a result of this unequal bargaining power, mouldmakers may also be required to wait for payment until after the mould has been successfully used in production. This can result in cash-flow problems for the mouldmaker and significant credit risk: John Holmes, Tod Rutherford and Susan Fitzgibbon, “Innovation in the Automotive Parts Industry: A Case Study of the Windsor-Essex Region”, paper presented at 6th Annual National Conference of the Innovation Systems Research Network (May 13-15, 2004) 22ff., online: http://www.utoronto.ca/isrn/publications/WorkingPapers/Working04/Holmes04_Automotive.pdf; “Troubling Terms: Moldmakers are Seeking Solutions to Payment Delays from Many of their Automotive Clients” (2000) 58 Canadian Plastics 1, online: http://www.canplastics.com/news/troubling-terms/1000164532/; “Tool, mould makers nervous as auto worries mount”, Windsor Star (November 18, 2008), online: http://www.canada.com/story_print.html?id=6c729a94-7ee4-4095-942b-8f43ae588934&sponsor=.

[113] LRCBC, Report on Debtor Creditor Relationships, Part II – Mechanics’ Lien Act: Improvements on Land (1972) 12-13.

[114] LRCBC, note 113, 22-23.

[115] See Ontario Ministry of Attorney General, Discussion Paper on Repairer and Storer Liens (1985) 24. A discussion of the similarities and distinctions between FWLWA and other Ontario commercial lien regimes is found below.

[116] See, for example, Hurst, note 46, 409.

[117] Now that loggers are incorporated, own their own equipment and, in some circumstances, work on their own account, they begin to resemble modern trade creditors more than the bushmen of 1891.

[118] Under the Ontario Act, only independent contractors who have “cut, removed, taken out or driven logs or timber” are entitled to assert a lien: FWLWA, note 1, ss. 3(2). In Levesque, note 111, the Court held that a contractor who maintained logging roads was not entitled to claim a lien under this provision.

[119] 1896 Amendment, note 8.

[120] Logging employees would have had recourse to the Master and Servant Act, R.S.O. 1877, c. 133, s.12, which provided for wage recovery orders by Justices of the Peace. However, these orders were not easily enforceable: Law Commission of Ontario, Vulnerable Workers & Precarious Work: Background Paper (Toronto: December 2010) 22-23, online: http://www.lco-cdo.org/VulnerableWorkersBackgroundPaper-December2010.pdf.

[121] See, for example, White v. Sandy Lake Lumber Co. (1912), 48 C.L.J. 25 (Ont. Dist. Ct.).

[122] This rationale for granting lien protection to loggers rather than mill employees was expressed in a historical context in Carpenter vs. Bayfield Western R. Co., note 57, quoted by Hurst, note 46, 408. It continues to be articulated by some industry observers as a reason for retaining lien legislation.

[123] These are extensively reviewed in Geoffrey England, Employment Law in Canada, 4th ed. (Lexis Nexis Canada, 2005), ch. 19. For limitations in the existing process for recovering unpaid wages, see the Law Commission of Ontario, Vulnerable Workers and Precarious Work, Final Report (Toronto: December 2012) 53-66, online: http://www.lco-cdo.org/vulnerable-workers-final-report.pdf. Also see a background paper commissioned for that Project, Leah F. Vosko, Eric Tucker, Mark P. Thomas, Mary Gellatly, New Approaches to Enforcement and Compliance with Labour Regulatory Standards: The Case of Ontario, Canada (November 2011), online: http://www.lco-cdo.org/vulnerable-workers-commissioned-papers-vosko-tucker-thomas-gellatly.pdf.

[124] Employment Standards Act, 2000, S.O. 2000, c.41, s.103 [ESA]. Employment standards legislation was first introduced in Ontario in 1969: Employment Standards Act, S.O. 1968, c. 35.

[125] ESA, note 124, s.81.

[126] ESA, note 124, s.14.

[127] Bankruptcy and Insolvency Act, R.S.C. 1985, c.B-3 [BIA].

[128] BIA, note 127, ss. 81.3, 81.4, 136(1)(d).

[129] Wage Earners Protection Program Act, S.C. 2005, c.47 [WEPPA]; Service Canada, “Wage Earner Protection Program”, online: http://www.servicecanada.gc.ca/eng/sc/wepp/.

[130] LRCBC, 1992 Working Paper, note 7, 14-15.

[131] Richard H. McLaren, Secured Transactions in Personal Property in Canada, 3d ed. (online) (Carswell, 2013) para. 1.01; also see Risk, note 47, 326 on a general characteristic of commercial legislation enacted during the mid-1800s: “The legislation was often a specific response to a particular and immediate problem, and was shaped or limited by the current perception of the problem. It was often made – or copied – hurriedly, without adequate consideration of need and context. The result was gaps, inconsistencies, and awkward limits, which were often met by hurried amendments.”

[132] Personal Property Security Act, S.O. 1967, c. 73 [PPSA]. The Act did not come into force until April 1, 1976.

[133] Smaller amounts may be secured by use of a credit card.

[134] This is a simplified description of a more complex priority ranking which also orders unperfected security interests. See Ronald C.C. Cuming, Catherine Walsh and Roderick J. Wood, Personal Property Security Law (Irwin Law, 2005) 8.

[135] PPSA, note 132, ss. 4(1)(a).

[136] PPSA, note 132, ss. 20(1)(a)(i) and 31.

[137] Cuming, Walsh & Wood, note 134, 225.

[138] Repair and Storage Liens Act, S.O. 1989, c.17 [RSLA]; Ontario Ministry of the Attorney General, note 115, 26; See the discussion below.

[139] The PPSA acknowledges this priority in s.31: “Where a person in the ordinary course of business furnishes materials or services with respect to goods that are subject to a security interest, any lien that the person has in respect of the materials or services has priority over a perfected security interest unless the lien is given by an Act that provides that the lien does not have such priority.”: PPSA, note 132.

[140] FWLWA, note 1, s. 7.

[141] See, for example, PPSA, note 132, ss. 28(1). Also see LRCBC, 1992 Working Paper, note 7, 25.

[142] See, for example, the lien created for the recovery of child support payments in arrears (although note that this lien is required to be registered in the Personal Property Security Registry [PPSR]): Family Responsibility and Support Arrears Enforcement Act, 1996, S.O. 1996, c. 31, s. 43 [FRSAEA].

[143] CFSA, note 55, s.63. Under s.3 of FWLWA, the Crown’s lien ranks ahead of forestry worker liens against the same wood: FWLWA, note 1.

[144] See Ronald C.C. Cuming, Catherine Walsh & Roderick J. Wood, “Secured Transactions Law in Canada – Significant Achievements, Unfinished Business and Ongoing Challenges” (2011) 50 C.B.L.J. 156, section II. A central registry system will not always be appropriate depending on the particular security device in issue. A registry is called for where there are many potential lenders and it is too costly for a searching party to make inquiries to determine if a security interest has been granted: Roderick J. Wood, Michael I. Wylie, “Non-Consensual Security Interests in Personal Property” (1992) 30 Alta. L. Rev. 1055.

[145] LRCBC, 1992 Working Paper, note 7, 15-16; Alberta Law Reform Institute [ALRI], Report on Liens (Edmonton, 1992) 61-62, online: http://www.law.ualberta.ca/alri/docs/rfd013.pdf

[146] BIA, note 127; Companies’ Creditors Arrangement Act, R.S.C. 1985, c.C-36 [CCAA]. Under the CCAA, companies may shelter from creditors under court supervision and the court may impose compromises in order to avoid a bankruptcy. This kind of creative compromise occurred in Buchanan, note 5. Court-supervised negotiations resulted in lien claimants recovering 75 per cent of their claim. Later, the government gave another company in the Buchanan family a $25 million forgivable loan to start the mill up again. In spite of this capital injection, the lienholders never did receive the remaining amounts owing to them.

[147] There does not appear to be any case law definitively addressing this issue.

[148] BIA, note 127, s.2.

[149] Roderick J. Wood, Bankruptcy and Insolvency Law (Irwin Law, 2009) 119-120.

[150] Bristow, Glaholt, Reynolds & Wise, Construction Builders’ Mechanics’ Liens in Canada, 7th ed. (Toronto: Thomson Carswell, 2005+) 8-60; Houlden and Morawetz, Bankruptcy and Insolvency Analysis (Insolvency Source, Westlaw Canada) para. 59.

[151] The Court relied on Husky Oil for the principle that “a province cannot create a priority scheme that overrides a federally-created scheme”: W. Mullner Trucking Ltd. v. Baer Enterprises Ltd. (2010), 1 B.C.L.R. (5th) 33 (C.A.) at par. 21 quoting from Husky Oil Operations v. Canada v. Canada (Minister of National Revenue), [1995] 3 S.C.R. 453.

[152] BIA, note 127, ss. 81.1 and 81.2.

[153] Canada, House of Commons Debates (1 November 1991), 4400; Robert A. Klotz, “Protection of Unpaid Suppliers Under the New Bankruptcy and Insolvency Act” (1993) 21 C.B.L.J. 161, 163 and 165.

[154] Buchanan, note 5, para. 42.

[155] Good v. The Nepisiguit Lumber Company Limited (1911), 41 N.B.R. 57, quoted in Acadia Forest Products Ltd. v. Flemming Gibson Industries Ltd. (1977), 31 N.B.R. (2d) 482 (Co. Ct.) at paras. 18, 41.

[156] Keenan Bros Ltd. v. Landgon, note 8.

[157] Construction Lien Act, R.S.O. 1990, c.C.30 [CLA].

[158] In Buchanan, the Court got around this by characterizing wood chips as pulpwood “cut very small”: Buchanan, note 5, para. 44.

[159] Once the wood is processed, the lien disappears: Buchanan, note 5.

[160] FWLWA, note 1, s.7

[161] For example, the PPSA provides that a third party buyer in the ordinary course takes property free of existing security interests. However, the PPSA protects the creditor by providing that the security interest extends to the proceeds of any sale of secured property: PPSA, note 132, ss. 25(1), 28(1).

[162] RSLA, note 138.

[163] PPSA, note 132, ss. 41(1): “A registration system, including a central office, shall be maintained for the purposes of this Act and any other Act that provides for registration in the registration system”.

[164] FRSAEA, note 142, s.43.

[165] PPSA, note 132, ss.1(1).

[166] Cuming, Walsh & Wood, note 134, 14.

[167] PPSA Reg. 912, s.16.

[168] The most common source of PPSA litigation is challenges to the validity of a registration due to registrant error: Cuming, Walsh & Wood, note 134, 269.

[169] Manitoba Law Reform Commission [MLRC], Report #124: The Stable Keepers Act, (August 2011) 22.

[170] PPSA, note 132, ss.18(1).

[171] RSLA, note 138, ss.7(5); Uniform Law Conference of Canada, Uniform Liens Act, 2000, ss. 5(1) [ULA], online: http://www.ulcc.ca/en/uniform-acts-new-order/older-uniform-acts/699-liens/1625-liens-act-2000.

[172] However, it is not necessary for a repairer or storer to start out having possession of the article in order for a non-possessory lien to attach: RSLA, note 138.

[173] See the similar conclusion of the MLRC in the Stable Keepers Act Report. An acknowledgement of indebtedness requirement would, in fact, have worked better in that context since stable keepers would have possession of the animals before the non-possessory lien came into effect so that an acknowledgement could be required as a condition of giving up possession: MLRC, note 169.

[174] FWLWA, note 1, s.3.

[175] The RSLA provides that non-possessory liens do not have priority over security interests arising after the lien arose but before the lien is registered: RSLA, note 138, s. 10.

[176] PPSA, note 132, ss. 30(1). This does not take into account the special priority provided to PMSIs and other special priority rules under the PPSA.

[177] PPSA, note 132, ss. 13, 30(3).

[178] Michigan, Journal of the House (90th Legislature, 2000, No 67) 2438‐2439, online: http://www.legislature.mi.gov/(S(tlhra0a1nx2z2u55ukhq5155))/documents/1999-2000/Journal/House/pdf/2000-HJ-11-30-067.pdf. The legislative debates do not provide much discussion of the reason for repeal: Michigan, House Legislative Analysis of Senate Bill 1124 (Lansing: House Legislative Analysis Section, 2000), online: http://www.legislature.mi.gov/documents/1999-2000/billanalysis/House/pdf/1999-HLA-1124-A.pdf.

[179] Code civil du Bas-Canada, accessed in Badouin, J.L. & Renaud, Y., Code Civil Annoté (Montréal: Wilson & Lafleur Ltée, 1988).

[180] L.R.Q., c. C-1991.

[181] British Columbia: Woodworker Lien Act, R.S.B.C. 1996, c.491 (governing logging employees), Forestry Service Providers Protection Act, S.B.C. 2010, c.16 [FSPPA] (governing logging contractors); Alberta: Woodmen’s Lien Act, R.S.A. 2000, c. W-14; Saskatchewan: Woodmen’s Lien Act, R.S.S. 1978, c. W-16; Manitoba: Woodmen’s Liens Act, R.S.M. 1987, c. W190; New Brunswick: Woods Workers’ Lien Act, R.S.N.B. c. W-12.5; Nova Scotia: Woodsmen’s Lien Act, R.S.N.S. 1989, c. 507; Oregon: ORS – 2011 Edition, Chapter 87 “Statutory Liens”, online: http://www.leg.state.or.us/ors/087.html; Washington: Washington State Legislature, Title 60 RCW “Liens”, online: http://apps.leg.wa.gov/rcw/default.aspx?Cite=60.  

[182] ALRI, note 145.

[183] ALRI, note 145, 56-62.

[184] ALRI, note 145.

[185] Woodmen’s Lien Act, R.S.A. 2000, c. W-14.

[186] Woodworker Lien Act, R.S.B.C. 1996, c. 491 [WLA].

[187] Another distinction is that, unlike the Ontario Act, the B.C. Act protects mill workers in addition to logging employees.

[188] LRCBC, 1992 Working Paper, note 7.

[189] LRCBC, 1994 Final Report, note 109.

[190] LRCBC, 1994 Final Report, note 109, 12.

[191] LRCBC, 1994 Final Report, note 109, 15. A similar recommendation was made by ALRI, note 145, 76-77.

[192] However, the proposed Act would have made the $20,000 super-priority subordinate to perfected PMSIs.

[193] FSPPA, note 181.

[194] FSPPA, note 181, s.2.

[195] FSPPA, note 181, s.11.

[196] Established by B.C. Reg. 64/2012.

[197] Legislative Debates of British Columbia, Committee of the Whole House, Bill 21 – Forestry Service Providers Protection Act, Tuesday May 25, 2010, 5716, Hon. P. Bell: “The member for Cowichan Valley earlier in his remarks suggested that stakeholders should all participate in the fund. I think that’s probably a safe bet….”

[198] The Ministry entered into an agreement with the Administrative Authority dated February 1, 2013, online: http://www.for.gov.bc.ca/ftp/hth/external/!publish/web/timber-tenures/Forestry-service-provider-protection-admin-agreement.pdf

[199] Legislative Debates of British Columbia, Committee of the Whole House, Bill 21 – Forestry Service Providers Protection Act, Tuesday May 25, 2010, 5685-5686.

[200] Legislative Debates of British Columbia, Second Reading of Bills, Bill 21 – Forestry Service Providers Protection Act, Tuesday May 18, 2010, 5479.

[201] In 2010, British Columbia’s logging industry generated $3.3 billion in revenues as compared to just under $1 billion in Ontario. Wages and salaries for logging contractors (and other forestry workers) amounted to $543 million in B.C. as compared to $158 million in Ontario: Canadian Forest Service, note 61, 12 and 14.

[202] A Canlii search of the B.C. courts database between 1980 and 2013 revealed 18 decisions containing the phrase “woodworker lien”. The Ontario courts database for the same time period lists only the 2 Buchanan decisions containing the phrase “forestry worker lien”. Of course, the number of reported court decisions  are not necessarily an accurate measure of the commercial use of the legislation. The LRCBC survey of registry offices found that relatively few liens were being filed in B.C.: 1992 Working Paper, note 7.

[203] Warehousemen’s Lien Act, R.S.O. 1980, c. 529 (first enacted in the 1920s).

[204] See Ontario Ministry of Attorney General, note 115.

[205] A lien may arise even where a repairer does not have actual possession of the article: RSLA, note 138, ss. 3(4).

[206] ALRI, note 145, 48.

[207] RSLA, note 138, ss.4(4).

[208] Arthur L. Close, “Commentary: Ontario Ministry of the Attorney General Discussion Paper on Repair and Storage Liens” (1985) 10 C.B.L.J. 359, 362.

[209] RSLA, note 138, ss.1(2).

[210] RSLA, note 138, ss. 7(5).

[211] RSLA, note 138, s.6.

[212] RSLA, note 138, s.14.

[213] Woodworker liens were not traditionally thought of in this fashion. Instead, they were intended as a means of statutory wage protection. However, the rationale fits insofar as harvesting timber results in an unharvested tree being transformed into logs ready for further processing.

[214] ALRI, note 145, 70.

[215] For example, an early recommendation for the RSLA was that it would only apply to repairer and storers who had once had possession of the articles but had given up possession. This is rarely the case for forestry workers.

[216] ALRI, note 145, 75.

[217] ALRI, note 145, 76-77.

[218] ALRI, note 145, 92.

[219] ALRI, note 145, 89.

[220] ALRI, note 145, 99.

[221] ULA, note 171. The Act was originally adopted by the ULCC in 1996 and amended in 2000.

[222] Uniform Law Conference of Canada [ULCC], 1994 Charlottetown PE Annual Meeting, Civil Section Documents – Report on Commercial Liens, 1994, online: http://www.ulcc.ca/en/1994-charlottetoen-pe/448-civil-section-documents/330-report-on-commercial-liens-1994?tmpl=component&print=1&page=.

[223] For a discussion of the ULA in comparison with Ontario`s RSLA, see Cuming, note 94.

[224] ULCC, note 222.

[225] ULA, note 171, ss.2(1) and Commentary.

[226] ULA, note 171, ss.5(1).

[227] ULA, note 171, ss. 8(3) and Commentary.

[228] Commercial Liens Act, S.S. 2001, c.15-1.

[229] Liens Act, S.N.S. 2001, c. 33, not yet proclaimed.

[230] British Columbia Law Institute, Report on the Uniform Liens Act, Report No. 23 (January, 2003), online: http://bcli.org/sites/default/files/Uniform_Liens_Act.pdf.

[231] Mechanic’s Lien Act, 1873, 36 Vict. ch. 27.

[232] On the social and economic importance of the construction industry as a factor motivating lien legislation, see Samuel L. Phillips, A Treatise on the Law of Mechanics’ Liens on Real and Personal Property, 3d. ed. (Boston: Little, Brown & Company, 1893) 11.

[233] Kevin McGuinness, Construction Lien Remedies in Ontario, 2d ed. (Toronto: Carswell, 1997).

[234] Stephen V. Fram, “The Proposed Ontario Construction Lien Act” (1981-1982) 3 Advoc. Q. 460, 463; also see the Law Reform Commission of Nova Scotia, Builders’ Liens in Nova Scotia: Reform of the Mechanics’ Lien Act (Final Report, June 2003) 18-19, online: http://www.lawreform.ns.ca/Downloads/Builders_Liens_%20FIN.pdf.

[235] Fram, note 234, 462.

[236] In 2006, approximately 33 per cent of Ontario construction workers were self-employed and, of these, 62 per cent were independent operators with no paid help. Of these independent operators, 75 per cent were unincorporated: Ontario Construction Secretariat, Independent Operators: Self Employment and the Underground Economy (May 2007),  online: http://www.iciconstruction.com/about/news/article_1C.cfm?CFID=7543469&CFTOKEN=30552437.

[237] In 2010, the construction industry Canada-wide had a unionization rate of approximately 30 per cent: Sharanjit Uppal Unionization 2011, Statistics Canada: Perspectives on Labour and Income, 4, online: http://www.statcan.gc.ca/pub/75-001-x/2011004/article/11579-eng.pdf. Although exact numbers for the logging industry are not known, the LCO heard in consultations that there is very little unionization remaining (as contrasted with the wood processing industry).

[238] See LRCBC, Debtor Creditor Relationships, Part II: Mechanics’ Lien Acts – Improvements on Land (1972) 14; Kevin McGuinness, A Theory of Mechanic Liens, S.J.D. Thesis, University of Toronto Faculty of Law (1982) 503.

[239] Northwest Territories Commission on Law Reform, Report on Mechanic’s Lien Law in the Northwest Territories, Yellowknife, 1988, quoted in McGuinness, note 233, 12.

[240] On the other hand, the fact that logs are a mobile form of property also complicates a woodworker lien regime since it is relatively difficult for third parties to ensure that others do not have competing interests in the logs.

[241]  McGuinness, note 238, 802.

[242] An informal Canlii search of the Ontario courts database between 1980 and 2013 revealed 926 court decisions including the phrase “construction lien”. A comparable search of the phrase “forestry workers lien” revealed only the 2 Buchanan decisions.

[243] For the distinction between liens and PPSA security interests, see ULCC, note 222, section VI.

[244] LCO, Modernization of the Forestry Workers Lien for Wages Act – Consultation Paper (August 2012), 20, online: http://www.lco-cdo.org/en/forestry-workers-consultation-paper

[245] National Forestry Database, Ontario Tenure Holders’ Rights, 2011-2012, online: http://nfdp.ccfm.org/data/tables/tab82_f_e.php.

[246] Apart from consensual security agreements, small businesses may use credit cards to manage their credit risk. Credit card companies assess consumers’ creditworthiness on behalf of the business owner. Banks provide a similar service in issuing lines of credit. However, these mechanisms are not available in respect of logging contracts given the relatively large amounts in issue.

[247] McGuinness, note 233, 15.

[248] This same concern led the British Columbia government to deny logging contractors a super-priority lien. The concern was that the financial industry would refuse to lend to small forest products companies in these circumstances: Legislative Debates of British Columbia, Second Reading of Bills – Bill 21, Forestry Service Providers Protection Act, Tuesday May 18, 2010, 5479, Hon. P.Bell. Instead, the government enacted the FSPPA which gives logging contractors only modest lien protection but also provides a compensation fund against which contractors can claim in cases of insolvency: FSPPA, note 181.


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