IV. Options for Reform2017-03-03T18:35:03+00:00

The previous section demonstrated that the status quo is not an option. The Act is disconnected from the modern logging industry, its coverage is uncertain, and its procedures are difficult to use. It is clearly no longer fit for purpose, and reform is needed.  

The simplest option for reform would be to simply repeal the Act and not replace it.  If the Act is to be retained, it could either be “tweaked” in order to make it more appropriate to a modern environment, or essentially redrafted from the ground up, preserving only the underlying policy goal of protecting vulnerable logging workers. This section briefly outlines what is involved in each of these options and offers some examples from other jurisdictions where each option was taken.

A.           Repeal

Repeal is appropriate if the underlying policy behind the Act is no longer appropriate. That is, if the Act’s goal of protecting logging workers no longer makes sense. At the time it passed, logging was mostly undertaken by employed individuals, who might be owed three or four months’ wages, totalling in today’s terms several thousand dollars. In the modern industry, there are virtually no employees conducting logging, with almost all of it being undertaken by contractors, almost all of which, even small, one person operations, are corporations. With the advent of mechanized logging using heavy equipment, enormous amounts of lumber can be cut by such contractors in a relatively short of time. Accordingly, the amounts at issue are also considerable larger, with many of the liens claimed in the Buchanan case amounting to hundreds of thousands of dollars each, some nearly a million.[83] 

Although smaller lien claims from small contractors do still exist, this context is clearly very different than that envisioned by the drafters of the Act. Arguably, the situation of corporations with heavy machinery placing liens on millions of dollars of wood is so radically different that the Act’s original purpose is no longer relevant to the logging industry. Are these really the people the Act is designed to protect? In addition, giving high-ranking liens to logging contractors arguably disrupts the comprehensive regimes set up in the Personal Property and Security Act and the Bankruptcy and Insolvency Act by the provincial and federal governments respectively by purporting to reallocate priority outside the rules set out in those Acts. Does the protection of logging contractors justify such disruption? 

In 2000, Michigan’s legislature reached the conclusion that its log lien law no longer served any useful purpose. Michigan’s law was cited as a point of comparison in the passage of the Ontario Act in 1891; the two laws are comparable though not identical. The repeal was carried out as part of a general effort by a legislative taskforce to get rid of outdated and unused laws.[84] Other laws repealed as part of the project were a ten cent bounty on rat heads and an appropriation of $150 per year to fund equipment for county cream testers.[85]   

The process of repeal was remarkably non-contentious. There appeared to be little or no debate in the legislature, no detailed policy justifications for repeal were recorded, and only two Representatives voted against repeal.[86] Michigan’s log lien law was clearly seen as straightforwardly obsolete. This does not mean that this is the right thing for Ontario to do, but the Michigan Legislature’s actions illustrate that simple repeal is a reasonable option that must be considered.

 

B.           Retaining the Act

If the Act is retained, it could simply be modernized under the existing template or redrawn from first principles. There are examples of recent lien reform that follow both of these models.

1.                   Updating the Act

A relatively confined approach to updating the Act would be to retain its overall structure, but update its drafting to address some or all of the problems identified in the previous chapter. This approach was recently used by Yukon in updating its Miners Lien Act and by the Manitoba Law Reform Commission in recommending updates to Manitoba’s Stable Keepers Act.[87] 

The scope of the Manitoba Law Reform’s report was deliberately kept narrow, with the aim being “to make recommendations for modernizing The Stable Keepers Act while enhancing its quality as a relatively user-friendly and flexible instrument”.[88] It did not address some of the wider issues addressed by reports such as the Alberta Law Reform Institute’s Report on Liens (discussed further below), and largely did not recommend radical changes to the law.[89] Instead, it recommended that the general scheme of the original Act be re-enacted in an updated format that followed modern drafting rules and fit in with the reality of the modern animal care industry. 

Yukon’s approach in revising its Miners Lien Act was similar in its scope. Like a lien under the Act, a Miners Lien secures the work done by miners by granting a lien over mine property until the amount owed to them is paid. Although the legislative debates did not explicitly state that the intention of reform was merely to update obsolete parts of the Act, this was certainly the approach taken. The structure and general policy of the original Ordinance from the early 1900s was left in place, with terminology, definitions and filing times being updated.[90] 

It is certainly possible to at least partially address most of the issues raised in section II with piecemeal revisions to the current statutes. Definitions of “labour” and “logs and timber” can be updated, the process for proving a lien can be simplified, and the application of the Act to subcontractors can be clarified.

 

2.                   Major Rewrite

If the policy underlying the Act is still thought to serve a useful purpose, but the problems with its current drafting seem too severe to remedy with minor amendments, a full rewrite from first principles may be the most sensible course of action. This approach was recommended by the Law Reform Commission of British Columbia in its Report on the Woodworker Lien Act 1994.[91] Though not taken up by the government at the time, the BC Legislature did eventually move to do a major rewrite of its own, albeit not entirely following the recommendations of the Law Reform Commission.[92]

Both approaches involved a radical rethink of the way log liens worked. The Law Reform Commission proposed a regime that integrated forestry liens very closely into the general structure of BC’s Personal Property Security Act. The Forestry Service Provider Protection Act (“FSPP Act”) passed by the Legislature in 2010 also made use of the BC PPSA (though not exactly as recommended by the Commission) and set up a compensation fund to help mitigate the impact of licence holder bankruptcy on logging contractors.[93] Reflecting the changes in the structure of the industry, the FSPP Act also only applied to contractors, with the thinking being that employees are sufficiently protected by other provincial and federal legislation.[94]  

An even more ambitious complete restructure was recommended in the ALRI Report on Liens. This report reviewed all the standalone lien Acts in force in the province, recommended the repeal of obsolete liens, and the integrating of every other lien into a single statute.[95] The proposed statute had comprehensive PPSA-style registration provisions and revised enforcement and dispute resolution processes.[96] The Report’s recommendations have not been acted on as yet, but it remains useful as an example of what an extremely bold rethink of liens looks like.

 

C.            Conclusion

All of the options discussed above have been used by at least one comparable jurisdiction in reforming at least one comparable lien Act. All ought to be considered in deciding how the Act should be reformed. The LCO is very keen to hear from those in the industry on what sort of reform would be best.

 

D.           Questions 

1).     Do you agree that the Act still serves a useful purpose? Why or why not? 

2).     If you agree the Act should be retained in some form, what sort of reform do you think would be best: a minor update of obsolete terminology and procedures, or a complete rewrite?

 

 

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