A. Introduction to FWLWA
Although 122 years old, FWLWA remains in almost original form. It provides that persons performing labour on logs or timber may claim a lien over those logs or timber to secure their wages. However, the passage of time has rendered the definitions in the Act ineffectual, leaving its scope unclear.
“Labour” is defined in the language of 19th century logging practices to include anachronistic functions such as running, rafting and booming logs, as well as work done by bush camp personnel such as cooks and blacksmiths who have now virtually vanished from the industry. The Act provides protection to both logging employees and logging contractors but is unclear as to whether it also covers subcontractors. Given the fragmented nature of the industry, this leaves the application of the Act to a large proportion of contemporary Ontario loggers in doubt.
The Act defines “logs or timber” as a list of items including telegraph poles, railroad ties, tan bark, pulpwood, shingle bolts and staves. This definition is no longer meaningful. Some of the included items, such as tan bark, are commercially obsolete and some important outputs of modern logging, such as woodchips and biomass, are missing from the definition. The definition also has the effect of limiting the life of the lien to the period during which the “logs or timber” remain in identifiable form. Once the logs are processed at the mill, a lien can no longer exist under the Act. This provision may have made sense at the turn of the century when logs lay in the bush over the winter months. However, now that logs are processed much more quickly (sometimes even while they are still in the bush), the provision significantly restricts the scope of the Act and the value of a lien.
The procedures in FWLWA are equally anachronistic. The claimant must file a lien claim and an affidavit verifying the claim in the local office of the Superior Court of Justice but there is no reliable means for third parties to become aware of these claims. The Act’s filing deadlines assume that logging remains a seasonal practice. For example, the deadline for logging employees doing winter labour is the April 30th after the work is done, whereas the deadline for logging employees doing summer labour is 30 days after the work is done. The presumption here is that loggers working in the bush over the winter have difficulty leaving camp to file a lien claim. Complicating matters further, a different deadline is specified for logging contractors filing a claim. This deadline is the September 1st after the work is done.
After filing a lien claim, the Act provides that loggers have 30 days to bring an action to enforce the lien. An action may be filed either in the Superior Court of Justice or the Small Claims Court, depending on the amount at stake. In both cases, the relatively informal procedures of the Small Claims Court are to be adopted where possible. While this provision might have been appropriate for wage recovery in 1891, it does not take into account the large amounts that may be claimed by contemporary logging contractors. Small Claims Court Rules are designed for claims less than $25,000 and provide for an abbreviated discovery process in order to facilitate access to justice. The drafters of the original Act presumably did not contemplate lien claims approaching $1 million.
The Act also provides that, where there is good reason to believe that the logs or timber are about to be removed from Ontario or sold or cut so as to be no longer identifiable, the Court may issue a writ of attachment and direct the sheriff to seize the logs. In this circumstance, the owner of the logs may regain possession of them by posting a bond covering the amount of the lien plus costs.
The Act provides that lien claims have priority over all other claims or liens except for certain Crown claims such as a claim for unpaid stumpage fees. Although perhaps sensible in 1891, it is unusual today for a non-possessory commercial lien to leapfrog over almost all other interests in the property in the absence of a registration requirement. The Act also provides that liens are effective against ordinary course sales to third party purchasers. This too is inconsistent with the modern convention which is to encourage the free exchange of goods by enforcing third party sales in the ordinary course.
Several other provisions of FWLWA are also outdated. For example, the Court is severely limited in the costs that it may award in relation to a lien proceeding. For uncontested claims in the Superior Court of Justice, costs are capped at $5 where a solicitor is employed. This increases to $10 for a contested claim. Even lower amounts are provided for where the action is brought in Small Claims Court.
Another provision provides that lien claimants may take proceedings under the Lakes and Rivers Improvement Act to procure the separation of logs seized by the sheriff from other logs with which they have been intermixed. This provision seems to have been orphaned since no such procedure remains in the current version of the Lakes and Rivers Improvement Act.
There is also a geographic restriction built into the Act. The Act applies only to the County of Haliburton and to the territorial districts in northern Ontario. This boundary excludes a significant area of commercial logging operations currently taking place in the southern part of the province. Loggers working in northern Ontario may claim a lien under the Act but loggers doing the same work in Mazinaw-Lanark, for example, may be excluded from protection.
B. Historical Backdrop to Forestry Worker Lien Legislation in Ontario
The introduction to FWLWA above illustrates how important the historical context is to understanding the policy behind the enactment of a forestry worker lien regime in Ontario, as well as the legal structure chosen for the Act. We provide some of that historical context in this section.
When the predecessor to the Act was first introduced in 1891, the logging industry was a central component of Ontario’s economy. It fed the saw mills which, in turn, produced lumber essential to building the railways and other infrastructure of a young country. During the second half of the 19th century, the industry experienced rapid growth. A raft of timbers worth approximately $12,000 mid-century was worth $100,000 by the turn of the century. Lumber barons capitalized on this growth and built large scale sawmills to process the timber. Among these were Michigan mill owners who hired Ontario contractors known as “jobbers” to oversee logging operations and, then, to tow huge booms of these logs to mills across Lake Huron.
Logging was strenuous physical work. Carrying or dragging logs required twice the energy necessary for drilling coal and three times the energy needed for bricklaying. Early in the season, workers known as “beavers” would cut trees and clear the bush for logging roads. Next, choppers would go into the bush in teams of three to fell trees using axes and crosscut saws. They would strip the trees of branches and then buck them into logs. Skidding crews would use horses and chains to drag the logs out to the roadside. Rollers would stack the logs onto the skidway. Mid-season, once the logging roads were well iced, haulers would load the logs onto a sleigh and deliver them to a landing beside a river, or even directly onto the frozen surface of a lake, to await the spring river drive. Come spring, these logs were rolled into the water and directed downstream using long hooks. On arrival at a lake, the logs were tied together in huge booms and raftsmen towed them to their destination. Except for the use of saws, axes and horse-drawn sleighs, these tasks were carried out manually.
Logging was also dangerous work, rivaling mining as the most dangerous industry in the province. Injuries resulted from falls, accidents with axes, rolling logs, falling trees and log jams. Injured loggers had little government support before 1914 when the Workmen’s Compensation Act was introduced.
Loggers spent much of the year living in the bush in logging camps with rudimentary accommodations and few comforts. Wage rates were low – often too low to support a family. Nevertheless, winter logging work was in demand as a means of supplementing other seasonal occupations such as farming and construction. As a result, mill owners had their choice of workers and loggers had little bargaining power to negotiate improved conditions. The demand for logging work, the isolated location of logging camps and the independent nature of bushworkers prevented unionization from taking hold in the early years.
Loggers were hired seasonally. Employment contracts set out the wage, length of employment (i.e., until spring) and other terms of employment. Wage rates were generally standardized depending on experience. Loggers were paid a monthly rate, although in later years piece-work became more common. Employment terms tended to favour the employer.
Contracts sometimes provided that wages were not payable until the raft of logs reached its destination regardless of whether or not the logger was still on staff. One reason for this was the relative scarcity of working capital in the early days of the lumber industry. Lumber companies were occasionally unable to meet payroll until they received the proceeds from selling the lumber at the end of the season. A second reason to withhold wages was to prevent loggers from “jumping” mid-season to another camp in search of better food or working conditions.
As a result, loggers were sometimes required to invest months of labour with only a promise of payment. And when wages were not forthcoming, loggers had few avenues of recourse. They could seek a legal judgment in debt from the local magistrate. However, where lumber companies or jobbers became insolvent (which happened frequently even then), this judgment was of little use. In some circumstances, where loggers delivered the logs to the buyer, a practice developed that they would only release the logs if the buyer agreed to be responsible for their wages. In at least one case, this arrangement was enforced by the courts on the reasoning that the sale agreement between the buyer and the lumber company would have anticipated this practice and a certain amount withheld to cover the wages.
C. Adoption of Forestry Worker Lien Legislation in Ontario
It was in this historical context that the predecessor to FWLWA was introduced in 1891. It seems clear that the intent of the original Act was to protect nineteenth century loggers from the financial risk associated with the logging industry at that time. This was the purpose accepted by the court in Buchanan: “Implicit in the legislature’s desire to protect forestry claims is a recognition that forestry workers are vulnerable.” But it is less clear whether this legislative intent was a general one or whether the legislators were targeting a particular mischief.
The 1891 debates in the Legislative Assembly leading up to the passage of the original Act are sparse. However, they suggest some specific factors motivating the creation of a logging lien. When the Bill was first introduced in the House, the Minister responsible indicated that it would provide lumbermen working in the shanties with the same protection given to mechanics under the Mechanics Lien Act. That Act provided construction contractors and subcontractors the right to assert a lien against the owner of land for the price of materials furnished and improvements made to the land, the object being “to prevent an owner from obtaining the benefit of the labour and capital of others without compensation”.
When the logging lien bill came up for second reading, it was described in a bit more detail:
Mr. Hardy explained that it applied to the districts of Algoma, Thunder Bay and Rainy River. Logs were got out in those places by jobbers who through lack of money sometimes coul