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In the decision in 9058-4004 Québec inc. c. 9337-9907 Québec inc.1 rendered on October 21, 2022, the court granted compensation to a subcontractor for its extrajudicial fees further to a general contractor’s unfounded contestation of its claim as part of a hypothecary action. The facts In May 2019, Portes de garage Citadelle Ltée (“Citadelle”) and general contractor 9337-9907 Québec inc. (“AllConstructions”) concluded a contract for the provision of services and materials needed to install unloading docks in a building under construction. On May 16, 2019, notice of the contract was given to the building owner, 9058-4004 Québec inc. (“Transport Pouliot”). The first two phases of Citadelle’s work were completed between June and August 2019. In late September 2019, AllConstructions allegedly vacated the worksite after a dispute with Transport Pouliot. The third phase of Citadelle’s work was completed in October 2019. On November 25, 2019, Citadelle sent a statement of account to AllConstructions and registered a legal hypothec on the building two days later. On December 23, 2019, after registering a prior notice of the exercise of a hypothecary right, AllConstructions brought a hypothecary action against Transport Pouliot in the Superior Court, claiming the sums it was owed. For its part, Citadelle brought a hypothecary action against the owner, Transport Pouliot, and instituted legal proceedings against AllConstructions in April 2020. It is important to note that during the proceedings, AllConstructions admitted that it had received payment from Transport Pouliot for the sums invoiced by Citadelle. To justify its refusal to pay its subcontractor Citadelle, AllConstructions argued summarily that the services and materials provided were inadequate and did not meet standards. Despite its weak position and the lack of compelling evidence, AllConstructions maintained its argument. Citadelle had no choice but to pursue its legal proceedings and apply to have AllConstructions’ action declared abusive in order to recover its extrajudicial fees. AllConstructions’ abuse of procedure Citadelle claimed that AllConstructions’ defence was unfounded, frivolous and intended to delay. AllConstructions only had testimonial evidence to support its allegations, and it failed to file any expert opinions or exhibits. The contract did not contain a “pay when paid” clause, and AllConstructions admitted in the proceedings that it had received payment from Transport Pouliot for the sums invoiced by Citadelle. AllConstructions claimed that it had serious arguments to make in response to the application to have its action declared abusive. It stated that the work performed by Citadelle was inadequate and that the materials and services provided were not up to standards. It maintained its position, despite the fact that it had vacated the worksite a month before Citadelle’s work was completed and, therefore, could not have verified the actual quality of the work performed. In March 2022, AllConstructions ultimately abandoned its contestation of Citadelle’s claim a few days before the trial and nearly a year and a half after the proceedings began. The judge allowed Citadelle’s application to have AllConstructions’ action declared abusive. AllConstructions’ defence was unfounded, frivolous and intended to delay. It had no solid factual or legal basis. The allegation that Citadelle failed to comply with standards in the performance of its contract is mere speculation, as AllConstructions left the worksite in September 2019. Citadelle incurred unnecessary extrajudicial fees as a result of AllConstructions’ unfounded contestation of its claim. The judge awarded Citadelle a sum of $9,000.00 as compensation for the legal fees that it had paid. What it means A general contractor that cannot justify a deduction from its subcontractor’s claims after the work is completed but does so anyway risks having its contestation declared abusive. Jurisprudence has established that abuse of procedure may consist of légèreté blâmable [blameworthy conduct]2 or témérité [recklessness] resulting from allegations that do not stand up to careful analysis or are exaggerated beyond the scope of the dispute between the parties.3 A manifestly unfounded action is a civil fault that may be subject to legal proceedings and sanctions in accordance with article 51 of the Code of Civil Procedure.4 A party that considers itself the victim of abusive proceedings may, in addition to applying to have the proceedings declared abusive, claim the reimbursement of reasonable legal fees it has paid.5 This is precisely what Citadelle did and what it obtained. AllConstructions irresponsibly managed its dispute with its subcontractor. It made arguments based only on unverified assumptions, even though the evidence set out in the application was relatively solid and complete. As a victim of abuse of procedure, Citadelle was granted a reimbursement of its legal fees in addition to the sums that it was owed by AllConstructions. Court file No. 760-22-011912-204 Royal Lepage commercial inc. c. 109650 Canada ltd., 2007 QCCA 915 El-Hachem c. Décary, 2012 QCCA 2071 2741-8854 Québec inc. c. Restaurant King Ouest, 2018 QCCA 1807 (CanLII) Only extrajudicial fees deemed reasonable are reimbursed in full. The factors considered in establishing a total reasonable amount are summarized in paragraph 32 of the case at hand and are cited from Groupe Van Houtte inc. c. Développements industriels et commerciaux de Montréal inc., 2010 QCCA 1970, and Iris Le Groupe visuel (1990) inc. c. 9105-1862 Québec inc., 2021 QCCA 1208

On September 18, 2019, the Minister Responsible for Government Administration and Chair of the Conseil du trésor introduced Bill 37, An Act mainly to establish the Centre d’acquisitions gouvernementales et Infrastructures technologiques Québec1 As its name suggests, this bill is intended to implement the restructuring of government procurement announced in the 2019–2020 budget2. If the bill is passed, the Centre de services partagés du Québec (CSPQ), as well as some other procurement organizations, will be replaced by two bodies: the Centre d’acquisitions gouvernementales will be the organization responsible for meeting the government’s general procurement needs, and Infrastructures technologiques Québec will handle its digital procurement. In 2017–2018, information technology contracts accounted for 17% of public body contracts3. Some administrative functions of the CSPQ would also be transferred to the Agence du revenu du Québec and the Conseil du trésor. Bill 37 also makes a number of amendments to the Act respecting contracting by public bodies, CQLR c. C-65.1, and its regulations, two of which are noteworthy. It is planned that, as of April 1, 2020, information relating to contracts involving an expenditure of more than $10,000, whether reached by mutual agreement or following a call for tenders, will have to be published in the electronic tendering system. The current limit is $25,0004. The bill also provides that, as of the date its assent (currently scheduled for the end of 2019), the imposition of a penalty for a final reassessment under the general anti-avoidance rule regarding an abusive tax avoidance transaction5 on the part of a company or related person will be recorded in the Register of Enterprises Ineligible for Public Contracts for five years. Such penalties will also be considered by the Autorité des marchés publics in its decision to authorize a contract with a public body. A 60-day transitional period is provided for in Bill 37, during which a taxpayer may make a late preventive disclosure to the Minister of Revenue6 by filing the form Mandatory or preventive disclosure of tax planning (TP-1079.DI-V). However, this type of disclosure will not be accepted if an audit by the Agence du revenu du Québec or the Canada Revenue Agency is already ongoing with respect to such a transaction. This measure is part of the current fight against aggressive tax planning7.   Quebec (National Assembly), Bill 37, An Act mainly to establish the Centre d’acquisitionsgouvernementales and Infrastructures technologiques Québec, 42nd Legislature, 1st Session. Quebec (Conseil du trésor), 2019–2020 Budget Plan (Quebec, Off. Publ., March 2019), p. H.61. Québec (Conseil du trésor), Statistiques sur les contrats des organismes publics 2017–2018 (Québec, Direction de la reddition de comptes et du soutien à l’encadrement des contrats publics, March 2019), p. 1. Sections 22 and 23 of the Act respecting contracting by public bodies, CQLR c. C-65.1; sections 39 and 39.2 of the Regulation respecting supply contracts of public bodies, CQLR c. C-65.1, r. 2; sections 52 and 52.2 of the Regulation respecting service contracts of public bodies, CQLR c. C-65.1, r. 4; sections 42 and 42.2 of the Regulation respecting construction contracts of public bodies, CQLR c. C-65.1, r. 5; sections 73 and 75 of the Regulation respecting contracting by public bodies in the field of information technologies, CQLR c. C-65.1, r. 5.1. Sections 1079.13.1 and 1079.13.2 of the Taxation Act, CQLR c. I-3. Section 1079.8.7.1 of the Taxation Act, CQLR c. I-3. See, in particular, Quebec (Conseil du trésor), 2019–2020 Budget Plan (Quebec, Off. Publ., March 2019), p. D.81.

That is what material suppliers want to know when general contractors with which they have contracted default on payment, particularly in bankruptcy cases. It is common practice for clients to require that the general contractor provide a surety bond to cover a significant breach of this nature. Generally speaking, the purpose of a surety bond contract to cover payment for labour and materials is to guarantee that the workers, suppliers and subcontractors used by the general contractor are paid.1 In order to benefit from the protection provided by the surety bond, a claimant must disclose its contract to the surety, usually within 60 days from the date on which the claimant commences work or on which the materials are delivered. When a claimant has not been paid or anticipates not being paid, it must send the surety a notice of claim within the time specified in the contract, which is generally 120 days from the date on which the services were completed or the materials were delivered. THE DECISION IN PANFAB On June 26, 2018, the Court of Appeal again examined the principle that requires disclosure to the surety in order to obtain payment for labour and materials, in Industries Panfab inc. v. Axa Assurances inc., 2018 QCCA 1066. In 2010, the Local Housing Bureau (the “Bureau”) retained Groupe Geyser inc. (“Geyser”) to construct three buildings in Longueuil with a total of 180 units. As stipulated in the construction contract, Geyser obtained a surety bond from Axa Insurance (“Axa”) to guarantee payment for labour and materials. Geyser subcontracted with Les Revêtements RMDL (“RMDL”) for the exterior cladding of the three buildings it was constructing. RMDL then signed a $330,000 contract with Industries Panfab inc. (“Panfab”) for it to supply metal sheathing boards. A few days before making its first delivery, Panfab informed Geyser, Axa and the Bureau of its contract to supply RMDL. A few months after the first delivery, RMDL ordered additional sheathing boards that were not part of RMDL’s initial order from Panfab. Panfab made an additional disclosure to the surety and upped the total cost of its contract. Panfab made two additional disclosures, in each of which it stated the new, higher total cost of its contract. Panfab’s total invoice for all of the materials came to $446,328.24, but it received only $321,121.84. Its claim was therefore for $125,206.40. RMDL declared bankruptcy in 2012 and, given the situation, Panfab sought to claim under the surety bond for payment for its materials. Decision at trial At trial, the Court found that Axa’s surety bond contract contained a stipulation for the benefit of third parties, based on which Panfab could characterize itself as a creditor under the contract and thus benefit from the guarantee provided by the surety bond. However, the Court concluded that there was only one contract between the parties and that the increase in the value of the contract had been disclosed more than 60 days after the first delivery of materials. In fact, it characterized the amount claimed as an overpayment and limited the amount that it ordered Geyser and Axa to pay to $54,830.66, since the effect of a judgment for the overpayment would have been to alter the terms of the surety bond contract and add to the respondents’ contractual obligations.2 Appeal In this specific case, the Court of Appeal found that the obligation of Geyser and Axa to jointly and severally pay the amount claimed for the materials to be used in the construction arose at the point when Panfab characterized itself as a creditor by making its first disclosure. The Court of Appeal held that the surety bond contract did not require that the value of the contract for the supply of materials be disclosed. The mandatory information to be provided was the type of work, the nature of the contract, and the name of the subcontractor. Panfab disclosed its contract with RMDL, the subcontractor, within the 60 days allowed and thus complied with the time requirements. The obligation to pay Panfab arose at that point. Given that the surety bond contract did not require that the value of the contract be stated in the notice of disclosure, the Court was of the opinion that Panfab had demonstrated good faith and transparency in informing Geyser and Axa of the changes to the value of its contract with RMDL, by providing amended notices of disclosure. The claim could therefore not be limited on the ground that Panfab had stated the value of its contract in its notice of disclosure, when there was nothing that required it to do so. The Court of Appeal therefore reiterated the principle that there is only one contract and thus only one notice of disclosure, notwithstanding the fact that Panfab sent the surety amended notices.3 An order for reimbursement for the full amount to be paid does not alter the terms of the surety bond contract. The Court therefore concluded that the trial judge had erred by holding that the amended notices of disclosure sent by Panfab were time-barred and were necessary in order for the total claim to be allowed. The Court of Appeal took the opportunity to reiterate the scope of the duty to inform on the part of a materials supplier or subcontractor. Geyser submitted that Panfab had breached its duty to inform and that its breach was the reason for the shortfall in the amounts withheld for paying all of the subcontractors and suppliers. The Court did not accept that argument; it relied on Banque canadienne nationale v. Soucisse (1981),4 which set out the foundation for a creditor’s duty to inform, and on article 2345 C.C.Q., reiterating that a creditor is required to provide any useful information to the surety at the request of the surety. In this case, Geyser and Axa had never asked Panfab for additional information under that article. To summarize, Panfab clarifies the already settled law regarding notices of disclosure to sureties, as stated in Fireman’s Fund (1989)5 and Tapis Ouellet inc. (1991), in particular: when a contract for the supply of materials is shown to exist between the parties and the materials have been incorporated into a construction project, the subcontractor may claim the amounts owed under the surety bond contract after sending a notice of disclosure that meets the requirements set out in that contract. It must be kept in mind that any surety bond contract may contain specific clauses and that reference must be made to those clauses. That is why the Court in Panfab concluded that the information relating to the value of the contract was not mandatory in the notice to the surety, since, in that case, the surety bond contract did not require that the value of the contract be included in the notice of disclosure. Vigilance is therefore the order of the day when it comes to the terms of surety bond contracts.   MONDOUX, Hélène, François BEAUCHAMP, “Les cautionnements de contrats de construction” in Collection de droits 2017-2018, École du Barreau du Québec, vol. 7, Contrats, sûretés, publicité des droits et droit international privé, Cowansville, Éditions Yvon Blais, 2017, p. 59. Industries Panfab inc. v. Axa Assurances inc., 2018 QCCA 1066, para. 14. Ibid. para. 22. National Bank of Canada v. Soucisse, [1981] 2 S.C.R. 339. Fireman’s Fund du Canada, cie d’assurances v. Frenette et frères Itée, 1989 CanLII 815 (QC CA).

Redefining and expanding the concept of conflict of interest, clarifying situations of “ineligibility to contract”, introducing a principle of supplier rotation, increasing the eligibility threshold for the award of a private contract. These are the main changes that the City of Montreal has made to what is from now on its by-law on contract management. Section 573.3.1.2 of the Cities and Towns Act, CQLR c. C-19, which requires all municipalities to adopt a contract management policy, entered into force on March 1, 2010.  There have been several versions of the City of Montreal’s policy, which was first adopted on December 16, 2010, including the most recent version adopted on August 25, 2016.1 On January 1, 2018, the Act mainly to recognize that municipalities are local governments and to increase their autonomy and powers, SQ 2017 c.13 (or “Bill 122”) transformed these contract management policies into by-laws.  The City of Montreal took this opportunity to revise its own policy, a new version of which was circulated to various City authorities beginning May 28, 2018 in order to be adopted on June 22 2018. The new by-law enters into force on June 26, 2018. Overview of the main changes Clarifications relating to scope: The policy’s central objective was to “sanction wrongful acts committed in the context of city contracts”,2 whatever these acts may be. The by-law is amended to clarify that it applies not only to contracts entered into by the City of Montreal, but also to subcontracts directly or indirectly connected to those contracts or to the related procedures (s. 3), a point on which the previous wording was ambiguous. The by-law also states that it is deemed to be an integral part of these contracts (s. 3, in fine). Codification of certain practices: As per s. 12, the City of Montreal is now obliged to preserve the personal notes and individual assessment prepared by each member of the selection committee, the composition, deliberations and recommendations of which remain confidential. As per s. 31, the City of Montreal must maintain a register of ineligible persons; this register is separate and distinct from the Register of enterprises ineligible for public contracts held by the secretariat of the Treasury Board in accordance with the Act respecting contracting by public bodies, CQLR c. C-65.01. Changes regarding ineligibility Obligation of all subcontractors to declare not only that they have no conflict of interest, but also that they are not in a situation that confers them an unfair advantage (s. 5), meaning a situation in which they would have had access to information related to a call for tenders which was not publicly available, for any reason whatsoever (s. 1(12)). For example, a subcontractor could be disqualified or have its contract terminated and be declared ineligible if the City of Montreal discovered that one of its former employees was associated in any way with the preparation of a call for tenders for the contract at issue. This new section also recognizes an arbitration award that stated that the twelve-month prohibition on hiring an individual who participated in the preparation of a call for tenders was too broadly worded and amounted to an “an unreasonable hindrance to the employability of scientists;”3 the proposed rewording (ss. 5-7) seeks to limit this prohibition to what is strictly necessary, i.e. situations where this participation confers an unfair advantage or creates a conflict of interest. Prohibition of persons listed in the City of Montreal’s register of ineligible persons from working on or from having an interest in a City of Montreal contract, without a specific authorization from the City (ss. 15-16, 28-30). For example, an architect listed in the register of ineligible persons could not be included on a team of professionals contracted by the City of Montreal, and could not finance this team. Clarification as to the cumulative nature of ineligibility periods for repeat offenders (s. 32) Offenders who, during their first two years of ineligibility, commit another offence which would be punishable by five years of ineligibility, become ineligible for six years from the date of the second offence.  Relaxation and tightening of certain rules related to awarding contracts and contract management Increase of the eligibility threshold: the City of Montreal can enter into a private contract if it involves an expenditure that is less than the expenditure threshold for a contract that can be awarded only after a call for public tenders in accordance with section 573 of the Cities and Towns Act, CQLR c. C-19 (s. 33). Fixed by ministerial decree, this threshold is currently set at $101,100. Rotation principle: regarding these private contracts, the City of Montreal may not enter into two similar contracts with the same supplier within 90 days of each other (s. 34). Introduction of rules specific to managing variations in the planned quantity of items for unit price contracts (ss. 1(14), 18) and the use of contingencies in budgeting; these contingencies are from now on specifically defined as “any modification of a contract that is accessory to that contract and that does not change its nature” (ss. 1(4), 19-20, translation). Several of the proposed changes recognize the recommendations resulting from arbitration awards or created by the Office of the Inspector General of Montreal.4 All of these changes are part of the City of Montreal's desire to reinforce the principles of healthy competition, transparency, and fairness that govern public markets in Quebec.   City of Montreal, Politique de gestion contractuelle (version finale), telle qu’adoptée par le conseil municipal, à sa séance du 23 août 2016, et par le conseil d’agglomération, à son assemblée du 25 août 2016, [“Contract management policy (final version), as adopted by the City Council in its session on August 23, 2016, and by the agglomeration council at its meeting of August 25, 2016”], online. See the Decision summary for case no. 1184990002 for decision-making documents sent to elected officials in anticipation of the agglomeration council’s regular meeting on May 31, 2018, online, p. 13/35. Le syndicat professionnel des scientifiques à pratique exclusive de Montréal c. Montréal (Ville), 2016 CanLII 68692 (Mr. André Sylvestre) [translation]. See the Decision summary for case no. 1184990002 for decision-making documents sent to elected officials in anticipation of the agglomeration council’s regular meeting on May 31, 2018, online.

Ledcor The issue in Ledcor1 was whether the builder’s risk policy taken out by the contractor that was contractually responsible for cleaning the windows of a building, covered damage to the windows caused by its poor cleaning work. The financial impact was significant since the cost of re-doing the cleaning was $45,000, while the cost of replacing the damaged windows amounted to $2.5 million. The Supreme Court decided that only the cost of re-doing the cleaning was excluded and so replacement of the windows, which was damage resulting from the faulty workmanship, was covered. The decision of the Supreme Court of Canada in Ledcor has clarified the interpretation of the faulty workmanship exclusion in builder’s risk insurance cases by limiting it to defective work and connecting the scope of the exclusion to the contractual obligations of the contractor responsible for the faulty workmanship (our Lavery bulletin on this issue can be accessed by clicking here). We would start by pointing out that the wording of the faulty workmanship exclusion in Ledcor2 is similar to the usual wording for this type of exclusion in builder’s risk policies. The decision in Ledcor is a landmark ruling. The approach it suggests, of examining the obligations set out in the contract in order to draw the line between faulty workmanship and damage caused by the faulty workmanship, is easy to apply in cases where the contract has only one component, as was the case in Ledcor. However, in cases where a faulty contractor’s contract has multiple severable components and the defective work relates to only one of them, applying the contract-based approach presents problems. In that situation, considering strictly the contract-based approach, the costs associated with the components that were properly performed would be excluded. However, that result would run counter to the objective of builder’s risk insurance policies, which are intended to provide broad coverage in order to avoid construction projects being paralyzed by disputes. LEG Exclusions LEG exclusions could well offer a solution in the case of contracts consisting of multiple severable components. These exclusions are worded in precise terms and have a clearly defined scope. LEG exclusions are clauses developed in the 1990s by the London Engineering Group (“LEG”). They are found in some builder’s risk insurance policies, and are widely used in Europe. They are less common in Canada, particularly on major projects, and are rarely used in the United States. LEG exclusion clauses can be briefly described as follows: Exclusion LEG 1/96 - “Outright Defects Exclusion”: excludes all loss or damage due to defects of workmanship, materials or design. Exclusion LEG 2/96 - “Consequences Defects Exclusion”: excludes only costs inherent in the proper performance of the work and rendered necessary to rectify a fault or defect discovered immediately prior to the damage occurring. Exclusion LEG 3/96 (revised in 06) - “Improvement Defects Exclusion”: excludes only costs incurred to improve the original design, material or performance of the work beyond the damage that occurred. These three exclusion clauses thus represent three graduated levels of coverage, with a premium that corresponds to the level of coverage that the parties wish to take out. Acciona and the recommendations of the IBC The decision of the British Columbia Court of Appeal in Acciona3 interpreted exclusion LEG 2/96 in a builder’s risk insurance policy for the first time in Canada. Also called “Consequences Defects Exclusion”, that is the exclusion that deals with damage resulting from faulty workmanship. IBC endorsement 4047, which has been recommended since 2010 to improve IBC 4042 in connection with builder’s risk insurance, essentially adopts the wording of exclusion LEG 2/96. The change between form 4042 (the wording of which was similar to the exclusion in Ledcor) and endorsement 4047 (the wording of which is similar to exclusion LEG 2/96 in Acciona) lies in the addition of a definition of the expression “resulting damage”. Like the text of exclusion LEG 2/96, that definition refers specifically to costs incurred to rectify the fault or defect if it had been discovered immediately before the damage occurred and if the damage had been rectified at that time. Exclusion LEG 2/96 underlies severability. This exclusion proposes a method by which the faulty workmanship, which is excluded, on the one hand, and the damage, which is covered, on the other hand, can be delineated. Only those costs that are inherent in the proper performance of the work to rectify the faults or the defect before the damage occurs will be covered by the exclusion. The decision in Acciona4 in connection with the application of exclusion LEG 2/96 proposes that the defect and the resulting damages be delineated as follows: "… the excluded costs are only those costs that would have remedied or rectified the defect immediately before any consequential or resulting damage occurred, but the exclusion does not extend to exclude the cost of rectifying or replacing the damaged property itself; the excluded costs crystallize immediately prior to the damage occurring and are thus limited to those costs that would have prevented the damage from happening." This approach implies that the exclusion crystallizes immediately before the damage but does not include the damage, which will, on the other hand, be covered5. To the extent that the builder’s risk insurance market wants to adopt it, endorsement 4047 suggested by the IBC, like the text of exclusion LEG 2/96, makes it possible to delineate the faulty workmanship and consequential damage, precisely, at a point in time. The Ledcor and Acciona approaches will help to reduce builder’s risk insurance litigation The decisions of the Supreme Court in Ledcor and of the British Columbia Court of Appeal in Acciona are key decisions in respect of questions of coverage that arise under builder’s risk policies. The wording of the exclusions they analyzed differs significantly and the two approaches they suggest are different. However, these two decisions provide a clear and specific methodology for delineating the scope of the exclusions. The approach based on the obligations set out in the contract suggested by the Supreme Court in Ledcor, like the approach based on severability suggested in Acciona, will make it possible to easily resolve some problems in applying faulty workmanship exclusion clauses in builder’s risk policies. These approaches will also reduce the volume of litigation. If you have questions or would like to know whether the methods proposed in Ledcor and Accionaapply to your case, our specialists in construction insurance will be able to help you.   Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Company et al. [2016]¸2 SCR 23. This wording in Ledcor is similar to the wording suggested by the IBC in drafting a similar exclusion in form 4042 (builder’s risk insurance) 1998. Acciona Infrastructure Canada Inc. v. Allianz Global Risks US Insurance Company, 2015 BCCA 347. This decision of the British Columbia Court of Appeal is final; the case had been referred back by the SCC after the decision in Ledcorand was withdrawn before the hearing scheduled for June 2017. Supra, note 5. On this point, see Sharon C. Vogel, Journal of the Canadian College of Construction Lawyers 2016, The Evolution of Builder’s Risk Insurance in Canada: A Brave New World for Resulting Damages?

On February 1, 2018, the Supreme Court of Canada rendered an important decision in Commission des normes, de l’équité, de la santé et de la sécurité du travail (“CNESST”) v. Caron1 (“Caron”), confirming the position expressed by the Court of Appeal in 20152 as well as the state of the law regarding the employer’s duty to accommodate  where a worker has suffered an employment injury. Quebec employers must therefore engage in the process of reasonable accommodation , in accordance with the provisions of the Charter of Human Rights and Freedoms3 (the “Charter”) up to the point of undue hardship, whether it be in the context of a worker exercising his right to return to work or seeking suitable employment following an employment injury. WHAT ARE THE MAIN CHANGES RESULTING FROM THE DECISION? As drafted, the Act respecting industrial accidents and occupational diseases4 (the “AIAOD”) does not explicitly state that employers have a duty to accommodate a worker who has suffered an employment injury at work. That being said, the case law on accommodation, as it has developed in recent years,imposes a duty on all employers to take the initiative to reasonably accommodate a worker who is disabled within the meaning of the Charter, which is clearly the case for a worker with functional limitations following an employment injury. Prior to the Court of Appeal’s decision in June 2015, the case law held that the rehabilitation measures under the AIAOD were, in and of themselves, an accommodation measure and neither the Commission de la santé et de la sécurité du travail(now the CNESST) or the Commission des lésions professionnelles (now the Tribunal administratif du travail (“TAT”)) were of the view that they had the authority to impose, recommend or suggest any form of accommodation to an employer. Consequently, they refused to apply the provisions of the AIAOD in light of the Charter. In order to ensure that a worker with a disability caused by an employment injury is not disadvantaged as compared with a worker with a pdisability caused by a personal condition, the Supreme Court of Canada confirmed that the implementation of the employer’s duty to accommodate must go beyond merely applying the provisions of the AIAOD and that the obligations imposed by the Charter must also be taken into consideration. HOW DOES THIS AFFECT EMPLOYERS? Caron will most likely change the way all participants (including the CNESST, employers, workers and their unions) will approach the process of finding suitable employment. For employers who have not already changed their practices following the Court of Appeal’s decision, the main consequences of the Supreme Court of Canada decision can be summarized as follows: Employers must try to reasonably accommodate a worker whose employment injury resulted in functional limitations and cannot limit themselves to simply claiming that there is no suitable employment available within the business. The CNESST and the TAT have the power to verify whether an employer tried to find an accommodation, before or after identifying suitable employment, in the context of applying the AIAOD. The duty to accommodate does not require that the employer fundamentally modify a worker’s employment conditions or create a customized position. However, the employer must make an actual effort to reinstate the worker in the business and, where necessary, reasonably accommodate, or even rearrange the worker’s tasks so that the worker can perform his or her duties, without undue hardship. Since the duty to accommodate must be assessed in light of the global situation. The one or two-year period, as the case may be, during which a worker may exercise the right to return to work under s. 240 of the AIAOD is nothing more than another factor to be considered, without being determinative.  According to the teachings of the Supreme Court of Canada regarding reasonable accommodation, employers cannot refuse to allow a worker to occupy suitable employment in their establishment based solely on an automatic application of s. 240, relying on the expiry of the time period within which the worker has to exercise the right to return to work.  In every case, employers must instead be able to establish that they tried to accommodate the worker with functional limitations. Should the TAT conclude that an employer’s claim that it has no suitable employment to offer a worker unlawfully interferes with a Charter right, it could exercise its remedial powers thereunder, which includes the power to impose accommodation measures on the employer or condemn it to pay the worker moral or punitive damages.  COMMENTS The Supreme Court of Canada has clearly set out the obligations of employers under the AIAOD applied in accordance with the Charter, and called upon employers to revise their management practices in employment injury files. As such, the process of finding suitable employment may become more complex and delicate for all parties involved because a full search is required. Employers should be able to establish that they actively sought a reasonable accommodation before they can claim that there is no suitable employment within their business for one of their workers with functional limitations. It will therefore be very useful, if not essential, for employers to keep a careful record of any steps taken in this regard. Workers and their unions will also have a duty to cooperate in searching for suitable employment. If employers have a duty to accommodate, workers have a corollary duty to accept any reasonable accommodation proposed. It will also be interesting to see how this decision will be applied by the CNESST and the TAT. Lavery will keep you informed of any significant development in this regard.   2018 SCC 3. 2015 QCCA 1048. CQLR, c C-12. CQLR, c A-3.001.

Tabled on December 1, 2017 by Lise Thériault, the Minister responsible for Consumer Protection and Housing, the main purpose of Bill 162 is to give effect to certain recommendations contained in the final report of the Commission of inquiry on the awarding and management of public contracts in the construction industry. Amendments to the Building Act Firstly, the Bill amends the definition of "officer" contained in the Building Act so as to include any shareholder of a partnership or corporation holding 10% or more of the voting rights attached to its shares, particularly for purposes of the assessment by the Régie du bâtiment du Québec (the "Board") of an undertaking’s integrity. The notion of "guarantor" is added to the Building Act to describe a natural person who, by applying for a licence on behalf of a partnership or legal person, or by holding such a licence himself or herself, becomes responsible for managing the activities for which the licence is being issued. In addition, the Board's powers of inquiry, verification and inspection are expanded. Finally, the Act provides for immunity from civil proceedings and protection from reprisals for any person who communicates information in good faith to the Board regarding any act or omission which he or she believes constitutes a violation or offence under the Building Act. Certain penal provisions have also been added for the purpose of sanctioning any person who takes reprisals in response to the disclosure of such information, or who submits false or misleading information to the Board. Additions to the Building Act Secondly, a conviction for certain offences, which already previously warranted restricted access to public contracts, will now lead to a refusal by the Board to issue a licence, and may result in the cancellation or suspension of an existing licence. Furthermore, where such a conviction leads to a person's imprisonment pursuant to a sentence, a licence can only be issued to the person once five years have passed following the end of the said term of imprisonment. The Board will be required to cancel a licence where the licence holder, or any officer of an undertaking holding a licence, is convicted of an offence or any indictable offence referred to in the Building Act, where the said person was already convicted of such an offence or indictable offence within the five preceding years. The Board is given new grounds pertaining to the integrity of undertakings to refuse to issue, suspend or cancel a licence, particularly where the corporate structure of the entity enables it to evade the application of the Building Act. In this regard, the Board is obliged, by regulation, to require any contractor to provide either a performance bond or security for wages, materials and services for the purpose of ensuring construction work continues, or the payment of creditors, in the event of the cancellation or suspension (in certain cases) of a licence. Lastly, a new penal offence for the use of "prête-noms" (nominees) is being added, and the prescription period in penal matters is being extended from one year to three years from the date on which the prosecutor had knowledge of the offence, without however exceeding seven years from the date of commission of the offence. Conclusion This Bill, which notably implements four recommendations of the Charbonneau Commission, will be worth watching when parliamentary proceedings resume in the National Assembly on February 6, 2018.

On August 31, 2017, the Ontario Court of Justice sentenced1 Detour Gold Corporation (“Detour Gold”) to pay a fine of $2,625,333 after it pleaded guilty to a charge of criminal negligence causing the death of an employee. Facts Detour Gold has operated an open pit mine near the Ontario-Québec border since 2013. In April 2015, the company tried several times to have a leach reactor repaired after noticing some leaks. On June 3, 2015, a Detour Gold millwright, Denis Millette, was assigned to repair a defective joint on the reactor. While doing the repair, the employee was exposed to sodium cyanide, a highly toxic substance used in the mining industry to extract gold from ore, that had leaked out from the reactor. The employee became ill and died. The autopsy results showed that his death was caused by sodium cyanide poisoning. On April 21, 2016, the company was charged with criminal negligence causing death under the Criminal Code,2 as well as with 15 counts under the Ontario Occupational Health and Safety Act.3 The company subsequently pleaded guilty to the criminal negligence charge in exchange for the charges under the Occupational Health and Safety Act being withdrawn. Decision The Court sentenced Detour Gold to pay a fine of $1.4 million, a victim fine surcharge of 30% ($420,000), and restitution to the deceased employee’s family in the amount of $805,333, the equivalent of the earnings he would have received until he retired. In its reasons, the Court found several instances of negligence on the part of Detour Gold, in particular, that the employee had had no training or information that would have enabled him to identify the signs of cyanide poisoning, the company had not ensured that the employee was wearing appropriate personal protective equipment, there was no clean-up procedure for sodium cyanide spills, and no one knew how to identify and treat cyanide poisoning. Referring to the recent judgments in Stave Lake Quarries Inc.4 and Metron Construction,5 the Court was of the opinion that the fine had to be significant, so that businesses would not view it as the ordinary cost of doing business,6 despite the fact that no criminal or penal charges had ever been filed against Detour Gold and the company had been experiencing deficits since it began operating in 2013. This $1,400,000 fine is the largest fine imposed on a company convicted of criminal negligence causing death.7 Note that six charges relating to violations of the Ontario Occupational Health and Safety Act8 are still pending against three Detour Gold supervisors. Other recent cases We would also draw your attention to several recent decisions in criminal negligence cases involving employers. In its decision dated October 27, 2016, in Stave Lake Quarries,9 the Provincial Court of British Columbia accepted the parties’ joint recommendation and sentenced the employer to pay a fine of $100,000, plus a victim fine surcharge of $15,000, following the death of an employee. The facts reveal that while carrying out a procedure on her second day on the job, an employee driving a truck used to haul rocks failed to use the parking brake when she stopped the truck. The air brakes failed and the employee died when the truck rolled over. In that case, the employer pleaded guilty to the charge of criminal negligence, primarily because it had failed to provide a rigourous system for hiring, training, and supervising. In another case, on July 21, 2017, the Court of Québec sentenced10 Century Mining Corp. to pay a fine of $200,000 for criminal negligence causing bodily harm, despite the fact that the company had declared bankruptcy in 2012. In that case, an employee doing drilling in a mine was crushed by a heavy truck; he suffered serious injuries and was blinded. The company was convicted of failing to identify the real risks in the situation and failing to inform the truck driver that drilling was underway. On the other hand, Ressources Métanor Inc.was acquitted11 on December 8, 2017, of criminal negligence causing death. A charge had been filed against the company as a result of an accident involving three employees who drowned in 2009 when the elevator car they were in descended to a level of the mine that was underwater. The facts revealed that the probes used to activate high water alarms had been disconnected and that a bolt in one of the pipes used to carry water underground was defective. In spite of those deficiencies, the Court found that Ménator’s officers had not shown wanton or reckless disregard. While certain deficiencies observed in the operations were contrary to the Act respecting occupational health and safety (“AOHS”),12 the evidence did not reveal that any person or organization was responsible for disconnecting the probes. We are also awaiting two criminal negligence decisions in the near future, in R. v. Fournier13 and R. v. CFG Construction inc.14 We would note that in 2016, in Fournier, the Superior Court of Québec dismissed15 the application for judicial review and, as did the judge who presided over the preliminary inquiry, allowed the charges of criminal negligence and involuntary manslaughter to proceed to trial. In that decision, the Superior Court concluded that a workplace death resulting from a violation of the AOHS could serve as the basis for an order to stand trial on a charge of manslaughter under the Criminal Code. We will be following this case with interest, because a conviction of an employer on a manslaughter charge resulting from a violation of occupational health and safety legislation would be a first. Conclusion Since Bill C-4516 was enacted in March 2004, making it easier to bring criminal negligence charges in cases involving workers’ health and safety, the number of convictions of employers has risen and the sentences imposed have skyrocketed. It is in employers’ interests to consider these court decisions as one more reason to enhance their prevention measures in order to ensure compliance with the applicable occupational health and safety legislation and thus fulfil their general duty to take appropriate measures to avoid injuries resulting from doing a job or performing a duty.   R.  v. Detour Gold,C.J.O., No. 0511-998-164537 / 0511-998-5380 (sentence August 31, 2017). Criminal Code, RSC 1985, c. C-46, sections 219 and 220. Occupational Health and Safety Act, RSO 1990, c. O.1. R. v. Stave Lake Quarries Inc., 2016 BCPC 377. R. v. Metron,2013 ONCA 541: see our comments on this decision here. See page 15 of the decision: “The fine must also be significant enough to not be considered as a simple cost of doing business”. We would note that in Metron, the employer was sentenced to pay a fine of $750,000. Charges against each of the supervisors for failing to supervise the employee and not ensuring that he was wearing personal protective equipment. Supra, note 5. R. v. Century Mining Corp., C.Q., No. 615-01-021168-136 (sentence July 21, 2017). R. v. Ressources Métanor inc., C.Q., No.625-01-003393-149 (conviction December 8, 2017). Act respecting occupational health and safety, CQLR c. S-2.1. R. v. Fournier, No. 500-01-088108-136. R. v. CFG Construction inc., No. 200-01-175428-139. Fournier v. R., 2016 QCCS 5456. An Act to amend the Criminal Code (criminal liability of organizations), Assented to on November 7, 2003, 2nd Sess., 37th Parl. (Can.). See our comments at the time on the passage of this bill here.

Bill 132 respecting the conservation of wetlands and bodies of water, passed unanimously by the National Assembly on June 16th of this year, is in keeping with the context of a significant modernization of environmental laws in Québec. Most of its provisions come into force immediately. Described by the Ministry of Sustainable Development, Environment and the Fight against Climate Change as providing gains for all,1 the amendments considerably refine the responsibilities of developers with respect to the presence of wetlands and bodies of water when carrying out their projects. A few amendments this Act makes to the Environment Quality Act2 (“EQA”) are worthy of attention. First, the Act introduces a duty of developers to determine whether a project is located in a wetland or body of water, which expression shall henceforth be defined by the EQA. It is to be expected that the interpretation of terms such as “marshes”, “swamps”, “ponds” and “peatland” will be further defined by caselaw, so that developers don’t stay stuck in the mud! As regards the environmental authorizations required for a proposed activity in a wetland or body of water, these shall be modulated based on the environmental risk posed to the affected area according to four risk levels, ranging from negligible to high. The regulations defining these environmental restrictions should come into force over the course of the coming year, thus refining the framework established by the Act. The Act implements a method for calculating the contribution which may be required as financial compensation for the loss of wetlands and bodies of water. In an effort to provide guidelines to a calculation that will necessarily be effected on a case by case basis, a mathematical formula has been adopted, which includes notably a multiplier based on a “rarity factor” of these wetlands and bodies of water depending on certain identified zones. While developers may consequently find themselves liable to pay financial compensation in amounts largely exceeding the value of the land encompassing the affected wetlands and bodies of water, the prior identification of zones also affords developers an opportunity to plan beforehand, which was not the case previously. Finally, the amendments to the EQA provide for the identification and conservation of certain remarkable or rare wetlands and bodies of water, which shall be protected by way of a special legal status and in which no activity likely to adversely affect their integrity will be allowed. As maps of these wetlands and bodies of water have yet to be drawn up, their identification may come assurprises to some landowners. Caution and proper planning are most advisable! Québec (MDDELCC), “Une nouvelle loi qui fait du Québec ‘un premier de classe’ en matière de conservation des milieux humides et hydriques [A New Act Makes Québec the ‘Head of the Class’ in the Conservation of Wetlands and Bodies of Water]”(June 16, 2017), (French only). CQLR, c. Q-2 (“EQA”).

TABLE OF CONTENTS Latest developments in the Canadian market Fengate acquires a solar project portfolio from Canadian Solar TerraForm Power increases the financing of its Canadian solar power portfolio SaskPower launches a call for tenders for 200 MW of wind energy Boralex closes the financing of the Port Ryerse wind farm in Ontario CPDQ posts an 11 .1% return on its infrastructure sector in 2016 Infrastructure Ontario appoints a new CEO SNC-Lavalin intends to launch a new infrastructure fund in 2017 InstarAGF raised $549M for its Essential Infrastructure Fund Bombardier and Metrolinx move toward a trial The Government of Québec confirms its support for the CDPQ’s REM project The future Canada Infrastructure Bank: a role which remains to be clarified Teacher’s former CEO to advise the Canada Infrastructure Bank Metrolinx CEO becomes an advisor to the Canada Infrastructure Bank British Columbia Budget 2017 provides for record levels of infrastructure investments Road programming 2017-2018: more than $4 .6B to be invested in the Québec road infrastructure network Alberta Budget 2017 increases infrastructure investments Québec Budget 2017 provides for massive investments in public transportation Newfoundland and Labrador Budget 2017 introduces a five-year infrastructure investment plan Innergex announces the commissioning of the 81 .4 MW Upper Lillooet River hydroelectric power plant Manitoba Budget 2017 steps up its commitment to public-private partnerships The Canada-Europe Free Trade Agreement: Impacts on the infrastructure industry Biomethanization: a fast-growing market in Québec Latest developments in the Canadian market Fengate acquires a solar project portfolio from Canadian Solar On February 1, 2017, Fengate closed the acquisition of three solar projects from Canadian Solar . The three projects, located in Sault Ste . Marie, in Ontario, represent a total capacity of 59 .8 MW . This acquisition constitutes Fengate’s largest power investment to date. The three projects each have a power purchase agreement with the Independent Electricity System Operator (IESO) with an average remaining life of approximately 15 years . These projects will continue to the operated by Canadian Solar under a long-term operating and maintenance agreement with Fengate. TerraForm Power increases the financing of its Canadian solar power portfolio On March 2, 2017, TerraForm Power announced that it increased by $114M the amount of financing dedicated to four Canadian solar projects . The group of projects includes the SunE Perpetual Lindsay (15 .5 MW), Marsh Hill (18 .5 MW), Woodville (12 .6 MW) and Sandringham (13 .1 MW) parks, which all have a 20-year power purchase agreement with IESO. Following this increase, the total financing amount for this group of projects is $234M while the initial loan was $120M . The financing term is seven years. Deutsche Bank and CIBC were joint bookrunners and joint lead arrangers for the transaction . Commonwealth Bank of Australia, Siemens Financial, the Fédération des caisses Desjardins du Québec and the Laurentian Bank are also members of the banking syndicate. SaskPower launches a call for tenders for 200 MW of wind energy On February 7, 2017, SaskPower launched a call for tenders for 200 MW of wind energy intended for independent producers able to develop, finance, build, own and operate wind power projects in Saskatchewan . The projects must be operational by April 30, 2020, in accordance with the terms of the call for tenders. Bids are expected by May 2, 2017 . SaskPower will assess the proposals based on criteria that include the proposed price, community involvement, participation of aboriginal groups, environmental aspects, etc . SaskPower intends to grant up to two 25-year power purchase contracts. Boralex closes the financing of the Port Ryerse wind farm in Ontario On February 22, 2017, Boralex announced the closing of a $33 .4M post- construction financing for the 10 MW Port Ryerse wind farm, located on privately owned lands east of the hamlet of Port Ryerse in Norfolk County, Ontario . This is a long-term financing provided by the DZ Bank AG Deutsche Zentral-Genossenschaftsbank (New York Branch) . The financing consists of a $2 .0M letter of credit facility and a long-term tranche of $31 .4M, the latter to be amortized over a period of 18 years. Note that the project is covered by a 20-year power purchase agreement with Ontario’s Independent Electricity System Operator (IESO) and that Boralex is now the sole holder of the project . CPDQ posts an 11.1% return on its infrastructure sector in 2016 The Caisse de dépôt et placement du Québec (“CDPQ”) posted an 11 .1% return on its infrastructure segment over calendar year 2016, according to an announcement made on February 24, 2017 . This same segment brought a 6 .6% return in 2015. The amount CDPQ invested in the infrastructure sector was $14 .6B in 2016 against $13B in 2015 . The pension fund invested Cdn .$1 .4B in infrastructure projects in 2016, against Cdn .$705M in 2015 . The pension fund holds 25 infrastructure assets worldwide, allocated between Australasia (10), North America (7), Europe (7) and Latin America (1) according to InfraAmericas. Transport and social infrastructures make up half of the infrastructure portfolio of CDPQ . The other half includes energy and health care. Infrastructure Ontario appoints a new CEO Mr. Ehren Cory has been appointed CEO of Infrastructure Ontario (IO) on February 2, 2017 for a 3-year term which should therefore terminate on February 1, 2020. Mr. Cory replaces the agency’s interim president and CEO, Toni Rossi. He joined IO in 2012 and recently held the position of president of the project delivery division . Prior to IO, he was a partner at McKinsey & Company, where he was a leader in the Infrastructure and Public Sector practices. SNC-Lavalin intends to launch a new infrastructure fund in 2017 At the announcement of the 2016 Q4 financial results, SNC-Lavalin’s management confirmed that they intend to finalize a new fund in 2017, which is intended for the Group’s North American operating infrastructure assets. The net book value of SNC’s investment portfolio is $417M . Its average fair market value as of March 1, 2017 was $4B . The assets include light trains, hospitals and highways worldwide . But Highway 407 will not be included in the fund. SNC seeks to entice passive investors in the fund, particularly insurance companies and small pension funds interested in investing in assets without participating in operations . InstarAGF raised $549M for its Essential Infrastructure Fund InstarAGF Essential Infrastructure Fund (“EIF”) obtained $549M in commitments to date (Source: InfraAmericas). The fund, concentrated on North America, has set a $750M target, with a maximum of $850M . The final closing of the fund is expected to occur during the 2017 fiscal year . The term of the fund is 15 years and includes a 2-year extension period . The objective is an internal return rate of between 9% and 14%. The target industries include transport, social infrastructures, renewable energies, power generation and public services . The fund seeks projects offering protection against market shifts, such as longterm contracts, concession contracts or a specific regulatory regime. Approximately 40% of the fund has been invested since January 2015 . The current portfolio of InstarAGF includes the Billy Bishop airport terminal, two wind projects totalling 30 MW in British Columbia and the Steel Reef Mainstream company, based in Calgary. Bombardier and Metrolinx move toward a trial The date of the trial of Bombardier and Metrolinx concerning the supply of light rail vehicles for the Eglinton and Finch West LRT projects should be known soon, at the conclusion of the hearings before the Superior Court of Ontario. Metrolinx blames Bombardier for the delays in delivering the 182 vehicles under the contract . For its part, Bombardier maintains that the delays are due to Metrolinx repeatedly modifying its requirements . The dispute already resulted in the postponement of the deadline for filing proposals for the $1B Finch West LRT project. The three preselected teams in the Finch West LRT project have been invited to include the supply of vehicles in their proposals, which paves the way to an alternate solution to that of Bombardier. If the supply and delivery model of the Finch West LRT project may be still modified, such is no longer the case for the Eglinton LRT contract, as the financial closing of the $5B project occurred in July 2015. The Government of Québec confirms its support for the CDPQ’s REM project According to a press release published on March 28, 2017 by the Caisse de dépôt et placement du Québec (“CDPQ”), the Government of Québec intends to invest $1 .28B in the Réseau électrique métropolitain (“REM”) project in Montréal. For its part, the CDPQ should invest $2 .67B in the project, in parallel with a $2 .28B contribution from the federal government, in respect of which discussions are still ongoing. The CDPQ’s net interest in the project should eventually be 51%, while the provincial and federal governments will each hold a 24 .5% interest. The CDPQ anticipates a return rate which should be between 8% and 9% for the project, which is consistent with the general return objective of the CDPQ, which is 6%. The federal and provincial governments will receive dividends when the 8% return rate for the project is reached . The dividends will then be paid to the minority shareholders until they reach their minimum 3 .7% target return rate . The 3 .7% target rate corresponds to the average borrowing cost of the entire debt of the Government of Québec . Once the minority shareholders reach the target return rate, the dividends will be paid in accordance with the ownership percentages. The project, which is considered to be a public-public partnership, involves the acquisition of a light 67 km railway system including 24 stations and linking downtown Montréal with the South Shore, the West Island, the North Shore and the Pierre Elliott Trudeau International Airport . The estimated cost of the REM is between $0 .69 and $0 .72 per passenger/km. The future Canada Infrastructure Bank: a role which remains to be clarified The Canadian Government recently shed some light on the creation of the Canada Infrastructure Bank (“CIB”), but many stakeholders still wonder about the functioning of the future institution and some have concerns about the consequences on the market. On March 22, 2017 in Ottawa, at the Parliament session on the budget, the Minister of Finance, Bill Morneau, stated that the CIB would commence operations by the end of 2017. The budget also referred to the status of key public transportation project which would be in the sights of the future bank, such as phase 2 of the Ottawa LRT, the Calgary Green LRT, Ontario’s RER program and Vancouver’s Millennium Line Broadway Extension, without, however, promising financing from the CIB. The launch of the process for appointing the CEO and chairman of the board of the bank has been announced. Some stakeholders in the industry wonder about the fact that the CIB could adopt a model similar to that of the CDPQ with Montréal’s Réseau électrique métropolitain (“REM”) project, which is called a “public-public” project. Moreover, many note the fact that there already is an increase of private financing and not enough investment opportunities in the infrastructure market, which calls into question the usefulness of a new player in this area. However, some stakeholders talk about major projects which would bring about broader economic benefits to the country and could justify subsidies from the bank in the form of equity investments or nonrefundable contributions. The government reiterated that it does not intend for the CIB to compete with existing provincial agencies such as IO, Saskbuilds, Partnerships BC or the Société québécoise des infrastructures. Teacher’s former CEO to advise the Canada Infrastructure Bank Jim Leech, former CEO of the Ontario Teachers’ Pension Plan (“OTPP”) will be a special advisor for the launch of the CIB. He will be responsible for setting up an implementation team, negotiating agreements with stakeholders, providing strategic advice on investments and, more directly, for specific projects across Canada. The CIB anticipates to deliver projects worth in excess of $200B over 10 years while minimizing the use of public money . The capital of the bank, that is, $35B over 10 years, would add up to the private financing provided by institutional investors in order to propose equity financings or subordinated loans in chosen projects. The federal government already courted some of the largest public pension funds of Canada, as well as foreign investors . The government wishes to attract investments of as much as four or five dollars in private capital for every tax dollar invested in new projects. In his economic statement in the fall of 2016, the government maintained that increased participation of institutional capital in infrastructures constitutes a priority. Jim Leech became president and CEO of the OTPP after having worked within the organization for six years . He retired from the fund on December 31, 2013. Metrolinx CEO becomes an advisor to the Canada Infrastructure Bank Bruce McCuaig, the CEO of Metrolinx, accepted a new position with the federal government, at the Privy Council Office, to support the launch of the CIB. Mr . McCuaig will be an executive advisor and will support the CIB special advisor Jim Leech – who was also recently appointed – as part of the process of launching the bank. Bruce McCuaig joined Metrolinx in 2010 . Under his leadership, the agency developed projects worth $8B financed by the private sector, notably the Eglinton Crosstown LRT, the new East Rail maintenance facility, Finch West LRT, Hurontario LRT and Hamilton LRT. Mr . McCuaig will be temporarily replaced by Mr . John Jensen, currently Chief Capital Officer with Metrolinx, pending the recruitment of a permanent successor. British Columbia Budget 2017 provides for record levels of infrastructure investments The 2017-2018 budget of British Columbia provides for $24 .5B investments over the next three fiscal years, that is a $1 .7B increase for the current fiscal year . This is the fifth balanced budget tabled by the liberal government, which also reaffirmed its commitment to public-private partnerships. This budget in investments and PPP projects include the following: $2.7B for hospital projects; $2.6B for post-secondary establishment infrastructure; $2B for the maintenance, replacement, renovation or expansion of educational institutions for students from kindergarten to 12th grade; $1.4B by the departments for the construction of infrastructures such as courthouses, correctional centres, office buildings and information systems; $7B for investments in transportation, including the project for the replacement of the George Massey tunnel (ongoing call for tenders). Road programming 2017-2018: more than $4.6B to be invested in the Québec road infrastructure network The Government of Québec will invest in excess of $4 .6B in the Québec road network between 2017 and 2019 in order to undertake, continue or complete 2,062 road construction projects throughout Québec and create and maintain more than 31,000 jobs. On March 3, 2017, in Montréal, the Minister of Transport, Sustainable Mobility and Transport Electrification, Mr . Laurent Lessard, announced the road programming for the next two years with the Minister responsible for the Montréal region, Mr. Martin Coiteux. The $4 .6B to be invested over the next two years are allocated as follows, based on the main axes of intervention established by the Ministère: $2.1B will be allocated to structures which the MTMDET is responsible for, and $252.6M will be allocated to the municipal network structure; An amount of over $1.2B will be allocated to pavement; $626.9M will be allocated to network improvement; $463.7M will be allocated to network development. From these amounts, $1.3B will be used to complete projects related in whole or in part to road safety improvement. Moreover, 90% of the amounts invested will be used to maintain assets. Alberta Budget 2017 increases infrastructure investments The 2017 budget of Alberta increases by $1.4B the infrastructure investment in addition to what had been announced in the 2016 budget, for a total of $29 .5B over the four coming years. The main areas of investment include: $7.6B in municipal infrastructure support; $4.7B for capital maintenance and renewal; $4.5B for health infrastructure; $3.8B for climate change and environmental sustainability; $2.6B for schools, including $500M for new school projects over the next four years and an additional $488M for future school projects beginning in 2018-2019; $3.1B for roads and bridges; $100M to support Albertans living on reserves who do not have reliable access to clean drinking water. Alberta’s last PPP project, the Southwest Calgary Ring road, worth $1.42B, is currently under construction and should be open to traffic in October 2021. Québec Budget 2017 provides for massive investments in public transportation The 2017 budget of Québec provides for infrastructure expenses of $91.1B over 10 years, that is a $2.4B increase over last year budget. Significant investments will be made in public transportation and in restructuring its management in the Montréal area. An additional $1.5B will be invested in public transportation for the following major initiatives: Réseau électrique métropolitain (REM) The Government of Québec intends to invest $1.28B in the Réseau électrique métropolitain (REM) project in Montréal. This contribution will be added to the $2 .67B of CPDQ and that of the federal government in the amount of $2 .28B which currently is under discussions . Calls for proposals are ongoing for the construction, rolling stock and maintenance aspects. The proposals must be submitted by the summer of 2017. Metro blue line The project includes a 5.5 km extension of the blue line toward Anjou, in the northeastern part of Montréal. The work should begin in 2021 and the investment will be described in the 2017-2027 Infrastructure Plan. Autorité régionale de transport métropolitain (ARTM) The government will create the ARTM in order to centralize the planning and delivery of public transportation in the Montréal area. This organization will be managed by the Montréal Metropolitan Community (MMC) . Its financing over five years will include $399M to [TRANSLATION] “maintain excellent financial solidity” and $587.7M for its role in the REM project. Complementary improvements to public transportation The government invests an additional amount of $333M over five years (in addition to the current amount of $1.2B) in the improvements to public transportation, adapted transportation and regional public transportation services across Québec. Newfoundland and Labrador Budget 2017 introduces a five-year infrastructure investment plan Newfoundland and Labrador budget 2017 provides for a $3B investment in infrastructure over the next five years . The government also announced that it intends to analyze all the major infrastructure projects to determine their eligibility for public-private partnerships. The major investments provided for in the infrastructure plan include the following: $330.9M for major health care projects; $53.8M for the construction of new schools and related repair and maintenance work; $44.7M for post-secondary establishments; $461.1M for municipal infrastructure, in partnership with the federal government; $372.2M for transportation infrastructure; $86.5M for the repair, maintenance and modernization of affordable housing units. Furthermore, the plan emphasizes the interest for partnerships with the private sector which stimulate innovation and allow for benefiting from the best market practices in managing operations. Innergex announces the commissioning of the 81.4 MW Upper Lillooet River hydroelectric power plant Innergex Renewable Energy Inc. (TSX: INE) has begun commercial operation of the 81.4 MW Upper Lillooet River run-of-river hydroelectric facility located in British Columbia. Innergex owns a 66.7% interest in the hydro facility and Ledcor Power Group Ltd. owns the remaining 33.3%. This is the largest hydroelectric power plant built by Innergex to this day. The facility is located on crown land, approximately 40 km north of the Village of Pemberton, in the Sea-to-Sky district of British Columbia. Construction began in October 2013 and was completed in March 2017. The facility is part of the Upper Lillooet River Hydro Project which includes two run-of-river clean energy generation facilities located in the Pemberton Valley: Upper Lillooet River (81.4 MW) and Boulder Creek (25.3 MW). On March 17, 2015, the Corporation announced the closing of $491.6M non-recourse construction and term project financing for both these projects. The commissioning of the Boulder Creek hydroelectric facility is expected in the second quarter of 2017. The Upper Lillooet River facility’s average annual production is estimated to reach 334,000 MWh, enough to power around 31,850 British Columbia households. All of the electricity it produces is covered by a 40-year fixed-price power purchase agreement with BC Hydro, granted in the context of the 2008 call for tenders for clean energy, which provides for an annual adjustment to the selling price based on a portion of the Consumer Price Index. Manitoba Budget 2017 steps up its commitment to public-private partnerships Manitoba’s budget 2007 provides for an infrastructure investment of over $1.7B in 2017-2018 and confirms the intention of the government to eliminate regulatory obstacles to private investment in public infrastructure in order to promote public-private partnerships. In the context of one of the largest infrastructure budget in Manitoba’s history, here are some of the major investments to be made in 20172018: $747M for roads, highways, bridges and protection against floods; $641M for health, education and housing infrastructure; and $370M for municipal and local infrastructure and other provincial infrastructures. The City of Winnipeg implemented several PPP projects in the areas of transportation and social assets. The Canada-Europe Free Trade Agreement: impacts on the infrastructure industry The Canada-European Union Comprehensive Economic and Trade Agreement (“CETA” or the “Agreement”) will create one of the largest free-trade zones in the world. It may come into force on a provisional basis once the Canadian Senate has validated Bill C-30. Then, only the approval of each of the member countries of the European Union (“EU”) will remain to be obtained for the Agreement to come into force on a final basis since it has already been ratified by the European Parliament. CETA will provide access to the large European market, which represents a GDP of approximately 15,000 billion euros per year and more than 500 million consumers, to Canadian businesses. The coming into force of CETA will have a significant impact on the infrastructure industries in Canada and Europe. We can already identify four aspects of the Agreement which will have direct consequences on same. Access to the European public market The European infrastructure public market represents between 2,000 and 3,000B dollars per year, which is even more than that of the United States. With CETA, Canadian firms, working particularly in the areas of engineering, project management and construction, will gain access to the national public markets of the EU 28 member States . Moreover, businesses will be allowed to participate in calls for tenders of, among others, public law bodies such as hospitals, schools and universities, European utilities (such as gas, power and water distribution) and entities responsible for urban and rail transportation. CETA will also provide European businesses with access to the Canadian public market, which has the wind in its sails since the announcement of the creation of the Canada Infrastructure Bank in the Government of Canada’s 2017 budget. Better labour mobility CETA will also increase labour mobility between Europe and Canada by facilitating the temporary assignment of some categories of persons (for example business people) . Therefore, it will be easier for businesses who bid on call for tenders to do business with the EU by having a person directly in the field. It will also be possible, in some cases, for businesses (such as those offering, for instance, installation and maintenance services), to send their own employees on site to supervise the work or train employees for this purpose. Another interesting aspect of CETA is the chapter on the recognition of the professional qualifications, which aims to establish a procedure for facilitating the potential negotiation of agreements for the recognition of qualifications of professionals and individuals working in regulated trades. Accordingly, it will be easier for Canadian and European businesses to hire qualified personnel. Elimination of tariffs The Agreement will eliminate all the tariffs currently collected on originating products used for infrastructure construction and maintenance. This includes building materials, energy production equipment, electrical equipment, railway products and information and communication technology products. The elimination of these duties represents a significant economic benefit for Canadian businesses, which had to pay high tariffs on many categories of products . For example, the customs duties on equipment for energy production and distribution could be as high as 14% and 6.5% for concrete products. European products will also enter Canada duty-free. Cooperation in regulatory matters Lastly, the Agreement will also implement the Protocol on the Mutual Acceptance of the Results of Conformity Assessment, which will facilitate the acceptance by Canada and the EU of test results and product certification from the other party, resulting in lower costs for businesses. Indeed, a business which had to go to Europe to have its products certified will be able to do so in Canada and the certification will be recognized by the EU . The same process will apply to European businesses wishing to have their products certified in Canada. This protocol applies, among other things, to building materials, machinery, electronic equipment and ATEX (“atmosphere explosive”) equipment. In closing, once CETA is in force, even on a provisional basis, Canadian and European businesses will benefit from privileged access to each others’ markets . Corporations in the infrastructure sector would be well-advised to carefully consider the new business opportunities resulting from the application of the Agreement. Biomethanization: a fast-growing market in Québec Biomethanization is a process whereby organic matter is fermented in the absence of oxygen, leading to the production of biogas (or biomethane) and a solid waste called digestate. Biogas may be reclaimed under the form of thermal or electrical energy or, once refined, it can replace natural gas. Digestate can be used as an organic fertilizer. Biomethanization is considered to be a renewable source of energy which participates in the energy transition toward a decarbonised economy. This form of energy has been around for many years in Québec with private projects such as the Gazmont power plant in 1996, located near the Miron Quarry in Montréal and EBI Energy’s power plant in 2003, located in Saint-Thomas, in the Lanaudière region . More recently, in 2017, Lavery participated in the financing of the Biomont project, a biogas cogeneration power plant located in Montréal, in the Villeray - Saint-Michel - Parc-Extension borough. The biomethanization sector has found a new impetus since 2010, with the implementation of the Program for the Treatment of Organic Matter through Biomethanization and Composting1 which encouraged municipalities and private stakeholders to undertake biomethanization projects. This initiative, which was developed by the Government of Québec and relies on the resources of the Green Fund, aims to banish any form of disposal of organic materials in landfills by 2020 . More recently, in 2016, the federal government confirmed $5B in investments over 5 years2 through the Green Infrastructure Fund, which aims, among other things, to reduce the production of greenhouse gases. The various programs offer financial support to many types of sponsors-operators, particularly cities (40%), regional county municipalities (“RCM”, 13%) and common-interest partnerships (47%) grouping cities, private businesses and RCMs . There are currently seven projects in the development phase, two in the construction phase, three in the commissioning phase and four in the operating phase. Among the largest projects in the development phase are those of the City of Montréal ($237M in investments), Québec City ($124M) and the City of Laval ($123M). The four completed and operating projects are those of Vallée-du-Richelieu, the City of Rimouski, the Rocher-Percé RCM and Multitech Environment, Rouyn-Noranda. The size of the projects varies from one community to the other based on the quantity of metric tonnes to be processed annually. The total cost of the investment is between $1 .3M and $237M (median of $27 .1M) . Both levels of government participate in the financing of the various projects in proportions varying between 20% and 70% of the total cost of the projects (53% on average) . In addition to the financing granted by the provincial and federal governments, the remainder of the financing is split between municipalities and private investors. Biomethanization is still a young technology in Québec and even in Canada. Giving time the market to adapt to this new reality will lead to its mastery, a challenge that sponsors-operators must face . Implementing these projects involves an adequate assessment of the risks related to the design, construction, technological choices and operational management, failing which costs are likely to spiral out of control . In this respect, the necessity of importing outside know-how still seems relevant, since many suppliers and operators who are involved in these projects are based in Europe or the United States . For European businesses, the new Canada-Europe free trade agreement may certainly promote their increased involvement. Lastly, another challenge brought about by these projects is that of profitability, namely, the valorization of outputs relative to inputs and the production process in a context of pressures on the price of gas and electricity. However, the growth of the carbon market, which henceforth includes Québec, the State of California and Ontario, seems to pave the way to a new source of income for sponsors and may improve the financial model of these projects. In conclusion, the program of the Government of Québec contributed to more than 16 biomethanization projects throughout the province, thereby reducing the environmental impact. The latest is the Matane biomethanization project, for which the municipality just completed a call for tenders on April 6, 2017. These projects represent many potential business opportunities for businesses operating in fields such as waste processing, waste-water treatment, renewable energies, etc., that wish to diversify their activities by taking advantage of the growth of the green economy.   Program running until December 31, 2017 (French only) www.infrastructure.gc.ca/plan/gi-iv-eng.html

When it comes to presenting a bid in response to a call for tenders made by a public body, two major questions are of interest to businesses concerned, namely “What is the nature of the contract?” and “Does my business conform to the conditions of the call for tenders, for example, those concerning the experience required of tenderers?” Absent the necessary skills in the field contemplated by the call for tenders or the years of experience required to comply with the conditions set out in the invitation to tender, businesses will refrain, obviously, from devoting time to a tender process they know they have no chance of winning. But what happens when a public body fails to comply with the conditions it itself deemed “essential”, whether explicitly or implicitly? Traditionally, courts would analyze such situations by attempting to characterize the default of the bid impugned for not respecting all the tender conditions as a “minor” or a “major” irregularity. However, in two consecutive decisions handed down within three months of each other, the Québec Court of Appeal repositioned the debate on different elements that are to be considered when analyzing the conformity of a bid. In its most recent decision, it even innovated by adding a new dimension to the manner in which the concept of “fairness among tenderers” is to be considered when analyzing the conformity of tenders. This text proposes a combined analysis of the decisions in Ville de Matane c. Jean Dallaire, architectes & EBC inc. 1 and Tapitec inc. c. Ville de Blainville 2 rendered by the Court of Appeal on November 25, 2016 and February 24, 2017, respectively. Ville de Matane c. Jean Dallaire, architectes & EBC inc. The City of Matane invited tenders for the building of a sports complex. One of the fundamental conditions of the call for tenders was that tenderers have experience in connection with at least three projects of comparable scale and complexity. This condition was characterized as “essential” in the invitation to tender. Despite this requirement, the City awarded the contract to a business that did not possess the required experience and that, to the City’s knowledge, only had experience in small-scale residential and institutional projects. EBC Inc., another bidder, sought to have the resolution awarding the contract annulled on grounds of the successful bidder’s lack of experience vis-à-vis the condition set out in the invitation to tender. The City of Matane tried to persuade the Court that the default was a minor irregularity inasmuch as the winning bidder undertook, subsequently to the opening of tenders, to have personnel on its team with sufficient experience to meet the requirement relating to the three projects of comparable scale and complexity set out in the invitation to tender. The Court of Appeal rejected the City’s argument and confirmed that the winning bid’s default did constitute a major irregularity. Indeed, through its own characterization as essential of the condition relating to experience on three projects of comparable scale and complexity, the City of Matane created a mandatory requirement with which compliance had to be demonstrated at the time of tendering. Allowing the winning bidder to prove its experience differently after filing its bid would amount to circumventing the City’s own requirement and would be contrary to the contract as well as to the principle of fairness between bidders. The requirement relating to the experience of tenderers set out in an invitation to tender must therefore be complied with and applied straightforwardly. Once a requirement of an invitation to tender is characterized as “essential”, the public body may not consider a default in relation thereto a “minor irregularity”. On the contrary, such a default necessarily constitutes a major irregularity. Tapitec inc. c. Ville De Blainville In this case, the City of Blainville was looking to have a sports field built with a synthetic grass surface. As it wished to find a highly specialized contractor familiar with the laying of this type of surface, the City of Blainville decided to proceed by way of a qualitative assessment of tenders received rather than automatically awarding the contract to the lowest bidder. As one of its conditions, the City required that tenderers have had a place of business in Québec for at least the past five years. Despite this requirement, the City awarded the contract to a business that had opened a place of business in Québec only two years previously. The Court of Appeal quashed the City’s decision and confirmed that the failure to meet a condition relating to a bidder’s experience, even if such condition is not explicitly characterized as essential, will automatically disqualify a bid, when the circumstances so warrant. This was the case in the City of Blainville’s tender documents which, although they did not contain words such as “essential”, “automatic disqualification” or “fundamental”, set out a condition of having had a place of business in Québec for at least five years, which condition was, according to the Court of Appeal, essential in that it resulted in limiting the number of bidders by imposing mandatory experience or qualification criteria. The Court insists on the effect of such conditions on businesses in their decision of whether or not to tender. As a result, a public body cannot consider such a default as merely a minor irregularity. Hence, the Court of Appeal clearly states that the obligation to accept only a conforming bid is owed as much to parties participating in the tender process as to those who refrained from so doing because they did not conform to the requirements set out in the invitation to tender. By limiting the pool of tenderers through the imposition of an experience requirement, the public body must absolutely reject any bid that does not comply with such requirement. Otherwise, the public body will breach the principle of fairness between bidders, which constitutes a major irregularity and renders its decision challengeable. The requirement relating to the experience of tenderers set out in an invitation to tender is therefore, where the circumstances so warrant, an essential condition from which the public body may not depart. Obviously, each case turns on its facts and a detailed analysis of the tender specifications will be necessary to determine whether the experience requirement is an essential condition. What can be gathered from these two decisions? These two judgments forcefully assert the principle of equality between bidders and the idea that by limiting the number of persons allowed to tender a bid through the imposition of criteria relating to experience or professional qualifications, public bodies make it their duty to abide by such criteria. A requirement characterized as essential in an invitation to tender can never be circumvented and any default in conforming to any such requirement appearing in a bid must automatically result in the disqualification of same. Failing this, bidders who were wrongly passed over will be entitled to claim damages for any injury suffered. Although the question is one to be determined on a case-by-case basis of whether or not a requirement relating to the experience or professional qualifications of bidders is essential, we note that the Court of Appeal seems to be encouraging certain public bodies to reconsider their manner of analyzing the conformity of the bids they receive, taking into account both other bidders and those contractors who may have forgone participation in a process they believed they had no chance of winning. Matane (Ville de) c. Jean Dallaire, Architectes, 2016 QCCA 1912. Tapitec inc. c. Ville de Blainville, 2017 QCCA 317.

When it comes to presenting a bid in response to a call for tenders made by a public body, two major questions are of interest to businesses concerned, namely “What is the nature of the contract?” and “Does my business conform to the conditions of the call for tenders, for example, those concerning the experience required of tenderers?” Absent the necessary skills in the field contemplated by the call for tenders or the years of experience required to comply with the conditions set out in the invitation to tender, businesses will refrain, obviously, from devoting time to a tender process they know they have no chance of winning. But what happens when a public body fails to comply with the conditions it itself deemed “essential”, whether explicitly or implicitly? Traditionally, courts would analyze such situations by attempting to characterize the default of the bid impugned for not respecting all the tender conditions as a “minor” or a “major” irregularity. However, in two consecutive decisions handed down within three months of each other, the Québec Court of Appeal repositioned the debate on different elements that are to be considered when analyzing the conformity of a bid. In its most recent decision, it even innovated by adding a new dimension to the manner in which the concept of “fairness among tenderers” is to be considered when analyzing the conformity of tenders. This text proposes a combined analysis of the decisions in Ville de Matane c. Jean Dallaire, architectes & EBC inc. 1 and Tapitec inc. c. Ville de Blainville 2 rendered by the Court of Appeal on November 25, 2016 and February 24, 2017, respectively. Ville de Matane c. Jean Dallaire, architectes & EBC inc. The City of Matane invited tenders for the building of a sports complex. One of the fundamental conditions of the call for tenders was that tenderers have experience in connection with at least three projects of comparable scale and complexity. This condition was characterized as “essential” in the invitation to tender. Despite this requirement, the City awarded the contract to a business that did not possess the required experience and that, to the City’s knowledge, only had experience in small-scale residential and institutional projects. EBC Inc., another bidder, sought to have the resolution awarding the contract annulled on grounds of the successful bidder’s lack of experience vis-à-vis the condition set out in the invitation to tender. The City of Matane tried to persuade the Court that the default was a minor irregularity inasmuch as the winning bidder undertook, subsequently to the opening of tenders, to have personnel on its team with sufficient experience to meet the requirement relating to the three projects of comparable scale and complexity set out in the invitation to tender. The Court of Appeal rejected the City’s argument and confirmed that the winning bid’s default did constitute a major irregularity. Indeed, through its own characterization as essential of the condition relating to experience on three projects of comparable scale and complexity, the City of Matane created a mandatory requirement with which compliance had to be demonstrated at the time of tendering. Allowing the winning bidder to prove its experience differently after filing its bid would amount to circumventing the City’s own requirement and would be contrary to the contract as well as to the principle of fairness between bidders. The requirement relating to the experience of tenderers set out in an invitation to tender must therefore be complied with and applied straightforwardly. Once a requirement of an invitation to tender is characterized as “essential”, the public body may not consider a default in relation thereto a “minor irregularity”. On the contrary, such a default necessarily constitutes a major irregularity. Tapitec inc. c. Ville De Blainville In this case, the City of Blainville was looking to have a sports field built with a synthetic grass surface. As it wished to find a highly specialized contractor familiar with the laying of this type of surface, the City of Blainville decided to proceed by way of a qualitative assessment of tenders received rather than automatically awarding the contract to the lowest bidder. As one of its conditions, the City required that tenderers have had a place of business in Québec for at least the past five years. Despite this requirement, the City awarded the contract to a business that had opened a place of business in Québec only two years previously. The Court of Appeal quashed the City’s decision and confirmed that the failure to meet a condition relating to a bidder’s experience, even if such condition is not explicitly characterized as essential, will automatically disqualify a bid, when the circumstances so warrant. This was the case in the City of Blainville’s tender documents which, although they did not contain words such as “essential”, “automatic disqualification” or “fundamental”, set out a condition of having had a place of business in Québec for at least five years, which condition was, according to the Court of Appeal, essential in that it resulted in limiting the number of bidders by imposing mandatory experience or qualification criteria. The Court insists on the effect of such conditions on businesses in their decision of whether or not to tender. As a result, a public body cannot consider such a default as merely a minor irregularity. Hence, the Court of Appeal clearly states that the obligation to accept only a conforming bid is owed as much to parties participating in the tender process as to those who refrained from so doing because they did not conform to the requirements set out in the invitation to tender. By limiting the pool of tenderers through the imposition of an experience requirement, the public body must absolutely reject any bid that does not comply with such requirement. Otherwise, the public body will breach the principle of fairness between bidders, which constitutes a major irregularity and renders its decision challengeable. The requirement relating to the experience of tenderers set out in an invitation to tender is therefore, where the circumstances so warrant, an essential condition from which the public body may not depart. Obviously, each case turns on its facts and a detailed analysis of the tender specifications will be necessary to determine whether the experience requirement is an essential condition. What can be gathered from these two decisions? These two judgments forcefully assert the principle of equality between bidders and the idea that by limiting the number of persons allowed to tender a bid through the imposition of criteria relating to experience or professional qualifications, public bodies make it their duty to abide by such criteria. A requirement characterized as essential in an invitation to tender can never be circumvented and any default in conforming to any such requirement appearing in a bid must automatically result in the disqualification of same. Failing this, bidders who were wrongly passed over will be entitled to claim damages for any injury suffered. Although the question is one to be determined on a case-by-case basis of whether or not a requirement relating to the experience or professional qualifications of bidders is essential, we note that the Court of Appeal seems to be encouraging certain public bodies to reconsider their manner of analyzing the conformity of the bids they receive, taking into account both other bidders and those contractors who may have forgone participation in a process they believed they had no chance of winning. Matane (Ville de) c. Jean Dallaire, Architectes, 2016 QCCA 1912. Tapitec inc. c. Ville de Blainville, 2017 QCCA 317.

The coming into force of the new Code of Civil Procedure on January 1, 2016 created some uncertainty for litigation lawyers. One issue was the role of experts in litigation and in particular the emphasis on joint experts and the filing of an expert’s report in lieu of testimony. Other provisions that appear to deal a blow to professional secrecy and the litigation privilege could also affect litigation lawyers and their clients. The second paragraph of article 235 C.C.P., which covers the expert’s duties, as well as the second paragraph of article 238 C.C.P., which covers testimony taken by an expert, read as follows: “235. Experts are required, on request, to “235. Experts are required, on request, to provide the court and the parties with details on their professional qualifications, the progress of the work and the instructions received from a party; they are also required to comply with the time limits given to them. They may, if necessary to carry out their mission, request directives from the court; such a request is notified to the parties.” “238. Any testimony taken by the expert is attached to the report and forms part of the evidence.” The recent Superior Court decision in SNC-Lavalin inc. v. ArcelorMittal Exploitation minière Canada (2017 QCCS 737) sheds some light on the scope of these provisions and the interpretation given to them by the courts. The judgment The Honourable Jean-François Michaud ruled on objections dealing with professional secrecy and the litigation privilege. SNC-Lavalin Inc. (“SNC”) asked for [Translation] “the experts’ letters of undertaking and the instructions given to them regarding the performance of their mandate”. ArcelorMittal Mining Canada and ArcelorMittal Mines Canada Inc. (“Arcelor”) objected, primarily on the ground of professional secrecy. Arcelor could also have raised the litigation privilege. Before 2016, all solicitor-client communications were confidential and the opposing party did not have access to them. For litigation lawyers, it was their secret garden. Justice Michaud nonetheless dismissed Arcelor’s objection and allowed SNC’s request for two reasons. First, the experts described their mandate in their report, which constitutes a waiver of professional secrecy, at least with respect to that description of their mandate. According to the judge, this reasoning also applies to instructions received later which may have changed the scope of the mandate. The judge was also of the opinion that article 235 C.C.P. reduced the extent of professional secrecy and the litigation privilege, which he found to be reasonable given the expert’s [Translation] “impartial role and the search for the truth”. In obiter, the judge states that article 235 C.C.P. applies even though the experts’ reports were prepared before the new Code of Civil Procedure came into force since that article had immediate effect according to the transitional rules. Lastly, the judge held that Arcelor would be required to provide SNC with any subsequent instructions it gave its experts, although only those relating to the scope of the mandate and excluding any other discussions between the experts and Arcelor or their attorneys. In the second part of its application, SNC requested for the documents consulted by Arcelor’s experts [Translation] “on which they based their opinion”. This essentially covered interviews the experts conducted with some of Arcelor’s employees, which were mentioned in their report. Based on jurisprudence which preceded the reform, the court held that SNC had a right to those interviews if they were recorded and/or transcribed, since the experts’ report referred to them. However, if the experts only took notes of the interviews, those notes were protected by professional secrecy and the litigation privilege and Arcelor was under no obligation to provide them to the other party. Justice Michaud also set aside the application of article 238 C.C.P. which, as mentioned, requires that experts attach any testimony taken to their report. His decision was based on the fact that this provision did not exist when the interviews were conducted and article 238 C.C.P. is not retroactive. Without going into detail about transitional law, which is not the subject of this newsletter, it is difficult to see why this article would be treated differently from article 235 C.C.P. The judge concluded that at some point he will order the experts to meet pursuant to article 240 C.C.P. to “identify the points on which they differ”. Conclusion This judgment and the provisions on which it is based certainly result in a big change for litigation lawyers. They and their clients will likely have to adjust to the new rules. As mentioned above, this new approach runs counter to not only professional secrecy and the litigation privilege, but also the principle that each party is master of his own evidence. However, debates among experts often lead to more disputes than they resolve. In future, lawyers must be scrupulously clear as to the mandates and instructions given to experts.