Government infrastructure projects are a large source of work for the construction industry. However, the lien rights of contractors and subcontractors are often varied or altered with respect to work performed on government lands. With respect to provincial government lands, these changes are usually set out in the provincial legislation, the Ontario Construction Lien Act. But, what about construction projects on federal lands like airports? The answer is that it depends.
Airports and aeronautics are a federal government undertaking. Ordinarily, provincial legislation applies to areas of federal jurisdiction provided that there is no direct conflict between any federal legislation on the subject. Where provincial legislation interferes with the core of a federal undertaking, the provincial legislation may be inoperative. Canadian courts have held that the application of provincial lien legislation to federally governed airports can be one such situation.
In particular, courts have held that construction lien claimants cannot register constructions liens against the ownership and/or leasehold of the federal government or a local airport authority.
For example, the Ontario Construction Lien Act gives a lien claimant the right to sell the lands on which it worked when it has not been paid for the work. If a contractor could sell an airport terminal building or radar tower as a result of non-payment, then it would interfere with the federal government's ability to govern the operation of airports to ensure a safe and strong flight network in Canada. This has been held to be the core of the federal undertaking such that the provincial legislation would not apply. In such circumstances, the lien claimant's right to lien the terminal building or radar tower in its entirety does not exist.
Nevertheless, those are not the only ownership or leasehold interests in airport lands. A restaurant may lease space for a coffee shop in the terminal building or a shipping company may lease hanger space at the airport. Either could hire a contractor to perform work on those leased premises. Arguably, the restaurant and shipping company businesses would not form a core aspect of the operation of an airport and, based on current case law, it may be possible to register a construction lien against those leasehold premises.
In this way, there are situations where a contractor or subcontractor cannot lien an airport and situations where it may be possible to lien an airport.
