12 August 2025 – The International Credit Insurance & Surety Association (ICISA) commends the Surety Association of Canada (SAC) for its timely and well-reasoned commentary on the recent Ontario court decision on performance bonds involving Earth Boring Co. Limited. This landmark ruling has raised questions in the construction and legal communities, and SAC’s clear analysis offers much-needed clarity.

SAC’s Response to the Ontario Performance Bond Ruling

In its article “Stay of Performance Bond – A Game Changer or Much Ado About Nothing?”, SAC President Steve Ness addresses concerns about the May 28, 2025 Ontario Superior Court of Justice Order. The Order placed a temporary stay on performance bond claims during restructuring proceedings under Canada’s Companies’ Creditors Arrangement Act (CCAA).

According to SAC, this type of stay is not unusual in insolvency situations. It does not revoke the obligee’s rights under the performance bond. Instead, it serves as a temporary pause to stabilize the business and keep projects moving toward completion.

“With apologies to Mark Twain,” Ness writes, “rumours about the death of performance bonds are wildly exaggerated.”

Why the Stay Does Not Weaken Performance Bonds

ICISA supports SAC’s position and recognizes the association’s leadership in providing fact-based guidance at a critical time. Key takeaways from SAC’s commentary include:

  • Performance bonds remain valid and enforceable despite the temporary stay.

  • The stay is strategic and short-term, not a cancellation of bond rights.

  • Labour and material payment bonds are unaffected, ensuring suppliers and subcontractors are paid.

  • The surety is actively engaged in supporting project continuity, not merely observing from the sidelines.

This case demonstrates how surety bonds protect all stakeholders during challenging circumstances — preserving value, ensuring project completion, and minimizing wider disruption.

The Importance of Clear Communication in the Surety Industry

By engaging with legal experts, sureties, and project owners, SAC has shown how transparent communication strengthens trust in the surety sector. ICISA encourages stakeholders to read SAC’s full article here for a deeper understanding of the decision’s implications.

For regular updates on surety industry developments, visit ICISA’s news section.