Issue link: https://digital.canadianlawyermag.com/i/79498
except for holdback money properly retained. The written declaration is made to the owner on the understanding that he will advance funds to the contractor in reliance on the statements made therein. Typically, construction projects are organized like a pyramid, with the benefit of labour and materials ascending from workers and suppliers, through subcontractors to the general contractor and, ultimately, to the owner. Funds are intended to move in the opposite direction, from the owner though the general contractor to the subcontractors and so forth. In order to ensure that the project progresses smoothly and on schedule, it is in the interest of the owner to ensure that funds flow down through the pyramid as intended and in accordance with the trust imposed on the funds pursuant to the applicable builders' lien legislation. Even though the sanctions for making statutory false declarations can be very serious, there persists in some corners of the construction industry the attitude that statutory declarations are mere formalities and that "everyone" knows that they are not to be taken literally. Under Canadian law, declarations have the same force and effect as though sworn under oath. A person who makes a false declaration exposes himself to prosecution under several provisions of the Criminal Code. Among these are perjury, which is an indictable offence punishable by imprisonment for a term of up to fourteen years and uttering a forged document, a summary conviction offence for which the penalty can be jail time or a fine. The courts also have the power to make orders for restitution to victims. In New Brunswick, officers of construction companies who have been guilty of forgery or perjury in the making of statutory declarations have been sentenced to up to one year of house arrest and been ordered to make restitution. In such cases, the explanation that the accused did not know what he was doing was wrong or that everyone else was DOING BUSINESS IN ATLANTIC CANADA FALL 2012 7 doing it have been of no avail in earning a reduced sentence. Instances of contractors being convicted and sentenced as a result of having made false statutory declarations seem to have had added a credibility to such declarations which may have been wanting in the past. Still subcontractors, material suppliers " subcontractors, material suppliers and others would be wrong to assume that payment of their outstanding accounts is secured "