Ontario Construction Secretariat backs prompt payment legislation

The Ontario Construction Secretariat is supporting a private member’s bill that seeks to have timely payment for construction services enshrined in law.

Bill 69, the Prompt Payment Act, would require that progress payments be made on a monthly basis at minimum and full payment within 30 days of completion of the work. It also outlines the right to suspend work if the payer is more than seven days late, and the right to withhold payment because of unsatisfactory performance, direct loss, or damage, as long as a letter in writing explaining the reasons is provided within 10 days.

If passed, Ontario would be the first Canadian jurisdiction to pass legislation addressing the issue of prompt payments for construction work.

Introduced by Vaughan, Ont. MPP Steven Del Duca, the bill passed its first and second readings in May. It has been referred to the Ontario Legislature’s Standing Committee on Regulations and Private Bills. Following this stage, it will return to the provincial legislature for a third reading and vote before it can become law.

Sean Strickland, CEO of the Ontario Construction Secretariat, an organization which represents the interests of contractors and workers in the unionized Industrial, Commercial and Institutional (ICI) construction industry, said the bill will help level the playing field, reduce risk and allow for better business decisions.

“Contractors who have upheld their end of the bargain in a construction project should be able to expect timely payment so they can put people to work on the next project,” he said. “Late payments in construction aren’t only harmful to our industry and the economy but they have a very real negative impact on workers and their families by lowering employment and investment in training.”