February 1, 2018 by Jillian Morgan
The federal government has called for industry input and recommendations on proposed prompt payment legislation.
Recommendations will be used to inform legislation with regards to payment terms and an adjudication process for federal construction contracts.
“Timely flow of payment within all tiers on construction projects is necessary to allow material and equipment suppliers, subcontractors and trades, labour, and general contractors to succeed in their businesses,” said Raymond Bassett, director of the Canadian Construction Association Executive Committee.
Bruce Reynolds and Sharon Vogel, Canada construction lawyers and partners at Singleton Urquhart Reynolds Vogel law firm, have been contracted to seek input.
Reynolds and Vogel led the consultation process for Ontario’s Bill 142 on construction and prompt payment.
The Canadian government has undertaken other prompt payment efforts, including publicly posted payments for construction contracts over $100,000. This effort intends to allow businesses involved in federal construction contracts to inquire about payment status.
The federal government has also reviewed payment terms in federal construction contracts and the Treasury Board’s 30-day mandated payment period.
“Canada’s trade contractors and tradespeople will benefit immensely from prompt payment legislation,” said John Galt, chair of the National Trade Contractors Coalition of Canada. “This legislation will fix the most significant bottleneck in federal construction and introduce new efficiencies to keep costs low and projects running smoothly.”
According to the federal government, 96 per cent of its main contractors are paid on time. However, some subcontractors who work for these main contractors are not paid on time, or within the required timelines.
Other provinces, including Alberta, New Brunswick, Quebec and Saskatchewan, are working on measures to address prompt payment in the construction industry.
“Today, our government is taking the next step in ensuring that subcontractors who work on federal construction contracts get paid on time,” said Steve MacKinnon, parliamentary secretary to the Minister of Public Services and Procurement. “Our government is committed to ensuring that construction investments flow efficiently to all contractors involved in federal projects.”
SOURCE: PUBLIC SERVICES AND PROCUREMENT CANADA