Canadian contractors are successfully pushing prompt-payment legislation on both the federal and provincial levels, as reputable construction companies endure delinquent payments on public projects.
Thanks to the active engagement of the Ontario Sheet Metal Contractors Association, Ontario has been the first province in Canada to introduce prompt-payment legislation (Bill-142, “Prompt Payment and Lien Act” reform) in May 2017, leading the way for similar provincial and federal efforts.
A member of the Prompt Payment Ontario (PPO) coalition, Ontario SMACNA has been leading the charge in lobbying members of the provincial parliament to pass the bill. The first reading of Bill-142 took place in May and now proceeds to committee this autumn. The bill pertains to provincial, municipal, and private sector construction.
“I cannot think of any more important issue than the need for prompt payment legislation in our industry,” said Darryl Stewart, executive director of Ontario SMACNA. “The provincial legislation will have the greater impact as this has bearing on the lion’s share of projects within the province.”
“In the meantime, delinquency in payments to our members continues to extend in time,” he added. “It is not uncommon to hear from a member having hundreds of thousands, if not millions, of dollars in payments delinquent beyond 120 days.”
“I know of members who have completed projects on time, without deficiency, and still have not received final payments beyond a year after completion,” he continued. “The bottom line is our members and other subcontractors are bankrolling the industry and it is killing our businesses. Too many businesses have fallen into bankruptcy as a direct result of payment delinquency.”
On the federal level, a prompt-payment bill (S. 224) passed Canada’s Senate in May and awaits a first reading in the House of Commons. Similar prompt-payment bills are pending in other provincial assemblies.
The proposal would require the federal government to make monthly payments to contractors on public projects, which are then required to make monthly payments to their subcontractors.
For more information visit the PPO website: http://ontariopromptpayment.com.