Prompt Payment Legislation
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The Ontario construction industry celebrated a great victory on December 5, 2017 as Bill 142 – the Construction Lien Amendment Act was passed with a unanimous vote at Queen’s Park. This marks the fi rst approved prompt payment legislation in Canada and will hopefully serve as a guide for the rest of the country to follow.

Bill 142 was fi rst introduced in the Ontario Legislature in the spring and has since been a priority item on the legislative agenda. Having attained royal assent before the house adjourns for the holiday season now promises a new year for the over 400,000 Ontario construction sector workers who will begin to see the effects of a prompt payment system that looks out for their livelihoods. The bill will also bring added adjudication measures that will signifi cantly reduce payment delays, which have been identifi ed as the biggest barrier to investment, improved productivity and increased employment in the construction industry.

In other regions of Canada, the development of prompt payment legislation continues.

In Saskatchewan, the Saskatchewan Construction Association announced at its annual general meeting that the provincial government would be introducing legislation to remedy increasingly long wait times for payment on completed projects.

In Quebec, the CMMTQ (Corporation des maîtres mécaniciens en tuyauterie du Québec) announced that provisions to Bill 108 were introduced in the spring of this year. The provisions allow the government to introduce prompt payment measures for public contracts, including payment schedules and adjudication mechanisms. It is anticipated that there will be pilot projects for one or two years prior to full implementation, in order to test the new measures. Following the test period, a regulation applying to all public contracts will be adopted. The CMMTQ continues to work with the Ministry on this issue.

Alberta Infrastructure began implementing prompt payment clauses in its various construction contracts since April 2016. In a letter to Alberta Premier Rachel Notley, the Alberta Construction Association applauded the change, and urged the province to extend these prompt payment clauses to other public agencies like school boards and municipalities. The province hasn’t given any other direction on this issue, but it certainly signals a shift in the industry.

The British Columbia Law Institute has been undertaking a builders lien reform project to review the Builders Lien Act (BLA). Although there has been signifi cant evolution in the BC construction industry, the BLA has not been comprehensively amended since 1997. An expert committee has been tasked to assist the BCLI to prepare a report indicating the proposed revisions. It is anticipated that the new or amended BLA will include prompt payment provisions similar to those in Ontario.

On a federal level, Bill S224 – the Canada Prompt Payment Act has currently stalled. After passing third reading in May, it is anticipated that the federal bill will closely model that of Ontario Bill 142.

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