prompt payment

Canada Prompt Payment Act introduced

Wednesday, April 27, 2016

Bill S-224, the Canada Prompt Payment Act, was introduced by Senator Don Plett at second reading in the Senate. This Act will ensure that contractors and sub-contractors working on federal government construction work are paid regularly and in a timely manner.

“As a former trade contractor, I know that in the construction industry, it is a tolerated practice that there are no strict timelines for payment, even when all parties are satisfied with the work completed,” said Senator Plett. “Delay in payment is the number one reason small- and medium-sized businesses in the construction industry are going out of business in Canada.”

Bill S-224 ensures the government makes progress payments to contractors on a monthly basis or at shorter intervals as specified in their respective contracts. This requirement is consistent when dealing with sub-contractors, as well. It accounts for milestone payments when applicable and allows contractors the right to suspend work, terminate a contract and collect interest on late payments.

Bill S-224 only covers contracts and sub-contracts with the federal government, and does not apply to construction projects that concern the respective provinces and territories.

“Senator Plett has been a champion on this issue for our industry on Parliament Hill over the last several years. He is from our industry and he gets it!” said John Galt, Chairman of the National Trade Contractors Coalition of Canada, in a press release. “This is a tremendous opportunity for Canada to join virtually every other country in the Western world that has some form of prompt payment legislation in place to address this worldwide problem.”

Senator Plett hosted several industry representatives from across Canada at a reception at Parliament Hill recently, following a prompt payment summit held earlier that week. At the summit, representatives discussed ways to encourage prompt payment to move forward at the provincial and territorial levels. Many Senators and Members of Parliament attended the summit to offer their support.

“After years of working with industry stakeholders on a solution to this problem, I am thrilled that we have a great piece of legislation before us,” added Senator Plett. “I look forward to the swift passage of this bill and I am hoping the Canada Prompt Payment Act will give the provinces the momentum they need to move forward on this at the provincial level.”

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