prompt payment

Feds seek input on prompt payment legislation

Tuesday, February 13, 2018

The Government of Canada is seeking industry input and recommendations on federal prompt payment legislation.

Bruce Reynolds and Sharon Vogel, independent experts, have been contracted to seek input from the construction industry to identify the elements required to develop a robust federal prompt payment regime. The federal government will use the proposed recommendations to inform the development of an effective legislative solution that will direct terms of payment and provide for an adjudication process for federal construction contracts.

Reynolds and Vogel conducted the consultation process leading to the successful implementation of Ontario Bill 142 on construction and prompt payment.

“Our government is taking the next step in ensuring that subcontractors who work on federal construction contracts get paid on time. The construction sector is an important employer and economic engine in Canada. Our government is committed to ensuring that construction investments flow efficiently to all contractors involved in federal projects,” said Steven MacKinnon, Parliamentary Secretary to the Minister of Public Services and Procurement.

This initiative builds on ongoing prompt payment efforts, notably the creation of a 14-point action plan, developed jointly by the government and the Canadian Construction Association. As of June 8, 2017, the Government of Canada has publicly posted all payments related to construction contracts of more than $100,000. This allows businesses involved in federal construction contracts, such as subcontractors, to make informed inquiries about the status of their payment. To date, four other actions have been completed:

  • completing an engagement strategy that describes the commitment of the Canadian Construction Association, Defence Construction Canada and Public Services and Procurement Canada to collaborate through the working group;
  • agreeing on prompt payment principles;
  • reviewing payment terms in federal construction contracts, including an assessment against industry standards; and
  • reviewing the Treasury Board’s 30-day mandated payment period to determine if there is flexibility to reduce this period.

“Canada’s trade contractors and tradespeople will benefit immensely from prompt payment legislation. This legislation will fix the most significant bottleneck in federal construction and introduce new efficiencies to keep costs low and projects running smoothly,” said John Galt, chair, National Trade Contractors Coalition of Canada.

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