National prompt payment guidelines needed

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by Kelly Lapointe last update:Oct 9, 2014

A national set of guidelines on the principles of prompt payment should be developed, concluded the Canadian Construction Association's (CCA) general contractors council during the association's recent 96th annual conference.
National prompt payment guidelines needed

“We all buy construction in terms of payment the same across country and we would be much better off having national guidelines. We should have national guidelines,” said Serge Massicotte, president of general contractor Massicotte Construction Ltd. based in Ottawa.

Massicotte proposed the motion, which was eventually passed, to ask the standard practices committee to develop a national set of guidelines on the issue.

The issue of prompt payment appears to be gaining momentum across the country as representatives from British Columbia, Alberta, Manitoba and Nova Scotia all reported at the council that they are looking at the issue closely.

Quebec is looking at changes to its civil code that would affect prompt payment. Industry leaders in these provinces are also looking closely to see what happens with the issue in Ontario, where Bill 69, the Prompt Payment Act, was scheduled for committee hearings on March 19 and 26 and a clause by clause reading on April 2 and 9.

After passing second reading in May 2013, the bill sat stagnant, many in the Ontario construction industry argued, until a recent push by several in the industry has seen it get to committee.

In Ontario, the private member’s bill builds a framework to ensure all contractors, from general contractors and down the subcontracting chain, receive payment within 30 days.

“Prompted by this kind of work, the Manitoba Mechanical Contractors Association has undertaken an effort there and formed a joint committee with all the different contractor roles... and we’re undergoing an effort to try and get some form of prompt payment legislation started in Manitoba. We’re interested in what the province of Ontario is doing,” reported John Bockstael, president and chief executive officer of Bockstael Construction Inc. based in Winnipeg.

Those who spoke at the council meeting noted that it would be helpful to have guidelines from the CCA as they explore the issue with their provincial governments.

In an update to the council on behalf of the Ontario General Contractors Association (OGCA), Mike Reinders, president of Maple Reinders Constructors Ltd., said there are currently too many holes in the legislation and the industry needs to work with other stakeholders, such as owners, to get it right.

One of the outstanding issues from the OGCA’s perspective is the need to address complex contracts such as alternative financing and procurement, public-private partnerships, engineering procurement and construction, design-build and integrated project delivery.

“The OGCA has always believed that there’s more work to be done on the legislation. A lot of amendments need to be made,” said Reinders.

He noted that the earliest Bill 69 can be referred to the Ontario legislature is April 10.

Members of the committee also noted that prompt payment relates to the Lien Act and in some cases can contradict it.

“It really requires reform of the Lien Act in Ontario and that’s probably is the case for all... it also mixes with the CCDC contracts,” said Reinders.

Various Ontario construction industry stakeholders have said they don’t expect Bill 69 to be passed in this session of the legislature as a spring election is considered imminent.

last update:Oct 9, 2014

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