It’s Construction and Skilled Trades Month in British Columbia and prominent industry member Chris Atchison is wondering why construction companies still have no payment security in the province.
“It is a dereliction of duty,” Atchison, president of the British Columbia Construction Association, told the Journal of Commerce.
“The thing that’s a little bit aggravating is it’s an easy win. It’s not new. There’s no risk. There is only goodness that can come from having legislation like this throughout our industry,” Atchison said.
Recently, Manitoba joined Saskatchewan, Alberta and Ontario after implementing prompt payment legislation. The federal government has also announced intentions to implement prompt payment legislation for federal projects. The bill was passed in 2019 but has yet to come into effect.
With so much action happening around the country, Atchison said there are several reasons he thinks B.C. has yet to catch up.
“One of the reasons that we’ve heard is that B.C. was waiting for the federal government to finally make its commitment to prompt payment legislation. The reasoning that we were told is that they wanted to make sure that they weren’t going in a direction that wasn’t consistent with what the federal government wanted to do so that we could be aligned across the country,” he said.
“That’s a bit convenient, in hindsight, given the fact that other provinces have seized the initiative and these are other provinces of differing political stripes.
“I think what it comes down to is capacity and understanding in the attorney general’s office that they just don’t see this in British Columbia, at the present time, as a priority.”
The Ministry of Labour did not respond to questions regarding prompt payment before deadline.
In an open letter addressing the province for the beginning of construction month, Atchison said the industry is “under a lot of pressure.”
“Contractors are working harder than ever but not always getting ahead, often due to issues related to non-payment and late payment, or unfair contract terms,” he said.
“The result is that continued investment in infrastructure, including much-needed multi-unit housing, is becoming a catch-22 for all of B.C.’s contractors. Without complementary measures to reduce the extreme financial risks of late or non-payment, our contractors and their workers face preventable financial hardship.”
Prompt payment takes on special importance in the construction industry where overheads can pile high before shovels are even in the ground.
“You’re paying for labour, supplies, benefits, your materials, your permits ― everything just stacks up and you end up not getting compensated for any of that until after an indefinite period of time,” he said.
“There’s a breaking point for all organizations.”
Atchison, who has been president of the BCCA for more than six years, has seen the trouble contractors go through firsthand.
“I know of one contractor that’s been waiting on a payment north of $8 million for a project that has been completed for more than a year,” he said.
While some companies are so large they can absorb $8 million in late payments, the vast majority of B.C. construction contractors cannot. More than 90 per cent have less than 20 employees.
“You’re counting on the most vulnerable of businesses with the most fragile economies, those that are least able to absorb a lot of risk that comes without payment certainty,” he said.
“Now, all of a sudden, those who are least able to afford that risk are having to make decisions on payroll, they’re having to have significant lines of credit, they’re absorbing more debt in order to continue to do what the province is asking us to do. It just makes no sense.”
A lack of prompt payment legislation isn’t just a burden for people working in the industry; it burdens the industry itsself.
Atchison said it’s harder to attract young people to a sector that contains payment uncertainty, thus causing the entirety of construction in B.C. to face a possible decline the longer prompt payment legislation remains an outstanding issue.
And as other provinces do enact prompt payment, B.C. faces the real possibility of a construction drain as tradespeople and contractors take their skills and companies east, Atchison said.
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