Industry stakeholders are keeping a close eye on Bill S-224, the Canada Prompt Payment Act, as it makes its way through the Senate, calling it a landmark piece of legislation that will benefit those working on federal construction projects.
As of April 19, the bill had reached second reading in the Senate after being introduced by Manitoba Senator Don Plett. First reading took place April 13.
"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 (NTCCC) in a statement.
"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."
Bill S-224 would ensure contractors and subcontractors on federal construction projects are paid promptly. The legislation only covers contracts, as well as the subcontracts to those contracts, with the federal government, the release makes clear, and also ensures that the government institution make progress payments to the contractor monthly or at shorter intervals depending on the details of the contract.
"This payment requirement is consistent down the contractual chain," the release reads.
It also accounts for milestone payments and states contractors have the right to suspend work, terminate a contract and collect interest on late payment.
"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," Plett said.
"Delay in payment is the number one reason small and medium-sized businesses in the construction industry are going out of business in Canada."
His sentiments are echoed by Tareq Ali, the director of marketing, communications and membership services with the Canadian Institute of Steel Construction (CISC).
"Eighty per cent of the construction industry workforce are employed by construction trade contractors," he said. "The ability for them to get paid in a timely fashion is critical to ensuring their long-term survival. If our members are not getting paid on time then it affects job creation, it affects wage payment, it affects investment, it affects innovation.
"I think it’s (the bill) a great accomplishment for the construction industry and we’re delighted to see that such an important issue is finally getting some attention and the traction it needs. The fact that this has been introduced and it’s moved through the senate, it’s something we’ve been asking for, for a long time."
News of the bill reaching second reading follows the NTCCC 2016 Prompt Payment Summit which took place April 17 to 20 in Ottawa. Trade contractor associations from across the country took part in the summit, which stressed the "urgent" need for federal prompt payment legislation. The event featured an advocacy and awareness component on Parliament Hill where attendees met with around 40 Parliamentarians and senior ministerial advisors to discuss the issue.
"NTCCC Representatives received overwhelmingly positive feedback from Parliamentarians who are looking forward to supporting the Canada Prompt Payment Act as it moves through the Senate and House of Commons," said John Blair, executive director of the Canadian Masonry Contractors Association. "Parliamentarians demonstrated strong knowledge about the need for this legislation, and many affirmed their support."
Bill S-224 still has to go through the committee and report stages at the Senate, the government process outlines, before it reaches third reading and then must be sent to the House of Commons, which will examine it in a similar three-reading process.
"The lack of prompt payment legislation is hurting small businesses, preventing job growth, and limiting apprenticeship access across the country," said Richard McKeagan, CEO of the Mechanical Contractors Association of Canada.
"This Bill supports small businesses and employment in the trades in Canada, and underlines the principle that people who do good work deserve to be paid in a timely manner."
Ali states this is one of the CISC’s main pillars, as they advocate for change in the industry.
"We’re pushing for prompt payment at both the national and provincial levels," he said. "It’s so critical. It’s the right thing to do."