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Canada Prompt Payment Act undergoes final review at Senate

DCN News Service
Canada Prompt Payment Act undergoes final review at Senate

OTTAWA — The Canada Prompt Payment Act, Bill S-224, will be undergoing a final review by a Senate committee before a vote is taken to send the bill to the House of Commons.

The bill has been the subject of rigorous review at the Senate Standing Committee on Banking Trade and Commerce since Feb. 2 and is ready to undergo a clause-by-clause review before the vote, explains a release from the National Trade Contractors Coalition of Canada (NTCCC).

Supporters of the bill have sent thousands of letters to senators and members of parliament to demonstrate the need to address payment delays in Canada’s construction sector with enforceable legislation, states the NTCCC, which has appeared before the committee to speak in favour of the bill.

Over the course of this study, criticisms have arisen from general contractors about the implementation of federal legislation on top of legislation currently being developed in Ontario as a result of the Construction Lien Act Review, which was undertaken by Bruce Reynolds and Sharon Vogel.

Many NTCCC members are also members of Prompt Payment Ontario and have expressed their support for the Reynolds and Vogel report. Bill S-224 was drafted prior to the release of the report and it is appropriate to review the bill in light of the extensive work and consultation that have gone into the recommendations stemming from that review, adds the release.

"Our members have reviewed the concerns of the general contracting community brought forward to the Senate committee and made many suggested amendments in line with what they are calling for," said John Galt, chair of the NTCCC, in a statement. "We agree with them that the Reynolds and Vogel report has earned multilateral support and should be the template for prompt payment legislation."

At a committee hearing Feb. 9, Aecon’s senior vice-president and deputy general counsel, Yonni Fushman, said, "If you give us Reynolds (referring to the report of Reynolds and Vogel), the general contracting community will be supportive."

The NTCCC has worked with senators to encourage those changes.

According to the release, the parliamentary secretary to the minister of public services and procurement Canada appeared before the committee on Feb. 8 to express the government’s concern for the "need to be mindful of forcing the Crown into a relationship with subcontractors and into new responsibilities where none was designed to exist."

Louis Davis, senior counsel for the constitutional, administrative and international law section for Justice Canada, stated that in this matter "the Government of Canada has no relationship with the subcontractors."

"This legislation is too important to be voted down because of crossed wires," said John Blair, executive director of the Canadian Masonry Contractors Association. "The bill does nothing to force the Crown into any different relationship with subcontractors than what already exists. We will work with government to rectify any confusion about the intent of this bill and the applicability of contract law."

Other comparator nations that have prompt payment legislation at the federal level include the United States, the United Kingdom, Ireland, Australia and New Zealand.

"We want the Government of Canada to take a leadership role and pass prompt payment legislation in respect to work on federal projects," said Galt. "The government can show Canadians that it values paying people who do good work in a prescribed amount of time. It would result in a more proportionate and equitable distribution of risk and would benefit taxpayers at no cost to the government."

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