TORONTO — As the tariff situation continues to evolve and escalate as the days pass, the Greater Toronto Sewer and Watermain Contractors Association (GTSWCA) has outlined some tips for members when it comes to contracts.
A grave concern with Donald Trump’s tariffs, is whether contractors and trades will be able to recover increased costs under their contracts.
The GTSWCA is advising members to check whether your contract includes provisions for price adjustments due to changes in taxes and customs duties.
“Fortunately, unlike construction cost increases caused by inflation or supply chain impacts, standard form stipulated price contracts generally include terms that expressly provide for adjustment to the contractor’s compensation when there are changes in taxes and duties,” a statement reads.
For example, paragraph 10.1.2 of the CCDC 2 – 2020 Stipulated Price Contract states the following: “10.1.2 Any increase or decrease in costs to the contractor due to changes in taxes and duties after the time of the bid closing shall increase or decrease the contract price accordingly.”
For future contracts the GTSWCA sates to raise the issue early and bring it to the owner’s attention as well as encourage the owner to include duty provisions in bid documents. GC 10.1 of CCDC 2 provides industry-accepted wording.
“Given the potential for tariff changes during Trump’s presidency, it is recommended that contractors review their contracts (both existing and future) to determine what, if any, relief is provided to them if tariffs change,” the statement reads. “Where contracts are silent on the point, it is likely that the contractor will not be able to recover these costs. Therefore, whenever possible, it is recommended that the contractor seek to have terms added that provide for adjustment to the contractor’s compensation upon any change in tariffs after bid close.”
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