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Associations, Government

BCCA report paves way for prompt payment legislation

Sarah Rowland
BCCA report paves way for prompt payment legislation

The British Columbia Construction Association (BCCA) recently released a cross-jurisdictional analysis report, marking a significant step in the long journey towards establishing prompt payment legislation in the province’s construction industry.

The report was presented to the provincial government, specifically the Ministry of the Attorney General, minister of finance and the premier, before its public release, initiating the process for consultations.

“It’s a functional document that looks at all of the components of the legislation in other areas and ensures that as we consider it in British Columbia, we’re learning from the language used and the lessons learned in other jurisdictions,” explains Chris Atchison, president of the BCCA.

“We have the opportunity to create something for British Columbia that is world class in terms of legislation, that will signal to builders across this province that they really matter.”

The report itself provides an overview of provinces that have either tabled or implemented prompt payment and adjudication, highlighting Ontario, Alberta, Saskatchewan, New Brunswick, Manitoba and Nova Scotia.

The report is the latest action taken by the BCCA, and complements a letter sent in October that was signed by over 30 industry partners.

Urgent need for change

The pressing need for reform is evident when considering the current challenges faced by those within the sector, Atchison explains.

“People aren’t being paid for up to 90, 120, 180 days and it’s crippling for payment certainty,” he says, adding it places an undue financial burden on contractors, especially smaller businesses that find themselves shouldering lines of credit to pay wages and suppliers.

Drawing a parallel with everyday financial transactions, Atchison highlights the stark contrast in payment expectations.

“If you get your Telus bill, your hydro bill, you’re paying that within 30 days or else you lose privileges to those services. The construction industry in British Columbia doesn’t work like that…It’s rife for abuse.”

The impacts of this lag in payment go beyond financial strains, Atchison explains.

“If you’re always worried about making sure you’re chasing down the money that you’re owed with no certainty, that puts a lot of stress on a system that’s already bending as a result of the demand.”

Moreover, the lack of prompt payment legislation may be inadvertently deterring people from pursuing careers in a sector that is already grappling with a labour shortage.

“It’s also not sending the right message to people we’re trying to encourage to become skilled tradespeople or business owners or contractors,” he says. “If we’re telling them on one hand that we need them to build but we don’t really care if they get paid or not or that’s not really our issue. We’re really sending a mixed message to people.”

Building future frameworks

Reflecting on his tenure, Atchison acknowledges prompt payment legislation has been a longstanding point of contention for the construction workforce.

“It’s always been an issue. It’s elevated in recent years to a primary, key issue but it’s always been there,” he notes.

The push for change gained momentum after Ontario’s introduction of the Construction Act in 2019, setting a precedent for the rest of Canada.

Public perception is crucial, Atchison observes.

While there may initially be a lack of understanding about what prompt payment legislation entails, awareness tends to grow over time.

Discussing the B.C. provincial government’s focus amidst various challenges, Atchison remarks, “They’ve jumped from a pandemic to a leadership change to a housing crisis.”

He believes, however, that introducing prompt payment legislation could be an “easy win” for the government, offering significant benefits for the construction industry despite the crowded political agenda.

As Atchison points out, there are over a quarter of a million people directly involved in B.C.’s construction industry, therefore, the economic and community benefits of fair and pragmatic payment systems are substantial.

And while its months away from the first draft, Atchison remains hopeful about the future, stating, “The best-case scenario is legislation in some form of prompt payment and adjudication would be tabled at the next session.”

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