Recently introduced federal prompt payment legislation is garnering praise from British Columbia stakeholders who would like to see more progress closer to home.
Federal prompt payment came into force on Dec. 9 to, as federal Minister of Public Services and Procurement Jean-Yves Duclos said, “to address long-standing construction industry concerns, including the timeliness of payments, protecting vital construction jobs and making it easier to do business with the Government of Canada.”
Electrical Contractors Association of British Columbia (ECABC) president Matt MacInnis said the new legislation is a welcome change for the construction industry.
“The federal government’s prompt payment legislation will bring welcome certainty for contractors working on eligible projects. Unnecessarily delayed payments are the number one concern for many of our members,” he said.
He added while the federal legislation is a move in the right direction, more needs to be done to bring prompt payment to B.C. projects.
“Seven provinces and the federal government now have introduced or passed some form of legislation mandating payment timelines on construction projects. ECABC believes British Columbia’s contractors and workers deserve the same fairness and protections available across the country and encourage B.C. to pass its own prompt payment legislation during the upcoming spring session,” MacInnis said.
British Columbia Construction Association president Chris Atchison echoed MacInnis’s concerns about a lack of movement on prompt payment legislation at a provincial level.
“Federal legislation only applies to federal infrastructure projects. We need provincial rules on the table in B.C., otherwise we’ll continue to fall behind other Canadian jurisdictions when it comes to prompt payment legislation,” he said. “That harms us in terms of business competitiveness, and it harms the livelihoods of the tens of thousands of British Columbians who make up B.C.’s construction industry. Prompt payment legislation was the single most important issue for our industry in 2023 and, regrettably, we’re carrying it over in 2024.”
Atchison also struck an optimistic tone as he and other stakeholders continue to push for changes in B.C. in the new year.
“We have had constructive discussions with government over the past year, including directly with Premier (David) Eby. We will be looking for the enaction of prompt payment legislation early in the 2024 legislative session. The health of B.C.’s construction industry depends on it,” he said.
The Federal Prompt Payment for Construction Work Act was developed by Public Services and Procurement Canada (PSPC) in collaboration with construction industry stakeholders and other government departments.
Under the terms of the legislation, “the federal government will have 28 calendar days to pay after the contractor submits a proper invoice. The contractor will then have seven days to pay its subcontractors, subcontractors will have another seven days to pay their sub-subcontractors and so on down the contracting payment chain,” a PSPC release said.
“The construction industry is a critical part of the Canadian economy. We reached a major milestone in ensuring that subcontractors who work on federal government contracts get paid on time. The coming into force of this legislation will alleviate payment delays and enhance financial stability for small and medium-sized construction companies, helping to support the more than 1.5 million workers of the industry during these difficult times for all Canadians,” Duclos added.
All existing construction contracts will have one year, as of Dec. 9, 2023, to comply with the Federal Prompt Payment for Construction Work Act.
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