The Saskatchewan Construction Association (SCA) is calling on the province to halt plans to exempt residential construction from prompt payment legislation.
“It creates financial instability, uncertainty and it really undermines a company’s ability to grow and continue running successfully,” said Mark Cooper, SCA president. “The point of the legislation is to fix this, but this would fix it for some and not others.”
The call comes after a story broke about a home developer failing to pass on an owner’s payments to tradespeople. The dispute has resulted in 11 companies putting liens on the project, totaling $175,000. Legal suits have now been filed against the owner and the developer.
The legislation was unanimously passed in 2019, but the government and industry are still consulting on regulations before it comes into effect next year. The law would bind participants to a fixed, cascading chain of payments. Project owners would be obligated to pay bills from general contractors in 28 days. Seven days after receiving that, general contractors would be obligated to pay their subcontractors.
The legislation would also establish a dispute resolution framework to prevent more payment issues from ending up in court. After Ontario, Saskatchewan would be the second province to enact legislation of this kind.
Cooper explained late payment is a systemic and financially devastating issue in the construction industry and stakeholders have worked for years with government to address it with this legislation that is poised to come into effect.
Cooper said it isn’t uncommon for contractors to wait more than 90 days to get paid, which has a domino effect all the way down to subcontractors and suppliers.
“Every builder in Saskatchewan is dealing with uncertainty right now and that is why this bill is so important,” said Cooper.
The province has told reporters that homebuilding groups are not interested in the legislation and have an existing structure that works for them and their subtrades, so an exemption will be granted.
“That is a bogus reason,” said Cooper, adding the SCA will continue to push the province to remove the exemption before the law comes into effect. “Although our members are primarily non-residential, this bill should apply to everyone who builds in Saskatchewan.”
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