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Saskatchewan government scraps residential prompt payment exemption

Russell Hixson
Saskatchewan government scraps residential prompt payment exemption
SASKATCHEWAN POLYTECHNIC — A trades student practices their skills at Saskatchewan Polytechnic. The province recently backed down from plans to exempt the residential sector from prompt payment legislation.

The homebuilding sector will not be exempt from Saskatchewan’s prompt payment legislation after heavy pressure from the construction industry.

“I think it was the construction industry and pushes from us, other groups and individual companies explaining the heartache and challenges they face that convinced the Minister of Justice Don Morgan to do the right thing,” said Mark Cooper, president of the Saskatchewan Construction Association (SCA). The provincial legislature unanimously passed prompt payment legislation last spring. Since then, the province has been working on the regulations that will guide the implementation of that legislation when it comes into force on April 1, 2021.

In the months leading up to Morgan’s decision on the exemption, several major stories broke highlighting issues in residential construction. These included a story about home developers failing to pass on an owner’s payments to tradespeople. The dispute has resulted in 11 companies putting liens on the project, totalling $175,000.

Cooper praised Morgan for introducing the legislation, getting it passed and always listening to the industry’s concerns when the exemption was being considered.

“He came around to see things pretty much the way everyone sees it,” said Cooper. “That’s good. It’s the way the government is supposed to work. And when the government makes a good decision, we should applaud them. Leaving that sector in the legislation we think is a big win for the industry and all the contractors that work in all parts of construction.”

According to the SCA, a residential construction exemption would have been disaster as is it is the very sector where contractors are most vulnerable to late payment.

“If you exempt the most vulnerable, they will be exposed to risks they don’t deserve,” said Cooper. “There is no good reason at all developers can’t pay their bills in a timely manner.”

The new 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.

Cooper said the SCA will now be working with Prompt Payment Saskatchewan and other partners to deliver training of all industry stakeholders regarding the legislation and its implications before the changes go into effect.

The association will also work to set up the adjudication authority.

The SCA states the authority will be the place that payment disputes will be settled quickly and affordably using construction experts.

Cooper added they will continue to fight to make sure that the legislation applies to as much of the construction industry as possible. He noted there are still other exemptions being studied that may need to be repealed.

These exemptions include the mining sector, SaskPower projects, engineers, architects and land surveyors.

“We hope that every construction project in Saskatchewan will be subject to prompt payment,” said Cooper.

The Saskatoon and Region Home Builders’ Association, which represents the region’s home construction industry, did not respond to requests for comment.

To hear more of Cooper’s views, click here.

 

Follow the author on Twitter @RussellReports.

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