Prompt Payment Bill Headed to Committee

In what is being billed as a win-win for the province’s construction industry, landmark prompt payment legislation has been tabled at Queen’s Park. The private member’s bill, introduced by Vaughan MPP Steven Del Duca, sets out various rules and requirements in relation to payments made under construction contracts.

It is mirrored after a framework agreement negotiated by the Ontario caucus of the National Trade Contractors Coalition of Canada (NTCCC) and the Ontario General Contractors Association (OGCA).

The bill, entitled Prompt Payment Act 2013, received first reading May 13 and is now headed to the Ontario legislature’s standing committee on regulations and private bills after passing second reading on May 16.

“I am proud to have brought forward a bill that produces significant measures to improve payment standards within the construction industry,” Del Duca said in a statement. “This is an important bill which addresses issues that members from all sides of the house can and should support.”

If passed, Ontario will be the first jurisdiction in Canada to have adopted such legislation.

“The intent of this is that based on fair contract conditions, if you do the work and you do it properly, you get paid in a timely manner,” said OGCA president Clive Thurston, who is optimistic that the bill will be passed, given that research indicates that there is support from all three provincial parties for such legislation.

“We’ve seen too many circumstances where monies are being withheld, in our opinion wrongly, and in some cases we believe, illegally.”

Thurston said payment legislation has become increasingly critical, with the failure of successive governments to update the province’s construction lien act. He said the lien act has major flaws, “which allow people not to get paid.”

The blueprint for the legislation was the result of more than a year of collaboration between the trade contractors’ coalition, which represents 11 associations, and the OGCA.

Sandra Skivsky, director of marketing and business development for the Canadian Masonry Contractors Association, a member of the NTCCC, said prompt payment is a win-win for everyone, including owners, contractors, sub-trades, suppliers and workers. It also benefits the Ontario economy as a whole.

In a statement issued on behalf of the NTCCC and the OGCA, Skivsky said prompt payment legislation will reduce financial risk and ensure that all contractors have rights to make business decisions based on fair and standard contract terms. This will especially help many small businesses in construction, she said.

She said the trade contractors’ coalition and the OGCA are committed to the language and framework developed for prompt payment and see the introduction of the act “as a positive and progressive step” to strengthening the construction industry in Ontario.

Concerns over prompt payment are not new. Industry officials note that payment periods throughout the supply chain have been routinely getting longer.

The proposed bill has received a thumbs-up from key industry leaders. “Prompt payment legislation is based on the fundamental principle that everybody deserves to get paid on time,” said Ashley De Souza, vice-president of policy & government relations at the Council of Ontario Construction Associations.

“It will create more construction jobs, encourage greater use of apprentices, enable more investment into machinery and equipment and lower the cost of construction.”

Geoff Wilkinson, executive director of the Ontario Road Builders’ Association (ORBA), said late payment practices have a significant negative impact on the construction industry and the economy.

“Late payment practices and the associated consequences are being experienced increasingly by ORBA members working on large alternatively financed procurement projects and we are pleased to see that action is being taken to address this issue.”

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