DATE: Thursday, May 12, 2016
TO: Members-Mechanical Contractors Association of Canada
FROM:Richard McKeagan, Chief Executive Officer
RE: Federal Prompt Payment Legislation
As a member of the Mechanical Contractors Association of Canada, you are also a valued member of the National Trade Contractors Coalition of Canada (NTCCC). We are pleased to advise you that NTCCC has been successful in getting Bill S-224 (Canada Prompt Payment Act) introduced at the Senate. On April 13th, the Act passed its first reading at the Senate and on April 19th, it received second reading at the Senate. To view the bill, go to http://mcac.ca/wp-content/uploads/2015/08/Prompt-Payment-Bill-S-224_1.pdf .
Although this is a huge step in the right direction, we need your assistance to help us move Bill S-224 forward. We ask that you contact your local/regional/provincial construction association and ask them: Are you supportive of Bill S-224 - Canada Prompt Payment Act?
For the construction industry, Bill S-224 will act as a catalyst encouraging and expediting provincial/territorial jurisdictions to enact their own legislation's which would apply to provincial/territorial government projects as well as those that are within the private sector. This would be similar to what happened in the United States. Some of the benefits associated with Bill S-224 include:
- Payment for work certified as being completed within 30 days
- Allow for progress payments on larger projects according to schedule draws again subject to certification that work has been satisfactorily completed to allow these draws
- Allow for interest and penalties to accumulate where payment within 30 days is not forthcoming
- Allow for contractors to suspend work where payment is not forthcoming for "unreasonable" periods without the contractor being in breach of contract
- The draft legislation contains the principle that payments for work certified complete down the construction chain should flow monthly, which itself is a principle embodied in the standard CCA and CCDC contracts
- It also makes reference to milestone payments as well as a dispute resolution process
- Prompt payment must be legislative as the common practice is that purchasers of construction altar standard contracts to get around obligations set out in policies and procedures
- General contractors, trade contractors, and suppliers alike working on construction projects deserve to be paid in a timely fashion for the work they have completed, like any other business operating in Canada.
- Canada is the only country in the Western world that has not adopted some form of prompt payment legislation. Are we different than the other countries? The answer is no!
- Prompt payment legislation has been adopted in the United States, the United Kingdom, Australia, New Zealand, Ireland, and the European Union has adopted a motion to require all EU members to enact prompt payment legislation. It is a worldwide issue!
- Canada needs to join these jurisdictions by enacting prompt payment legislation that supports small business construction owners by ensuring all contractors and employees are paid in a timely fashion for the work they have completed.
Please take a moment and reach out to your contact your local/regional/provincial construction association and ask them: Are you supportive of Bill S-224 - Canada Prompt Payment Act?
We promise to keep you updated of our progress as we work to see Bill S-224 be enacted as legislation in Canada.
Richard Keagan, CEO
Cc: Provincial/Zone MCA's
Board of Directors