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Federal budget speech supports prompt payment legislation for trades


March 21, 2019
By Peter Saunders
Photo courtesy Bill Morneau

March 21, 2019 – In this week’s federal budget announcement, finance minister Bill Morneau (pictured) further solidified the Liberal government’s commitment to implement ‘prompt payment’ legislation and adjudicative measures for Canadian trade contractors.

As the term suggests, such legislation would create a structured process to ensure all payments flow promptly down the construction supply chain, where delayed payments have long been a systemic issue. An added adjudication process, meanwhile, would act as a mechanism to reinforce on-time payments.

The National Trade Contractors Coalition of Canada (NTCCC)—comprising 10 organizations, including the Canadian Electrical Contractors Association (CECA)—has advocated over the last decade for such legislation, as it would reduce risk in business and provide a more secure playing field for contractors, who perform 80% of the work in Canada’s overall construction sector. Under a prompt payment system, they will be able to better plan for the future and bid on more projects.

“Prompt payment legislation will protect jobs, strengthen small businesses, stimulate training and improve productivity,” says Ed Whalen, president and CEO of the Canadian Institute of Steel Construction (CISC), which has advocated in partnership with NTCCC. “Hats off to the government for listening to the true builders of the middle class.”

To date, Bill S-224, dubbed the Canada Prompt Payment Act, has gone through three readings and been passed by the Senate without amendment. Next, it will be deliberated by the House of Commons.

“The federal government is the single largest construction-owner in Canada and has now set the tone that prompt payment should be an industry standard,” reads a CISC press release. “We applaud their ongoing efforts in bringing legislation to Canadians and acknowledge their unwavering support of this initiative. With this action being a federal priority, we look forward to seeing provincial governments adopt prompt payment legislation of their own.”