By Anthony Capkun
April 13, 2015 – “Trade contractors have a high dependence on cash flow and, right now, the money isn’t trickling down to pay people who’ve completed work—even when there is no dispute about the work that’s been done,” said John Blair, director with the National Trade Contractors Coalition of Canada.
Representatives from Canada’s trade contract communities came together last week at the Prompt Payment Summit in Ottawa to discuss the “urgent need for federal and provincial governments to adopt prompt payment legislation”, reports NTCCC, adding the summit also focused on strategies to engage other concerned stakeholders who operate regionally and at the federal level.
Trade contractors perform more than 80% of all construction work in Canada, insists NTCCC, yet they “routinely receive late payments from general contractors, which has resulted in cash flow problems that discourage hiring, investments in capital and, in some cases, even bankruptcy”.
Due to prompt payment issues, NTCCC says fewer contractors can bid on projects, thereby driving employment down and keeping apprentices from training opportunities. The adoption of prompt payment legislation would stimulate the construction sector at no direct cost to government, adds NTCCC, “while bringing Canada in line with all other comparable jurisdictions”.
“South of the border, 49 of the 50 states have adopted prompt payment legislation,” explains NTCCC, adding that the United Kingdom, Ireland, Australia and New Zealand have enacted these laws. “Most recently, the European Union has adopted a Prompt Payment directive which all of its member states are required to translate into domestic law. Canada is the clear outlier,” continued NTCCC.
“This issue is hurting families, young people looking for work and costing small businesses money all across the country,” said Richard McKeagan, president of the Mechanical Contractors Association of Canada. “Governments should be aware that the lack of prompt payment legislation in Canada is a barrier to prosperity, and we’re proposing a painless fix.”
NTCCC was established in 2004 to provide an organized forum for Canada’s national trade organizations to share information and resources, and collaborate on issues of common interest. Among its members is the Canadian Electrical Contractors Association.