Prompt Payment Act Set for Final Review in Senate Committee

March 17, 2017

Bill S-224, the Canada Prompt Payment Act, has undergone a rigorous review at the Senate Standing Committee on Banking Trade and Commerce since February 2, and is ready to undergo clause-by-clause review before a vote to send the bill to the House of Commons.

Supporters of the bill have sent thousands of letters to senators and members of Parliament to demonstrate the widespread need to address payment delays in Canada’s construction sector with enforceable legislation.

The National Trade Contractors Coalition of Canada (NTCCC) has appeared before the committee to speak in favour of the bill alongside witnesses representing tradespeople and suppliers.

Over the course of this study, criticisms have arisen from general contractors about the implementation of federal legislation on top of legislation currently being developed in Ontario as a result of the Construction and Lien Act Review, which was undertaken by Bruce Reynolds and Sharon Vogel. Many NTCCC members are also members of Prompt Payment Ontario (PPO) and have expressed their support for the Reynolds/Vogel Report and suggest that it be the template for prompt payment legislation. Bill S224 was drafted prior to the release of the report.

“Our members have reviewed the concerns of the general contracting community brought forward to the Senate Committee and made many suggested amendments in line with what they are calling for,” says John Galt, Chair of NTCCC. The organization has worked with senators to encourage those changes.

“This legislation is too important to be voted down because of crossed wires,” says John Blair, Executive Director of the Canadian Masonry Contractors Association “The bill does nothing to force the crown into any different relationship with subcontractors than what already exists. We will work with government to rectify any confusion about the intent of this bill and the applicability of contract law.”

Louis Davis, Senior Counsel, Constitutional, Administrative and International Law Section for Justice Canada, stated at committee that “it is questionable whether Bill S-224 is constitutional since regulation of construction contracts is generally a matter of provincial jurisdiction.” However, Gerald D. Chipeur, a partner with Miller Thompson, provided a legal opinion that Parliament has jurisdiction to enact Bill S 224 under section 91(1)(a) of the Constitution Act. “The only way that this bill is, in my view, bullet proof is because it is limited to federally owned property.”

Other nations that have prompt payment legislation at the federal level include the U.S.A, U.K., Ireland, Australia and New Zealand. Nobody appearing before the committee has made an argument about Canada’s uniqueness, or given a reason why our construction sector should operate differently than those in other Western, industrialized countries.

“We want the Government of Canada to take a leadership role and pass prompt payment legislation, in respect to work on federal projects,” says Galt. “The government can show Canadians that it values paying people who do good work in a prescribed amount of time. It would result in a more proportionate and equitable distribution of risk and would benefit taxpayers at no cost to the government.”

The National Trade Contractors Coalition of Canada (NTCCC) provides an organized forum for Canada’s national trade organizations to share information, resources, and to collaborate on issues that are of common interest. The membership currently comprises the Canadian Electrical Contractors Association, Heating Refrigeration and Air-Conditioning Institute of Canada-Contractors Division, Canadian Roofing Contractors Association, Canadian Automatic Sprinkler Association, Canadian Masonry Contractors Association, Mechanical Contractors Association of Canada, Interior Systems Contractors Association, Thermal Insulation Association of Canada, Sheet-Metal Contractors Association, and the Canadian Institute of Steel Construction.

Find out more about Bill S0224: https://openparliament.ca/bills/42-1/S-224/.