< Browse more articles

Nova Scotia has now joined several other provinces and the Federal government in taking action on prompt payment rules in the construction industry. Nova Scotia is proposing to rename its Builders’ Lien Act, and during March it introduced amendments that will help ensure contractors, subcontractors and suppliers are paid for their services based on clear timelines set out in regulation.

The Builders’ Lien and Prompt Payment Act, as amended, will create an adjudication process to resolve disputes faster and a rate of interest for late payments.

“The construction industry is important to the economic growth of the province and to the well-being of the people who work in the industry,” said Justice Minister Mark Furey, “This legislation… will help companies meet payroll, purchase supplies and cover other expenses in a timely fashion.”

Nova Scotia is still early in the process, compared with some governments in Canada. Before finalizing legislation it will consult with contractors, sub-contractors, suppliers, trade unions, engineers, road builders, Canadian Federation of Independent Business, municipalities, the Nova Scotia Federation of Municipalities and other interested stakeholders.

The HRAI has been working on prompt payment changes with Canada and the provinces, along with the National Trade Contractors Coalition of Canada (NTCCC), The Canadian Construction Association (CCA), the General Contractors Alliance of Canada (GCAC), and Public Service and Procurement Canada (PSPC).

SPRING BUDGET REAFFIRMS FEDERAL LEGISLATION

Canada’s Finance Minister, Bill Morneau, included a commitment to pass prompt payment legislation in the Fall Economic Statement, tabled on November 21, 2018; and reaffirmed those intentions in the spring budget on March 19, 2019.

ONTARIO & QUEBEC

Among provinces, Ontario and Quebec were the first to move. In Ontario Bill 142 The Construction Lien Amendment Act was passed in December 2018, with some of its measures (Holdback Payments and Preservation and Perfection of Liens) coming into force this month, and the remainder of the requirements on October 1, 2019.

Quebec moved in December of 2017, adopting Bill 108, which has now led to a pilot study. The pilot is expected to continue for at least several more months, leading ultimately to finalized regulations.

MANITOBA & SASKATCHEWAN

In Manitoba Bill 218, The Prompt Payments in the Construction Industry Act passed second reading in April last year, sending it to committee. In November the Manitoba Law Reform Commission completed a review and issued its final report on the Act and proposed prompt payment rules. Final reading is expected soon.

Similarly, in Saskatchewan Bill No. 152, an Act to amend The Builders' Lien Act was introduced on November 20, 2018. It is expected to receive second reading soon, and be finalized during the spring 2019 legislature session. Development of a regulatory framework will follow, with the possibility that the legislation could be in force by January 2020.

Advocacy efforts are also underway to encourage British Columbia and Alberta to move in the same direction. These governments are all monitoring each other and seem to be developing a more or less harmonized set of rules.

New regulations generally include a built-in adjudication process, and requirements that once an invoice is received, owners must pay general contractors within 28 (or 30) days. After that, general contractors are required to pay the sub-contractors within a prescribed period, seven days in Ontario. Generals and sub-contractors receive mandatory interest on late payments and can suspend work on a project if not paid.

For more information on Prompt Payment Legislation, contact Scott Paap, spapp@hrai.ca.