< Browse more articles

On September 26, 2016, the Ontario Government released the Construction Lien Act Review Report. The Review recognizes that delinquent payments in the construction sector lead to many issues beyond financial instability. Employment rates are lower and apprenticeship opportunities have been decreased due to financial risk. Moreover, some trade contractors resort to off-loading payroll risk by increasing the number of self-employed, independent operators in their workforce, thus increasing the underground economy. As late payment puts employers at risk it also increases the risk to workers’ pension and benefit plans.

Moreover, the increase in late payment risk in the construction industry not only has negative consequences for the workers and businesses, but also the provincial government. Government construction costs are higher because trade contractors must incorporate the risk of late payment into their bids. The increased risk also reduced the amount of work trade contractors can afford to take on, thus reducing the bidding pool for projects.

The report recommends legislating a prompt payment regime for the public and private sectors.  The next steps will be for industry stakeholders to work with parliamentarians on implementing prompt payment legislation in Ontario.

For more information contact Scott Papp, Manager, Divisional Programs (Contractors) at 1-800-267-2231 ext. 233 or spapp@hrai.ca