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In June of 2017, Public Services and Procurement Canada (PSPC) took an important step in an effort to increase efficiency and cash flow on federal construction projects. The department will publicly disclose payments made to prime contractors on its website so that subcontractors know when they can expect payment. This information will be made available for all construction contracts over $100,000 on the PSPC website.

The National Trade Contractors Coalition of Canada (NTCCC) of which HRAI is a member, continues to focus on passing legislation that will end the systemic practice of payment delays from prime contractors to sub-contractors, that continues to hurt the construction industry and the overall economy.

The federal government pays 90% of its invoices in accordance with the mandatory 30-day period. The real issues for sub-contractors arise when prime contractors withhold payments for completed work. NTCCC has estimated that the average collection period for sub-contractors from prime contractors went from under 58 days in 2002 to 71.1 days by 2012. Many in the industry believe that figure has grown still. These delays drive costs up for taxpayers and often result in lay-offs across the industry. Many trade contractors have considered insolvency or have gone bankrupt due to late payments.

Canada is an outlier among developed countries like the U.S., U.K., Ireland, Australia and New Zealand which all have prompt payment legislation in place.

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