Bleak future for prompt payment in B.C.

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Provincial governments in Ontario, Saskatchewan, and Manitoba have either adopted or are looking at prompt payment legislation, as is the federal government. But, for British Columbia, there doesn’t seem to be an immediate future.

In 2017, the Mechanical Contractors Association of British Columbia (MCA-B.C.) reached out to Attorney General David Eby of B.C. In this letter, more than 35 various trade organizations pushed for legislation. The response indicated that the government is busy and there is little chance for prompt payment to be included any time soon, reported Dana Taylor, executive vice president and CEO of MCA-B.C.

The B.C. government expressed interest in implementing legislation, but not in the foreseeable future, he added. “It would have been easier to address if they had simply said no. But they didn’t because they want it.”

The group is hoping for legislation similar to that in Ontario, he added. Ontario was the first province to pass prompt payment legislation with Bill 142, the Construction Lien Amendment Act. The bill passed in the provincial legislature Dec. 5. It will be introduced in installments with the final provisions and adjudication in full-effect by October 2019.

It establishes clear payment timelines for all parties involved in a construction project. The legislation states that once an invoice is received, owners are required to pay general contractors within 28 days. After that, general contractors are required to pay the sub-contractors within seven days. An adjudication period is in place to settle disputes. General contractors and sub-contractors receive mandatory interest on late payments and can suspend work on a project if not paid.

A workable adjudication process is a must, said Taylor. “The adjudication is the important piece for a lot of people. And because we haven’t done it here in Canada before I think there is some hesitancy on that as well. But I think that with any type of new legislation there is misinformation that makes its way through the system and concerns about what is a legitimate delay in payment.”

The current system cannot handle everything properly, added Taylor. “The rest of our business environment doesn’t support prompt payment. The only remedy is the court system, and the court system is costly and backs up. All that will do is make it 90 days, two years, or no payment at all depending on the judgement.”

The next steps will be to continue running the prompt payment B.C. website, an online letter writing campaign, and surveying data and sending to government officials.

For now, B.C. seems to just have to wait and see. MCA-B.C. plans to continue working with key government officials to try and make progress on prompt payment.

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