Dartmouth, Nova Scotia – Prompt payment has long been an issue plaguing the construction industry. Provinces from coast to coast have pushed for or enacted legislation related to prompt payment.
The Construction Association of Nova Scotia (CANS) is hoping the provincial government will commit to final regulatory legislation by the end of the year.
“Our province needs a prompt payment solution that works for everyone, including tradespeople, contractors, government and consumers,” said Duncan Williams, president and CEO of CANS.
Over the years, provinces including Ontario, Saskatchewan, B.C., Manitoba, and Quebec have all voiced concerns over prompt payment. Over the years, even the federal government has tabled legislation regarding prompt payment in the construction industry.
In 2019, the Nova Scotia government took its first steps in the fight for prompt payment by proposing amendments to the Builders’ Lien Act. It would establish prompt payment rules, which ensures that contractors, sub-contractors, and suppliers in the construction industry are paid in a timely manner. But after a recent survey, it seems more work needs to be done as no such regulations have been put in place.
CANS represents around 800 companies throughout Atlantic Canada. As part of an industry-related survey, 58 Nova Scotia-based companies were polled. The results of the survey showed that 66 per cent reported not being paid on time, either “most of the time” or “all of the time” for work completed. Having previously conducted surveys in 2015, 2016 and 2018 regarding prompt payment, the figure above was 61 per cent in 2015, 70 per cent in 2016, and 77 per cent in 2018.
The survey also highlighted that 90 per cent of the respondents believed that delayed payment increases the cost of doing business and 54 per cent stated delayed payments reduced the ability to bid work and grow their business.
“Every year, 35 to 40 construction-related companies go bankrupt, resulting in 700-800 jobs lost and these impacts are increasing at an alarming rate,” said Williams.
CANS is proposing that if the provincial government enacts legislation, prompt payment will improve the money in the economy, increase fairness and transparency, lower the costs of construction projects, and allow contractors to bid more work.