Nova Scotia and Saskatchewan are moving forward with prompt payment legislation.
On April 11 the Nova Scotia government proposed amendments to the Builders’ Lien Act that establishes prompt payment rules ensuring that contractors, subcontractors and suppliers in the construction industry are paid in a timely manner.
The legislation will provide the authority for establishing an adjudication process to resolve disputes quicker when deadlines are not met. The changes will include a rate of interest for payments not made, reports the Nova Scotia government
The new legislation will now be titled Builders’ Lien and Prompt Payment Act. More regulation-making powers will be given to the Governor in Council to support the prompt payment and adjudication process provisions.
“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 Mark Furey, justice minister and minister responsible for the Builders’ Lien Act. “This legislation and the regulations to be created under it will clearly set out the prompt payment responsibilities of all parties on a construction project.”
Consultations will be held this spring with contractors, sub-contractors, suppliers, trade unions, engineers, roadbuilders, the Canadian Federation of Independent Business (CFIB), municipalities, the Nova Scotia of Municipalities and other interested parties.
“We are extremely pleased that Nova Scotia will bring in legislation that establishes minimum standards and clearly articulates the rights and responsibilities of all parties to a construction project,” said Duncan Williams, president of the Construction Association of Nova Scotia. “Based on our research, delayed payment is having a growing negative impact on businesses, workers and our economy.”
Saskatchewan adopts prompt payment
On the other side of the country, Saskatchewan passed its prompt payment bill on May 2, which will become part of the Builders’ Lien Act. Bill 152 is expected to be proclaimed by the lieutenant governor sometime within the next year, reports Saskatchewan-based lawyers Caroline J. Smith, association lawyer for McKercher LLP., and Collin K. Hirschfeld, partner lawyer at McKercher. The bill received royal assent on May 15.
Under the new legislation, owners and developers will be required to provide payment within 28 days of receiving a formal invoice for construction services. Contractors will be required to provide payment to subcontractors within seven days of receiving a payment from the owner or developer.
The person required to provide payment can also dispute the payment through the interim adjudication process if they feel an invoice is inaccurate. By providing a more robust process and clearer guidelines, the government hopes to reduce the number of payment delay cases that end up in court.