Saskatchewan is the latest province to introduce prompt payment legislation to ensure trades and sub-trades get paid in a timely manner.
On Nov. 20 the Saskatchewan government introduced The Builders’ Lien (Prompt Payment) Amendment Act, 2018, which is designed to better protect and define the rights and obligations of owners, developers, contractors and subcontractors. It will create a payment process to establish reasonable timelines for providing payment for construction projects. It will also establish an interim adjudication process that can be used in addition to arbitration and litigation.
“While the Builder’s Lien Act was meant to balance the needs of contractors and their customers, over time it has become apparent there is some room for improvement,” said Justice Minister and Attorney General Don Morgan. “This legislation provides a robust set of timelines to ensure payments are made by owners and developers to contractors, and by contractors to subcontractors, in a timely manner.”
Under the proposed 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.
“We are pleased to see the government deliver on its commitment to protect Saskatchewan construction companies – mostly small businesses – from unreasonable delays in payment that harm them, their employees, and our economy,” remarked Saskatchewan Construction Association president and CEO Mark Cooper. “While we still need to review the entire Bill introduced today, we agree with the government that no one should ever face bankruptcy because they haven’t been paid for high-quality work they’ve already completed.”
Under this new legislation, 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.
Ontario has already adopted prompt payment legislation and similar laws are pending in other provinces and with the federal government.