The Minister of Public Services and Procurement in Canada, Jean-Yves Duclos, has gone on to announce that the federal prompt payment legislation came into force on December 9, officially addressing long-standing construction sector concerns in terms of timely payments.
The government went on to state that the construction industry in Canada happens to be an essential driver of the economy, as it employs almost 1.5 million people. It is well to be noted that in 2016, industry stakeholders went on to raise the long-standing challenge of payment delays with the contracting chain. The new legislation looks to tackle payment deferrals along the contracting chain, making sure of timely payments for construction work as well as supporting the industry’s vitality.
Apparently, the federal prompt payment legislation makes sure that each party in the construction chain in Canada goes on to receive timely payment when it comes to construction work that’s offered for a project. The predictable as well as timely payment of contractors along with subcontractors enables significant federal infrastructure projects like work on buildings and bridges to get completed.
Notably, the collaborative effort of Public Services and Procurement Canada, construction industry stakeholders, along with other government departments has gone on to witness the development of the Federal Prompt Payment for Construction Work Act. Within the terms of the legislation, the federal government must go on to make payments within a span of 28 calendar days post a contractor submits an apt invoice. It is worth noting that the contractor will then have 7 days so as to pay its subcontractors, who will have another 7 more days to pay to their subcontractors, and so on throughout the contracting payment chain.
In August of this year, the government awarded a contract to ADR Chambers Inc. so as to provide adjudication services as well as oversee the adjudication process.
Minister Duclos went on to stress the importance of the construction industry in the Canadian economy, saying that they reached a prominent milestone to make sure that subcontractors who happen to work on federal government contracts happen to be paid on time.
He added that the coming into force of the said legislation will ease-off payment delays and also elevate the financial stability for small as well as medium-sized construction companies, thereby helping to support the above 1.5 million industry workers across difficult times for all Canadians.
Notably, the legislation grants existing construction contracts one year from December 9 in order to comply with the Federal Prompt Payment for Construction Work Act.
