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Saskatchewan to Introduce Prompt Payment Legislation

Another Canadian province is updating legislation to help the construction industry. Initial amendments to Ontario's Construction Lien Act went into effect July 1, increasing lien time tables to give contractors and subcontractors an extra 15 days to preserve a lien. New rules to prompt payments will go into effect in fall 2019. Saskatchewan is following suit with a similar prompt payment legislation.

According to the Saskatchewan Construction Association (SCA), legislation will be introduced this fall (the Legislative Assembly of Saskatchewan resumes Oct. 24). "While introduction of legislation is a major step in the right direction, it marks the next phase in this work, not its conclusion," said SCA President and CEO Mark Cooper, MBA, PMP, in a release.

Cooper expects the legislation process to be completed in spring 2019 but said more needs to be done. Education and training will be needed for those in the industry as well as consultants and lawyers that work alongside the contractors and subcontractors.

The average time to receive payment in construction is more than 70 days, according to Cooper. Ontario's new law requires owners to pay general contractor invoices within 28 days of receiving them. General contractors are then required to pay subcontractors within seven days after receiving the payment from the owner. The same is said for subcontractors that pay other subcontractors.

Manitoba is also pushing prompt payment legislation. The Prompt Payments in the Construction Industry Act (Bill 218) had a second reading in April.

-Michael Miller, managing editor

​For the latest construction credit news, visit NACM's Secured Transaction Services.

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Wednesday, 12 August 2020