2019 budget: Federal government says it will introduce prompt payment leglislation


Finance Minister Bill Morneau confirmed in his March 20 budget speech the federal government’s commitment to implementing federal prompt payment legislation and adjudicative measures.

Trade groups including the Mechanical Contractors Association of Canada (MCAC) and the Canadian Institute of Steel Construction (CISC) expressed enthusiasm after the announcement.

The implementation of federal prompt payment legislation will provide a structured process that ensures all payments flow down the construction supply chain promptly. Additionally, an added adjudication process will act as a mechanism to reinforce that payments be made on time. This legislation will reduce risk in business and provide a secure playing field for trade contractors who perform 80% of the work in Canada’s construction sector. Under a prompt payment system, they will be able to better plan for the future and bid on more projects.

“The Canadian steel construction industry fully supports the 2019 budget that includes prompt payment legislation for Canadian Federal construction projects,” says Ed Whalen, president and CEO of the CISC. “Prompt Payment legislation is the single most important Bill for the security of families employed in construction. It will protect jobs, strengthen small businesses, stimulate training, and improve productivity. Hats off to the government for listening to the true builders of the middle class.”

In close partnership with the National Trade Contractors Coalition of Canada (NTCCC) over the last decade, the CISC has been a leading organization in advocating the need for prompt payment legislation. Delayed payments have been one of the biggest challenges in the Canadian construction industry due to the negative impacts that recurring cash-flow problems have had on the construction supply chain, trades people, Canadian families, and the overall construction economy.

“The federal government is the single largest construction-owner in Canada, and they have now set the tone that prompt payment should be an industry standard, the CISC statement said. “We applaud their ongoing efforts in bringing federal prompt payment legislation to Canadians and acknowledge their unwavering support of this initiative. With this action being a federal priority, we look forward to seeing provincial governments adopt prompt payment legislation of their own.”

Meanwhile, while appreciating the prompt payment legislation, the Canadian Construction Association (CCA) was less enthusiastic about the overall budget, saying in a statement that it is disappointed that the federal government has not taken more concrete actions to restore investor confidence in Canada.

“CCA had wished to see a fiscal remedy for the ongoing steel and aluminum tariffs, some relief for our heavy construction sector that is facing new challenges with carbon pricing, and a strong commitment to improving the flow of infrastructure funding,” said CCA president Mary Van Buren.

Addressing the workforce shortage issue is another key priority for the construction industry. The CCA is appreciative of the federal government’s recognition of the importance of a skilled, diverse and tech-savvy workforce in Canada and is highly supportive of the commitment of $46 million over four years for Skills Canada Funding, the promotional campaign to attract young Canadians to the skilled trades and the increased funding for co-op placements.

“By creating workplace opportunities for students in construction during their studies, we hope to inspire the next generation who will build our future sustainable communities,” Van Buren said.. The CCA also looks forward to participating in the announced Apprenticeship Strategy to ensure that the existing programs adequately address barriers to entry and other related workforce initiatives.

‘’The CCA continues to applaud the efforts of the government on the Investing in Canada plan, particularly the $2.2 billion top-up to support municipal and local priorities,” she said.  “We believe these proposed measures will indeed help ‘Build a better Canada’ and look forward to working with the government on their timely adoption.”


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