“We are proud of the impact and leadership that the
CISC and its members and associates have had in champi-
oning Bill S-224.”
“Delayed payment is one of the biggest issues impact-
ing the Canadian construction industry, taking billions out
of the economy, and putting thousands of middle class
families at risk of job losses and bankruptcies,” CISC says
in its news release. “According to industry data, $46 billion
in payments remained unpaid past a 30-day period which
represents about 16 per cent of the estimated $285 billion
in annual construction activity in Canada.”
“Today we are one step closer to securing the long-term
future of our industry and the livelihood of millions of mid-
dle class Canadians that depend on us,” CISC says. “We
urge the House of Commons to strongly consider the dev-
astating impacts of delayed payments on our industry and
on the middle class families that we support, and for the
benefit of all Canadians, pass Bill S-224 with overwhelming
support.” Meanwhile, the CCA recently outlined progress in a year-
old joint government-industry working group to facilitate
prompt payment discussions on federal construction proj-
ects. See the interim status report here (page xx).

“The interim status report is about what the working
group is doing, where we are currently and what the gov-
ernment has more or less agreed to do with CCA,” CCA
president Michael Atkinson said in a published report. “It’s
an interim report only.”
“We identified more than a dozen potential areas of so-
lutions to look at prompt payment on federal construction
projects, some of which are contractual and some of which
are non-contractual. We’re just a little more than halfway
through them so the interim status report summarizes
where we are to date but we still have a number of other
items on our agenda.”
The CCA and the two government contracting authorities
- Public Services and Procurement Canada (PSPC) and De-
fence Construction Canada (DCC) – agreed in April 2016 to
6 – June 2017 — The Canadian Design and Construction Report
form the joint working group, including CCA prompt pay-
ment task force chair Ray Bassett, trade contractors, spe-
cialty contractors, general contractors and services
providers. “Both PSPC and DCC have agreed not only to adopt
these principles advocating for a prompt payment culture
on federal construction projects, but are going to insert
them in all of their front end documents for their construc-
tion tenders,” Atkinson was quoted as saying.

The interim report’s priorities include transparency, a
statement of principles, fair payment terms, government
services standards and education.

PSPC and DCC will begin posting on a public website
the dates on which they issue payments to their prime con-
tractors for construction contracts above $100,000.

“Essentially the thinking behind this is once the supply
chain knows that a payment has been made by the owner,
in this case the federal government to the prime contractor,
they at least know that the payment has been made and
then can take the recourses within their own contract and
their own bailiwick to ensure payment is made promptly,”
Atkinson was quoted as saying. “Anyone, not just suppliers
and contractors on that project but pretty well anyone...if
you have the project number or the contract number you
would be able to go to a public website and see the dates
on which payments have been made on these contracts.”
Atkinson said that the working group is still holding
meetings and considering several other initiatives including
a review of holdback requirements and a review of the dis-
pute resolution process. Overall, he was quoted as saying
he hopes the working group will raise awareness and sup-
port more promptness of payment throughout the chain.

“The fact that people will know the federal contracting
authorities are shining a light on it through measures like
transparency, like including their commitment to prompt
payment principles being put right in the front end docu-
ments of all the construction contracts...that may well go a
long way to improving practices on federal construction
projects,” Atkinson said.




New Ontario
Construction Act takes shape
Prompt payment, adjudication and lien reform
among 98 recommendations accepted by
provicial government, says Bruce Reynolds
Canadian Design and Construction Report staff writer
Ontario’s new Construction Act, which will update con-
struction lien legislation and set out adjudication and
prompt payment rules, should be introduced this spring
and, if all goes according to plan, become law by the end
of the year, says Bruce Reynolds.

Reynolds, with Sharon Vogel, conducted a thorough re-
view of the Construction Lien Act on retainer of the provin-
cial government, providing his report to the provincial
attorney general last May. Speaking at a panel discussion
at the Ontario General Contractors’ Association (OGCA)
Symposium in early April, he said the government agreed
to implement 98 of his report’s 101 recommendations, and
then retained him to assist the legislative drafters in creat-
ing the new law.

He was asked by the government to consult with the in-
dustry on replacing the Construction Lien Act after an al-
liance of trade contractors and associations sought to
introduce provincial prompt payment legislation, pushing a
private member’s bill (Bill 69) through the legislative
process until other stakeholders stepped in and encour-
aged the government to drop that legislation.

The new legislation will mandate prompt payment, set-
ting out interest payment requirements for delayed pay-
ments. As well, it will “focus on the modernization of the
(Construction Lien) act that hasn’t been looked at in a holis-
tic way since the early 1980s,” Reynolds said. A third com-
ponent of the legislation will include considering the
“efficiency or lack thereof of dispute resolution” in the con-
struction industry.

“Our instructions included adopting an approach that
was transparent, inclusive, and which was aimed at being
collaborative,” he said.

Vogel and Reynolds identified 60 stakeholder groups, es-
sentially recognizing “if anyone identified themselves as a
stakeholder, they were a stakeholder.”
The reviewers identified more than 80 issues and ad-
dressed 60 of them in the package, and then held further
consultations, including “40 face to face meetings” to make
a total of 101 recommendations, 100 numbered and one
not (the name of the legislation: “Construction Act: An Act
Respecting Security of Payment and Efficient Dispute Res-
olution in the Construction Industry.”
In an interview, Reynolds said the three recommenda-
tions that the government decided not to include in the law
included: • allowing individual lots in subdivisions to be the defin-
ing point for construction lien actions (Reynolds said
certain stakeholder interests were strong enough to
have this provision removed from the draft legislation.);
• a proposal for common elements in condominium
buildings to be required to have a single PIN to which
liens could attach, and the interests of all unit owners
would be subject to this lien (he said that the province
had recently revised the Condominium Act and didn’t
want to revisit the condo law at this time); and
• the introduction of a pilot project for project trust ac-
counts “utilizing a representative number of projects in
the public sector.”
He said “we are now on draft 10 of what will be part of
the ultimate amending legislation,” with a review of its key
elements of modernization, prompt payment and adjudica-
tion. “We think we’re getting there, with legislation both with
consistency for regulations and that will balance fairly the
interests of the various segment of the industry,” he said.

“We’re hopeful that the bill will get first reading before
the end of the session, go to committee, and in the fall,
have second and third reading,” Reynolds said. He urged
stakeholders to “support the project in committee” before
the legislation receives final reading and is proclaimed into
law. The Canadian Design and Construction Report — June 2017 – 7