Ontario Construction News staff writer
The Canadian Institute of Quantity Surveyors (CIQS) says the recent enactment of the Federal Prompt Payment for Construction Work Act is a crucial step towards fostering a fair and transparent construction industry.
All existing construction contracts will have one year to comply with the new rules.
“This legislative milestone was a focal point during CIQS’s most recent engagements on Parliament Hill this past October where we met many supportive parliamentarians from various parties,” CIQS said in a statement.
“We look forward to continued cooperation with those parliamentarians and others in shaping policies that contribute to the success and sustainability of our dynamic industry.”
New legislation came into force on Dec. 9, to address long-standing construction industry concerns, including the timeliness of payments, protecting vital construction jobs and making it easier to do business with the Government of Canada.
Public Services and Procurement Canada collaborated with key construction industry stakeholders, as well as other government departments, to develop federal prompt payment legislation, which led to the Federal Prompt Payment for Construction Work Act. Under the terms of the legislation, the federal government will have 28 calendar days to pay after the contractor submits a proper invoice. The contractor will then have 7 days to pay its subcontractors, subcontractors will have another 7 days to pay their sub-subcontractors, and so on down the contracting payment chain.
The federal prompt payment legislation aims to ensure that each party in the construction chain receives timely payment for the construction work provided for a project. It is the predictable and timely payment of contractors and subcontractors (and sub-subcontractors) that allows important federal infrastructure projects, such as work on buildings and bridges, to be completed.