Journal of Commerce | Russell Hixson | October 26, 2020
Proposed prompt payment legislation for the construction industry is expected to go into effect next June, construction industry leaders said.
Terry Parker, executive director for the Building Trades of Alberta, said the legislation would be implemented following an awareness campaign that is to run from now until March 2021.
Parker and other industry stakeholders believe the changes will make for a healthy industry.
“It’s a positive step. We are very excited to see them move in this direction. (Late payment) directly impacts our contractors and in turn has the potential to impact our members,” said Parker.
He explained when companies don’t get paid or go bankrupt, union worker pay and benefits can get tied up. Parker said the unions worked closely with the province and other industry stakeholders to guide the legislation.
“There was a lot of unity in the industry,” he added. “I want to thank the government for moving forward on this legislation. It makes for a healthy industry and we are glad to see the government be proactive in helping all contractors in the industry.”
Bill Black, president of the Calgary Construction Association, also praised the province, noting officials took the stakeholder consultation process seriously.
“We are deeply appreciative of how much they listened to what the industry had to say,” said Black. “They did an incredible job of listening and interpreting. The end result is something we believe is very good for our members, owners, contractors, jobs and for the flow of cash so people can keep their businesses operating.”
Black added that for Alberta, which has been hit with slumped oil prices as well as the COVID-19 pandemic, the legislation is a bright spot.
“A lot of the trades and other companies in our industry in Alberta really need some good news,” he said. “This is an old issue and at least it’s some news that progress has been made and it’s nice to be able to share good news in such tough times.”
The legislation has the support of many other major industry groups, including the Alberta Construction Association (ACA), Calgary Women in Construction, the Alberta Trade Contractors Coalition, Concrete Alberta, the Alberta Roofing Contractors Association (ARCA) and the Electrical Contractors Association of Alberta.
“The Alberta Roofing Contractors Association appreciates the open and dynamic consultation process which included participants from the entire construction community,” said ARCA executive manager Karen Rutherford in a press release. “ARCA is looking forward to seeing this legislation enacted, which we believe will be an important tool in assisting independent contractors to manage their businesses effectively.”
Frederick Vine, chair of the ACA, stated in a release that the association’s members are supportive of the changes.
“These mechanisms help timely completion of construction projects, ensure our employees are not impacted by payment delays and provide better value for taxpayers on public infrastructure projects,” he said.
The proposed legislation, which transforms the Builders’ Lien Act into the Prompt Payment and Construction Lien Act, would require payment within 28 days, extend lien filing deadlines, prohibit “pay-when-paid” clauses and establish a system to adjudicate disputes.