November 24, 2009

National Trade Contractors Coalition lobbies for changes to Ontario’s Lien Act

PATRICIA WILLIAMS

staff writer

The National Trade Contractors Coalition of Canada (NTCCC) has taken its campaign for prompt payment to Queen’s Park, calling on the Ontario government to help ensure the success of small businesses by creating the necessary legislative framework.

As a first step, the coalition suggested making amendments to the Construction Lien Act, as proposed by the Council of Ontario Construction Associations and allied groups. Amendments were suggested in June.

“We see this (lien act amendments) as a catalyst for introduction of prompt payment legislation,” said John Blair, executive director of the Canadian Masonry Contractors Association. “Amending the act is advancing the larger cause.”

Fourteen members of the coalition, which represents nine national and trade contracting organization, met last week with MPPs, advisers and Premier Dalton McGuinty.

During the normal course of business, a trade contractor carries substantial up-front costs to complete a particular job, the NTCCC said in a statement later. This includes equipment, materials, and employee salaries. These costs are substantial, “even if they are expected.”

To a certain extent, all businesses are forced to carry some costs while they wait for payment, the NTCCC said. In most industries, payment is received when goods or services are delivered or along some other predictable schedule. In the construction industry, however, “it is a tolerated practice” that there are no strict timelines for payment of services delivered.

“Even at the best of times, businesses rely on being promptly paid for services delivered,” said Blair, chair of the NTCCC’s prompt payment committee. “Delays increase costs, as we are forced to borrow to cover operating expenses. But a much more worrisome, and very real concern, is that delayed payments will limit our ability to carry out future business. This can inevitably lead to businesses closing and loss of jobs.”

NTCCC believes that improvements in this regard can be achieved by amending the lien legislation.

Proposed amendments include clarifying what constitutes an “improvement” under the act, continuing a contractor’s lien rights for a longer period of time and protecting liens in the event of a discharge of action. These reforms are also supported by associations representing highrise builders.

“By so ensuring prompt payment, Ontario will be at the vanguard of a national effort to provide financial stability for trade contractors,” Blair said.

“Such stability will protect jobs across the province, reduce the costs associated with construction and help thousands of small businesses remain successful.”

Blair said coalition members also took advantage of the close to 30 Queen’s Park meetings to promote use of standard contract documents.

Print | Email | Comment