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November 5, 2010

Council of Ontario Construction Associations calls for new prompt payment legislation

The Council of Ontario Construction Associations (COCA) is set to champion advocacy efforts for new provincial prompt payment legislation to help strengthen Ontario’s construction industry.

“It is about establishing a new cultural norm for the industry in Ontario,” said David Zurawel, COCA’s vice-president of policy and government relations.

“It is a very pervasive problem and the legislation that does exist to deal with it is old and antiquated. Also, the issue is complicated by the fact that the release of holdback and lien rights is a moving target for every subcontractor.”

COCA’s board of directors has decided that the association should join the efforts started by the National Trade Contractors Coalition of Canada (NTCCC) “to get results for Ontario contractors.”

Ian Cunningham

NTCCC has been engaged on the issue both provincially and federally. The coalition has suggested that federal government contracts should include provisions for trade contractor payments since current payment clauses apply only between government and the general contractors.

COCA believes that since it has found some traction with Queen’s Park in getting further Construction Lien Act consultations rolled out, the issue of prompt payment legislation must also be addressed.

“Late payment for completed work can no longer be a tolerated practice in our industry,” said Ian Cunningham, COCA president, in a statement.

“Our contractors incur significant upfront expenses with every project, yet defined terms of payment for services provided do not exist.

“All too often, the result is owners not paying general contractors and general contractors not paying trade contractors.”

Zurawel said that Ontario is “slowly becoming the odd man out” by not implementing prompt payment legislation like other jurisdictions have.

He noted that in 1998 Britain introduced new prompt payment legislation tied to federal government procurement.

Since then, it has updated that legislation to ensure alignment with European Union regulation on the issue.

Massachusetts, Florida, Michigan and New York have also passed new legislation mandating prompt payment protocols.

“The next logical step is to get out in front of the issue,” said Zurawel.

“We can do that by having stipulations or pre-existing terms and conditions for a project, which include a well-defined timeline for payments for services rendered and an agreed upon rate of interest to be applied on funds that are not paid.”

New prompt payment legislation bolsters calls from Ontario’s banking, small business, manufacturing and construction community that “business as usual won’t cut it anymore”, said Zurawel.

“The whole issue of playing fast and loose with other people’s money has to come to an end.”

COCA said it will ensure that the prompt payment legislation issue will be one it pushes in the lead up to next year’s provincial election.

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