Government seeking recommendations on federal prompt payment legislation

The Government of Canada is committed to growing the economy, strengthening the middle class and helping those working hard to join it. As part of this commitment, action is underway on multiple fronts to ensure that construction contractors and subcontractors who do business with the federal government are paid promptly.

Steven MacKinnon, Parliamentary Secretary to the Minister of Public Services and Procurement, and the Honourable Judy A. Sgro, Chair of the Standing Committee on Transport, Infrastructure and Communities, on behalf of the Honourable Carla Qualtrough, Minister of Public Services and Procurement, announced on January 30, 2018 that the government is seeking industry input and recommendations on federal prompt payment legislation.

Bruce Reynolds and Sharon Vogel, independent experts, have been contracted to seek input from the construction industry to identify the elements required to develop a robust federal prompt payment regime. The federal government will use the proposed recommendations to inform the development of an effective legislative solution that will direct terms of payment and provide for an adjudication process for federal construction contracts. This initiative builds on ongoing prompt payment efforts, notably the creation of a 14-point action plan, developed jointly by the government and the Canadian Construction Association.

Raymond Bassett, a member of the CCA executive committee and chair of the CCA Manufacturers, Services & Suppliers Council, said: “We look forward to contributing to this process and doing what we can to improve the flow of payment on Federal construction projects and to help contractors succeed.”

As of June 8, 2017, the Government of Canada has publicly posted all payments related to construction contracts of over $100,000. This allows businesses involved in federal construction contracts, such as subcontractors, to make informed inquiries about the status of their payment.

To date, four other actions have been completed:

  • completing an engagement strategy that describes the commitment of the Canadian Construction Association, Defence Construction Canada and Public Services and Procurement Canada to collaborate through the working group;
  • agreeing on prompt payment principles;
  • reviewing payment terms in federal construction contracts, including an assessment against industry standards;
  • and reviewing the Treasury Board’s 30-day mandated payment period to determine if there is flexibility to reduce this period.

These steps will support small and medium-sized enterprises at the heart of our economy, creating jobs and helping grow our middle class.

Read PSPC news release

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