Posting of Contract Payments Will Help Subcontractors Get Timely Payments
Public Services and Procurement Canada (PSPC) recently announced that it will publicly disclose payments to prime contractors so that construction subcontractors know when they can expect payment.
“Our government understands that too many workers and small businesses in the construction industry face financial hardship because of payment delays," said Steven MacKinnon, Parliamentary Secretary to the Minister of PSPC. "We are helping eliminate this unfair situation by providing those who work on federal construction projects with the information they need to get paid by their contractors on time and help bolster a healthy industry and a vibrant economy.”
The government has a strong record of promptly paying its contractors. This increase in transparency will allow companies and individuals working for those prime contractors to know when they can expect payment and to take action under their respective contracts when payments are late.
As of June 8th, PSPC began publishing payment information on its website for all construction contracts of over $100,000.
“Late payment can no longer be an acceptable option, added the Honourable Judy Sgro, Chair, Standing Committee on Transport, Infrastructure and Communities. "Contractors who complete their obligations have to be paid appropriately in a timely manner. We will continue to take steps to find successful resolutions that all hard working Canadians would expect.”
The Minister of Public Services and Procurement has also engaged other federal organizations and provincial governments to identify and build consensus on potential improvements to payment practices.
This work complements Government of Canada measures already in place. For example, PSPC-managed construction contracts of over $100,000 require prime contractors to submit statutory declarations with every request for payment acknowledging that they have met all legal payment requirements. They are also required to provide contract security (such as bonds) to protect subcontractors against non-payment.
This initiative is the product of a joint government-industry working group, composed of PSPC, Defence Construction Canada and the Canadian Construction Association. The working group is also considering other measures to support timely payment in the construction industry, such as potential improvements to payment terms and contractual holdbacks.
“Defence Construction Canada believes that the transparency from public disclosure of contract payments is a positive step for its industry partners," said James Paul, President and Chief Executive Officer, Defence Construction Canada. "We hope this will bring more fairness in payments made to construction contractors, tradespeople and suppliers, and contribute to a stronger Canadian industry overall.”
- The Government of Canada pays 90% of its invoices in accordance with the mandatory 30-day payment period.
- PSPC pays over 96% of its contractors in accordance with the mandatory 30-day payment period.
- Over 75% of construction services purchased by the federal government are handled by PSPC.
- The Government of Canada continues to consult with the construction industry (for example, the Canadian Construction Association and the National Trade Contractors Coalition of Canada) to explore and put in place measures that would improve prompt payment practices in the construction industry.
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