Over the last decade, these delayed payments have grown immensely leading to job losses, slowed projects and small business bankruptcies. Largely affected by overdue payments are Canada’s trade contractors. While they wait for payment, they must still pay their staff and suppliers. This causes an increase in construction costs to customers. This results in a reduction in the amount of hiring and training that a firm can take on leading to declining growth across the sector and limiting the long-term availability of skilled labor.
Since 2015, the Canadian government has created a new legislation to resolve the issues in regards to prompt payment. Bill S-224 or the Prompt Payment Act was created in order to promote consistency and punctuality when it comes to payments. The new legislation aims to not only help contractors, workers and their families, but it aims to help stimulate the overall economy.
As the legislation was introduced, there has been immense support for the bill including the Contractors Division of the Heating, Refrigeration and Air Conditioning Institute of Canada (HRAI) and the Mechanical Contractors Association of Canada (MCAC). Support from these associations that both happen to also be a part of the National Trade Contractors Coalition of Canada (NTCCC) helped take the bill to the Senate so quickly.
To read more about Canada’s Prompt Payment Act, or to express your support, click here.