Proposed rules call for “balanced approach”

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                OGCA and sub-trades group reaches agreement on draft prompt payment legislation

    Ontario construction report staff writer

                A milestone has been reached on the road to addressing concerns over prompt payment for general and trade contractors in Ontario

                The Ontario Caucus of the National Trade Contractors Coalition of Canada (NTCCC) and the Ontario General Contractors Association (OGCA) have drawn up a blueprint of what could ultimately become the basis for Canada’s first legislation governing prompt payment.

                “After more than a year of collaboration, we now have the groundwork for a workable piece of legislation that will see fairness from the sub-sub, to the trade contractor and general contractor and right up to the owner,”  OGCA president Clive Thurston said in a news release.

                “This is a total industry effort,” said NTCCC national director Richard McKeagan. “This is great for the relationship between the trades and generals with benefits for all concerned. Prompt Payment legislation will help address problems in all sectors, up and down the construction supply chain.”

                The NTCCC has been advocating prompt payment legislation in several jurisdictions, but the original version of the legislation caused concerns among general contractors, who feared the proposed legislation did not take a balanced approach. The new legislation must still make its way through the provincial legislative process.

                Concerns over prompt payment are not new to the industry,  OGCA chair David Blake said in the statement. “Payment periods throughout the supply chain have been routinely getting longer, creating animosity and frustration on all sides. This joint agreement will go a long way to address these concerns and ease tensions. It is a win for everyone involved.”

                The NTCC believes all three provincial parties support some sort of prompt payment legislation for the construction industry.“Now that OGCA and NTCCC have agreed to what the proposed legislation could look like, relative to the terms and conditions, the Ontario industry has a good shot of being the first jurisdiction in Canada to introduce such legislation,” said NTCCC Ontario caucus chairman John Blair, representing the Canadian Masonry Contractors Association.

                A joint task force of OGCA and NTCCC will present its recommendations to provincial government representatives in hopes of starting a dialogue towards ground-breaking legislation. Should the government of the day agree to introduce legislation, there is still a lot of work and review to be done, OGCA and NTCCC officials agree.

                Under the proposed legislation, owners, contractors and sub-trades will still be able to negotiate their contracts individually.  However, general contractors won’t be caught in a squeeze play, if owners refuse to pay and sub-trades still expect to be paid. The rights and obligations extend through the supply chain, Thurston indicates. “”Everyone has the obligation to pay,” Thurston said.  “If we aren’t paid, we have rights” — namely to stop work until the payment issues are resolved.

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