Prompt payment legislation will kick in March 1st next year as the government enacts protection for Saskatchewan contractors from what the industry calls systemic late payments.
Contracts signed on or after that date have the right to expect payment within 28 days of filing a proper invoice. As well, contractors will have seven days to pay subcontractors after receiving a payment from an owner or developer.
The Saskatchewan Contractors Association and several industry groups including the General Contractors Association of Saskatchewan, Mechanical Contractors Association of Saskatchewan, Electrical Contractors Association of Saskatchewan, Saskatchewan Masonry Institute, Canadian Institute of Steel Construction, Saskatchewan Roofing Contractors Association, Saskatchewan Association of Architects and legislators have been working on the new provision for over six years.
Krystal Monteith VP of the Lloydminster Construction Association weighs in on the mechanics of the new law.
“So basically if the contract remains unpaid after they have had a favourable judgement in the adjudication process, then with this new legislation, the contractor can walk off site and not be replaced.”
A new nonprofit body called the Saskatchewan Construction Dispute Resolution Office has been created to manage the adjudication process.
Monteith adds that if a developer brings in another contractor at that stage to complete the work, the legislation also enforces payment to redound to the original contracted entity.
“If somebody walked away from a contract, the person who had hired them would be able to hire somebody else to do it, if they had walked away for non-payment. Now with this, if they file a dispute and if it’s in their favour with the adjudication process of course, then they are able to walk off the site for not getting paid and they can’t be replaced. And if they re-mobilize to finish the work, then they get paid for that as well.”
Monteith feels by reducing the financial uncertainty through ensuring prompt payment, that will have a positive impact on investment going forward.