Saskatchewan contractors decry prompt payment exemption
August 4, 2020
A plan to exempt residential construction from provincial prompt payment legislation has riled the Saskatchewan Construction Association (SCA).
In an open letter on its website dated July 10, the SCA noted that Saskatchewan was the second province to agree to enact prompt payment legislation. The legislation would bind everyone in the building process, by law, to pay up within 28 days.
The legislation was unanimously passed in 2019, but the government and industry are still consulting on regulations before it comes into effect in 2021. Under the law, project owners would be obligated to pay bills from general contractors in 28 days. Seven days after being paid, general contractors would be obligated to pay their subcontractors.
Minister of Justice Don Morgan has, however, moved to exempt residential developers from that law.
“The SCA fervently disagrees with that, and we have been lobbying hard against any exemption,” said SCA president and CEO Mark Cooper.
The issue came to a head recently when a Saskatchewan residential developer allegedly failed to pay its contractors and subcontractors following construction of a home. As a result, 11 companies placed liens on the new house though the owner claimed that the developer had been paid in full for the work.
The province said home-building groups have an existing structure that works for them and their subtrades, so an exemption would be granted.
The SCA disagrees.
“Unfortunately, late payment is a systemic issue in construction, and it has a devastating domino effect down the chain of contractors, subcontractors, and suppliers. Too often, we hear horror stories of companies not getting paid 90 plus days after work was completed on time and to specifications,” the SCA letter states.