B.C. is introducing legislation to establish long-sought construction payment rules that will ensure contractors and subcontractors are paid within 28 days, and create an adjudication process to resolve disputes.
Attorney General Niki Sharma called it a matter of "fairness" at a Tuesday (Oct. 7) press conference.
"This legislation is about making sure people are paid on time for the work they do," she said.
The new rules would prevent developers and others hiring construction workers from delaying paying those contractors. Without these proposed rules in place, contractors and subcontractors can be forced to wait to be paid while still trying to meet payroll and cover expenses, as developers delay, sometimes for months.
Sometimes the workers themselves must wait to be paid, being forced to pay for tools and equipment, while carrying debt. Sharma said that this wait can continue even after a project is finished.
"Small and medium-sized contractors, many of them family-run businesses, have carried the heaviest burden, and workers and their families feel the stress when money they've already earned doesn't arrive on time," Sharma said.
Industry groups such as the British Columbia Construction Association (BCCA) have long lobbied for these changes.
"For too long, delayed payments and disputes have put our industry at risk, forcing businesses to shoulder unfair financial burdens and late payments," said BCCA President Chris Atchison.
Matt MacInnis, president of the Electrical Contractors Association of B.C., called this the "highest priority change" that the B.C. government can make to support the electrical construction industry.
"It's unreasonable that contractors are often waiting several months to get paid for work that they have completed while still making payroll every two weeks and paying suppliers, typically on a monthly basis," MacInnis said.
The new prompt-payment rules will be based on similar systems in other Canadian jurisdictions, such as Ontario and Alberta.
The adjudication process would allow disputes to be resolved more quickly and avoid costly court proceedings. This process will be industry-funded to ensure it is "self-sustaining."
This adjudication process will not displace parties' right to sue in court.
As the province tries to keep pace with new housing development by building new infrastructure, the B.C. government hopes this will help move projects forward more quickly.
"This change is about fairness for the construction industry, an industry that has built our province to power our economy through tough times," Infrastructure Minister Bowinn Ma said.
