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Legislation introduced to create tighter payment timelines for construction industry

The Builders’ Lien (Prompt Payment) Amendment Act will define more efficient timelines in providing payment for projects within the construction industry.
The Builders’ Lien (Prompt Payment) Amendment Act will define more efficient timelines in providing payment for projects within the construction industry. File Photo / Global News

Legislation was introduced on Tuesday by the government of Saskatchewan to better protect and define the rights and obligations of owners, developers, contractors and subcontractors.

The Builders’ Lien (Prompt Payment) Amendment Act, 2018 will create a payment plan to set up more efficient timeline in providing payment for projects.

It will also establish an interim adjudication process that can be used in addition to arbitration and litigation.

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“While The Builder’s Lien Act was meant to balance the needs of contractors and their customers, over time it has become apparent there is some room for improvement,” Justice Minister and Attorney General Don Morgan said.

“This legislation provides a robust set of timelines to ensure payments are made by owners and developers to contractors, and by contractors to subcontractors, in a timely manner.”

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If passed, owners and developers would be required to provide payment within 28 days of receiving a proper invoice while contractors would have seven days to pay their subcontractors after receiving payment form the owner or developer.

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“We are pleased to see the government deliver on its commitment to protect Saskatchewan construction companies – mostly small businesses – from unreasonable delays in payment that harm them, their employees, and our economy,” Saskatchewan Construction Association president and CEO Mark Cooper said.

“While we still need to review the entire Bill introduced today, we agree with the government that no one should ever face bankruptcy because they haven’t been paid for high quality work they’ve already completed.”

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Under the proposed legislation, the person required to provide payment can argue the payment through interim adjudication process if they feel an invoice is inaccurate.

The province is hopeful this legislation would reduce the number of payment delay cases that end up in court.