The Government of Saskatchewan has announced the enforcement date of a long-awaited prompt payment legislation.
It was designed to ensure that construction companies that do satisfactory work, will get paid for that work in a timely manner.
“So today, the way things work is that construction companies will many times go months without getting paid for their work that they have actually completed,” CEO of the Saskatchewan Construction Association, Mark Cooper said.
Prompt payment legislation will put an end to that by enforcing that a company be paid within 28 days of submitting a proper invoice.
If they are not paid within the 28 days, the company would then have the right to an adjudication process or the ability to walk off the job if deemed necessary.
The 28-day period is causing some concern though, particularly from the Saskatchewan Urban Municipalities Association.
Their representatives like Vice-President of Cities, Gerald Aalbers, are worried that it is too tight of a window.
“I believe that every contractor knows that if you work for a municipality you will get paid, again it may take 45 days or it could be 30 days. But by forcing the 28 days, it just adds a huge challenge.
A challenge, that Aalbers believes will take money out of taxpayers pockets, since municipalities often have to hire outside contractors to complete major capital and infrastructure projects.
“If the work isn’t complete or there are deficiencies, once the contractor is paid and moves out of town, how are those deficiencies going to be dealt with? That might put additional pressure on our home towns to seek legal action to get that contractor back. We want to make sure the taxpayers hard-earned money is applied in the best possible way,” Aalbers said.
Cooper is all for the new rules as he has seen first hand the struggles that construction workers have gone through.
“I’ve had calls from business owners in tears because they’re leveraged to the max on their lines of credit, they’ve mortgaged their homes and they’re trying to figure out how to keep their employees working and they’re just not getting paid. And that level of frustration and anxiety and angst has been a real problem for these companies,” Cooper said.
The Saskatchewan Urban Municipalities Association have lobbied the government for an exemption from the legislation, something that Cooper does not agree with.
“Everybody has to pay their bills, and there’s no reason whether you’re small or large, that you should get an exemption from paying your bills in a timely manner. And it’s just not true that entities cannot process payments or go through disputes within a reasonable timeline that exists all around the world,” said Cooper.
The legislation takes effect on March 1, 2022.