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  • Getting Paid for Work - It's Time for Prompt Payment

    June 1, 2017


    Getting Paid for Work - It's Time for Prompt 

    Payment


    Yesterday, May 31st, the province of Ontario introduced a bill that, when passed, will assist Ontario construction companies in getting paid for work they’ve completed. When this bill becomes law, it will be the first of its kind in Canada. Unlike every other Western nation, Canada does not ensure through law, in any jurisdiction, that construction companies get paid in a reasonable timeframe.

    It’s past time that we fixed this problem, and I think Saskatchewan can actually lead the way.
    Unlike other industries, it is very common for construction companies to complete work and then wait for lengthy periods of time to get paid for that work. In fact, the AVERAGE payment time in Canada is 72 days. Imagine dealing with that in your personal finances…waiting on average, more than two months to get paid for something you do today. Crazy.

    I tried this in the grocery store a few weeks back. I got to the till with a bunch of groceries and I asked the clerk if I could pay them in two months. She of course said no. I tried it at a car dealership. Also no. I tried it at a restaurant and at a hotel. Neither went over well.

    That being said, I do have the option – if I’m lucky enough to have credit – of putting these expenses on a credit card and paying them off in future months. That is one potential solution…but only if I can get credit and pay significant interest penalties for doing so.

    Construction companies rarely have any choice in the matter. The power in a contractual relationship rests with the party that is offering the contract. Owners often leverage this power to force payment terms that force companies to wait for months on-end, with little recourse. They, like you and I, can finance these delays on credit, but that means they end up paying for the “privilege” of getting paid for work. Ridiculous.
    It is time for all of Canada to join the modern world in ensuring that construction companies get paid promptly for completed work. In the day and age of electronic payments and processing, no one should have to wait more than 30 days to be paid for their work.

    Over the last several months, the SCA has been working together with a number of industry association partners to develop a legislative plan for resolving this issue in Saskatchewan. The group, called Prompt Pay Saskatchewan, has developed a cohesive legislative strategy that would allow for the Government of Saskatchewan to introduce a new bill as early as the Fall of 2017.

     
    I believe we have the chance for Saskatchewan to leapfrog Ontario and become the first province to introduce legislation to solve this problem. All indications are that we have a provincial government that is open to a legislative solution, and we do have a workable solution. In the coming weeks, the challenge we have is to identify individuals, groups, companies, associations, etc that either support or oppose a prompt payment legislated solution. If you have thoughts on this issue, or if you know of groups that we should be talking to about this, please email us details at johnl@scaonline.ca. John Lax, our policy Manager, is leading this file for the SCA.

    I hope that next year when I get to the annual SCA Summer Meeting in Elk Ridge (where I am as I write this), we will be able to celebrate a new world for Saskatchewan construction companies. A world in which they get paid for work in a timely manner. A world where, finally, a construction company will be treated like any other company. I think it’s time.

    Mark Cooper, MBA, PMP

    President and CEO
    Saskatchewan Construction Association

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