Canada: Prompt Payment In Canada: Recent Developments

Since our original article on prompt payment reforms across Canada was published in May 2018, there have been several developments across the country with prompt payment and construction lien act reform.

In Ontario, the first tranche of amendments came into force on July 1, 2018 (dubbed the "modernization" changes, updates to lien timelines, holdback timelines, trust provisions and mandatory bonding on public projects), and the second tranche of the amendments is fast approaching with prompt payment and adjudication coming into force on October 1, 2019. The province has also responded to many comments from the industry regarding the initial amendments with further changes in Bill 57 (proclaimed December 2018), and updated regulations and forms (to be finalized and published shortly). Construction companies, lawyers, owners and the industry in general are all scrambling to implement processes and procedures to make the transition as pain free as possible. The Ontario reforms include somewhat tricky transition rules that are important to follow carefully: if a contract was entered into, or a procurement process commenced, in respect of an improvement prior to October 1, 2019, the prompt payment and adjudication rules will not apply.

The Federal government legislative reform, initially commenced by the introduction of Bill S-224, did result in the commissioning and publishing of a report in the summer of 2018. After reviewing the report, the Federal Government commenced drafting the legislation in the fall of 2018. The drafting process was a bit slower than anticipated, however, very recently the prompt payment legislation was released in the government's budget bill, An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2019 and other measures. The proposed legislation is the first major construction legislation at the federal level, but remains subject to a lot of 'tbd' provisions, that will be expanded upon in the regulations, including much of the adjudication regime and the Adjudication Authority itself. The legislation follows much of the Ontario act, including defining capital repair for added certainty of what's covered, defining proper invoice and making it the trigger for the payment timelines, and using the 28-7-7-7 cascading payment obligations from owner to contractor to subcontractor etc., and creating an adjudication process for disputes. Some notable items include: the owner has 21 days to provide the contractor with a notice of non-payment (ON - 14, SASK - 14); introduction of optional holdback no greater than the provincial amount where the work is taking place; 21 days to initiate an adjudication from defined points in time; and adjudication is binding unless parties come to a written agreement or the determination is set aside by a court order or arbitral award. The transition provisions require some mental gymnastics, but the Act will apply, one year after the day on which the Act comes into force, to contracts entered into by a contractor after the day on which the Act comes into force.

Saskatchewan and Nova Scotia have also tabled legislation since this article was initially published. Saskatchewan's Bill 152, The Builders' Lien (Prompt Payment) Amendment Act, 2018, introduced in November 2018, has now passed Third Reading and is now waiting to be proclaimed. The Saskatchewan reforms mirror most of the major prompt payment and adjudication provisions and timelines of the Ontario act, including 28-7-7-7 payment cascade, prescribed forms for dispute, adjudication provisions and an Adjudication Authority.1  Nova Scotia has also recently introduced legislation, which has passed second reading and proceeded to Committee stage.2  The Nova Scotia act includes many of the same prompt payment and adjudication provisions of the Ontario, Saskatchewan and Federal acts, however, the timelines will be determined via regulations which are not yet available.3

Manitoba is the only remaining province actively pursuing legislative change. In November 2018 the Law Reform Commission produced their final report on modernizing the act, and legislation will likely follow in 2019 or 2020; the fate of Bill 218 remains unclear.4

New Brunswick remains in a holding pattern after an election in 2018, and no new Law Reform Notes have been published since May 2018 when stakeholder engagement was ongoing.

Andrew J. O'Brien is Director, Surety Risk, with Travelers Canada and Ted Betts is a partner with Gowling WLG.

Footnotes

1 For more information, see this helpful article: http://www.mckercher.ca/resources/saskatchewan-introduces-prompt-payment-bill-for-construction-industry or http://www.publications.gov.sk.ca/details.cfm?p=92521

2 https://nslegislature.ca/legislative-business/bills-statutes/bills/assembly-63-session-2/bill-119

3 For more information, see this helpful article: https://www.singleton.com/2019/04/nova-scotia-to-modernize-its-construction-legislation-and-introduce-prompt-payment-and-adjudication/

4 http://www.manitobalawreform.ca/pubs/pdf/136-key_messages.pdf (summary), or http://www.manitobalawreform.ca/pubs/pdf/136-full_report.pdf (full report).

Read the original article on GowlingWLG.com

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
19 Sep 2019, Seminar, Birmingham, UK

Providing GCs, Heads of Legal and senior in-house lawyers with timely, topical and practical legal advice on a variety of topics.

26 Sep 2019, Seminar, London, UK

Providing GCs, Heads of Legal and senior in-house lawyers with timely, topical and practical legal advice on a variety of topics.

8 Oct 2019, Seminar, Birmingham, UK

Supporting the development of paralegals, trainees and lawyers of up to five years' PQE by providing valuable knowledge and guidance together with practical tips.

Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions