Federal Prompt Payment now in effect
December 19, 2023 | By HPAC Magazine
The federal government will have 28 days to pay after the contractor submits a proper invoice, and the contractor will then have seven days to pay its subcontractors.
Prompt payment for federal construction contracts is a priority for the #GC. That’s why today we’re announcing legislation to ensure timely payment for each party in the federal construction chain. https://t.co/cMGMjs1liI pic.twitter.com/rFT1NqnXpg
— Public Services and Procurement Canada (@PSPC_SPAC) December 12, 2023
To ensure all construction workers on projects contracted by the Government of Canada are paid in a timely manner, the government has announced that federal prompt payment legislation has come into force as of December 9, 2023
The Federal Prompt Payment for Construction Work Act states that the federal government will have 28 calendar days to pay after the contractor submits a proper invoice.
The contractor will then have seven days to pay its subcontractors, subcontractors will have another seven days to pay their sub-subcontractors, and so on down the contracting payment chain.
The federal prompt payment legislation aims to ensure that payment for the construction is predictable and timely.
Any existing construction contracts will have 1 year, as of December 9, 2023, to comply with the new Act.
Also, any federal construction work being done in provinces or territories that have already enacted a similar prompt payment and adjudication regimes, which currently includes only Ontario, Saskatchewan and Alberta, in those designated provinces contracts will, by default, be under the prompt payment regime of the province.