Saskatchewan contractors will see prompt payment provisions in 2022
By Anthony CapkunConstruction HPAC General Management general contractors prompt payment subtrades
As of March 1, 2022 the Builders’ Lien (Prompt Payment) Amendment Act will be enforced in the province.
Next year, the Builders’ Lien (Prompt Payment) Amendment Act, 2019, will be proclaimed into force in Saskatchewan.
“For years, contractors have essentially been financing projects and carrying all the risk,” said Mark Cooper, president & CEO, Saskatchewan Construction Association. “As of March 1, 2022, they will be protected from having unpaid invoices sitting there for months at a time.”
“Generally speaking, to say contractors are relieved would be an understatement,” said Cooper when we asked him about the overall reaction from the province’s construction sector.
For other jurisdictions seeking prompt payment, take note: it’s not a quick process. Prompt payment legislation has already been enacted in Ontario, and similar acts have received Royal Assent in Alberta, Nova Scotia and New Brunswick but have not yet been put into force.
“The Saskatchewan Construction Association and industry partners have been pushing for this legislation for the last 6+ years,” said Cooper. “It has taken an immense amount of consultation with industry stakeholders—contractors, consultants, lawyers, the design community—and, of course, the government.”
Cooper explained that, with the time it took to craft the legal framework, prepare industry experts to become trained adjudicators, develop the Saskatchewan Construction Dispute Resolution Office (described below), to continually manage the new legislation, “it has added up to many hours of advocacy work and many dollars invested”.
The new legislation will protect and define the rights and obligations of owners, developers, contractors and subs by establishing reasonable payment timelines for construction projects, and introducing an interim adjudication process as an alternative to arbitration and litigation.
“To reach consensus on a fair and fast-moving adjudication process that protects contractors from systemic late payment for work completed on time and to specifications—while allowing for a dispute mechanism with binding arbitration—is no easy task, but the wait will be well worth it,” Cooper added.
The payment timelines will mandate that owners and developers provide payment within 28 days of receiving a proper invoice for construction services. Contractors will have seven days to provide payment to subcontractors after receiving a payment from the owner or developer.
“These changes will ensure the prompt payment of contractors and subcontractors, and will enable parties to resolve issues quickly and without added costs—which, in turn, will help projects move forward without delays,” said Justice Minister and Attorney General Gordon Wyant.
The new adjudication process under the Act will enable parties to seek interim resolution for disputed payments. It will be overseen by the Saskatchewan Construction Dispute Resolution Office (SCDRO), a not-for-profit corporation designated by the minister to act as the official Adjudication Authority. The SCDRO will work with the ADR Institute of Saskatchewan Inc. to provide trained, independent adjudicators for disputes under the process.
“Although the legislation is not perfect—and there are a few sectors that are exempt from this law, such as mining—it is a huge step forward,” said Cooper.