Friday, July 19, 2024
AdvocacyContractsPrompt Payment Legislation

ACA Moves Forward on Prompt Pay

On April 6th, the ACA Board discussed prompt pay and a motion unanimously approved which calls for the following:

“ACA proceed as follows on Prompt Pay: Advocate the Provincial Government to initiate a 3rd party review of the entire project chain including consultants for the construction industry in Alberta”.

ACA has been addressing the prompt pay issue for several years and during that time has worked with owners, members, and other stakeholders to create a number of points of consensus:

  • Creation of a multi-stakeholder ad hoc committee in recognition that industry consensus is valued, including dialogue with industry associations representing industrial owners, the residential sector, and the design community.
  • One outcome of the ad hoc Committee was collaboration with Alberta Infrastructure to introduce contract language concerning payment and progressive release of holdback.
  • ACA has written public sector owners across Alberta urging their adoption of the Alberta Infrastructure terms.
  • ACA continues to promote adoption by other owners, including Alberta Health Services, the University of Alberta and Edmonton Public Schools.
  • ACA has also acted on a recommendation of the ad hoc committee to work with LCAs to promote education and adoption of best practices for payment.
  • Consequently, ACA’s Board has supported multi-stakeholder “Optimizing the Payment Process” workshops to improve payment processes. A best practices report will be produced in Spring 2018 from these workshops.

ACA has followed the review and recent passage in Ontario of Bill 142 to include prompt pay in a revised liens act. The Manitoba Law Reform Commission has initiated in 2018 a review of Manitoba liens legislation.  The Saskatchewan Construction Association is advocating for prompt pay legislation. ACA has also responded to the 3rd party review of prompt payment for federal government contracts.

ACA would participate to support the review process.

ACA’s Board believes that:

  • Such a review should be comprehensive and consider changes to relevant legislation including the Builders Lien Act
  • Such a review encourage prompt payment (and progressive release of holdback) terms be specified in provincial procurements and where the Province contributes more than 50% of project funds
  • The review consider the promptness of payment from prime consultant to sub-consultant, as restricted cash flow impacts the quality of documents prepared for tender and post award contract administration

ACA will continue to partner with Local Construction Associations to develop workshops to promote the best practices produced through the Optimizing the Payment workshops, so that progress can be achieved even while a review is underway.