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Prompt payment legislation being introduced at Queen’s Park

New Construction Lien Act expected to be in place by fall
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Ontario Attorney General Yasir Naqvi will be tabling legislation on May 31 to bring about long-awaited reforms to the Construction Lien Act.

The legislation comes on the heels of years of lobbying by the construction industry and labour to tackle a growing problem of delinquent payment problems with contractors having to wait months to get paid for work that’s certified as finished.

The government-commissioned Striking the Balance report was released to the provincial government last year and was expected to provide the guideposts to craft a new Construction Lien Act this spring.

For construction and union groups, the concept of prompt payment is simple: payment for completed work within 30 days.

After a few aborted attempts to bring reform to the system, Naqvi’s office appointed construction law experts Bruce Reynolds and Sharon Vogel to conduct a critical review of the problem in 2015.

They held extensive industry consultation meetings and sifted through 77 written submissions. Their report, which examined similar legislation in the U.S., Europe, Australia and New Zealand, calls for a dispute resolution mechanism in Ontario.

Industry groups say delinquent payment drives up the cost of construction, constricts cash flow to small business, stymies job creation, affects worker payroll and reduces apprenticeships.

The government decided to take additional time last fall to conduct more rounds of consultation in preparation to introduce legislation this spring with a modernized act in place by the fall of 2017.



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