It may come as a shock to other industries, but in the Industrial, commercial, institutional and multi-unit residential construction sector, contractors aren’t paid upon completion of their work.
Standard payment terms in the construction industry are often as much as 180 days. If payment still doesn’t come, there’s not much a contractor can do about it.
Other provinces are leading the way with prompt payment legislation, but B.C. is not even following. The legislation is proving to be highly effective in getting quick resolutions and payments outside of the court system. While the federal government is moving forward with its own legislation, that will only protect contractors on projects funded by federal tax dollars.
B.C. continues to fall behind Ontario, Saskatchewan, Alberta, the United States and the United Kingdom by leaving contractors to fend for themselves. Our local construction businesses are forced to act as de facto banks, borrowing to finance projects up front while waiting to be paid for other work. They are essentially financing the construction of B.C.’s homes, businesses and infrastructure.
Prompt payment legislation is simple: Independent industry adjudicators with actual construction experience hear from both the construction business that is not being paid, and the party that is holding back the money. These adjudicators understand how the construction industry works and can cut through the noise to make a fair and efficient determination. Contractors get paid for the work they have completed to the quality promised. It’s not complicated. It keeps cases out of the court system. The simple existence of the legislation is a proven deterrent to bad actors.
In early 2022, B.C.’s Ministry of Attorney General promised that a prompt payment working group would get legislation ready for passing in fall 2022. The promise wasn’t kept, and B.C.’s construction industry is still waiting for the government to act.
This is an issue that unites the industry. Open shop or union, regardless of location, trade or company size, we are united in the demand for prompt payment legislation.
The BC Construction Association and the Vancouver Regional Construction Association have joined with our regional partners and more than 30 associations across the industry in B.C. to make this the leading issue in advocacy for the industry. We have worked with ministers, MLAs, premiers and countless committees to explain the logic and the urgency, and to keep prompt payment legislation top of mind.
In this economy, not getting paid on time is far too expensive. As the province continues to lean on the construction industry to build the economy back after COVID-19, the cracks are appearing in the foundation of our sector. Prompt payment legislation will unlock cash flow, remove borrowing pressures and alleviate risk throughout the entire construction ecosystem.
All we lack is political will. B.C. doesn’t need to be a pioneer on this issue. We can benefit from the work other provinces are already doing well and simply address the nuances of the B.C. market.
Donna Grant is president of the Vancouver Regional Construction Association (vrca.ca). Chris Atchison is president of the BC Construction Association (bccassn.com).
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