LEXPERT MAGAZINE
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Q3 2019 11
ON OCTOBER 1, 2019, the Ontario Construction Act's
prompt payment and adjudication provisions will come into force.
While that regime is the first of its kind in Canada, it likely won't
be the only one for long.
In 2017, Public Services and Procurement Canada retained the
authors of the Ontario Expert Review of the Construction Lien
Act to conduct a review of the federal statutory scheme and make
recommendations to accelerate payments within the construction
industry and on federal government projects. On August 2, 2018,
their report, titled Building a Better Framework for Prompt
Payment and Adjudication in Canada, was released. e report
recommends the adoption of prompt payment and adjudication on
federal construction projects, based on the Ontario model.
Bill C-97, the Budget Implementation Act, 2019 No. 1 was
introduced on April 8, 2019, and received Royal Assent on June 21,
2019. Division 26 of that Act enacts the Federal Prompt Payment
for Construction Work Act, which follows the recommendations
of Building a Better Framework and adopts aspects of the Ontario
prompt payment and adjudication model.
In addition, several provinces have followed Ontario's lead by
introducing prompt payment and adjudication legislation.
In May, 2019, Bill M223, the Prompt Payment (Builders Lien)
Act, was introduced in British Columbia. e Bill provides for a
prompt payment regime, but does not incorporate a comprehensive
adjudication model similar to the Ontario one.
In 2018, the Manitoba Law Reform Commission published e
Builders' Liens Act: A Modernized Approach. e Commission
recommends the implementation of a prompt payment regime
as well as a private adjudication system akin to that established
by Ontario's Construction Act. e Commission further
recommended that these changes be incorporated within e
Builders' Liens Act, with such modifications as are necessary to
synchronize its contents with other remedies in the Act, and not
legislated as a stand-alone statute.
e Legislative Services Branch of the New Brunswick Office of
the Attorney General similarly intends to implement changes based
on those in Ontario.
Nova Scotia introduced a prompt payment and adjudication
regime in Bill 119, which went through all readings and received
Royal Assent in less than a month, but has not yet been proclaimed.
On November 20, 2018, the Saskatchewan government
introduced Bill 152, e Builders' Lien (Prompt Payment)
Amendment Act, 2018. e Bill includes both prompt payment
and adjudication regimes which seem to be modelled on the
Ontario Act. e Bill went through third reading on May 2, 2019.
In Québec, the Act to facilitate oversight of public bodies'
contracts and to establish the Autorité des marchés publics, which
received legislative assent on December 1, 2017, implemented
pilot projects for prompt payment and adjudication for certain
government contracts. Public bodies governed by the pilot project
must pay their general contractors on the last day of the month,
and the general contractor must pay their subcontractors on the
5th day of the next month, and each subcontractor must pay its
own subcontractors on the 10th day of the next month. To date,
there is no plan to extend a prompt payment regime to the private
construction sector in Quebec.
Of course, even in Ontario the prompt payment and adjudication
provisions of the Construction Act have yet to come into force, so
it remains to be seen how the construction industry will respond to
these major changes in terms of both when payments are made and
how payment disputes are resolved.
By: Keith Bannon, Managing Partner of Glaholt LLP
1
www.cca-acc.com/wp-content/uploads/.../Building-a-Federal-Framework-Report.pdf
2
www.manitobalawreform.ca/pubs/pdf/136-full_report.pdf.
3
Legislative Services Branch, Office of the Attorney General, Government of New Brunswick, "Law Reform
Notes (#41)" issued May 2018, available online at:
