Recent exemptions granted by the Government of Alberta under the Prompt Payment for Construction Work Act (PPCLA) is raising concerns for the Calgary Construction Association (CCA).
The association believes that exemptions undermine the fundamental principles of fairness and transparency embedded in the legislation and is urging a reconsideration of this approach in the future to ensure a level playing field for all stakeholders.
Enacted in 2022, the PPCLA was introduced to foster fairness and transparency in payment practices within the construction industry – notably, requiring owners to pay contractors within 28 days of receiving proper invoices. However, the recent granting of exemptions to certain entities threatens the core objectives of the legislation. The CCA emphasizes that all stakeholders, regardless of size or stature, should be held to the same standards to maintain the integrity of the construction sector.
“The PPCLA was put into place in 2022 to provide fairness and accountability in the industry. We are deeply concerned that the ink hasn’t even dried on the legislation, and exemptions have already been granted,” said Bill Black, president, and COO of the Calgary Construction Association.
“Granting exemptions to large corporations creates an imbalanced landscape, favouring giants over smaller players. These exemptions undermine the fundamental principles of fairness and equity that the PPCLA aims to promote, creating an uneven playing field for all involved parties.”
The erosion of trust and relationships within the construction industry is a significant concern for the CCA. Granting exemptions based on investment dollars to the province sends a damaging message that fairness can be compromised, eroding trust between contractors, subcontractors, and suppliers. This erosion of trust jeopardizes the collaborative nature of the industry, which relies on strong relationships for success.
The CCA also expresses concern that these exemptions may discourage compliance with industry regulations. Granting exemptions sets a dangerous precedent, suggesting that compliance is optional. This not only undermines the purpose of the legislation but also poses a risk to the industry’s overall integrity.
“The construction industry’s reputation is built on fair and prompt payment practices. Exemptions under the PPCLA risk tarnishing this reputation, leading to disputes, legal battles, and damaged professional relationships,” said Black. “Timely payments are vital for maintaining healthy business relationships, and exemptions can jeopardize the industry’s image.”
