Prompt payment is coming to Manitoba. The provincial government has introduced amendments to the Builders’ Liens Act to make prompt payment a reality in the construction industry.

“The window for major construction is often limited by seasonal challenges, so greater efficiency in project remuneration is important to the flow of work performed and to project owners, contractors and Manitoba workers,” said Consumer Protection and Government Services Minister James Teitsma. “These amendments would establish specific payment obligations to owners, contractors and subcontractors in the construction industry, specifying a timely payment structure based on the progress of the work, the achievement of project milestones and the project’s conclusion.”

Builders’ Liens Amendment Act (Prompt Payment) has been developed in response to concerns expressed by construction industry stakeholders about delayed payments causing problems throughout project payment chains. While existing legislation secures claimants’ rights to funds and ensures the funds are kept within the construction pyramid and flow appropriately, there is currently no remedy for late payments.

A prompt payment framework would enhance the regulatory and economic competitiveness of the province and assist the industry by:

• ensuring orderly and timely construction projects by avoiding the disruptive effects of non-payments through supply chains;
• avoiding increased construction costs that result from bidders adding contingency amounts to allow for the risk of late payments, ensuring better value;
• reducing the risk of disruptions to construction projects while ensuring subcontractors and suppliers can pay bills and workers; and
• establishing an adjudication framework to resolve prompt payment disputes in a timely manner.

Winnipeg Construction Association president Ron Hambley said this is a positive step forward for the industry.

“Prompt Payment legislation will help ensure contractors and sub-contractors are being paid on time during the construction process,” he said. “Delayed payments create significant cashflow struggles for contractors whether they’re small, medium or large businesses. This legislation will help make sure payments flow in an orderly and predictable manner.”

Bill 38 would guarantee payment to general contractors within 30 days of an invoice being issued, and sub-contractors shortly thereafter. Successful passage of this legislation will bring Manitoba in line with similar requirements in place throughout Canada, including in Ontario, Saskatchewan and Alberta.