Prompt Payment Legislation - Electrical Contractors Association of ...

The President’s RemarksJim KellettThe President’s RemarksPromptPayment LegislationIIn these “Remarks” I want to do something different than describethis edition of the Ontario Electrical Contractor. I want to educate youand sell you on a great idea and hopefully get your support to achieveit. That idea is Prompt Payment Legislation (PPL). What is it? Simplylegislation which mandates regular timely payment for constructionwork performed and remedies like interest penalties or legal workstoppage if not paid.The ECAO is a member and the manager of the Canadian ElectricalContractors Association (CECA), which in turn is a foundingmember of the National Trade Contractors Coalition of Canada(NTCCC). Through this network of relationships we are able toprovide comprehensive and independent representation of tradecontractor issues at all jurisdictional levels. The primary interest ofthese organizations is to promote improvements to the paymentsystem in construction to the benefit, firstly, of trade contractors, butalso for the entire construction contracting chain.Over the past couple of years the focus has become more precise,targeting on the promotion of CCA/CCDC standard contracts,documents and guides, and the enactment of prompt paymentlegislation similar to other jurisdictions such as the U.K., Australiaand the USA. [See David Zurawel’s article about PPL in the USA onpage 10]. Now these two objectives are merged together as it becomesclear to us that promotion of standard contracts and prompt paymentare not just complementary…they are the same.In Ontario the NTCCC in partnership with the Council of OntarioConstruction Associations (COCA) lobbied the provincial politicalparties about prompt payment throughout the year running up to theOctober 6th election. The first significant breakthrough came in June2011 with the introduction of a private member’s bill by Liberal MPPDave Levac on the last day of the legislature prior to the election. TheBill was based on similar American legislation and was entitled “AnAct to protect contractors by requiring prompt payment of constructioncontracts.” While it’s true the Bill died on the order paper, four thingsgot accomplished:• Legislated prompt payment provisions for construction became arealistic objective;• All three political parties announced their support for promptpayment for construction during the course of the electioncampaign;• The trade press and other construction associations like theCanadian Construction Association (CCA) and the OntarioGeneral Contractors Association (OGCA) became actively engagedin the prompt payment debate and dialogue;• The trade contractor community recognized that legislated promptpayment must be consistent with the CCA/CCDC standardcontracts, both prime and subcontract, to gain full industrysupport.During the summer, the impetus from Dave Levac’s private membersbill brought the general and trade contractors together in an agreementto achieve prompt payment legislation which would meet the interestsof both generals and subs and would be consistent with CCA/CCDCstandard contracts. The job of drafting that document was assignedto the Canadian Electrical Contractors Association (and ECAO) whoretained Geza Banfai of Heenan Blaikie LLP and also of the CCDC.After a number of drafts, focus groups and revisions, the draft PPLwas approved by the NTCCC on October 5 and turned over to theOGCA for their review and comment. Official endorsement from theOGCA followed 3 weeks later.The NTCCC has since visited most provinces delivering theirprompt payment message and receiving strong support from thetrade contractor communities there. In some instances the meetingsprompted the establishment of provincial trade contractor coalitionssimilar to NTCCC. It seems the national dialogue has begun.At the time of writing these “Remarks”, the Ontario constructionindustry is on the verge of launching a full on campaign to makeprompt payment a legislated reality. This is ground breaking on somany levels. It validates the importance and relevance of standarddocuments, guides and best practices to the real world; it defines tradecontractors as a significant, independent force in construction; and, itprovides an opportunity for the entire industry to work as a unit forthe benefit of all constituents.ECAO is completely committed to the enactment of prompt paymentlegislation in Ontario and looks to each electrical contractor, memberor not, for their support.Ontario Electrical Contractor8