Final Report and Best Practices: Builders Lien – Prompt Payment Legislation and Associated Regulations

Introduction

Prompt payment legislation sets timelines by which construction contracts need to be paid and creates a dispute resolution mechanism to efficiently deal with disputes. The purpose of this legislation is generally to improve the financial stability within the construction industry. Several jurisdictions, including Ontario, Saskatchewan and Alberta have legislation in force already, while the remaining governments are in various stages of the process, with some further along in the legislative and regulation development process and others in the very early stages or still contemplating whether they will bring legislation forward.

Issues and Outcomes

There was opportunity for jurisdictions contemplating, or in the early stages of developing their prompt payment rules and adjudication processes, to learn from other jurisdictions through a shared body of knowledge and to adopt similar approaches to jurisdictions with models already in place because there is benefit in avoiding regulatory divergence where possible and encouraging jurisdictions to adopt common processes, as outlined in CFTA Article 408. While the ideal outcome from a regulatory cooperation exercise is generally intended to be a single, uniform model across Canada, the reality in this instance with Prompt Payment is that some jurisdictions are already well down the path of developing their legislation regulations while others are just starting or even contemplating this process making harmonization in the near term unlikely.

Activities and Deliverables

A jurisdictional scan was undertaken and given the wide distribution of Parties along the legislative development process (with some finished, some in process and others still contemplating) the working group agreed that the most practical course of action was to develop a Best Practices document based on the experiences of those jurisdictions that were already far along in the process.

Jurisdictions with prompt payment rules and adjudication regimes either in development or in place, were asked to provide information on approaches for: designing regulations, designing an adjudication model, consultation, and transition implementation. Consideration for consulting with indigenous groups was added by staff with the federal government.

Views on these issues could help inform legislation, regulations, and implementation processes in other jurisdictions. The primary benefit of the appended Best Practices document is that it can enable jurisdictions to develop high quality and consistent regulations, faster.