Better Contracting: Achieving Balance amongst Parties II |
In previous years various construction associations surveyed their members regarding the state of implementation of the Construction Act (2019) and whether relationships (and payment flows specifically) had improved (as the Act expected they would). In 2024 Bill 216 (Construction Act part II) was passed to become law to fill some gaps, correct some problems, make experience-based improvements, etc., and realize its full potential benefits.
The core aspect of the Construction Act focusses on payments for work/services, which is covered in several ways but importantly:
- No party can contract out of Prompt Payment (“rule of 7” 28 days for contractor and then 7 days for subcontractors)
- Invoicing practices have been simplified away from “Proper Invoice” to “any invoice”(obligation on buyer to act and no longer avoid payment due to “improper invoice”)
- “Improvements”, not all construction work/services, are covered by the Act and Prompt Payment and “improvement” means, in respect of any land,
- (a) any alteration, addition or capital repair to the land,
- (b) any construction, erection or installation on the land, including the installation of industrial, mechanical, electrical or other equipment on the land or on any building, structure or works on the land that is essential to the normal or intended use of the land, building, structure or works, or
- (c) the complete or partial demolition or removal of any building, structure or works on the land; (“amelioration”)
- Capital repair
- (1.1) For the purposes of clause (a) of the definition of “improvement” in subsection (1), a capital repair to land is any repair intended to extend the normal economic life of the land or of any building, structure or works on the land, or to improve the value or productivity of the land, building, structure or works, but does not include maintenance work performed in order to prevent the normal deterioration of the land, building, structure or works or to maintain the land, building, structure or works in a normal, functional state. 2017, c. 24, s. 2 (17).
The following questions explore the key aspects of your business as they relate to your important projects, contracts, and payments. The time focus should be today and your most recent experience (2024), as most of the previous environmental factors that negatively impacted construction (COVID-19, inflation, supply shortages, etc.) are now less important.
This survey is confidential, and no data will be collected that will identify you specifically. Participating associations are primarily interested in grouped responses. This survey has two component parts:
Section 1: Company Situation: basic information regarding your company
Section 2: Contracts and Prompt Payment Situation: are you being paid promptly for improvements you make, and if not why not (a crucial issue)
At the end of each section, you will be provided an opportunity to identify an issue(s) you experienced/are experiencing that you consider relevant and worthwhile for further consideration.
A pdf copy of the survey is available for reference here