NOVA SCOTIA NEEDS PROMPT PAYMENT

Our province needs a prompt payment solution that works for everyone, including tradespeople, contractors, government and consumers. While immediately felt in our industry, there is a serious risk to Nova Scotia’s competitiveness long-term if we do not take action to fix the issue now. 

Over the last several years, the construction industry has witnessed a very disturbing trend. Delinquent payment in the Industrial Commercial Institutional (ICI) sector, which employs over 30,000 people and contributes $6 billion in revenue to our economy, is producing detrimental results for construction firms in our industry.

Delinquent payments are hurting our economy and continues to worsen. Every year, 35-40 construction-related companies go bankrupt, resulting in 700-800 jobs lost, and these impacts are increasing at an alarming rate. Companies cannot invest in hiring workers, provide training and most importantly, offer a safe place for their employees to work.

A Nova Scotia Prompt Payment Coalition member – the Construction Association of Nova Scotia – continues to survey its members to solicit feedback on prompt payment. Here are some highlights from the 2021 survey:

• 66% of respondents indicated that delayed payments are occurring most or all of the time on their projects.
• 75% believe that the right legal framework does not exist to improve timeliness of payments.
• 90% indicate that delayed payment increases the cost of doing business.
• 54% indicate that delayed payment reducing their ability to bid work and grow their business.
• 75% indicate that delayed payment increases the cost of project delivery.
• 74% agree or strongly agree that if paid in a timelier manner, their firm would expand operations/ grow their firm; while 65% indicate they would hire more people.

Prompt payment legislation sets out the rights and responsibilities of all parties to a construction project through the establishment of minimum standards for payment, dispute resolution, and communication. The Act will set out minimum payment requirements and will have a systematic approach to how the money will be released with rights and responsibilities set forth for all parties to a construction project.

If the provincial government enacts legislation, prompt payment will:

• Improve the movement of money in our economy.
• Increase fairness and transparency.
• Increase efficiency and productivity.
• Lower the cost of construction projects, public and private.
• Reduce the burden on our judicial system.
• Drive investment, employment, training, innovation, and purchase of equipment (ie. apprentices).
• Increase competition and a number of bidders on public work.
• Allow contractors to bid more work.

The previous provincial government, led by the Honourable Stephen McNeil, made a commitment to introduce prompt payment legislation at the Nova Scotia legislature’s fall sitting in 2020, however, that was delayed due to COVID-19.