A bill designed to protect contractors in Manitoba from getting stiffed by customers is making its way through the legislature.
The Prompt Payments in the Construction Industry Act has gone through second reading and been has been referred to committee but that committee will probably not happen until the fall, according to Brandon Conservative M-L-A Reg Helwer.
Helwer said the fair and balanced legislative proposal will ensure a timely flow of payments across the construction industry to companies and workers.
"Payment delays affect the viability of businesses, general costs of construction and Manitoba’s competitiveness across North America in attracting investment," said Helwer in his opening remarks to introduce the bill.
Under the proposed legislation, a contractor or subcontractor, with notice, could stop work or terminate the contract if a payment is late. Right now that would be considered a breach of contract.
"It's sad to see that this kind of legislation is necessary but we've heard from the construction industry that, while everybody uses trade credits, sometimes trade credit does get abused and it causes many difficulties when it comes to paying companies and paying staff."
Bill 218 would also create a new mechanism to deal with delinquent payments in which an adjudicator could also be appointed to resolve a late payment issue. Helwer admitted the details on how that mechanism would work still needs to be determined.
"The way I see it is that if there is a dispute on what should be paid or when it should be paid both entities in which a general contractor and a subtrade would agree to use the dispute resolution mechanism. They would then agree on an adjudicator who has experience in the construction industry and that adjudicator would look at the evidence and the agreements and decide what should happen going forward. That way work can continue on site so that there's no work stoppage and both parties would agree to abide by what adjudicator's decision."
The bill received unanimous support in passing second reading.
Helwer said he is working with representatives from the construction industry and unions in an effort to achieve consensus in order to satisfy the needs of Manitoba’s Construction Industry and protect those most affected by delinquent payment.