NOVA SCOTIA NEEDS PROMPT PAYMENT

Our province needs a prompt payment solution that works for everyone including tradespeople, contractors, government, and consumers. While this serious problem is being felt now 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.

The existing law in Nova Scotia – the Builders Lien Act – is costly, cumbersome, and inaccessible to 65 percent of the construction industry (small and medium-sized family-owned companies consisting of 50 or fewer employees). It addresses non-payment as opposed to delinquent payment and the lien rights of many in the industry will expire long before they realize they will not get paid.

Over the last six years, one of the NS Prompt Payment Coalition members – the Construction Association of Nova Scotia – surveyed its members four times (2015, 2016, 2018, and 2021) to solicit their feedback on prompt payment.

Here are some highlights from the 2018 survey:

• 77% of respondents indicated that delayed payments were occurring most or all of the time on their projects.
• 70% believe that the right legal framework does not exist to improve the timeliness of payments.
• 94% indicate that delayed payment increases the cost of doing business
• 67% indicate that delayed payment reducing their ability to bid work and grow their business
• 75% indicated that delayed payment increases the cost of project delivery
• 55% agree or strongly agree that if paid in a more timely manner, their firm would increase the use of apprentices; while 53% 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 industry is committed to supporting the government to enact model legislation that is progressive and responsive. The NS Prompt Payment Coalition is asking the government to immediately begin to work with our Coalition to formulate and bring forward legislation before the end of 2020.