TORONTO — Members of Prompt Payment Ontario (PPO) are looking forward to working with the government on the creation and introduction of legislation to modernize the Construction Lien Act (CLA) next spring.
PPO members participated in the CLA review consultation process. According to a PPO release, the review recognizes that delinquent payments in the construction sector lead to many issues beyond financial instability.
"Employment rates are lower and apprenticeship opportunities have been decreased due to financial risk," reads the release.
"Some trade contractors resort to off-loading payroll risk by increasing the number of self-employed, independent operators in their workforce, thus increasing the underground economy. As late payment puts employers at risk it also increases the risk to workers' pension and benefit plans. Moreover, the increase in late payment risk in the construction industry not only has negative consequences for the workers and businesses, but also the provincial government. Government construction costs are higher because trade contractors must incorporate the risk of late payment into their bids."
The increased risk also reduced the amount of work trade contractors can afford to take on, thus reducing the bidding pool for projects, adds the release.
"Late payment is one of the biggest risks to trade contractors, their employees and suppliers," PPO said in a statement. "We are glad to see the report's recommendation to legislate a prompt payment regime for the public and private sectors. Putting this legislation in place will ensure that we can build Ontario. Prompt payment is simply 'doing the right thing,' those that oppose it must have another agenda."
Members of PPO are looking forward to working with parliamentarians on implementing prompt payment legislation in Ontario as soon as possible, concludes the release.
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