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NTCCC stress prompt payment for entire industry

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by Patricia Williams last update:Sep 11, 2014

The National Trade Contractors Coalition of Canada (NTCCC) has reiterated its call for Ottawa to enact prompt payment provisions throughout the entire construction chain.

As a first step, the coalition suggested that a “simple addition” be made to the standard federal government contract to extend the existing payment provisions from the Crown to the general contractor to include parties throughout the construction chain.

In a release, the coalition said during the normal course of business, trade contractors carry “a substantial amount” of upfront costs on a particular job. This includes equipment, materials, employee salaries, and maintaining necessary insurance, amongst any number of other variables. These costs are substantial, even if they are expected.

“To a certain extent, all businesses are forced to carry some costs while they wait for payment for goods delivered or services performed,” the NTCCC said.

“In most industries, payment is received when goods or services are delivered or along some other predictable schedule.

“In the construction industry, however, it is a loosely tolerated, but very impracticable and a costly practice when there are no strict time lines for payment for services rendered.”

Coalition representatives raised the matter in meetings with more than 35 MPs, senators and policy advisers at its recent Parliamentary Day. In an interview, Richard McKeagan, president of the Mechanical Contractors Association of Canada, a founding member of the NTCCC, said the meetings “went well.”

“We were well received,” he said.

“Almost everyone we met understood the situation and was supportive verbally.”

McKeagan said some of the parliamentarians agreed to write to the president of the Treasury Board, while others suggested introducing private member’s bills. Some requested additional information. Follow-up meetings are scheduled with some senior MPs.

“I would say that in the next six months or so, we will have a pretty good handle on where things are going.”

The day on Parliament Hill preceded meetings with national associations representing the design sector. Items on the agenda included looking at ways and means of working together to improve the state of tender documents and to also educate the entire industry on the quantitative impact of change orders.

“Basically, we proposed that the industry work together on both of these issues,” McKeagan said.

“I’d say we planted the seed in terms of dealing with some of these issues that affect both the design and construction communities.”

John Gamble, president of the Association of Consulting Engineering Companies-Canada, said the meeting was “positive and very candid.

“I think there is a willingness to share concerns and information,” he said.

“I think we are all concerned about the completeness of drawings and specifications. I think we all recognized that there is a lot of short-sighted, bottom-line pressure on the entire delivery chain, right from the architects and engineers right down to the contractors.”

NTCCC was established in 2004 to provide an organized forum for Canada’s national trade organizations to share information and resources and collaborate on issues of mutual concern.

Follow Patricia Williams on Twittter @Patricia_DCN.

last update:Sep 11, 2014

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