By Cheryl Jahn

Construction industry seeks legislative change

Oct 23, 2023 | 4:13 PM

PRINCE GEORGE – It’s an industry that floated to the provincial economy throughout the pandemic. Construction, and it is the number one generator for gross domestic product in B.C.

“Well, we do have $157 billion of proposed construction,” explains Nicole Bryant, CEO of the Northern Regional Construction Association. “Over half of that right now is proposed in the north. So that means a lot for our region, the construction industry, even though the commercial sector is down slightly, we are still going steady in northern B.C.”

According to the Construction Association, there are just over 26,000 construction companies employing 164,000 people who earn an average of $73,000 per year. B.C. has what’s called a Lien Act, but the Construction Association says it has no teeth.

“The Lien Act states that substantial hold-back is to be paid upon substantial completion of that contract. So there are several contracts within the main prime contract. So when the subcontractors reach a substantial completion of their part of the project, they are able to request for their hold-back funds at that point. And sometimes these contractors are waiting years to get paid.”

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Doug Engstrom with Westcana Electric cites a personal example.

“So one project that comes to my mind is in May of 2022, we started with the supply-only price to secure some materials before the material price costs escalated to project installation wasn’t going to go ahead right away. But in order to save the owner your money, we procured the materials. Then we’ve got into a contract with the supply and install put together. We’re still waiting for a 10% holdback for May of 2022.”

And it costs companies like his a pretty penny.

“Oh, absolutely it does. And it doesn’t really matter the size of your company, the dollars are just as important, you know, relevant to your volume of work. You know, you need that 10% that probably represents 100% of your profit.”

What the Association seeks is something called “prompt payment” legislation.

“It would put in an adjudication process in place which would give and give owners 28 days to pay their contractor and give that contractor, then ten days to pay their subcontractor,” explains Bryant.

Ontario amended its law to require an owner to pay a contractor within 28 days of receiving an invoice and a contractor to pay a subcontractor within seven days of receiving payment.