PHOTO: Adobe Stock/Sculpies
The Manitoba government’s prompt payment regulation, which aims to facilitate the timely flow of construction payments, came into force on April 1.
“Construction projects are complex and involve many parties, including owners, contractors, sub-contractors, engineers, labourers and material suppliers, and often conflicts between these parties can result in withholding funds,” said Public Service Delivery Minister Mintu Sandhu. “These regulations make sure the local contractor at the end of the chain is protected, as they are often the one who are affected by delayed payments.”
The prompt payment regulation addresses concerns from the construction industry about delayed payments causing problems through project payment chains, noted the minister, adding that the legislation will help the industry avoid the disruptive effect of non-payments as it strives to manage construction projects in an orderly and timely manner.
“The establishment of an adjudication framework and authority were important steps taken by this government,” added Sandhu. “The construction sector is vulnerable to the impact of delayed payments because of the tiered payment structure and these changes will reduce the risk of disruptions to projects while ensuring sub-contractors and suppliers can continue to pay bills and their workers.”
The regulations set out the duties and powers of the adjudication authority including details about payment and adjudication, process in the event of non-payment, requirements for adjudicators and other matters concerning the conduct of an adjudication.
“Our industry is thrilled to see the creation of a construction prompt payment system in Manitoba and the launching of the new prompt payment adjudication authority,” said Ron Hambley, president of the Winnipeg Construction Association. “We were pleased to collaborate with the Manitoba government and dedicated industry professionals to create an adjudication authority that will provide oversight and guidance as the industry adjusts to this new system.”
He explained that withheld payments can impact contractors, and especially smaller contractors, as delays in cashflow can put them at financial risk. “We are confident that the prompt payment system in Manitoba will work to address these concerns,” he said.