Proceedings of the Standing Senate Committee on
Banking, Trade and Commerce
Issue No. 17 - Minutes of Proceedings - March 29, 2017
OTTAWA, Wednesday, March 29, 2017
(53)
[English]
The Standing Senate Committee on Banking, Trade and Commerce met this day at 4:21 p.m., in room 9, Victoria Building, the chair, the Honourable David Tkachuk, presiding.
Members of the committee present: The Honourable Senators Black, Campbell, Day, Enverga, Greene, Massicotte, Moncion, Plett, Ringuette, Smith, Tannas, Tkachuk, Wallin and Wetston (14).
In attendance: Michaël Lambert-Racine and Brett Capstick, Analysts, Parliamentary Information and Research Services, Library of Parliament; Michel Bédard, Parliamentary Counsel, Office of the Law Clerk and Parliamentary Counsel, Senate of Canada.
Also present: The official reporters of the Senate.
Pursuant to the order of reference adopted by the Senate on Monday, November 28, 2016, the committee continued its examination of Bill S-224, An Act respecting payments made under construction contracts. (For complete text of the order of reference, see proceedings of the committee, Issue No. 12.)
After debate, it was agreed that the committee proceed to clause-by-clause of Bill S-224.
It was agreed that the title stand postponed.
It was agreed that clause 1, which contains the short title, stand postponed.
After debate, it was agreed that clause 2 carry.
The chair asked whether clause 3 shall carry.
The Honourable Senator Plett moved:
That Bill S-224 be amended in clause 3, on page 2, by replacing lines 37 and 38 with the following:
"milestone means the point in time provided for in a construction contract for the submission of a payment application when a specified portion of the construction work is complete or a specified period of time, greater than one month, is reached. (étape)''.
After debate, the question being put on the motion in amendment, it was adopted.
The Honourable Senator Massicotte proposed an amendment to clause 3 relating to the definition "improvement''. After debate, the Honourable Senator Massicotte withdrew his amendment.
The Honourable Senator Plett moved:
That Bill S-224 be amended in clause 3, on page 3, by replacing line 6 with the following:
"request for payment that meets the requirements for submission and content set out in a construction contract. (demande de paiement).''
After debate, the question being put on the motion in amendment, it was adopted.
It was agreed that clause 3, as amended, carry.
It was agreed that clause 4 carry.
It was agreed that clause 5 carry.
It was agreed that clause 6 carry.
The chair asked whether clause 7 shall carry.
The Honourable Senator Plett moved:
That Bill S-224 be amended in clause 7, on page 4, by replacing lines 15 to 17 with the following:
"on or before the 20th day following the approval or certification of the contractor's payment application.''
After debate, the question being put on the motion in amendment, it was adopted.
After debate, the Honourable Senator Massicotte moved:
That Bill S-224 be amended in clause 7, on page 4, by replacing lines 4 to 7 with the following:
"7 (1) Unless otherwise specified in the construction contract, a government institution must make progress payments to a contractor for construction work on a monthly basis.''
After debate, the question being put on the motion in amendment, it was negatived by a show of hands.
The Honourable Senator Massicotte moved:
That Bill S-224 be amended in clause 7, on page 4, by replacing lines 8 to 13 with the following:
"7 (2) Where no date for progress payments is provided for in the construction contract, the contractor must submit to the government institution and to the payment certifier, on the last day of the month, a monthly payment application that sets out a claim for the construction work performed as of that day.''
After debate, the question being put on the motion in amendment, it was negatived by a show of hands.
The Honourable Senator Massicotte moved:
That Bill S-224 be amended in clause 7, on page 4, by replacing lines 14 to 16 with the following:
"7 (3) Unless otherwise specified in the construction contract, the government institution must pay the contractor on or before the 20th day following the approval or certification of the contractor's payment application.''
After debate, the question being put on the motion in amendment, it was negatived by a show of hands.
It was agreed that clause 7, as amended, carry.
The chair asked whether clause 8 shall carry.
The Honourable Senator Plett moved:
That Bill S-224 be amended in clause 8, on page 4, by replacing lines 18 to 21 with the following:
"8 (1) Where the construction contract provides a date for final payment, a government institution must make final payment in respect of construction work no later than the date provided in the construction contract or the 20th day after the approval or certification of the payment application, whichever is earlier.''
The question being put on the motion in amendment, it was adopted.
It was agreed that clause 8, as amended, carry.
The chair asked whether clause 9 shall carry.
The Honourable Senator Plett moved:
That Bill S-224 be amended in clause 9, on page 5, by replacing lines 15 to 17 with the following:
"before the 23rd day following the approval or certification of the subcontractor's payment application.''
The question being put on the motion in amendment, it was adopted.
It was agreed that clause 9, as amended, carry.
The chair asked whether clause 10 shall carry.
The Honourable Senator Plett moved:
That Bill S-224 be amended in clause 10, on page 5, by replacing lines 18 to 21 with the following:
"10 (1) Where the construction contract provides for a date for final payment, a contractor or subcontractor must make final payment in respect of construction work no later than the date provided in the construction contract or the 30th day after the approval or certification of the payment application, whichever is earlier.''
The question being put on the motion in amendment, it was adopted, on division.
It was agreed that clause 10, as amended, carry.
The chair asked whether clause 11 shall carry.
The Honourable Senator Plett moved:
That Bill S-224 be amended in clause 11, on page 6, by replacing line 6 with the following:
"payments in respect of the improvement and, in respect of milestones relating to time intervals, milestone payments are provided at intervals no less frequent than the intervals provided in the contract between the government institution and the contractor.''.
The question being put on the motion in amendment, it was adopted.
It was agreed that clause 11, as amended, carry.
It was agreed that clause 12 carry.
It was agreed that clause 13 carry.
It was agreed that clause 14 carry.
The chair asked whether clause 15 shall carry.
The Honourable Senator Massicotte moved:
That Bill S-224 be amended in clause 15, on page 7, by replacing lines 3 to 8 with the following:
"15(b) where a construction contract does not provide for progress payments, the costs of the construction work performed and of the related goods or services supplied as of the payment period for the period in question, including the costs of all changes.''
The question being put on the motion in amendment, it was negatived by a show of hands.
It was agreed that clause 15 carry.
The chair asked whether clause 16 shall carry.
The Honourable Senator Plett moved:
That Bill S-224 be amended in clause 16, on page 7, by replacing line 11 with the following:
"after its receipt when it is submitted by a contractor, or the 20th day after its receipt when it is submitted by a subcontractor, unless, before that time, the payer or the''.
The question being put on the motion in amendment, it was adopted.
The Honourable Senator Massicotte moved:
That Bill S-224 be amended in clause 16, on page 7, by replacing lines 29 to 33 with the following:
"(b) an estimate of any portion of the cost of a change that is the subject of the disagreement where the dispute of a payment application in whole or in part is limited to the cost of the change or its method of evaluation.''
The question being put on the motion in amendment, it was negatived by a show of hands.
It was agreed that clause 16, as amended, carry.
The chair asked whether clause 17 shall carry.
The Honourable Senator Plett moved:
That Bill S-224 be amended in clause 17, on page 8,
(a) by replacing lines 7 to 10 with the following:
"dance with this Act, the payee may suspend performance of the construction work
(a) if the payee is a contractor, by immediately providing a written notice of default to the government institution, and sending a copy of the notice to all'';
(b) by replacing lines 15 to 17 with the following:
"(b) if the payee is a subcontractor, by immediately providing a written notice of default to the payer, and sending a copy of the notice to the government in-''; and
(c) by replacing lines 23 to 26 with the following:
"work if the payer fails to make payment in accordance with a decision of an adjudicator rendered pursuant to section 20 within seven days after the decision is rendered or within such other time period as the adjudicator may order.
(3) Where a payee commences and diligently continues adjudication, the payee may, by written notice to those persons''.
After debate, the Honourable Senator Massicotte moved that the motion in amendment be amended by replacing lines 6 to 14 with:
17 (1) Where a payer fails to make payment or the payee fails to satisfy its obligations, subsequent to and in accordance with an adjudication order that is not being appealed to a higher court, the payee may, after a 14 day written notice to the government institution and all affected contractors and subcontractors, suspend performance of the construction work and/or terminate the construction contract with the payer.
Similarly, where the payee fails to satisfy its obligations, subsequent to and in accordance with an adjudication order that is not being appealed with a higher court, the payer may after a 14 day written notice to the government institution and all affected subcontractors, suspend performance of the construction work and/or terminate the construction contract with the payee.
The question being put on the subamendent, it was negatived by a show of hands.
The question being put on the amendment, it was adopted.
It was agreed that clause 17, as amended, carry.
The chair asked whether clause 18 shall carry.
The Honourable Senator Plett moved:
That Bill S-224 be amended in clause 18, on page 9, by replacing lines 16 and 17 with the following:
"rate prescribed by regulation, whichever is greater.''
The question being put on the motion in amendment, it was adopted.
It was agreed that clause 18, as amended, carry.
The chair asked whether clause 19 shall carry.
The Honourable Senator Plett moved:
That Bill S-224 be amended in clause 19,
(a) on page 9,
(i) by replacing line 21 with the following:
"payee in accordance with a decision of an adjudicator under section 20.'', and
(ii) by replacing line 25 with the following:
"payment within 14 days after receipt of the notice, the''; and
(b) on page 10, by replacing line 4 with the following:
"make payment within 14 days after the receipt of the''.
The question being put on the motion in amendment, it was adopted.
It was agreed that clause 19, as amended, carry.
The chair asked whether clause 20 shall carry.
The Honourable Senator Plett moved:
That Bill S-224 be amended in clause 20, on page 10,
(a) by replacing lines 17 to 19 with the following:
"identify the matter in dispute and the relief sought.'';
(b) by adding after line 24 the following:
"(4.1) Each party may provide a written submission to the adjudicator respecting the matter under dispute within 10 days of the later of the appointment of the adjudicator or the receipt of the notice by the other party.
(4.2) The adjudicator must render a decision within 28 days, or any greater period agreed to by the parties, of the expiry of the period referred to in subsection (4.1).
(4.3) Where the adjudicator does not render a decision within the period referred to in subsection (4.2), a party may refer the matter to another adjudicator by providing the other party with a notice under subsection (2).''.
(c) by replacing lines 28 and 29 with the following:
"and they must comply with it until such time as the dispute is finally determined by legal proceedings, arbitration or agreement of the parties.
(6.1) A decision of the adjudicator is enforceable as a judgment of a court of competent jurisdiction.''.
The question being put on the motion in amendment, it was adopted.
It was agreed that clause 20, as amended, carry.
It was agreed that clause 21 carry.
The chair asked whether clause 22 shall carry.
The Honourable Senator Plett moved:
That Bill S-224 be amended, on page 12, by adding the following after line 2:
"Holdbacks
22.1 Despite any other provision of this Act, a construction contract may provide a payer with the right to retain holdbacks provided that the holdbacks in a construction contract between a contractor and a subcontractor or between a subcontractor and another subcontractor do not exceed the holdbacks provided in the construction contract between the government institution and the contractor for the same improvement.''
The question being put on the motion in amendment, it was adopted.
The Honourable Senator Day proposed that, when the bill is reprinted the new clause 22.1 be renumbered to become clause 22 and that existing clause 22 be renumbered to clause 23. It was agreed with leave.
It was agreed that clause 22 carry.
It was agreed that clause 23 carry.
It was agreed that clause 1, which contains the short title, carry.
It was agreed that the title carry.
It was agreed that the bill carry, as amended, on division.
It was agreed that any necessary consequential changes be made to the numbering of provisions and cross references as a result of the amendments to this bill.
It was agreed that Bill S-224 be reported with amendments to the Senate at the earliest opportunity.
At 6:05 p.m., the committee adjourned to the call of the chair.
ATTEST:
Lynn Gordon
Clerk of the Committee