Standing Senate Committee on Banking, Trade and Commerce

Report of the committee

Tuesday, April 4, 2017

The Standing Senate Committee on Banking, Trade and Commerce has the honour to present its

TWELFTH REPORT

Your committee, to which was referred Bill S-224, An Act respecting payments made under construction contracts, has, in obedience to the order of reference of November 28, 2016, examined the said bill and now reports the same with the following amendments:

1.  Clause 3, pages 2 and 3:

(a On page 2, replace 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)”; and

(b on page 3, replace 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)”.

2.  Clause 7, page 4: Replace lines 15 to 17 with the following:

“on or before the 20th day following the approval or certification of the contractor’s payment application.”.

3.  Clause 8, page 4: Replace 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.”.

4.  Clause 9, page 5: Replace lines 15 to 17 with the following:

“before the 23rd day following the approval or certification of the subcontractor’s payment application.”.

5.  Clause 10, page 5: Replace 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.”.

6. Clause 11, page 6: Replace 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.”.

7.  Clause 16, page 7: Replace 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”.

8.  Clause 17, page 8:

(aReplace 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”;

(breplace 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

(creplace 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”.

9.  Clause 18, page 9: Replace lines 16 and 17 with the following:

“rate prescribed by regulation, whichever is greater.”.

10.  Clause 19, pages 9 and 10:

(a On page 9,

(i) replace line 21 with the following:

“payee in accordance with a decision of an adjudicator rendered pursuant to section 20.”, and

(ii)  replace line 25 with the following:

“payment within 14 days after receipt of the notice, the”; and

(b on page 10: replace line 4 with the following:

“make payment within 14 days after receipt of the”.

11. Clause 20, page 10:

(aReplace lines 17 to 19 with the following:

“identify the matter in dispute and the relief sought.”;

(badd 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).”; and

(creplace 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.”.

12.  New clause 21.1, page 11: add the following after line 31:

“Holdbacks

21.1 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.”.

13. Make any necessary consequential changes to the numbering of provisions and cross-references resulting from the amendments to the bill.

Respectfully submitted,

DAVID TKACHUK

Chair