Prompt payment legislation is on the rise across Canada but not without caveats and some surprises.
Leduc summarized the current state of prompt payment in Canada and stressed the overriding goal is to achieve “cash neutrality.” “You should understand and arrange yourself internally for whatever payment terms are going to apply to you. If you’re a subcontractor in Ontario, you should be expecting to get paid 35 days after an invoice, called the proper invoice, both from the general contractor and the owner,” he said. “If you’re not getting paid in that 35 day window, why is that?”
One of the unintended consequences of prompt payment legislation is that with increased cash flow more employees have struck out on their own and started their own construction firms, Leduc said. While there has been progress across Canada in terms of prompt payment legislation it is not evenly distributed and Leduc said in some cases more needs to be done.