NOVA SCOTIA NEEDS PROMPT PAYMENT NOW

Our province needs a prompt payment solution that works for everyone, including tradespeople, contractors, government and consumers. While immediately felt in our industry, there is a serious risk to Nova Scotia’s competitiveness long-term if we do not take action to fix the issue now. 

Over the last several years, the construction industry has witnessed a very disturbing trend. Delinquent payment in the industrial, commercial, and institutional (ICI) sectors, which employ over 35,000 people and contributes $6 billion in revenue to our economy, is producing detrimental results for construction firms in our industry.

Delinquent payments are hurting our economy and continues to worsen. Every year, 35-40 construction-related companies go bankrupt, resulting in 700-800 jobs lost, and these impacts are increasing at an alarming rate. Companies cannot invest in hiring workers, provide training and most importantly, offer a safe place for their employees to work.

The Construction Association of Nova Scotia continues to survey its members to solicit feedback on prompt payment. Here are some highlights from a recent survey:

• 66% of respondents indicated that delayed payments are occurring most or all of the time on their projects.
• 75% believe that the right legal framework does not exist to improve timeliness of payments.
• 90% indicate that delayed payment increases the cost of doing business.
• 54% indicate that delayed payment reducing their ability to bid work and grow their business.
• 75% indicate that delayed payment increases the cost of project delivery.
• 74% agree or strongly agree that if paid in a timelier manner, their firm would expand operations/ grow their firm; while 65% indicate they would hire more people.

Once regulatory and adjudication framework for prompt payment is in place, it will:

• Improve the movement of money in our economy.
• Increase fairness and transparency.
• Increase efficiency and productivity.
• Lower the cost of construction projects, public and private.
• Reduce the burden on our judicial system.
• Drive investment, employment, training, innovation, and purchase of equipment (ie. apprentices).
• Increase competition and a number of bidders on public work.
• Allow contractors to bid more work.

The provincial government has made a commitment to produce regulatory and adjudication framework for Nova Scotian companies. In discussions with the province, three potential adjudication models have been presented. CANS has advocated for the introduction of a short-term adjudication framework modelled after Saskatchewan, in anticipation of a national adjudication model.

As of early October 2022, the file is currently sitting with Nova Scotia’s Department of Justice. They have indicated they will have final adjudication framework in place by Fall 2022 but we have seen no movement.