MPPs heard first-hand testimony yesterday on how Bill 69, the Prompt Payment Act, will disrupt Ontario's construction sector

F-PRO coalition members testified before the Standing Committee on Bill 69's limitations and risks to industry, taxpayer and consumers alike, urging action to avoid serious disruption and costs

TORONTO, March 20, 2014 /CNW/ - Ontario construction companies joined municipalities and homebuilders in testimony yesterday before the Standing Committee on Regulations and Private Bills, urging members to take seriously the wide-ranging consequences of a bill moving through the province's legislature. "Without proper, sufficient consultation and with only three hours of discussion, MPPs are being asked to decide on a bill with serious consequences for the construction industry," said Chris Gower, Executive Vice President, PCL Construction.

The Fair Payment Reform Ontario (F-PRO) coalition of construction companies includes Eastern Construction, ACS Infrastructure Canada, Carillion, Dragados Canada, EllisDon, PCL Construction, Aecon and Bird Construction.  As Aecon's Vice President and Assistant General Counsel, Yonni Fushman, made clear to Members yesterday, the companies have joined together because, "Bill 69 will play havoc with the way the entire industry operates, affecting everyone from homeowners conducting renovations to the successful and timely completion of major projects."

"The motives behind Bill 69 are well intentioned, but in its current form it goes well beyond its intended purpose to ensure tradespeople are paid on time," he continued.  Among a number of issues raised, F-PRO challenged the committee on the following limitations proposed under the Bill:

• Freedom of the market
• Holdbacks would be limited under the bill, preventing smaller companies from assuming larger project work as they attempt to grow because they could not take additional holdback as security
• Companies' ability to challenge performance through withholding payment
• Irrespective of completion or performance, a payer would no longer have cause to challenge performance through withholding; under the bill, only recourse is the courts

F-PRO is concerned that without major amendment, the bill would mean that simple activities such as homeowners or contractors tying payment to performance, or holding back a portion of pay until work is satisfactorily completed, would no longer be allowed. "The fact is, the end result of this process would be higher construction costs, especially for major projects funded by the taxpayer", Gower said.

F-PRO fully supports the principles behind Bill 69 - contractors and subcontractors should be paid promptly for good work.  However, because Bill 69's reforms are so wide-reaching, the better mechanism for this discussion is a legal review with industry, rather than a Private Member's Bill that does not adequately anticipate the bill's consequences.  F-PRO hopes committee members listened to the concerns expressed yesterday and will move the bill into a more formal, consultative and deliberative process that is better for everyone: industry, consumers, homeowners, local governments and taxpayers.  The second and last opportunity to debate the bill takes place on March 26^th.

SOURCE: Fair Payment Reform Ontario

Media enquiries: Joe Pickerill, StrategyCorp, [email protected] or 416-864-7112 x2225