Proposed Prompt Payment Act Sacrifices Quality, Accountability

TORONTO, March 19, 2014 /CNW/ - Association of Municipalities of Ontario (AMO) President Russ Powers is urging the Ontario Legislature's Standing Committee on Regulations and Private Bills to rethink Bill 69, The Prompt Payment Act, 2013.

"Our residents expect prompt payment of contractors to be balanced with the need to ensure that work is done correctly," said Powers. "Quality control, due diligence and professional inspections ensures that public dollars are spent wisely and that public safety is protected".

"Municipal governments pay their bills in a professional manner – once they know the work is properly done. That shouldn't change".

AMO is concerned that this Bill will create unnecessary risks and costs, for tax payers, by promoting work stoppages, driving up municipal insurance premiums and forcing disputes into litigation.

The Prompt Payment Act is a Private Members Bill proposed by Vaughan MPP Steven Del Duca (LIB). AMO is concerned that this sweeping legislation would:

• Standardize payment terms in all construction contracts;
• Eliminate deficiency and warranty hold-backs, a common practice that helps ensure work is done correctly;
• Not allow for professional inspection and certification before payment;
• Eliminate the practice of tying payment to contract or construction milestones;
• Require progress payments every 31 days or less;
• Force invoices to be paid, or formally disputed, within 10 days; and
• Be particularly problematic for large infrastructure projects, with complex funding arrangements.

As currently written, the Bill would limit a homeowner's ability to ensure work was performed to standard, let alone restrict a municipal government's ability to ensure that large scale construction projects meet with quality control and safety standards.

AMO believes that Bill 69 should be withdrawn to allow for appropriate consultation with affected stakeholders. 

AMO is a non-profit organization representing almost all of Ontario's 444 municipal governments.  AMO supports and enhances strong and effective municipal government in Ontario and promotes the value of municipal government as a vital and essential component of Ontario and Canada's political system.

SOURCE: Association of Municipalities of Ontario

Brian Lambie, AMO Media Contact, 416-729-5425, [email protected]; Follow the AMO Conference on Twitter: @AMOPolicy