B.C. prompt payment moving slowly: ‘We keep getting pushed off’ (2024)

Associations, Government

B.C. prompt payment moving slowly: ‘We keep getting pushed off’

Grant Cameron

A perfect storm of inflation, interest rate hikes, supply chain issues and wildfires have all affected B.C.’s construction industry this year, however a persistent lack of provincial prompt payment legislation (PPL) has just added to the woes, says Chris Atchison, president of the BC 51¹ú²úÊÓƵion Association (BCCA).

More projects in the province were delayed or put on hold as a result of budgetary pressures brought on by problems plaguing the industry, he notes. Meantime, wildfires affected pockets of smaller projects,

“There’s pressure on budgets due to inflation and the cost of material and the cost of labour shortages, mostly on the private side,” he says. “When we’re seeing projects go to market and then that cost is coming back, it’s a bit higher than anticipated. People are delaying a little bit, waiting for a more favourable time.”

Lack of PPL, which would ensure workers and businesses get paid on time, is an added headache for the industry, with some B.C. contractors and workers going to work in jurisdictions that have protections.

“When we don’t have a system or the legislative rigour in British Columbia that we’re seeing in other jurisdictions to protect the industry, like the prompt payment legislation, contractors are having to really protect themselves, their livelihoods and the livelihoods of skilled tradespeople that work for them,” says Atchison.

The BCCA has many members, whether they be larger general contractors or trade contractors, that operate in multiple jurisdictions and in other provinces like Alberta and Ontario where PPL has been enacted, he says.

“The feedback that we’re given is that having prompt payment legislation in a jurisdiction is a game-changer. It enables both certainty in payment terms, it allows relative confidence when it comes to change orders, and it allows for communication to be required on projects and just ensures the overall health and transparency of a project.

“In absence of that, when you remove communication, when you remove transparency, remove certainty, you create a climate that isn’t optimal for all those who are needed in our industry.”

An earlier survey by the BCCA revealed 34 per cent of contractors are paid late more than 25 per cent of the time. It’s not unusual for contractors to go three or four months without being paid, according to the BCCA.

Atchison says the labour shortage is not specific to B.C. and notes the lack of PPL is not the sole reason for the situation – but it’s not helping matters.

“If B.C. continues to enable this two-tiered system of construction in Canada, where we don’t have legislation that ensures prompt payment, lien reform and adjudication, then we’re going to continue to lag behind and fall behind the rest of Canada when it comes to a province that really supports a healthy and robust construction economy.”

Last spring, the BCCA learned a working group would be convened to study how PPL could be introduced in B.C. The province notified the association it is doing an analysis of what’s happening in other jurisdictions and Atchison agrees the experiences and views of other stakeholders across B.C. should be considered. However, the association wants consultations to happen in a more timely manner.

“This isn’t something that we want to do in isolation. We need to build an inclusive table to get the best legislation possible for British Columbia. But the Office of the Attorney General clearly has other priorities and has dedicated its resources to other legislation. It’s unfortunate because we’ve been requesting this for a number of years for them to review this and it’s a significant issue for British Columbia.

“I guess the best way to say it is we’ve been pushed off. We keep getting pushed off and the priority isn’t there. But we also feel there are people within the government who are paying attention to what’s happening in other jurisdictions.”

Atchison says the BCCA has offered to provide the attorney general’s office with an analysis that compares federal and provincial legislation that exists across the country in order to keep the ball moving on the proposal.

Meantime, the BCCA and its partners are plugging away with other programs aimed at getting new recruits into the trades system. They include Builders Life, which connects individuals and newcomers to workforce programs, and BCCA Apprenticeship Services, a program that supports small- and medium-sized employers to hire and register first-year apprentices.

“We’re doing extremely well in attracting new people to the industry,” says Atchison. “It’s really good news coming from the uptake, both from the talent side and the contractor side.”

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B.C. prompt payment moving slowly: ‘We keep getting pushed off’ (2024)


What is a prompt payment? ›

Prompt payment is a commercial discipline which requires businesses to: agree fair and reasonable payment terms with their suppliers. ensure suppliers' invoices are approved and paid within agreed terms. encourage adoption of the same practices throughout their supply chain.

What is the prompt payment clause? ›

The clause requires prime contractors to pay subcontractors for satisfactory performance of their contracts no later than 30 days from receipt of each payment from the grantee. This requirement comes from the Disadvantaged Business Enterprise rule found at 49 CFR § 26.29.

What is the timeline for the prompt payment act? ›

The Prompt Payment Act requires State agencies to pay properly submitted, undisputed invoices within 45 calendar days of initial receipt. If the requirement is not met, State departments must automatically calculate and pay the appropriate late payment penalties as specified in Government Code section 927, et seq.

What are the responsibilities of agency heads with regard to prompt payment? ›

§ 1315.3 Responsibilities.

Each agency head is responsible for the following: (a) Issuing internal procedures. Ensuring that internal procedures will include provisions for monitoring the causes of late payments and any interest penalties incurred, taking necessary corrective action, and handling inquiries.

How does PromptPay work? ›

PromptPay allows you to receive money using just your Citizen ID number or mobile phone number. All you'll have to do is to first link it to your TMRW bank account.

What is the penalty for prompt payments? ›

Any contractor who violates this section shall pay to the subcontractor a penalty of 2 percent of the amount due per month for every month that payment is not made. In any action for the collection of funds wrongfully withheld, the prevailing party shall be entitled to his or her attorney's fees and costs.

How do I request a prompt payment? ›

Send a Brief Email Requesting Payment

If you don't hear back from the client after your first check-in, or if your client acknowledges that they received the invoice but you still don't receive prompt payment, follow up with a brief, professional email. Outline the invoice due date and how many days ago it was due.

What is the United States prompt payment act? ›

In 1982, Congress passed the Prompt Payment Act to require Federal agencies to pay their bills on a timely basis; to pay interest penalties when payments are made late, and to take discounts.

How do you encourage prompt payments? ›

8 Simple Ways to Encourage Debtors to Pay on Time
  1. Build Strong Client Relationships. ...
  2. Set Clear Payment Terms. ...
  3. Invoice Promptly. ...
  4. Make it Easier for Clients to Pay. ...
  5. Consider Offering Incentives for Early Payments. ...
  6. Implement Penalties and Late Payment Fees for Slow-Paying Clients. ...
  7. Keep in Touch and Send Friendly Reminders.
Aug 10, 2023

What is often mandated by state prompt payment laws? ›

The Act states that state agencies need to pay any invoice within 45 calendar days of receipt, provided that the invoice is: Undisputed. Properly Submitted.

How long does the Government have to accept an invoice? ›

If the agency does not take the discount, it must pay within 30 days of receiving a proper invoice, unless the agency uses an accelerated payment.

What is the prompt payment act 31 usc 3903? ›

(a) Under regulations prescribed under section 3903 of this title , the head of an agency acquiring property or service from a business concern, who does not pay the concern for each complete delivered item of property or service by the required payment date, shall pay an interest penalty to the concern on the amount ...

When must the Government pay the invoice according to the prompt payment act? ›

(A) The 30 thday after the designated billing office receives a proper invoice from the contractor. (B) The 30 thday after Government acceptance of the work or services completed by the contractor.

What is meant by prompt payment? ›

Prompt Payment is defined as the timely payment of invoices by an organization. It is a key part of supply chain management and is often used as a metric to measure the performance of an organization. Prompt payment can also be used as a negotiating tool between suppliers and buyers.

What does the prompt payments act require from DoD components? ›

PPA requires federal agencies to pay their bills on a timely basis, to pay interest penalties when payments are made late and to take economically justified discounts only when payments are made by the discount date.

What is the meaning of prompt money? ›

Prompt Payment is defined as the timely payment of invoices by an organization. It is a key part of supply chain management and is often used as a metric to measure the performance of an organization. Prompt payment can also be used as a negotiating tool between suppliers and buyers.

How do I ask for a prompt payment? ›

There are no rules regarding how to politely ask for payments but here are some things to keep in mind.
  1. Don't use threatening phrases.
  2. Avoid using emotional language or being aggressive.
  3. Add a copy of your invoice and details required to make payment.
  4. Remind the client of the terms.
  5. Keep it short.

How do you prompt someone to pay? ›

When politely reminding someone of payment, you should include the following information in your payment reminders:
  1. Use clear subject lines.
  2. Re-attach the original invoice.
  3. Write in a friendly tone, even if payments are late.
  4. Make the payment due date clear, and reiterate the payment terms they agreed to.
Jun 25, 2024

What is prompt pay price? ›

Healthcare providers sometimes offer "prompt pay" discounts to encourage patients to pay their bills within a certain period, including outstanding copayments or deductible amounts.

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