Evidence of meeting #208 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was payment.
A video is available from Parliament.
Acting Chief Executive Officer, Parks Canada Agency
In fact, there's a certain amount of pressure associated with the operations themselves. For example, if it were impossible to determine the boundaries in the Canada National Parks Act, these people wouldn't be able to carry on their activities next year.
Liberal
The Chair Liberal Wayne Easter
Are you not going to ask what the ski rates are and how they compare to Mont-Tremblant?
Are there any other questions? It sounds pretty straightforward.
Thank you, gentlemen.
We'll turn to the last note.
Acting Chief Executive Officer, Parks Canada Agency
I can speak to the one-year appropriation very quickly if you like, Mr. Chair.
Acting Chief Executive Officer, Parks Canada Agency
Under the Parks Canada Agency Act of 1998, our agency operates on a two-year cycle of appropriations. The government is working to bring more departments and agencies into a one-year appropriation model. For Parks Canada, this was actually announced as part of budget 2014, but was never legislated. It was, again, announced in budget 2019 and now forms part of this piece of legislation.
Parks Canada is presently working with the Department of Finance on the transition to a single-year appropriation model. Part of the rationale, and something that is invisible to many Canadians is that Parks Canada is one of the government's largest asset holders and as the government moves large departments like PSPC and National Defence into an accrual-based model for managing assets, we too will move in that direction. This helps to facilitate that transition.
Acting Chief Executive Officer, Parks Canada Agency
It's a two-year cycle, so we would shift to a one-year cycle like most federal departments.
Liberal
The Chair Liberal Wayne Easter
It doesn't really apply to this, but I'm going to ask you anyway.
I want to give you an example on Prince Edward Island. We have the Prince Edward Island National Park. The land is leased out to two farmers, which is a good thing. One of the farmers died this year, so that land has to be released.
Parks Canada tells me the tender process is so long it can't get it done for spring cropping, so we're going to have weeds growing this summer on that farm. That's going to be lovely for tourists to see. What tender process do you have to follow at Parks Canada if you're going to tender something out that's on Parks Canada land?
Acting Chief Executive Officer, Parks Canada Agency
There is no successor to the person who passed away in this instance.
Liberal
The Chair Liberal Wayne Easter
You can look into it and get back to me.
To me, it's a simple matter: Lease it out for one year to someone rather than letting it sit idle and grow weeds.
Acting Chief Executive Officer, Parks Canada Agency
Okay, we can come back to you on that.
Liberal
Liberal
Liberal
The Chair Liberal Wayne Easter
If there are no more questions for Parks Canada, thank you very much, Mr. McNamee and Mr. Nadler.
Now we're turning to division 26, on prompt payment for construction work.
We have Mr. Kilpatrick, director general; Mr. Gardner, senior director; and Mr. Meszaros, senior counsel.
Crawford Kilpatrick Director General, Strategic Sourcing Sector, Department of Public Works and Government Services
Thanks very much, Mr. Chair and committee members, for hearing us this evening.
I'm the director general lead on this particular initiative, working with Public Services and Procurement Canada. Chris Meszaros is part of our legal team and has been integral in the development of the initiative. Shawn has been very, very active in the development of the legislation as an instructing officer. It's a new measure called the federal prompt payment for construction work act.
How did we get here today? I'll give you a little bit of context.
At the 50th annual general meeting that we had with the Canadian Construction Association and the federal government, the issue of timeliness of payment came up as a topic of conversation. This was in April 2016. At that meeting, the Canadian Construction Association indicated that in 2015 alone, there were $285 billion of construction contracts nationally. There was almost $46 billion in delayed payments, so that's over 16% of the total construction value nationally.
Payments made to contractors were evidently not flowing effectively through the payment chain to subcontractors, sub-subcontractors, etc. At that meeting, the federal government was asked to take a leadership role and engage in dialogue with the Canadian Construction Association and others, to identify, assess and implement possible measures to address timeliness of payments.
In early 2018, Public Services and Procurement Canada commissioned independent experts to lead an engagement process seeking input from the national construction industry to identify the elements required to develop a robust, prompt payment regime. The independent experts led the national engagement process. They invited stakeholders from across Canada to participate. There were over 55 engagement sessions, and they met with over 500 people. A recommendations report was submitted to government in June 2018.
In August 2018, the independent experts hosted a stakeholder meeting in Toronto to discuss the recommendations report and the reasoning behind those recommendations with industry stakeholders.
The new legislation was developed. It was informed by the recommendations report. It will help to ensure that payments flow down the construction payment chain promptly and contribute to the government's objective of achieving best value on its construction projects. This applies to federal contracts, federal projects on federal lands.
Typically, legislation dealing with contractual relations would fall within provincial jurisdiction in relation to property and civil rights. However, the federal legislation will apply exclusively to federal projects on federal lands.
We've been working very closely with the construction industry over the past number of years. This has culminated, to this point, in the development of legislation. The construction industry directly employs over 1.5 million Canadians. It represents 7.5% of Canada's total workforce and is approximately 7.2% of the gross domestic product for Canada.
We have engaged with the Canadian Construction Association, the National Trade Contractors Coalition of Canada and the General Contractors Alliance of Canada, amongst others. Our efforts have been supported to date.
Ontario's Bill 142, which was a provincial bill including similar prompt payment terms and adjudication measures, was unanimously supported and received royal assent in Ontario in December 2017. We are planning on conducting additional industry engagement sessions, which will occur during the development of regulations that will go along with this piece of legislation.
That's where we are now. I'd be more than happy to take questions.
Liberal
The Chair Liberal Wayne Easter
Okay, $46 billion in delayed payments seems fairly substantial.
Mr. Sorbara.
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
Thank you, Mr. Chair.
I have a few comments. I do need to applaud one of my colleagues who worked on this for a very long time, the honourable Judy Sgro. She has been a big advocate for prompt payment legislation at the federal level for a very long time. I do wish to thank the minister, the honourable Carla Qualtrough, and parliamentary secretary MacKinnon.
I attended a number of the meetings, and it is something that impacts many of my stakeholders in the area I represent, a lot of GCs and subcontractors in the area. I'm glad to see this legislation in the BIA.
I have a quick question. What percentage of construction contracts are awarded at the provincial level in the total bucket in Canada?
Shawn Gardner Senior Director, Real Property Service Management Contract Division, Department of Public Works and Government Services
I guess, ultimately, what we have been told by the Canadian Construction Association is that the federal government deals with about 1% of the commercial construction market. That would suggest that the 99% is others.
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
Yes, and the majority of the others are the province and the municipal and regional level. I would argue that the federal leadership role on the file is very important. This is somewhat following the provinces, but also demonstrating leadership for provinces that haven't signed on yet.