My name is Sandra Skivsky, and I am the chair of the National Trade Contractors Coalition, NTCCC. We'd like to thank the committee for inviting us here today to talk about Bill C-97.
The NTCCC represents trade contractors. We are a group of associations that formed back in 2004 and cover the major trades across Canada. These are trade contractors who perform about 80% of the work on site and directly employ the majority of tradespeople. Our members include approximately 12,000 mostly small and medium-sized businesses.
As you mentioned, I am joined here by Geza Banfai of McMillan LLP, who has provided thoughtful input and counsel to NTCCC on this topic for more than a dozen years. He was also involved in the advisory committees, both in the Ontario prompt payment efforts and here, federally.
One of the most important issues that NTCCC is focused on—and one of the reasons we began in the first place—is getting paid for work that's properly done. It's a major issue for our members.
Our objective is to ensure that prompt payment laws will be adopted in Canada, both at the federal level and in each province. We are very pleased to say that the federal prompt payment for construction act in the 2019 budget will introduce prompt payment rules on the federal construction contracts.
In the last 10 to 15 years, payment delays on all projects in all jurisdictions across Canada have increased. Delays have become not only more common, but longer. They have grown from something like 58 to 72 days in a very short period of years, and in many cases they go beyond that. Until recently—starting with Ontario's movement—there was no enforceable language in place at any level of government to ensure the proper and timely flow of payments through the construction chain.
Why is this important? Delayed payments cause serious inefficiencies, including project delays, fewer competitive bids and less opportunity to invest. They also lead to lower employment because of the pressure on operating cash flow that a trade contractor experiences due to late and uncertain payments. In the end, fewer jobs are created, the impact of government investments is reduced, fewer apprentices are hired and, in the worst case, small businesses go bankrupt.
The Canadian construction industry needs legislative and cultural change with regard to payment practices. Our members are very excited that this legislation is included in the budget, not only because of the prompt payment and adjudication regime that applies to federal projects, but also as a standard that can facilitate prompt payment in provinces and territories that have not yet established their own regime. Consistency, which Mary alluded to, is very important.
I would like to point out, as well, that there was a great deal of consultation and industry input into the creation of this language. It covers a complex, multi-level payment system that has many permutations—almost too many to list sometimes.
There was a detailed report produced by Reynolds and Vogel with recommendations developed from those consultations and additional research. Many of those recommendations are reflected in the language.
The industry—together with legal subject matter experts—looks forward to working closely with PSPC and other groups to ensure the implementation of this federal prompt payment regime. At the end of the day, once the regulations are in place and the industry and its advisers can process the language systematically as a whole, we can then provide some thoughtful and constructive input into what amendments need to be made.
We anticipate a national, industry-wide transition that will increase the promptness of payment across construction projects and change the current cultural norm of late payments. In light of this, we wish to thank and applaud key parliamentary champions—and we had a few—who did significant heavy lifting to ensure this issue was addressed. They include Minister Carla Qualtrough and Parliamentary Secretary Steven MacKinnon and their staff, and senior officials at PSPC.
We also wish to acknowledge the Honourable Judy Sgro and Senator Don Plett, who have been with us since day one and whose tireless efforts will lead to very positive outcomes for tradespeople, our trade contractor members and the construction industry as a whole.
If you have any questions, or would like any clarifications, we would be happy to entertain them. Thank you.