Update on Promt Payment from CCA

Highlights from the CCA Board Meetings

Held March 5 – 6 in New Orleans

CCA Action on Prompt Payment
The outcomes/recommendations emanating from the September 2015 CCA Industry Summit devoted to prompt payment and cash flow were as follows:

  • CCA does have a leadership role to play in Canada with respect to industry payment and cash flow issues. CCA needs to establish a clear policy position on payment and payment practices in the Canadian construction industry;
    • CCA can be a hub or clearing house for sharing prompt payment information and best practices – domestic and international (e.g. the U.S., Australia, the UK, etc.) – as well as with respect to efforts and developments at the provincial level;
    • There is support for creating new and/or strengthening existing CCDC/CCA standard contracts and guides that speak to prompt payment including embracing the adjudication process, the right to suspend the work/terminate the contract for breach of the payment terms, and greater transparency as to the flow of funds in the contracting chain;
    • CCA should not proactively get involved in any provincial initiatives – but participate if asked (although likely there would have to be a full consensus of CCA partner associations in that province);
    • There is general support for CCA to educate the federal government on industry payment challenges and to support the notion of federal prompt payment legislation applicable to federal government construction contracts only; and
    • CCA should involve all parties in the contracting chain and the industry in this discussion – including owners and consultants.

    Last October, the CCA board passed the following motion as a partial response to the foregoing outcomes:

    • “THAT, CCA work with its partner associations, interested stakeholders, and federal contracting authorities, to educate the federal government on the importance of prompt payment and cash flow on federal construction projects, and work together to resolve any concerns, which may include the enactment of federal prompt payment legislation acceptable to the industry.”

    Shortly thereafter a CCA taskforce was established to achieve that objective.
    At its March 2016 meetings, the CCA board agreed to the following further course of action for CCA in this regard:

    1. Task the new CCA federal taskforce on prompt payment to develop a clear CCA policy position on payment and payment practices in the industry as a first step in its deliberations;
    2. CCA staff should establish and maintain a special section on the CCA website to serve as a hub or source of information on prompt payment information/legislation and best practices;
    3. With regard to the recommendation calling for a review of CCDC/CCA standard documents and guides, CCA will update CCA 28 2009 – A Guide to Improving Cash Flow in the Construction Industry, with a view to expanding its scope beyond simply the prime contract level to include best practices, available rights and remedies, etc. for subcontractors/suppliers;
    4. The CCA federal prompt payment taskforce has been established to deal with creating new / strengthening existing CCDC / CCA documents and educating federal government.
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