Proposed legislation targets contractors not paying bills

Proposed law targets delinquent contractors Jeff Keele reports on legislation that would allow companies to pack up their tools over overdue bills.

Harry Laarveld has been doing masonry for 35 years with bricks and stones.

Sometimes money he’s owed gets blocked.

Laarveld says in his business a handshake used to be enough, now he says some of the bills he submits to general contractors are not paid on time.

"It is a big problem, it's a widespread problem, and it's a problem that has become worse,” said Laarveld, owner of Eurocan Enterprises Ltd.

The small business owner says it can get to the point where some payments are 90 days overdue.

"That is the point where we get into trouble, our cash flow dies," said Laarveld.

Now a private members bill before the Manitoba legislature aims to crack down on companies in arrears.

Brandon West PC MLA Reg Helwer has tabled the Prompt Payments in the Construction Industry Act.

"Payments have been stretched out and people aren't paying on time," said Helwer.

Under the proposed legislation if payments are late, a contractor or subcontractor may, with notice, stop work or terminate the contract. Right now that would be considered a breach.

The alternative, an adjudicator may be appointed to resolve the issue.

"This legislation gives them access to another dispute resolution mechanism so the project can continue work," said Helwer.

Harry Laarveld welcomes the proposed legislation, he wishes it wasn't necessary.

Laarveld also points out these delays have a trickle-down effect on construction workers and tradespeople.

Companies can go under, impacting pensions, future jobs could be scaled back, and it can cause stress.

"Imagine having a payroll to attend to on Thursday, it's going in the bank Wednesday night and you're not quite covered,” said Laarveld.

Ontario has already passed a law and Ottawa is currently consulting on similar legislation that would cover federal construction projects.