The sa国际传媒 Construction Association is renewing its call for the province to introduce prompt-payment legislation to protect contractors.
Chris Atchison, president of the association, said higher interest rates “reverberate” down the construction pyramid to contractors, who have higher costs of borrowing for material purchase, payment of skilled labour and carrying costs of invoices that aren’t getting paid in a timely fashion.
A downturn predicted for 2023 by many economists could mean real problems for smaller companies, he said.
“That’s why we have been calling for prompt payment legislation — we have no payment certainty for those contractors, and it costs a lot when you don’t get paid on time,” he said.
The province has only said it has been monitoring the implementation of similar legislation in other provinces, but has not reached a decision on what will happen in sa国际传媒
Atchison said the association has seen enough in places like Alberta, Saskatchewan and Ontario to know it could work here.
“Every bit of information we have gleaned is that it’s working — yeah it needs to be tweaked, but it’s working for the owners, it’s working for the contractors and the sub trades,” he said. “If we borrow the best legislation from those jurisdictions, we can create something in sa国际传媒 that is building on their success.”
Without the legislation, Atchison said contractors face significant financial risk as they take on more debt while they wait up to 120 days to be paid.
He noted contractors might not be able to withstand the pressures from higher interest rates and the inability of others to pay their bills.
“If there’s no legal obligation to pay them in a certain time frame, then those people are invariably going to take advantage of that situation,” he said.
The call for such legislation came alongside a new report from the sa国际传媒 Construction Association showing investment in the province’s industrial, commercial, and institutional construction sectors is down 11 per cent since February 2020, while contractors are facing significant increases in cost.
“I think [higher interest rates] are maybe delaying or shelving some of the larger private projects,” Atchison said. “Interest rates are going to impact everybody.”
The report noted contractors are struggling to balance declining commercial demand with rising costs of materials and labour.
Atchison said due to rising interest rates, high supply and labour costs, the private sector has pulled back on spending in the sector, though public investment in institutional projects remains fairly steady and the labour shortage is still the industry’s biggest problem.
“What is apparent is even if there is a correction, we’re still going to have a skilled-labour shortage. So we still need to be making the investments in training and the attraction and retention of a skilled workforce,” he said.
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