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December 1, 2015 In This Issue
Member Update
Industry News
Education and Training
Innovation and Technology
By The Numbers
Events
Important Dates
MCA Canada's Charity of Choice
Important Links
M.A. STEWART & SONS LTD.
Ecco Heating Products Ltd.
FastEst, Inc.
Member Update
Lost somewhat amid all the headlines about cleaning up the construction industry was a very important message: the Charbonneau Commission has recommended that the Quebec government adopt mandatory payment timelines on construction contracts.

If the provincial government adopts all 60 recommendations contained in the 1,700-plus page report—and Premier Philippe Couillard has promised it will—the province could become the first in the country to adopt prompt payment provisions.

The full text of the translated recommendation is appended below.

Recommendation 15 - To reduce delays in payments to construction contractors

During testimony before the Commission, several contractors have reported the problem of delays in payment of invoices submitted to public work providers (DOP). Generally, payment of accounts payable is 30 days after the invoice date, but payment delays in the construction industry are now 3 to 6 months, according to the latter.

These observations were confirmed by other witnesses involved in the public administration. According to the director of supply of the City of Montreal between 2003 and 2006, Serge Pourreaux, the Finance Department had estimated that in 2003 or 2004, 80% of invoices were paid within varying from 4 to 6 months.

During his testimony, the engineer and investigator Jeannette Gauthier Commission echoed this concern. Having met 25 of them and six suppliers of materials, she first said that the average payment period reached four months. She also said that this situation, generalized to all work providers, seemed worse with the public sector.

A study by the firm Raymond Chabot Grant Thornton (RCGT) also confirms this information. In Canada, the average time of collection of receivables in the construction industry exceeded 11.3 days in 2002 that of all the other industrial sectors. And in 2011, this gap has increased from 20.6 days. Worse, in the construction industry, the sectors with the highest percentage of customer accounts receivable over 120 days are those of the civil engineering and roads and the institutional setting. Customers in these areas are mainly in the public sector.

For the Commission, this situation presents three major problems. First, it gives significant power to site supervisors, since they must approve such progress payments. According to the approval rate of these, these professionals can intimidate or encourage construction contractors, thereby contributing to private corruption ploys. Second, this situation contributes to restricting competition in the industry, thus promoting the creation and maintenance of collusive agreements. Indeed, having already paid their workforce, suppliers and subcontractors, entrepreneurs must financially support these payment terms. This lack of liquidity limits the number and growth by restricting their ability to undertake new mandates. In this regard, in 2013, over three-quarters of contractors have refused to answer at least one tender, judging unfair payment terms or anticipating payment problems. In addition, late payments penalize more small and medium businesses (SMB) who do not always have easy access to credit. They are therefore more at risk of experiencing financial difficulties. This is not likely to encourage them to engage in new markets.

Third, this situation favors the infiltration of organized crime in the construction industry. Indeed, (SMB)s facing financial difficulties arising from excessive accounts might be tempted to resort to other non-traditional funding sources. In fact, this is what happens. The non-traditional financing is used by a significant proportion of construction companies because of late payments.
 
To these three major problems must be added a fourth, this time for the state. This situation encourages contractors to consider this financial risk in the price of the tenders submitted. In other words, these financing costs are transferred to the public work providers, and thus taxpayers.

To counter these adverse effects to the progress of the construction industry and development of the economy, several States have undertaken to supervise payment terms to their suppliers. These are the United States, the European Union, the United Kingdom5 and the State of South Australia in Australia.

The Commissioners therefore recommend to the Government to adopt legislative or regulatory provisions in order to propose, as part of a prime contract and subcontracts a standard production time progressive statements and payments to reduce the grip of construction supervisors and DOP on companies working in the construction industry as well as the possible infiltration of organized crime.
 
The HEAT is On! was the theme of MCA Canada’s 74th Annual National Conference. It was held at the amazing Omni Ranchos Las Palmas Resort & Spa in magnificent Palm Springs, California, from November 16 to 19.

The nearly 350 delegates who attended enjoyed a host of educational programs, workshops and social events. The conference kicked off with the John Bradshaw Memorial Golf Tournament, sponsored by IPEX, at the Desert Hills Golf Club. The winning team of Bruce Laing, Christopher Weins and Rick Levesque beat out a number of close competitors on a picture-perfect course and day.

The opening night California Dreaming party included food stations from around California, live music by cellist Marsden and live dance music by Beach Boys cover band Catch A Wave. There was also ample shopping at local vendor stations and incredible hot-air balloon rides.

Victaulic’s Opening Breakfast featured keynote speaker and former NHL All Star Clint Malarchuk who provided an amazing and uplifting story of his life in the NHL and beyond while suffering from mental illness.

Our off-site event was held at the Field of Dreams. Sponsored by the United Association, the fun featured baseball and many other sports, and brought back memories of younger days to all the participants. It was spectacular fun and everyone left with a smile—despite a few aches and pains.

The conference ended with our first awards gala. A.O Smith, Bradford White, Apollo Valves, Taco Canada and IPEX received Certificates of Appreciation. Peter Ashton received the Doug Crawford Memorial Award. MCA America was recognized for its contribution to Operation Eyesight. AON Insurance, A.O. Smith, Total Energy Systems and Wolseley Mechanical Group all earned 100 Year Awards. Finally, the prestigious Gary Greig Memorial Award was presented to MCA Newfoundland and Labrador Manager Dave Dawe. Congratulations to all our award recipients.

There were plenty of business meetings mixed in among these great events: several committee meetings, the CEC Council meeting, the MSCC board of directors meeting, the annual general meeting itself and the MCA Canada board of directors meetings.

Finally, and perhaps most importantly, there was a changing of the guard among the board of directors. MCA Canada President Gaetan Beaulieu handed the association’s reins over to new President Del Pawliuk. The association also recognized retiring board members Peter Ashton and John Baker for their contributions.

Everyone had a great time in California. We look forward to seeing everyone next year in Orlando, Florida, at the Yacht and Beach Club Resort on Disney World’s property from November 14 to 17, 2016.

Stand by for more conference highlights in future editions of Just the Fax.
 
The MCA Canada Member Multimedia Information Program delivers timely and valuable information to our members via email (Just The Fax), the Internet (www.mcac.ca) and direct mail. The program’s goal is to provide every MCA member with regular information on upcoming events, programs and projects. In addition, each communication will feature one of our Membership Advantage Programs, which can save you thousands of dollars each year. This program is brought to you by the generosity of our featured associate member.
 
December's Multimedia Information Program includes:
 
  • Annual Associates Calendar – The 2016 Associates Calendar is on its way. Filled with valuable supplier innovations as well as important dates such as the provincial and zone conferences and AGMs, MCA Canada’s National Conference, partner and affiliated organization events, and educational programs, the calendar has become a popular item among members. Our thanks go out to Allpriser, HPAC Magazine, Oventrop, Victaulic, IPEX, PLAD, LynCar Products, Jonas Software, Bradford White, Masco Canada, Praxair and Rheem for their contributions.

  •  Membership Advantage Program – This month, we feature our partnership with Avis and Budget car rentals. Avis is the leader in premium commercial and leisure segments of the travel industry while Budget focuses mainly on the value-conscious market. Members can enjoy discounts throughout the year on Avis' line of premium commercial and leisure vehicles or Budget's inventory of value-conscious vehicles. Coverage includes more than 10,000 locations in over 175 countries around the world. For more information, visit mcac.ca and click the Membership tab.

This month's program brought to you by Canplas. Based in Barrie Ontario, Canplas is one of Canada’s leading manufacturers of injection-molded, thermoplastic products for the construction industry. For 50 years, Canplas has produced a broad range of plumbing commodities, using their plastics and manufacturing expertise to consistently produce high-quality gravity drainage fittings that can be found in the construction of just about every home in Canada. Canplas also manufactures Duraflo residential ventilation products and has been actively growing its Endura Grease Management brand in recent years, offering some of the most user friendly and high performing grease interceptors to commercial foodservice applications at home and internationally. Canplas Vaculine Central Vacuum products also draw upon the broad expertise to offer a full range of fittings and sweep inlet products to a distribution network extending internationally. Canplas is an Aliaxis Group company, a worldwide leader in the production of plastic products for the movement of fluids in the construction of commercial, residential, industrial and municipal sectors. For more information, visit canplas.com.
 
Industry News
The stench of collusion and corruption that permeated Quebec’s construction industry and spread to bureaucrats, political parties and organized crime was far more rife than originally thought, says the judge who headed the Charbonneau Commission.

 
Concern is mounting in the insurance industry over water damage caused by faulty plumbing, utilities or construction in highrise strata buildings leading to ramped up deductibles or insurance cancellation. It is hitting all aspects of strata development ranging from developers and general contractors, trades working on a project, to strata corporations.

 
Plan includes a broad-based carbon tax and phasing-out the province's coal-fired power generation by 2030.

 
Province becomes first jurisdiction in North America to outlaw energy source.

 
N-Two Cryogenic Enterprise Inc.
Victaulic Company of Canada
Bradford White Canada Inc.
Education and Training
The Construction Education Council recently announced new dates for its popular Gold Seal and Blue Seal Accredited Project Management Program.



The program will be offered over 10 days this spring: from March 31 to April 4 and April 21 to April 25. As always, it will be run in partnership with our friends at the University of Waterloo.



Make a point to check out this great session. It's incredibly popular and filled with all kinds of valuable insight.

 
Innovation and Technology
BuildBoom is hoping to be the next big thing in the construction industry.


 
By The Numbers
According to the confidential Wholesalers' Sales Report produced by the Profit Planning Group, October total product sales were down by $34.5 million dollars or down 5.7 percent compared to October 2014.

 
Events
The World Design Summit Organization and Tourism Montreal have announced that Montreal will host the World Design Summit in 2017, bringing together professionals in architecture, landscape architecture, graphic design, industrial design, interior design and urban design and planning.

 
Nearing the end of what appears to have been a relatively lacklustre year, the most recent indicators of economic growth are still sending mixed signals.

 
Miura Canada
Bibby-Ste-Croix
QuoteSoftware
Important Dates
  • December 2–4: Construct Canada, The Buildings Show – Metro Toronto Convention Centre, Ontario
  • March 31–April 4, 2016: Project Management – Part 1, University of Waterloo, Waterloo, Ontario
  • April 21–25, 2016: Project Management – Part 2, University of Waterloo, Waterloo, Ontario
 
MCA Canada's Charity of Choice
MCA Canada’s Charity of Choice is Operation Eyesight Universal, an initiative that aims to wipe out trachoma, a disease that causes blindness. Since 1963, Operation Eyesight has helped save the vision of more than 35 million people—simply by providing them with access to clean water and basic sanitation.

To date, MCA Canada and its members have generously raised enough money to build 30 wells through Operation Eyesight. Let’s keep up the great work. Consider giving to Operation Eyesight this holiday season.

For more information, call 613-232-0492 or email mcac@mcac.ca.
 
 

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