Introducing prompt payment and adjudication on federal construction projects: What you need to know
Building on the momentum of Ontario’s new Construction Act, the federal government now proposes the Federal Prompt Payment for Construction Work Act, within Bill C-97 (Budget Implementation Act, 2019).
On April 28, 2019, the Bill passed second reading in the House of Commons and was referred to the Standing Committee on Finance for further review. In this update from Osler, they briefly examine issues on the potential application and scope of the statute, initial differences with the Ontario legislation, and potential effects of the new legislation on existing construction contracts.
In addition, they note some rather surprising transition provisions that contemplate a one-year deferral period, and does not provide for any grandfathering of existing contracts. Therefore, existing federal construction contracts prior to the enactment of the new legislation must nevertheless comply starting a year from enactment.