Thank you very much for having us at the committee meeting today.

We are the General Contractors Alliance of Canada. We are a national organization made up of over 450 general contractors across Canada. We build over 85% of the institutional, commercial and light industrial construction completed in our country on an annualized basis. Member companies range in size from small regional contractors to the 10 largest contractors in Canada.

The GCAC is a strong supporter of prompt payment in Canada and has developed extensive expertise on this subject through its involvement in the provincial prompt payment movement. Through provincial general contractor associations and local chapters, the GCAC and its member companies have been working with provincial governments in Ontario, Quebec and Saskatchewan to draft prompt payment legislation that achieves the objectives of both the government and industry.

The prompt payment portion of Bill C-97 is a welcome piece of legislation for the GCAC and our industry. We thank the government for working with us on this legislation, as it will make the Canadian construction industry more competitive and efficient.

Our comments today are practically based and are focused on making the bill workable, and this is an important point, so that the objectives of the bill are actually delivered as intended. We have developed a short list of recommendations.

First, proposed section 9, on submission of a proper invoice, should have a clause that would give Her Majesty and the contractor the ability, if all parties agreed, to negotiate, revise and resubmit the proper invoice within the 21-day review period while maintaining the original proper invoice submission date.

Negotiating and revising a monthly invoice is a normal industry practice, and maintaining this practice would significantly reduce adjudications. The provinces of Ontario, Quebec and Saskatchewan have adopted this practice. Consistency across the country is an objective of the industry.

The second point is on proposed section 16, regarding adjudication. A significant part of this function would be left to the regulations and is in the body of the act. The act should include two specific points in proposed section 16.

First is the definition of what can be adjudicated, including non-payment of a proper invoice and the cost of services or materials provided under a contract, including change orders, whether approved or not, and proposed change orders. Over 50% of construction non-payment issues are a result of a failure to pay change orders promptly. Ontario, Quebec and Saskatchewan have recognized this issue with their definition included in their acts. It also keeps the definition consistent from one jurisdiction to another.

Second is the ability of a contractor to consolidate the same or related adjudications in one adjudication, to be heard by one adjudicator at the same time. It's a key point. This would prevent the same adjudicated issue from being heard by two different adjudicators who might not render the same decision, thereby putting one party in an unfair financial position.

Our third point is that as Bill C-97 is currently drafted, there is no provision to deal with the specific needs of public-private partnership projects, or P3s, as they are called. The federal government has an active P3 building program. It will face issues with the lending market that currently funds P3 projects in our country. The Construction Act in Ontario has developed specific clauses with lenders and P3 companies that have properly dealt with the needs of lenders on P3 projects. The GCAC strongly encourages the government to include these in Bill C-97.

Proposed subsection 9(4), on submission of a proper invoice, refers to “verification of the construction work”. This would create confusion, as it is unclear what is meant by “verification”, as such a term is not a customary construction term. Additionally, there is no reference to a proper invoice. The GCAC proposes revising this drafting to say “certification of the proper invoice”, which includes a reference to the proper invoice and includes the term “certification”, as it is a customary construction term that is understood by our industry.

Bruce Reynolds and Sharon Vogel put together a consultation report for PSPC. It was a very good report. It went around the world and established best practices and what worked and what didn't work. It was very thorough. It outlines a number of recommendations for justice, PSPC and the government. The points we've made in our report to you are included in that report. There are many others, but these are the key ones.

The report gets to the heart of prompt payment and puts together a methodology that is really key to the success of this piece of legislation actually working in the field. That's the key part that we're trying to distinguish for you today. These changes are small, but they'll have a big impact on the day-to-day operation of the act, how the act is going to execute itself. It's not a contract; it's for when problems hit contracts. Having these pieces in place will allow those problems to resolve very quickly.

We're big supporters of the legislation. We thank the government for including it.

We look forward to questions. Thanks for hearing us.

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