Prompt Payment Legislation costly to hometowns

Municipalities of Saskatchewan is calling on the Government of Saskatchewan to reconsider prompt payment legislation and regulations that have the potential to cost municipalities millions in taxpayers’ dollars and harm good governance practices.

“Our municipalities are responsible for the infrastructure projects that build better lives for 80 per cent of Saskatchewan’s residents,” said Municipalities of Saskatchewan President Gordon Barnhart. “The Builders’

Lien (Prompt Payment) Amendment Act and accompanying regulations potentially expose our hometowns to millions of dollars of losses in both dollars and time as municipalities are forced to rush payment on projects that may not be complete or meet standards.”

The new legislation requires project owners to pay invoices from general contractors within 28 days of receiving an invoice and introduces a new dispute resolution process.

“We value and support our local businesses, and our hometowns often pay invoices within 30 days,” said President Barnhart. “But it is our duty to ensure infrastructure projects meet and exceed public safety standards, and funding is not wasted. Under the new legislation, municipalities will have less time to ensure projects meet standards and we could end up spending more money to take part in a legislated adjudication process to recover funding on projects that are discovered to be incomplete.”

Municipalities of Saskatchewan is disappointed in the lack of consultation on the act and regulations. Multiple requests for consultation were made to the Government

of Saskatchewan, including a letter sent on July 23 to Saskatchewan Justice Minister Don Morgan asking for municipal consultation on the development of regulations. The regulations were brought before Cabinet in August.

“As the order of government closest to the people, we are responsible for ensuring safe infrastructure projects that enhance the quality of life for our residents while being financially responsible with our taxpayers’ dollars,” said Barnhart. “Our hometowns deserve to be consulted on legislation that impacts those responsibilities.”