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FederalDid not become law (session ended)42nd Parliament, 1st Session

Bill S-224 explained in plain English

An Act respecting payments made under construction contracts

Federal Parliament bill summary, status, timeline, sponsor, votes, and official sources.

At a glance

Jurisdiction
Federal Parliament
Legislature / Parliament
Parliament of Canada
Session
42nd Parliament, 1st Session
Bill number
Bill S-224
Full title
An Act respecting payments made under construction contracts
Current status
Did not become law (session ended)
Latest event
Senate bill awaiting first reading in the House of Commons
Last updated
May 4, 2017

Official Parliament of Canada snapshot for 42nd Parliament, 1st Session. MP vote breakdowns appear when the House of Commons publishes a recorded division export for that bill. Senate and House stage details include official debate/sitting links when LEGISinfo publishes them.

Chamber
Parliament of Canada
Current Stage
Senate bill awaiting first reading in the House of Commons
Latest Activity
May 4, 2017
Plain-language explanation
In plain English (our explanation)

Our plain-language take, written for civic education.

Source: By PoliticalData.ca

AI-assisted, reviewed before publishing
Short Version

Bill S-224 creates the Canada Prompt Payment Act to require government institutions and construction contractors to make timely payments to contractors and subcontractors on federal construction projects, with specified payment deadlines, dispute resolution procedures, and remedies for non-payment.

What It Means

Bill S-224 proposes a new federal law called the Canada Prompt Payment Act. The law aims to ensure that contractors and subcontractors working on construction projects for the federal government are paid on time. Here is what the act would require: **Government institutions** must pay contractors: - Progress payments monthly (or more frequently if the contract specifies) within 20 days of payment approval - Final payments on the date set in the contract or within 20 days of approval, whichever is sooner **Contractors** must pay their subcontractors: - Progress payments monthly (or more frequently) within 23 days of payment approval - Final payments within 30 days of approval or on the contract deadline, whichever is sooner **Subcontractors** submitting payment applications must do so on the 25th day of the month for monthly payments. **Payments are automatically approved** if a payer (government institution or contractor) does not respond to a payment application within specified timeframes (10 days for contractors, 20 days for subcontractors). A payer can only dispute specific amounts if they provide written reasons and references to the contract. **Milestone payments** (lump sum payments at project stages) are allowed only if the government contract permits them, and subcontractors must receive advance notice. **Remedies for unpaid invoices:** - Contractors and subcontractors can suspend work if payments are overdue and can suspend passing payments to their own subcontractors - They can refer payment disputes to a binding adjudication process within 28 days - They can terminate the contract for non-payment after giving 14 days' notice **Interest** must be paid on overdue amounts at the rate in the contract or a prescribed rate, whichever is higher. **Subcontractors have information rights**, including the right to know payment deadlines in the government contract and receive notice when upstream payments are received. The act applies to all construction contracts between government institutions and contractors, and to related subcontracts. It does not apply to employment contracts or classes of contracts prescribed by regulation. The law comes into force six months after royal assent.

What This Bill Does
  • Enacts the Canada Prompt Payment Act to regulate payment timelines for construction work under federal government contracts
  • Requires government institutions to pay contractors monthly progress payments within 20 days of approval or certification
  • Requires government institutions to make final payments by the contract deadline or within 20 days of approval, whichever is earlier
  • Requires contractors to pay subcontractors monthly progress payments within 23 days of approval
  • Requires contractors and subcontractors to make final payments within 30 days of approval or by the contract deadline, whichever is earlier
  • Establishes automatic approval of payment applications after 10 days (for contractors) or 20 days (for subcontractors) if the payer does not respond
  • Allows payers to dispute only specific amounts in a payment application if they provide written notice with reasons and contract references
  • Permits milestone (lump sum) payments only when authorized in the government contract and requires notice to subcontractors
  • Allows contractors and subcontractors to suspend work performance if payments are overdue
  • Allows contractors and subcontractors to suspend passing payments to lower-tier subcontractors if they experience non-payment
  • Creates a binding adjudication process for payment disputes, with decisions within 28 days or as agreed by parties
  • Allows contractors and subcontractors to terminate construction contracts after providing 14 days' notice of non-payment
  • Requires payment of interest on overdue amounts at the contract rate or prescribed rate, whichever is greater
  • Requires contractors to disclose payment deadlines and dates/amounts of payments received to subcontractors
  • Prevents parties from contracting out of or waiving rights, obligations, or remedies under the act
  • Excludes employment contracts and classes of contracts prescribed by regulation
  • Authorizes the Governor in Council to make regulations to carry out the purposes of the act, including dispute resolution procedures
  • Comes into force six months after royal assent
Who Is Affected
  • Government institutions (federal departments, ministries, and Crown corporations listed in the Access to Information Act and the Financial Administration Act)
  • Contractors performing construction work directly for government institutions
  • Subcontractors performing construction work for contractors or other subcontractors on government projects
  • Payment certifiers appointed under construction contracts
  • Adjudicators selected to resolve payment disputes
Rights, Duties, Or Obligations
  • Government institutions must make progress payments monthly or at shorter intervals specified in the contract, within 20 days of approval
  • Government institutions must make final payments by the contract deadline or within 20 days of approval, whichever is earlier
  • Contractors must pay subcontractors monthly progress payments within 23 days of approval or certification
  • Contractors and subcontractors must make final payments within 30 days of approval or by the contract deadline, whichever is earlier
  • Payment applications are automatically approved if the payer does not respond within 10 days (for contractors) or 20 days (for subcontractors), except where the payer disputes specific amounts with written reasons
  • Payers may only withhold amounts from a payment that are disputed or require amendment, and disputes are limited to loss, damage, correction costs, or disagreements over change values
  • Contractors and subcontractors may suspend work performance if payments are overdue and must provide written notice of default to the payer
  • Contractors and subcontractors may suspend passing payments to lower-tier subcontractors if they experience non-payment, provided they diligently pursue adjudication
  • Contractors and subcontractors must pay interest on overdue amounts at the rate in the contract or the prescribed rate, whichever is greater
  • Contractors and subcontractors may refer payment disputes to adjudication, with an adjudicator's decision binding until final legal determination
  • Contractors and subcontractors may terminate construction contracts for non-payment after providing 14 days' notice if the payer does not pay
  • Non-government payers must provide notice to subcontractors of payment dates and amounts received on the construction work
  • Contractors and subcontractors must provide subcontractors with advance written notice of any milestone payments
  • Contractors must disclose payment due dates in the government contract if requested by a subcontractor
  • No person may waive any rights, obligations, or remedies provided under the act
Important Dates
  • The act comes into force six months after royal assent (Section 24)
Financial Or Tax Impacts
  • Interest must be paid on overdue payments at the rate specified in the construction contract or the rate prescribed by regulation, whichever is greater
  • Payment amounts are not specified in the bill (these depend on individual construction contracts)
  • The cost to the federal government of administering the act and appointing adjudicators is not specified
Enforcement Or Penalties
  • A payer who fails to make payment in accordance with the act is in default, and the payee may suspend work performance and provide written notice of default
  • A payer who fails to make payment in accordance with an adjudicator's decision is in default after 7 days, and the payee may suspend work performance
  • Contractors and subcontractors whose payment obligations are suspended must pay interest on suspended amounts from the original due date
  • Suspension of work performance or suspension of payments to lower-tier subcontractors in accordance with the act does not constitute a breach of the construction contract
  • Termination of a construction contract in accordance with the act does not constitute a breach of the construction contract
  • A payer who fails to disclose payment information or misleads a subcontractor regarding payment information is liable to the payee for any resulting damages, and a court may order compliance and award costs
  • An adjudicator's decision is binding on the parties and enforceable as a judgment of a court of competent jurisdiction until the dispute is finally determined by legal proceedings, arbitration, or settlement
Uncertainties Or Limits
  • The bill does not specify the prescribed rate of interest on overdue payments; this will be set by regulation after the act is passed
  • The bill does not identify which classes of construction contracts may be excluded by regulation (Section 5)
  • The bill does not specify the procedures, qualifications, or appointment process for adjudicators other than general references to the construction contract, party agreement, or court appointment (Section 20)
  • The bill does not specify how disputes over milestone payment values or completion of milestones will be adjudicated
  • The bill does not specify remedies or procedures if an adjudicator fails to render a decision, other than allowing referral to another adjudicator
  • The bill does not specify what constitutes 'sufficient cause' for a payment certifier's failure to issue a certificate for final payment within 10 days
  • The bill does not address interaction with provincial mechanics' lien laws or other provincial construction payment legislation
  • The bill does not specify the consequences for a government institution's failure to comply with payment obligations
  • The bill does not clarify whether suspension of performance by a subcontractor must occur within a specific timeframe after non-payment
Laws Or Regulations Affected
Canada Prompt Payment Act (new)
created

A new federal law is created to establish mandatory payment timelines and remedies for construction work on federal government projects. The law specifies when government institutions, contractors, and subcontractors must pay for construction work and what happens if they do not.

Source: Section 1

Financial Administration Act
referenced

The definition of 'government institution' in the new act references the meaning of Crown corporations in the Financial Administration Act (section 83).

Source: Section 3 (definition of government institution)

Access to Information Act
referenced

The definition of 'government institution' in the new act references bodies and offices listed in Schedule I to the Access to Information Act.

Source: Section 3 (definition of government institution)

Generated using AI from official bill text. Not legal advice. It is written by PoliticalData.ca for civic education, automatically checked and spot-reviewed before publishing.

Official text

Parliamentary Process

Step 1
First reading
Apr 13, 2016
Completed

Bill S-224, concerning payments in construction contracts, completed its first reading in the Senate on April 13, 2016, and proceeded through further Senate stages before moving to the House of Commons.

Introduction and first reading, Apr 13, 2016
End of stage activity, Apr 13, 2016
Chamber sittings
Introduction and first reading - Apr 13, 2016

Bill S-224, an act respecting payments made under construction contracts, was introduced and received its first reading in the Senate on April 13, 2016.

Step 2
Second reading
Nov 28, 2016
Completed

The Senate completed the second reading stage for Bill S-224, An Act respecting payments made under construction contracts, on April 19, 2016, and the bill has since moved through further Senate stages and is now awaiting first reading in the House of Commons.

Second reading, Nov 28, 2016
Referral to committee, Nov 28, 2016
End of stage activity, Nov 28, 2016
Chamber sittings
Debate at second reading - Apr 19, 2016

The Senate's second reading debate on Bill S-224, concerning payments in construction contracts, was adjourned on April 19, 2016, as part of a broader Senate sitting that included various other proceedings.

During a Senate sitting on April 19, 2016, senators discussed various topics, including international agreements, firefighter safety, the role of independent senators, and debated seating arrangements, while also advancing legislation like Bill S-224 (Canada Prompt Payment Act) and committee studies.

Debate at second reading - Jun 7, 2016

The Senate sitting on June 7, 2016, featured a debate on Bill S-224 concerning prompt payments in construction contracts, along with other legislative and procedural business.

The Senate continued the debate on Bill S-224, an act to ensure prompt payment under construction contracts, highlighting its importance for small businesses and efficient government spending.

Debate at second reading - Oct 26, 2016

During the Senate's second reading debate on Bill S-224, Senator Fraser explained her limited understanding of the bill's purpose to protect subcontractors and adjourned the debate.

Debate at second reading - Oct 27, 2016

On October 27, 2016, the Senate sat and continued debate on Bill S-224, An Act respecting payments made under construction contracts, among other legislative and procedural business.

Debate at second reading - Nov 2, 2016

On November 2, 2016, the Senate debated Bill S-224 (construction contract payments), Bill S-226 (Magnitsky Law), Bill S-228 (marketing to children), and Bill S-229 (underground infrastructure safety), alongside discussions on Senate modernization.

Debate at second reading - Nov 28, 2016

During a Senate sitting on November 28, 2016, Bill S-224, concerning payments in construction contracts, was read a second time and referred to committee, with a senator speaking in support and outlining potential amendments.

Step 3
Consideration in committee
Apr 4, 2017
Completed

Bill S-224, concerning payments under construction contracts, completed its committee review in the Senate on April 4, 2017, before moving to further readings and then awaiting introduction in the House of Commons.

Committee report presented with amendments, Apr 4, 2017
End of stage activity, Apr 4, 2017
Chamber sittings
Committee report presented with amendments - Apr 4, 2017

The Senate presented the Twelfth Report of the Standing Senate Committee on Banking, Trade and Commerce regarding Bill S-224, An Act respecting payments made under construction contracts, and scheduled it for further consideration.

Step 4
Report stage
Apr 6, 2017
Not completed

The Senate Report stage for Bill S-224 occurred on April 6, 2017, but was not completed, and the bill is now awaiting first reading in the House of Commons.

Chamber sittings
Debate at consideration of committee report - Apr 6, 2017

During the Senate's Report stage on April 6, 2017, the twelfth report of the Banking, Trade and Commerce Committee concerning Bill S-224, An Act respecting payments made under construction contracts, was presented with amendments, and the debate on its adoption was adjourned.

Step 5
Third reading
May 4, 2017
Completed

Bill S-224 completed its third reading in the Senate on May 4, 2017, and is now awaiting first reading in the House of Commons.

Third reading, May 4, 2017
End of stage activity, May 4, 2017
Chamber sittings
Debate at third reading - May 4, 2017

The Senate convened on May 4, 2017, for a sitting that included Royal Assent, Question Period, a Committee of the Whole hearing for a Public Service Commission appointment, and third reading debates on bills related to drug control, prompt payment in construction, and second reading debates on national security oversight and park management, alongside other procedural business.

Step 1
First reading
Not reached yet
Not reached

Bill S-224, concerning payments under construction contracts, is awaiting its first reading in the House of Commons after having completed all Senate stages.

Step 2
Second reading
Not reached yet
Not reached

The House of Commons Second Reading stage for Bill S-224 has not yet been reached, as the bill is awaiting its first reading in the House, despite having completed its process in the Senate.

Step 3
Consideration in committee
Not reached yet
Not reached

Bill S-224, concerning payments under construction contracts, has progressed through the Senate and is awaiting first reading in the House of Commons, where committee consideration has not yet occurred.

Step 4
Report stage
Not reached yet
Not reached

The Report stage for Bill S-224 in the House of Commons has not yet occurred, and the bill is awaiting its first reading in that chamber.

Step 5
Third reading
Not reached yet
Not reached

Bill S-224, An Act respecting payments made under construction contracts, has a 'Third reading' stage in the House of Commons marked as 'Not reached', indicating this procedural step has not yet taken place there.

Debate and sitting links point to official parliamentary sources when LEGISinfo publishes them. Any plain-language discussion summaries should be generated from those official texts and reviewed before public display.

Vote Summary

No published recorded division

This bill is still active. We only show vote counts after the legislature publishes a recorded division.

Sponsor
Donald Neil Plett
Senator | Details not listed in current Senate roster
Jurisdiction
Federal Parliament

No published representative vote breakdown

This bill is still moving through the process. When a recorded division is published, representative positions can be listed here.

Official sources

Status, sponsor, votes, and timeline on this page are drawn from these official legislative sources and public records. Each summary above is attributed to its own source.

How this data is sourced