Prompt Payment update from the Province of Saskatchewan
On March 1, 2022, The Builders’ Lien (Prompt Payment) Amendment Act, 2019 will be proclaimed into force.
The Act will introduce a number of changes that protect and define the rights and obligations of owners, developers, contractors, and subcontractors. These changes include establishing reasonable timelines for providing payment for construction projects and introducing an interim adjudication process – as an alternative to arbitration and litigation.
The payment timelines will mandate that owners and developers provide payment within 28 days of receiving a proper invoice for construction services. It will also require contractors to provide payment to subcontractors no more than seven days after receiving a payment from the owner or developer.
The new adjudication process under the Act will enable parties to seek interim resolution for disputed payments. The statutory process will be overseen by the Saskatchewan Construction Dispute Resolution Office (SCDRO}, a not-for-profit corporation designated by the Minister of Justice and Attorney General to act as the official Adjudication Authority. The SCDRO will work with the ADR Institute of Saskatchewan Inc. to provide trained, independent adjudicators for disputes under the process.
With these changes, Saskatchewan is joining the national trend towards prompt payment legislation in the construction industry. By establishing clear legislative rules and timelines we are seeking to ensure the prompt payment of contractors and subcontractors to enable parties to resolve issues quickly and without added costs – which in turn will help projects move forward without delays.