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March 18, 2019

Nova Scotia construction industry not being paid on time, province steps in to set rules



As reported in The Star, construction businesses in Nova Scotia say late payment is a chronic issue that’s driving many to bankruptcy and the province has responded with legislation to speed up the payment of debts.

Duncan Williams, president of the Construction Association of Nova Scotia, said contractors, subcontractors and suppliers in the construction industry regularly wait months or longer for invoiced debts to be paid, with few tools available to retrieve what’s owed.

The unreliable cash flow makes it difficult for businesses to pay wages and other expenses.

“It is happening all the time and it’s been happening for decades,” Williams told reporters Friday at Province House, adding that the problem is worsening.

In a survey of the 800 members of his association, Williams said 70 per cent reported chronic late payment on contracts.

Thirty to 40 construction businesses went bankrupt in Nova Scotia last year, according to Williams, and he attributed half of those to late payment.

As it stands, construction businesses can put a lien on properties for outstanding debt, but nothing is retrieved until the property is turned over to a new owner, which can take years. Williams said that in court proceedings, debtors sometimes negotiate to pay less than the original agreement and cash-strapped small business owners just “take what they can get.”

Justice Minister Mark Furey said that in the current Builders’ Lien Act, “there’s no mechanism in place that can provide for an efficient payment process.”

He said the construction industry — which accounts for 5.5 per cent of the province’s GDP and employs more than 30,000 people — asked the government for a fix.

Keep reading in The Star


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