Prompt Payment becomes law in Ontario: Developers must pay contractors within 30 days for work completed.

• Position: Design-Build

Bill 142, otherwise known as the Construction Lien Amendment Act, passed unanimously at Queen's Park on Dec. 5.

It's considered a major victory for more than 400,000 contractors and tradespeople in Ontario in resolving payment delays which have been the industry's largest barrier to growth.

"This legislation could not have been introduced at a better time, as higher interest rates will make delayed payment unbearable," said Prompt Payment Ontario director Ron Johnson in a news release.

Prompt Payment Ontario is a single-issue lobby group made of contractor associations, unions, suppliers, general contractors and pension trust funds.

"We hope that this groundbreaking piece of legislation will set the stage for change across the country."

For years, industry groups have said delinquent payment has driven up the cost of construction, constricted cash flow to small business, stymied job creation, affected worker payroll, and reduced apprenticeships.

Trade contractors have waited months to get paid for work that's been certified as being complete.

Under the new rules, the owner of a construction project is required to pay the general contractor within 28 days of receiving the invoice.

The subcontractor must receive payment from the general contractor within seven days of receiving payment from the owner.

Other changes concern providing more time for contractors and subcontractors to resolve their disputes outside of court by extending timelines to file liens and start court actions from 90 days to 150 days.

After earlier prompt payment bills died on the legislature floor, the Wynne government appointed an independent review in 2015, led by construction law experts Bruce Reynolds...