The Federal Prompt Payment for Construction Work Act was passed in June 2019 and came into effect on December 12, 2023. There are many similarities with the prompt payment provisions in the Construction Act in Ontario, but members dealing with projects under federal jurisdiction should become familiar with the distinct differences.

Examples of the Differences Between Ontario and Federal Implementations

Unlike in Ontario, there is no exemption for existing contracts. By December 9, 2024, all existing federal construction contracts must be brought into compliance with the Federal Prompt Payment for Construction Work Act.

The federal government may choose to have provincial rules apply to any given project provided this is done before parties have entered into a contract. This is optional and may, or may not, be advantageous to the holder.

Under the federal legislation, His Majesty or a service provider has 21 days to issue a notice of non-payment. Under the Construction Act, this is only 14 days.

Architects should:

• onot advise His Majesty or a service provider about how to accomplish compliance;
• consider whether the legislative changes require extra work that justifies extra fees; and
• should seek legal advice about how the Act applies to contracts they are administering, the architectural services contracts they are providing services under, and the contracts they have with subconsultants.

This is only a cursory review of the new federal Act. Readers are advised to consult their own legal, accounting. or insurance representatives to obtain suitable professional advice.

This article originally appeared in the Practice Advisory—the OAA’s bimonthly e-newsletter developed by the OAA’s Practice Advisory Services team, comprising architects and other staff, which offers numerous resources for both member and the public. The OAA does not provide legal, insurance, or accounting advice. Readers are advised to consult their own such representatives to obtain suitable professional advice in those regards.