Prompt Payment Movement Sweeps Across Canada: Is the Energy Industry Ready to Comply?

Abstract

Jurisdictions throughout Canada are debating, drafting, and enacting legislation for prompt payment and mandatory adjudication in the construction industry. The purpose of such legislation is to avoid the pitfalls of delayed payments and improve the dispute settlement system. Although this legislative push is inspired by reforms undertaken in the UK decades ago, Canadian jurisdictions are now following Ontario’s lead in legislating swift payment deadlines and adjudication requirements. This article surveys these legislative changes as they first occurred in the UK context and as they are now occurring throughout Canada. Special attention is given to implications for the Canadian energy sector. The article concludes by offering some risk allocation strategies for drafting contracts under the new statutory requirements.