Mayors discuss construction PST, prompt payment and 2024 election

“As an example, the two new water reservoirs in P.A. cost $12 million,” Cody told paNOW. “However, the six per cent PST cost us $750,000 extra that taxpayers had to pay. It’s unfair municipalities should be taxed the PST.” He said the mayors would continue to lobby the government to end the tax.

There has been a continued slump in the Saskatchewan construction sector in recent years and the industry and opposition NDP have called for the PST to be withdrawn. The government has stressed it needs to find revenue sources.

Contractors hurt by slow payments

Another issue that rankles the city leaders is one that looks set to change the financial landscape of the construction sector by ensuring companies are not having to wait long for payment for the work they’ve done. The amendment to legislation, once in force in 2020, will mean construction company owners and contractors will have to promptly pay up for services rendered. Basically, unless payment is disputed within 14 days of an invoice being delivered, the bill must be paid within 28 days. There would be a separate adjudication authority in place to deal with dispute resolution.

However, Cody says municipalities want the regulations to exempt them because 14 days is too short a period to determine if there are problems with the workmanship or materials like the laying of large amounts of concrete.

“We need that extra time to be sure that everything within a product is proper,” he said.

The Saskatchewan Construction Association (SCA) calls that argument “bogus.”

“The reality is professionals who certify payments will tell you the 14 days is possible and municipalities in Ontario and other parts of the world (who have the prompt payment legislation) manage to do it,” Mark Cooper the president and CEO of the SCA and chief spokesperson for Prompt Payment Saskatchewan told paNOW. “We all know that government doesn’t like to move fast, but we wouldn’t need this legislation if we didn’t have a problem.”

Cooper said the majority of construction companies were small and were under financial pressure to pay their employees and sub-contractors promptly, so it was unfair that clients such as municipalities were taking 90 days or longer to pay up for work completed.

Election 2024

Another issue discussed by the Mayors’ Caucus this week was the 2024 provincial election. It may seem a long way off, but Cody said a suggestion being made by Prince Albert got some traction. It calls for the province to change the date of the election that year from November to May so that new councillors aren’t immediately thrown into crucial fall budget decisions. Municipal elections are already set for November 2020.

“It would just give people who are newly-elected an opportunity to get their feet wet before budgeting starts in the fall,” Cody said. Cities start deliberating their annual budgets in November.

“If the election is in the November some of those [councillors] won’t have an opportunity to do anything prior to budgeting.”

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glenn.hicks@jpbg.ca

On Twitter:@princealbertnow

by Glenn Hicks

Mayors discuss construction PST, prompt payment and 2024 election

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