1. Prompt Payment Awareness
ALBERTA
Trade Contractors Coalition
Prompt Payment Awareness
This presentation is presented to all political parties and government agencies to introduce and raise awareness of the ATCC Prompt Payment issues.

2. Trade Contractors Coalition
ALBERTA
Trade Contractors Coalition
The ATCC met informally before 2014, and with funding from founding members was formed on January 1, 2014 by 10 provincial trade associations.
Mechanical Contractors Association of Alberta
Sheet Metal Contractors Association of Alberta
Electrical Contractors Association of Alberta
Alberta Roofing Contractors Association
Masonry Contractors Association of Alberta
Thermal Insulation Association of Alberta
Provincial Glass Association of Alberta
Alberta Wall and Ceiling Association
Heating Refrigeration and Air Conditioning Contractors of Canada
Canadian Automatic Sprinkler Association

3. A Unified Voice ALBERTA Trade Contractors Coalition ATCC represents:
Over 3000 trade contractor businesses and 10s of thousands of employees
Involved in over $10 billion of construction projects in Alberta
Construction employs approximately 256,000 people in Alberta, 11.3% of the labour market
ATCC Facts:
Over 3000 trade contractor businesses in Alberta employing over 256,400 people. (11.3% of labour market)
Contribute annually to over $1 Billion of construction projects.
Construction

4. Goal  All trade contractors being treated equally and fairly.
ALBERTA
Trade Contractors Coalition
Current Situation
Trade Contractors are working independently to solve payment issues.
Goal  All trade contractors being treated equally and fairly.
Currently, trade contractors are working independently on solving payment issues.
It is a widespread issue, many trade contractors are facing issues with receiving payment under 60 days.

5. Current Situation ALBERTA Trade Contractors Coalition
Accounts receivable over 30 days continue to increase
2014 ATCC member survey – 78.6 – average number of days for accounts receivable
Overdue accounts averaged $233,820 with gross sales of $6,866,426
In the ATCC survey, average number of days for member’s 2014 A/R grew to 78.6 days.
Overdue balances on accounts of more than 60 days held an average balance of $233,819.92
On average gross sales of $6,866,426.62
Trend is only getting worse.

6. Impact on business ALBERTA Trade Contractors Coalition
Trade Contractors are providing short term unsecured project financing that can cycle in the neighborhood $1,000,000,000 – $1 Billion
Under existing legislation contractors must continue to work until contract obligations have been fulfilled regardless of payment in arrears.
Net effect  reduced cash flow
Reduces cash flow, Can’t bid, cant pay employees, cant train, cant maintain
(Same as Ontario study)
Skills – overall less competitive and more costly for eve
Smaller business have a tougher time …

7. Impact on construction
ALBERTA
Trade Contractors Coalition
Impact on construction
Construction rates increase
Project costs increase
Reduces cash flow, Can’t bid, cant pay employees, cant train, cant maintain
(Same as Ontario study)
Skills – overall less competitive and more costly for eve
Smaller business have a tougher time …

8. Impact on public spending
ALBERTA
Trade Contractors Coalition
Impact on public spending
Good employers may go out of business
Fewer competitive bids on every project
Unnecessary project delays
Higher costs for all publically funded projects
Reduces cash flow, Can’t bid, cant pay employees, cant train, cant maintain
(Same as Ontario study)
Skills – overall less competitive and more costly for eve
Smaller business have a tougher time …

9. Project Funding – Labour
ALBERTA
Trade Contractors Coalition
Project Funding – Labour
$10 million public school
$9 million is work allocated to trade contractors
Of the $9 million, $6 million is labour costs
Trade contractors pay employees every 2 weeks
Example:
Labour January 1 to 14, payed on Jan. 15
T.C. invoice for labour on January 20th
TC Receives labour payment in 75 days, April 5th
T.C. finances project labour costs
Clearly explain how the financing / funding model affects trade contractors.
Example - New school - $10M
GC fees - $1M
$9M Trade Contractors
60% Labour - $6M
Paid every 2 weeks.
Jan. 1 to 14 – pay then 75 days – do not see money until March 15 (financed)
If you have consistently the same $$, it will right itself, no consistency – does not right itself.
40% Materials - $3M
Have to pay upfront for all materials and labour (up front) to obtain labour and equipment.

10. Project Funding – Material
ALBERTA
Trade Contractors Coalition
Project Funding – Material
$10 million public school
$9 million is work allocated to trade contractors
Of the $9 million, $3 million is material costs
Trade contractors pay upfront for material.
Example:
Material installed by T.C. in January
T.C. invoices for material on January 20th,
T.C. receives payment 75 days later, April 5th
T.C. finances project material costs
Clearly explain how the financing / funding model affects trade contractors.
Example - New school - $10M
GC fees - $1M
$9M Trade Contractors
60% Labour - $6M
Paid every 2 weeks.
Jan. 1 to 14 – pay then 75 days – do not see money until March 15 (financed)
If you have consistently the same $$, it will right itself, no consistency – does not right itself.
40% Materials - $3M
Have to pay upfront for all materials and labour (up front) to obtain labour and equipment.

11. Prompt Payment Legislation
ALBERTA
Trade Contractors Coalition
Prompt Payment Legislation
A legislated payment cycle
Interest payment on overdue accounts
The right to suspend work
Reasonable financial disclosure
Payment transparency
A regulated payment cycle (not legislated), commitment by A.I. entering contracts, carve out disputed costs
The right to suspend work with no replacement workers until finances have been resolved.
Reasonable financial disclosure on all public documents.

12. Prompt Payment Legislation
ALBERTA
Trade Contractors Coalition
Prompt Payment Legislation
Mandatory notification of disputed elements
Progressive release of holdback
Mandatory dispute resolution process
Mandatory use of Standard Documents (i.e. CCDC)
Financial disclosure for private projects
Government write regulations that enforce days from invoice approved with mandatory timeframe of approval.
15 days to approve, 45 days to pay – If not –lien process will be initiated.
Create a good public policy that would treat fairly, ensure private contractors follow suit.
Clarification that we do not want someone to arrive on our jobsite and take on our work. Not a problem with Surety.

13. Moving Forward … ALBERTA Trade Contractors Coalition
The ATCC brings this issue to your attention to:
Enlighten you on this serious construction trade issue
Seeking your support, guidance and
Your active pursuit to resolve this issue on behalf of your constituents.
By regulation
If not by ethics and legislation
** Look at bylaws, partnerships **

14. Concluding remarks Questions / Comments Thank you ALBERTA
Trade Contractors Coalition
Concluding remarks
Questions / Comments
Thank you