A comparison of provincial and federal acts, regulations, and contract documents that control the effect of holdback policies

Abstract

There i s much d i s p l e a s u r e with the current l e g i s l a t i o n c o n c e r n i n g holdbacks. Holdback p o l i c i e s r e s u lt i n a l o s s of e a r n i n g s on the p a r t of the c o n t r a c t o r . This r e p o r t recommends r e v i s i o n s to the New Brunswick l i en l e g i s l a t i o n . I t h a s attempted t o c r e a t e a b a l a n c e between a) k e e p i n g the holdback amount large enough to p r o t e c t the people who s u p p l i e s work, s e r v i c e s , or m a t e r i a l s and b) k e e p i n g t h e holdback s m a l l enough so t h a t i t does not c r e a t es an u n n e c e s s a r y cash flow burden on the c o n t r a c t o r. E v e r y p r o v i n c e ' s a p p l i c a b l e l i e n l e g i s l a t i o n and documentation c o n c e r n i n g holdbacks have been r e v i e w e d except Quebec's. Quebec was not i n c l u d e d due to i t s l a c k of l i en l e g i s l a t i o n and i t s v a s t l y d i f f e r e n t laws. The d e t e r m i n a t i o n of which p r o v i n c i a l p o l i c i es c o n c e r n i n g holdbacks worked the b e s t and t h e ir a p p l i c a t i o n to New Brunswick were t h e d e c i d i n g f a c t o r s i n t he r e v i s i o n s t o the c u r r e n t l e g i s l a t i o n . I f t h e recommendations of t h i s r e p o r t were f o l l o w e d much of the c o n f u s i o n p r e s e n t ly found i n t h e New Brunswick l i e n l e g i s l a t i o n would be removed so t h a t i t would be i n l i n e w i t h contemporary c o n d i t i o n s in t h e c o n s t r u c t i o n i n d u s t r y.