The Canadian Institute of Steel Construction (CISC) – together with its members and stakeholders within the steel industry – has issued a statement saying that it opposes the BC government’s support for reprisal clauses.
The response comes after the Supreme Court ruled to dismiss an appeal over the provincial government using reprisal clauses for construction.
Reprisal clauses ban contractors and subcontractors from bidding on government work for a given period if they are involved in legal disputes against the government.
“The use of reprisal clauses by governments needs to stop now,” said CISC president and CEO Ed Whalen. “It is essentially extortion and will lead to higher construction prices for the taxpayer with fewer contractors willing and able to bid on Government projects.”
Whalen added that governments should be demonstrating the best practices in construction and thus should serve as role models to the industry.
“Blackballing contractors is not fair, nor is it right,” the CEO remarked.
In December 2019, the Supreme Court upheld the reprisal clauses in the city of Burnaby’s contract terms, which affected contractors that have been engaged in legal proceedings against the city in the past two years.
CISC pointed out that due to reprisal clauses, even the settlement process under prompt payment legislation would be considered action against the government, and thus the reprisal clause would be applicable.
“If existing legislation would be eclipsed by clauses such as this, then the effectiveness of legislation is limited or nullified,” said Whelan. “You cannot punish businesses when they are following the legal process and keep them out for up to 24 months thereafter.”
