The GTA Construction Report – February 2009 – PAGE A9
New regulations increase requirements on home builders
MATTHEW DESROSIERS – The GTA Construction Report Editor
ing about someone walking said Foster. what is out of the norm and large cash transactions are
in with $10,000 or more in The CHBA has been crosses the line into being both fairly straightforward,
Home builders are address, occupation and date cash. If that were the case, working with FINTRAC for suspicious.” Lamey said the government
preparing themselves for of birth. They must also ver- there would have to be more than a year on these FINTRAC has placed organization understands
new government regulations ify the information with records kept and a report regulations. During that their guidelines on-line, identifying suspicious activ-
coming into effect later this government-issued identifi- filed.” time, they tried to convince which provide examples of ity can be difficult in certain
month. cation. Lamey said the regula- the government agency to be past cases to give businesses situations.
The Financial Transac- Foster said for the most tion does not prevent these more specific in what quali- an idea of what could be “There are going to be
tions and Reports Analysis part, the regulations won’t transactions from taking fies as a suspicious transac- suspicious, and what kinds times when it may not be
Centre of Canada (FIN- create too much extra work place, but does require accu- tion. FINTRAC provided of things to look for. possible for the person in-
TRAC) is extending record- for the home builders. rate records be kept. The some additional guidelines, Home builders who do volved in the transaction to
keeping and reporting “In the vast majority of purpose of the law, he said, but it’s still wide open, Fos- not make the adjustment in know there’s something
requirements for the federal cases for builders, it’s really is to help recognize which of ter said. time for the Feb 20 regula- criminal behind it,” he said.
Proceeds of Crime (Money a question of doing a couple these transactions are legiti- While Lamey admitted tion change could face fines “We don’t expect real estate
Laundering) and Anti-Ter- things you haven’t been mate, and which are not. the suspicious transaction is and other punishments developers to know every
rorist Financing Act to in- doing.” The more complex type the trickiest to understand, should one of their clients time. It’s too big a thing to
clude real estate developers However, apart from the of transaction that must be it’s because the type of turn out to be a criminal. ask.”
as of Feb 20. record-keeping require- reported, and the one that transaction has different def- “Liability is non-compli- However, companies
“The regulations have ments, home builders must has some home builders initions for different types of ance with the Proceeds of must be able to prove they
been in place for some time, now file reports to FIN- concerned, are labeled as business, he said. Crime (Money Laundering) have the necessary policies
they just haven’t applied to TRAC on certain types of suspicious transactions. “There’s an element of and Terrorist Financing and procedures in place to
real estate developers until transactions. “If there’s something judgment,” he said. “We Act,” said Lamey. “There’s meet the new regulations,
this month,” said David Fos- The most straightforward about the person you’re have to recognize that suspi- expectation, and a legal re- and have kept appropriate
ter, director of environmen- situation is in the case of a dealing with that might lead cious transaction require- quirement now, to meet records of the transaction.
tal affairs at the Canadian large cash transaction of you to suspect they’re in- ments cover a lot of different these requirements. If you’re To protect members from
Home Builders’ Association more than $10,000, said volved in some illegal activ- types of businesses, and real audited or evaluated on accidentally overlooking
(CHBA). Peter Lamey, spokesperson ity, like someone who estate development is just whether or not you have their new obligations, the
These new regulations for FINTRAC. doesn’t want their name on one. Every market is going moved up your regulatory CHBA set up an information
will require home builders “For our purposes, cash the deed or who doesn’t to be a little bit different. requirements, the potential website (www.chba.ca/fin-
to keep records of specific literally means a bag-full of want to provide you the in- The people operating in the to be fined is there.” trac) to help understand the
client information for each 20s,” he said. “When we formation you’re asking for, business have the best abil- While record-keeping re- regulations.
transaction, including name, talk about cash, we’re talk- (you have to file a report,)” ity to judge what is unusual, quirements and reporting on
Payment complaints for Government buildings work
Ontario Realty Corporation changing project management
company working arrangements, policies
atically align project delivery. Following a million in Greater Toronto.” She said that She called local MPP Aileen Carroll to
MARK BUCKSHON
– The Construction News & Report Group President
province-wide reprocurement by ORC of its under the current project management con- raise the issue. Smith said she then received
project management services, the project tract, SNC-Lavalin ProFac would generally a call from Clive Thurston, president of the
The Ontario Realty Corporation has management responsibilities previously settle contractors’ approved invoices within Ontario General Contractors Association,
changed its policies and working arrange- overseen by SNC-Lavalin ProFac and other 60 days. who proposed a meeting in Barrie with
ments with project management companies project management providers have been di- Smith said she was “shocked” by the ORC’s Greidanus and consultant Brian
after receiving complaints from contractors vided among three project management scope of the problem after she polled mem- Watkinson.
and suppliers about slow payment of in- companies. bers when some complained to her about Greidanus said the ORC is looking into
voices related to the hundreds of millions of In an email to BCA members, Mike Grei- slow payments from SNC-Lavalin ProFac. and resolving the concerns of about 15 con-
dollars in government building work done danus, ORC’s senior vice president of proj- “In total, I have 29 written complaints tractors who outlined their concerns. The
each year. ect services, wrote that SNC-Lavalin ProFac and I probably received about a dozen tele-
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While the issue and solutions are will now be responsible for project manage- phone calls,” she said.
Continued on page A11
province-wide, things reached a boiling ment in eastern Ontario; while CB Richard
point in November and December when Ellis will be responsible for Toronto (under
dozens of Barrie Construction Association $100,000), southwest Ontario and northwest
members complained that SNC-Lavalin Pro- Ontario, and MHPM Project Managers has
Fac Inc. had failed to pay invoices in a been assigned responsibilities in central On-
timely manner, says BCA administrative di- tario (excluding Toronto) and northeast On-
rector Alison Smith. tario. For projects valued between $1 and $5
Clive Thurston, president of the Ontario million in the Greater Toronto region, the
General Contractors Association, says even three service providers will share the work.
before the Barrie Construction Association As well, says Greidanus, the ORC has in-
addressed the issue with its members, the cluded provisions in its management com-
OGCA and ORC had been working on solu- pany contracts requiring them to settle
tions in co-operation with construction asso- invoices within 45 days.
ciations across the province. “We have had In an interview, Marni Dicker, senior vice
a 100 per cent success rate in resolving is- president business and government affairs at
sues,” Thurston said. “ORC, then under SNC-Lavalin ProFac, says “we work with
(Chief Operating Officer) Greg Dadd took the industry all the time about payment is-
immediate steps to correct (payment issues) sues and are ready to remedy any issues that
and when the new management came in they (contractors) may have.”
have moved aggressively and in full consul- She said in fact “SNC-Lavalin ProFac
tation with the industry to improve and has enjoyed a very positive relationship with
change ORC,” Thurston says. ORC over the past 10 years, and looks for-
Under new ORC rules, contractors will ward to continuing to provide project man-
be selected through a pre-qualification agement services for ORC in eastern Ontario
process co-ordinated by the ORC to system- and one third of projects between $1 and $5
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