October 2011
PFD | Municipal

Regulation respecting construction contracts of municipal bodies

In amending the Cities and Towns Act and the Municipal Code , the legislator added another string to its bow by setting out means to regulate the granting of construction contracts by municipal bodies.

On August 31, 2011, the Regulation respecting construction contracts of municipal bodies was published in the Gazette officielle du Québec. The regulation is especially important to all contractors who enter or seek to enter into contracts with municipal bodies (i.e. a municipality, an urban community, an inter-municipal board, a public transit business or any other type of municipal organization).

A contractor (or subcontractor) seeking to enter into a contract valued at $25 000 or more with a municipal body must first obtain a certificate of compliance from Revenu Québec. This certification will only be granted to contractors who have filed the returns required under Québec tax laws and do not have any overdue accounts with the Ministère du Revenu.

In addition, the certification must be issued more than 90 days before the date and time limits for receiving bids. In the case of mutual agreement contracts, the certification must be issued more than 90 days before the contact award date. The same conditions apply to all subcontractors.

Before the construction work involving subcontractors begins, the contractor must provide the municipal body with the name and address of the subcontractor, the amount of the subcontract and its end date, as well as the number and the issue date of the subcontractor's certificate . This information must be updated if the contractor concludes a contract with a new subcontractor after the construction work has begun.

Revenu Québec certification is not required for contractors who do not have an establishment in Québec where activities are carried out on a regular basis or for contracts or subcontracts that are granted under circumstances in which it is urgent to act to preserve the safety of people or property.

It is important to note that the regulation comes into effect on January 1, 2012 . There will be a short grace period for contractors and subcontractors from January 1, 2012 to June 30, 2012, during which only warnings will be issued to those who fail to comply.