GTSWCA works with municipal governments to adopt a pay assurance amendment to their Servicing Agreement. Incidences of non-payment or bankruptcy, when developers fail to pay sewer and watermain contractors for the satisfactory completion of work, are rare. However, when they do occur they can severely harm - and even bankrupt - contractors. Suppliers and workers have to be paid every week, regardless of whether a developer settles his debts.
For this reason, the GTSWCA, works with municipalities to adopt Pay Assurance. Under the Association's plan, prime service contractors can make a direct claim on the letters of credit that developers post with municipalities, once the Municipalities' needs have been looked after and the engineers for the Municipality and the developer have certified the work. The aim of this plan is to achieve a fair solution for the three groups involved: municipalities, contractors and developers. It indemnifies municipalities, protects contractors and gives developers 121 days to pay.
Pay Assurance is now in effect in the City of Mississauga, City of Brampton, Region of Peel, Region of Halton, City of Burlington, Town of Oakville, Town of Milton, Town of Markham, City of Vaughan, Town of Richmond Hill, Town of Newmarket, Region of York, Town of Aurora, and was recently approved in principle in the City of Pickering.
Pay Assurance has also been endorsed by Building, Industry and Land Development (BILD) in Ontario, Peel and Durham