Edmonton, Alberta — Following years of inaction on non-payment, Alberta’s government has passed the “Prompt Payment and Construction Lien Act” and supporting regulations. Previously, the act was titled “the Alberta’s Builders’ Lien Act” and operated under Bill 37, “The Builders’ Lien (Prompt Payment) Amendment Act, 2020.”
This framework sets out clear timelines and rules for payments and liens as well as a new adjudication framework for payment disputes within the construction industry. Regulations will come into force on Aug. 29.
“This framework was much needed by the industry as a whole, and it’s been great working with a government that has listened to and engaged with us all along the way,” said Terry Milot, chair of the Alberta Trade Contractors Council.
Fundamental changes to the Prompt Payment and Construction Lien Act include:
- A new adjudication process for the construction industry to address payment disputes.
- 28-day timelines for owners to pay proper invoices from general contractors.
- Contractors and subcontractors are required to pay their own subcontractors within seven calendar days of being paid themselves.
- Extended timelines (in calendar days) for registering liens from 45 days to 60 days for the construction industry, and 45 days to 90 days for suppliers within the concrete industry only. The oil and gas lien period remains at 90 days.
- New language has been added around public-private partnerships, which will now mean that prompt payment rules only apply to construction, not operations and maintenance.
- Municipal public works projects are subject to prompt payment legislation, but provincial government projects under the Public Works Act are not.
- Clarification was added that the prompt payment rules apply to professional consultant (engineers and architects) contracts.
The Alberta government highlighted that amendments to the act would help ensure contractors and subcontractors get paid on time, strengthen Alberta’s economic recovery and protect jobs. Bill 37 received royal assent on Dec. 9, 2020.