Ontario Construction News staff writer
A Prompt Payment and Construction Lien Act and supporting regulations were passed recently in the Alberta legislature. The new framework provides the province’s construction industry with timelines and rules for payments and liens, as well as a new adjudication framework for payment disputes.
“This framework has been a long time coming. It’s great to see that this government took a problem and consulted extensively with industry to reach a solution,” stated John Winter, chair of the Alberta Construction Association. “This framework will be beneficial for all levels of construction, and I look forward to seeing it come into force.”
The new regulations go into effect Aug. 29, setting rules for:
- administration of the adjudication process, including eligibility
- training and associated costs for adjudicators
- payment of lien holdbacks
- transition of existing construction contracts
- when change orders are subject to prompt payment rules
- administrative items, including adjudication procedures and timelines, and consolidation of disputes that are subject to prompt payment rules
Owners will have a 28-day timeline to pay proper invoices from general contractors. Contractors and subcontractors will be required to pay their own subcontractors within seven calendar days of being paid themselves.
Timelines for registering liens move from 45 days to 60 days for the construction industry and from 45 days to 90 days for suppliers within the concrete industry. The oil and gas lien period remains at 90 days.
“Prompt payment is a transformative initiative for the construction industry,” added Jason Portas, Alberta chair of the General Contractors Alliance of Canada. “Minister Glubish had a strong vision to bring this initiative to the sector. We appreciate his willingness to constantly improve the process and the extensive stakeholder consultation undertaken by Service Alberta and the Alberta government.”
To address public-private partnerships, the legislation clarifies that the prompt payment rules will only apply to the construction portion of contracts, and not operations and maintenance of a project.
Previously, Alberta had no rules for payment timelines in the construction industry, which meant these timelines were vague if not addressed in a contract. These changes will set a clear timeline of 28 calendar days for general contractors to receive payments, and seven calendar days after payment is received for contractors to pay subcontractors, giving construction industry professionals confidence to operate successfully.
The construction industry is a multi-billion dollar sector of Alberta’s economy that creates thousands of jobs for Albertans. Amendments to the act will help ensure contractors and subcontractors get paid on time, strengthen Alberta’s economic recovery and protect jobs.