Alberta Moving Toward Prompt Payment Legislation

Oct 30, 2020

Bill 37: The Builders’ Lien (Prompt Payment) Amendment Act, 2020 would introduce timelines and rules for payments and liens in all construction industry sectors, ensuring contractors and subcontractors are paid on time.

The bill passed its first reading on October 21st. 

Previously, Alberta had no rules for payment timelines in the construction industry, which meant these timelines were vague if not addressed in a contract. If passed, these changes will set a clear timeline of 28 days for payments to be received, giving construction industry professionals the confidence they need to operate successfully. The bill also includes an adjudication system to resolve disputes.

The construction industry is a multi-billion dollar sector of Alberta’s economy that creates thousands of jobs for Albertans. Amendments to the act would help ensure contractors and subcontractors get paid on time, strengthen Alberta’s economic recovery and protect jobs.

Key changes

If passed, amendments will:

• set a 28-day timeline for owners, contractors and subcontractors to pay invoices
• prohibit ‘pay-when-paid’ clauses in construction contracts
  • ‘pay-when-paid’ clauses allow contractors to withhold payment from their subcontractors until the contractor is paid, unfairly placing the risk of non-payment onto subcontractors
• extend timelines for registering liens:
  • construction industry: from 45 days to 60 days
  • concrete industry: from 45 days to 90 days
• increase the minimum amount owed that can be subject to a lien from $300 to $700
• allow dispute resolution through adjudication, which is faster and less costly than going to court
• introduce new rules allowing holdback money on large, multi-year projects to be released without risk at pre-set times
• improve subcontractors’ access to payment information
• rename the Builders’ Lien Act to the Prompt Payment and Construction Lien Act

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