Alberta to implement prompt payment rules this summer
February 28, 2022 By Crane & Hoist Canada staff
Alberta has passed the Prompt Payment and Construction Lien Act and supporting regulations to help enhance protections in the province’s construction industry.
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.
The regulations will come into force on Aug. 29, 2022 and will be available online at alberta.ca.
The prompt payment framework addresses long-standing industry concerns, protects jobs and keeps investment moving throughout our economy.
“We’ve been hard at work over the past two years collaborating with the construction industry to develop a prompt payment framework,” said Nate Glubish, Alberta’s Minister of Service.
“This important effort will ensure that hard-working Albertans will be paid on time. These measures support our economic recovery – as well as economic growth – and I’m excited to see them come into force this summer.”
In the fall of 2020 and spring of 2021, the Alberta legislature passed several changes, including a new adjudication process for the construction industry to address payment disputes. As well, owners will be required to pay proper invoices from general contractors in 28 days.
Contractors and subcontractors are required to pay their own subcontractors within seven calendar days of being paid themselves. The province has also extended times limes 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.
“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,” said 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.”
Alberta’s new regulations will create 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.
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