Alberta announces prompt payment legislation for construction

CALGARY, ALTA. – The province of Alberta announced it will introduce prompt payment legislation for the construction industry.

The legislation would mark the first changes to the Builders’ Lien Act in nearly 20 years and long-standing calls from the construction industry to address payment timelines, lien periods and adjudication.

“We are answering calls and addressing concerns from the construction industry to protect jobs by ensuring everyone throughout the supply chain – from general contractors to subcontractors – is paid on time for their work,” said Nate Glubish, minister of Service Alberta, in a press release. “We’re doing this at a critical time when Alberta’s government is moving forward on its recovery plan and when hard-working Albertans in construction can least afford payment uncertainty.”

The new legislation would make the following changes:

• Get rid of the need for contracted timelines by requiring owners, contractors and subcontractors to pay invoices within 28 days.
• Lengthen the deadline for unpaid contractors and subcontractors to file liens against a project with the government’s Land Titles Office from 45 days to 60 days.
• Workers in the concrete and oil and gas industries would have 90 days to file liens.
• Ban “pay-when-paid” clauses from construction contracts to end the practice of pushing financial risk down to subcontractors.
• Build an adjudication system to resolve disputes instead of sending them to court.
• New rules allowing for holdback money on large, multi-year projects to be released without risk at pre-set times.
• Boosting contractors’ access to payment information.
• Increasing the minimum amount owed that can be subject to a lien from $300 to $700.
• Renaming the Builders’ Lien Act to the Prompt Payment and Construction Lien Act.

According to the province, the legislation has the support of many major industry groups, including the Alberta Construction Association, Calgary Women in Construction, Building Trades of Alberta, Alberta Trade Contractors Coalition, Concrete Alberta, the Alberta Roofing Contractors Association and the Electrical Contractors Association of Alberta.