Alberta passes prompt payment law

Alberta has amended its Builders’ Lien Act to include a 28-day period for project owners to pay general contractors and a seven-day period for contractors to pay subcontractors once they are paid. It also puts in place an adjudication process allowing payment disputes to be resolved more quickly than through courts.

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

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 the confidence they need 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.

Key changes

Bill 37: The Builders’ Lien (Prompt Payment) Amendment Act, 2020:

• sets a 28-day timeline for project owners to pay invoices to general contractors
• sets a seven-day timeline for contractors to pay subcontractors after receiving payment
• extends timelines for registering liens:
  • construction industry: from 45 days to 60 days
  • concrete industry: from 45 days to 90 days
• increases the minimum amount owed that can be subject to a lien from $300 to $700
• allows dispute resolution through adjudication, which is faster and less costly than going to court
• introduces new rules allowing holdback money on large, multi-year projects to be released without risks at pre-set times
• improves subcontractors’ access to payment information
• renames the Builders’ Lien Act to the Prompt Payment and Construction Lien Act