Alberta introduces prompt payment framework
By Adam FreillCommercial Concrete Construction Infrastructure Institutional P3s
Provincial act sets out timelines and rules for payments and liens.
Alberta’s government has passed the Prompt Payment and Construction Lien Act and supporting regulations. The framework provides the construction industry with timelines and rules for payments and liens, as well as a new adjudication framework for payment disputes.
The new regulations address rules for administration of the adjudication process, including eligibility; payment of lien holdbacks; transition of existing construction contracts; and adjudication procedures and timelines. It also addresses change orders and how those may be subject to prompt payment rules.
“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.”
Under the new legislation, 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.
In addition, the act outlines that municipal public works projects will be subject to prompt payment legislation, but provincial government projects under the Public Works Act will not.
Regulations are set to come into force on August 29.