Prompt payment edges closer to reality in Alberta; Bill 37 passes First Reading
“Today we have gained some justification for our long-term efforts; tomorrow, we will need to continue these efforts to ensure this legislation will meet the needs of all our association’s members.”
By Anthony Capkun
October 21, 2020 – This afternoon, Bill 37 (Builders’ Lien–Prompt Payment–Amendment Act) passed First Reading in the Alberta Legislature, paving the way toward prompt payment legislation in Alberta’s construction sector.
“Today we have gained some justification for our long-term efforts; tomorrow, we will need to continue these efforts to ensure this legislation will meet the needs of all our association’s members,” said Terry Milot, chair of the Alberta Trade Contractors Coalition. “For the past seven years, trade contractor associations have collaboratively worked through the ATCC to put pressure on the government to address the issue of slow payment in the construction industry.”
Bill 37 would introduce timelines and rules for payments and liens in all construction industry sectors to ensure contractors and subcontractors are paid on time.
The Bill’s sponsor is Nate Glubish, Minister of Service Alberta. (Watch his announcement at bottom.)
“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 Glubish.
Previously, Alberta had no rules for payment timelines in the construction industry, which meant these timelines were vague if not specifically addressed in a contract, says the province.
In fact, proposed changes to the Builders’ Lien Act are the first in almost 20 years, and address long-standing concerns within the construction industry, including payment timelines, lien periods and adjudication.
“The Electrical Contractors Association of Alberta values its close working relationship with the many government departments, and is supportive of the new legislation to improve payment cycles and adjudication of payment disputes. This not only improves the business community, but the lives of everyday, hard-working Albertans,” said Tim Brundage, president, Electrical Contractors Association of Alberta.
If Bill 37 passes, amendments will:
• set a 28-day timeline for owners, contractors and subcontractors to pay invoices.
• prohibit “pay-when-paid” clauses in construction contracts.
• 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.
• 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 & Construction Lien Act
“We anticipate this new legislation will greatly assist trade contractors and their suppliers to better predict and maintain positive cash flow positions, enable them to grow in their communities, sustain and improve their employment base, provide enhanced employee training as well as reinvest money back into their communities,” added Milot.
If passed, Bill 37 will take effect upon proclamation.