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Since I was appointed as the Minister of Service Alberta, the issue of timely payment within the construction industry has been brought to my attention time and time again.
Everyone deserves to get paid for the work they do, and Alberta’s government has been speaking with Albertans in the construction industry about the ongoing issues they experience with timely payment. I’m pleased to say that through those discussions, we have worked together to find solutions on the issues that those in the construction industry have been fighting for, for up to 10 years. On October 21, we introduced legislation that will make it easier for Albertans working in the construction industry to do business and get paid on time.
This is a critical time to make these changes. Alberta is still fighting the COVID-19 pandemic and Alberta’s government is working hard both to bring the province into a recovery now and to ensure that that recovery focuses on the long-term prosperity of all Albertans. I began the important work of tackling the prompt payment issue long before any of us had first heard the word coronavirus. But now, with so many in our province struggling to hold on to their jobs so that they can still pay their bills, these legislative changes are especially important. Those in the construction industry cannot afford not to be paid, now more than ever.
Everyone working in the construction industry, from general contractors to subcontractors, should have confidence that they will be paid on time. Alberta’s government has introduced changes that, if passed, would require proper invoices to be paid within 28 days. Writing this into law removes the ambiguity that is sometimes included in construction contracts, and provides consistency and certainty of payment across the industry.
If payment on a project is not received, contractors and subcontractors have the option of filing a lien on a construction project, which gives them a secured interest in the project. However, I’ve heard that the current 45-day timeline doesn’t always give people enough time to assess the need for a lien and to file it, so we are proposing to extend the filing timelines from 45 days to 60 days for the majority those in the construction sector. We are proposing an exception for the concrete industry, because concrete work requires extra time for the final product to cure before testing. For this reason, those in the concrete sector will have 90 days to file a lien (the same timeline for those in the oil and gas industry).
Unfortunately, there will still be times that payment disputes come up. Currently, when there is a dispute over an invoice or payment, construction companies have to go to court for resolution. Court can be expensive, which is a cost felt more keenly by small businesses, and it can take months or years for disputes to be heard. Many valid claims are ultimately not pursued because the cost and time are simply too prohibitive.
Payment disputes need to be resolved quickly and without a huge financial burden, so the Government of Alberta is proposing an adjudication system that allows people in the construction industry to resolve disputes outside of court. Adjudication will cost less money and allow disputes to be resolved by expert decision-makers in a matter of days instead of years. This will further help ensure stability and viability in the sector and give more confidence to all those throughout the supply chain.
With the prompt payment changes we have proposed in Alberta, small, medium, and large businesses in the construction industry will be able to count on timely payments. This will reduce uncertainty and stress for employers and employees alike. These changes will help the many construction businesses who are facing a tough economy, so that they can continue to protect and create jobs in Alberta.
As Alberta’s government focuses on our Recovery Plan, we are continuing to listen to Albertans and do what we can to ensure businesses are getting what they need to manage their affairs and operate with confidence they will be paid on time, while at the same time reducing stress and creating confidence for employees that they too will be paid and continue to have jobs. That’s what a culture of prompt payment is all about, and I’m proud to help make it happen in Alberta.