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.
“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. 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 proposed legislation would:
- Eliminate the need for contracted timelines by requiring owners, contractors and subcontractors to pay invoices within 28 days.
- Extend 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.
- Prohibit ‘pay-when-paid’ clauses from construction contracts to end the practice of transferring financial risk to subcontractors.
- Establish an adjudication system to resolve disputes, rather than rely on the courts.
“Members of the Alberta Construction Association support legislated payment cycles and adjudication of payment disputes. These mechanisms help timely completion of construction projects, ensure our employees are not impacted by payment delays and provide better value for taxpayers on public infrastructure projects.”
“Calgary Women in Construction recognizes that this type of legislation is critical, especially in these times, for ensuring the viability of the powerful construction industry in this province; especially for small to medium-sized business, as well as individual subcontractors. An updated and improved Builders’ Lien Act, especially one addressing prompt payment, has been missing far too long.”
“The Building Trades of Alberta welcomes this much-needed legislation, which will help ensure workers are paid promptly and on time for the good work they do building and maintaining our province. This is something Alberta has needed for some time, and we thank the provincial government for bringing it forward.”
“The Alberta Trade Contractors Coalition supports the legislation of construction payment requirements and associated dispute resolution mechanisms. 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.”
“Concrete Alberta commends the collaborative approach taken with industry to modernize the Builders’ Lien Act. The proposed changes acknowledge the unique position of the concrete industry in construction projects and will improve cash flow throughout the construction industry, while ensuring industry has the tools available to manage fiscal risks. This support of fiscal predictability will further enable the construction sector to drive the province’s economic recovery.”
“The Alberta Roofing Contractors Association appreciates the open and dynamic consultation process which included participants from the entire construction community. ARCA is looking forward to seeing this legislation enacted, which we believe will be an important tool in assisting independent contractors to manage their businesses effectively.”
“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.”
“At Westcor, we pride ourselves on people-first initiatives and these amendments ensure that people-first includes all those working in the construction industry. We are very encouraged by the government’s swift action to address the years-long concerns of our industry, which employs one out of 10 Albertans.”
Alberta’s Recovery Plan is a bold, ambitious, long-term strategy to build, diversify, and create tens of thousands of jobs now. By building schools, roads and other core infrastructure we are benefiting our communities. By diversifying our economy and attracting investment with Canada’s most competitive tax environment, we are putting Alberta on a path for a generation of growth. Alberta came together to save lives by flattening the curve against COVID-19 and now we must do the same to save livelihoods, grow and thrive.
Quick facts
- Liens are legal claims against properties that contractors, subcontractors, suppliers and labourers use as a way to collect money owed to them for labour and materials used to improve the land, including work on any structures.
- ‘Pay-when-paid’ clauses are sometimes used in construction contracts to allow contractors to withhold payment to subcontractors until the project owner or developer has made a payment to the contractor.
- Other proposed changes to the bill include:
- New rules allowing for holdback money on large, multi-year projects to be released without risk at pre-set times.
- Improving contractors’ access to payment information.
- Increasing the minimum amount owed that can be subject to a lien from $300 to $700.
- Changing the name of the act from the Builders’ Lien Act to the Prompt Payment and Construction Lien Act.
