UPDATED*: Payment solutions for construction workers

Following years of inaction on nonpayment, Alberta’s government worked closely with industry to create a solution that works. The prompt payment framework addresses long-standing industry concerns, protects jobs and keeps investment moving throughout our economy.

“We’ve been hard at work over the past two years collaborating with the construction industry to develop a prompt payment framework. This important effort will ensure that hard-working Albertans will be paid on time. These measures support our economic recovery – as well as economic growth – and I’m excited to see them come into force this summer.”

Alberta’s government has passed the Prompt Payment and Construction Lien Act and supporting regulations. This framework sets out clear timelines and rules for payments and liens as well as a new adjudication framework for payment disputes within the construction industry. Regulations come into force on Aug. 29 and will be available online at alberta.ca.

“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. This framework will be beneficial for all levels of construction, and I look forward to seeing it come into force.”

“Prompt payment is a transformative initiative for the construction industry. With the regulatory and adjudication framework, organizations will be paid fairly and on time and will soon have options accessible to them should that not happen. 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.”

“The prompt payment and builders’ lien framework was necessary for the construction industry as a whole. This framework has finally introduced measures to ensure industry is paid, and in a timely manner, which opens up cash flow, supports our economic recovery and recognizes the unique position of the concrete industry. Overall, the level of engagement from this government has been incredible – it’s great to see that Minister Glubish listened to industry when this was raised as a problem and worked with us to find a solution.”

“This framework was much needed by industry as a whole, and it’s been great working with a government that has listened to and engaged with us all along the way. These regulations are designed to provide fairness to our hard-working tradespeople, and we look forward to the regulations coming into force this summer.”

“It’s great to see that professional engineers and architects are included in this framework. Delays in cash flow create a significant business risk in the design and construction industry. We are grateful that this government took the initiative to address this long-standing issue. With the prompt payment framework in place, our members now have assurance they will be paid in a timely manner and will have access to an adjudication process for any payment disputes.”

What the regulations cover

The new regulations set out the rules for:

• administration of the adjudication process, including eligibility
• training and associated costs for adjudicators
• payment of lien holdbacks
• transition of existing construction contracts
• when change orders are subject to prompt payment rules
• administrative items, including adjudication procedures and timelines, and consolidation of disputes that are subject to prompt payment rules

Quick facts

• The following legislative changes were passed in the fall 2020 and spring 2021 sessions, and will be in force on Aug. 29:
  • A new adjudication process for the construction industry to address payment disputes.
  • 28-day timelines for owners to pay proper invoices from general contractors.
  • Contractors and subcontractors are required to pay their own subcontractors within seven calendar days of being paid themselves.
  • Extended timelines (in calendar days) for registering liens from:
    • 45 days to 60 days for the construction industry
    • 45 days to 90 days for suppliers within the concrete industry only
  • The oil and gas lien period remains at 90 days.
  • New language has been added around public-private partnerships:
    • Prompt payment rules only apply to construction, not operations and maintenance.
    • Municipal public works projects are subject to prompt payment legislation, but provincial government projects under the Public Works Act are not.
  • Clarification was added that the prompt payment rules apply to professional consultant (engineers and architects) contracts.

Rules for posting a Certificate of Substantial Performance (which verifies that construction work is substantially complete) on job sites were modernized.

*Editor's note: Media contact information has been updated.