Following legislation tabled by Service Alberta Minister Nate Glubish on October 21, 2020, Alberta will be the next province in Canada to adopt prompt payment legislation for construction industry contracts. Prompt payment refers to legislated timelines for when contractors and sub-contractors must be paid following submission of a proper invoice. Some changes contemplated under the new legislation include:
- requiring invoices be paid 28-days after they have been received;
- introducing a binding adjudication process to address contract disputes;
- modernizing holdbacks to allow release of holdbacks at pre-set times, as opposed to a 10 per cent holdback being held until project completion;
- extending the period to file a lien to 60-days and increasing the minimum lien amount to $700;
- prohibiting “pay when paid” clauses in contracts;
- changing the name of the Builders’ Lien Act to the Prompt Payment and Construction Lien Act; and
- organizing the act to make it more user-friendly.
While none of these updates have passed the Legislature yet, they will impact how municipalities contract, and also affect billing and payment cycles. To further assist our members with navigating these changes, we are arranging a webinar to answer questions our members may have. Stay tuned for further editions of Digest to learn more.