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The Government of Alberta has tabled amendments to strengthen prompt payment for construction projects.
The Service Alberta Statutes Amendment Act, 2024, proposes changes to the Prompt Payment and Construction Lien Act (PPCLA), and the Public Works Act.
Amendments would result in all construction projects following the same set of prompt payment rules, which were established in legislation in 2021. Before now, Alberta’s government always prioritized prompt payment for government contracts, but the rules in the PPCLA only applied to private sector projects.
“On behalf of the Electrical Contractors Association of Alberta, and the entire construction sector, we extend our sincere thanks to the Alberta government for listening to industry concerns and taking decisive action by subjecting itself to Alberta’s Prompt Payment Legislation. This critical step demonstrates the government’s commitment to fairness and transparency in our sector,” said Jason Kuziw, president, Electrical Contractors Association of Alberta.
“Reliable, timely payments are essential to maintaining a thriving construction industry,” said Bill Black, president and CEO of the Calgary Construction Association. “These amendments signify Alberta’s commitment to supporting our construction workforce and ensuring they can focus on building the infrastructure that our province relies on.”
Prompt Payment and Construction Lien Act and Public Works Act amendments
The Public Works Act (PWA) governs projects administered by the Crown.
Amendments to the PWA would:
Extend a prompt payment and adjudication framework to Alberta government projects under the PWA. This includes mandated payment timelines and invoicing provisions including a 31-day billing cycle from prime to owner unless testing or commissioning is required.
Utilize the nominating authority as established in Part 5 of the PPCLA and associated regulations.
Mirror the PPCLA amendments for adjudication, arbitration and an action in court to proceed in parallel.
Apply to public construction projects through legislation but exclude maintenance projects related to upkeep of capital assets and special scope contracts which are projects delivered using a public-private partnership method.
Not introduce statutory requirements for holdback or liens on any government project.
The PPCLA creates rules for the timing of payments in Alberta’s construction industry and sets out a streamlined adjudication process for disputes related to payment or work performed as an alternative to the courts. The PPCLA came into force in August 2022.
Amendments to the PPCLA would:
Clarify the adjudication process to ensure an efficient option for dispute resolution.
Address the act’s rigidity of including consulting professions like engineers and architects in the PPCLA, allowing them to opt out of holdback requirements and lien rights on a project-by-project basis.
Remove ambiguity around when a construction contract is complete. It would clarify when final payment under a contract or subcontract is considered to have been made and make adjudication available for 30 days after that date.
Amendments to the PPCLA will come into force upon proclamation while changes to the Public Works Act come into effect in Spring 2025. |
