Prompt Payment Proclamation – New Regulations and Date in Force

On February 25, 2022, the Province of Alberta proclaimed the Prompt Payment and Construction Lien Act (the “Act”), formerly known as the Builders’ Lien Act, to be in force on August 29, 2022. The Province also introduced related regulations that fill in details around the Act, particularly around the new adjudication regime.

The Act introduces various amendments to the former construction legislation relating to payment and invoicing as well as disputes and adjudication. The details of these new changes have been outlined by our office in previous articles linked here:

In addition to the Act’s proclamation, the Province of Alberta introduced the Builders’ Lien Forms Amendment Regulation as well as the Prompt Payment and Adjudication Regulation.

Builders’ Lien Forms Amendment Regulation

The Form Amendment Regulation sets out the new forms required under the Act, specifically:

  1. Between owners and contractors, the Notice of Dispute under section 32.2(2) of the Act (Form 1);
  2. Between contractors and subcontractors, the Notice of non-payment under sections 32.3(5) and 32.3(6) of the Act (Forms 2 and 3); and
  3. Between subcontractor and subcontractor, the Notice of non-payment under sections 32.5 (6), and 32.5(7) of the Act (Forms 4 and 5).

In addition to the Act’s proclamation, the Province of Alberta introduced the Builders’ Lien Forms Amendment Regulation as well as the Prompt Payment and Adjudication Regulation.

Prompt Payment and Adjudication Regulation

The Prompt Payment and Adjudication Regulation contains three main parts. The first relates to Lien, Prompt Payment, and Right to Information; the second to Nominating Authority and Administration; and the third to Dispute Adjudication.

  1. Lien, Prompt Payment, and Right to Information: Part One of this regulation provides clarification on: conditions for payment of amounts retained (under section 24.1(2) of the Act), time for proper invoices (under section 32.1(6) of the Act), rate of interest on late payment (under section 32.6 of the Act), and the requirements for statement of accounts (under section 33(3)(d) of the Act).
  2. Nominating Authority and Administration: Part Two of this regulation outlines among other things, the designation, qualifications and duties of a Nominating Authority. The Nominating Authority is a body designated to oversee the appointment of adjudicators and the adjudication process, and is also charged with developing and supervising training and qualifications for adjudicators and maintaining a registry of qualified adjudicators.
  3. Dispute Adjudication: Part Three of this regulation details the matters that may be referred to dispute adjudication under the Act, as well as the processes relating thereto including notices, determination of matters, termination of adjudication, resignation by adjudicator, adjudicator’s failure to conclude adjudication, and consolidation of adjudication.  

The regulations do not alter the substance of the Act that was passed in 2020. They clarify many details around the Act, particularly establishing the regime governing adjudicators and Nominating Authorities. The most substantive part of the regulations is likely section 19 which prescribes the matters subject to adjudication:

(a) the valuation of services or materials provided under the contract or subcontract, including in respect of a written change order, whether approved or not, or a proposed change order, as the case may be;
(b) payment under the contract or subcontract, including in respect of a written change order, whether approved or not, or a proposed change order;
(c) disputes that are the subject of a notice of non-payment under Part 3 of the Act;
(d) payment or non-payment of an amount retained as a major lien fund or minor lien fund and owed to a party during or at the end of a contract or subcontract, as the case may be; and
(e) any other matter in relation to the contract or subcontract, as the case may be, that the parties in dispute agree to, regardless of whether or not a proper invoice was issued or the claim is lienable.

This list of matters subject to adjudication appears quite broad upon initial review, and the interpretation of this list by the courts in the coming months and years will be of great interest.

For any questions you may have about the new Act and corresponding regulations, contact any member of the McLennan Ross Construction Practice Group.

To register for our complimentary in-person seminar addressing the prompt payment legislation, click here.