WC136 MayJune 2024 - Magazine - Page 8
LEGAL
A Year Later: Alberta’s Prompt
Payment & Construction Lien Act
All parties involved in water projects need
to be mindful of legislative changes.
BY LAUREN TORESON AND EMMA JOHNSTON
OR GROUPS ENTERING into drinking water treatment, wastewater treatment, and even hydroelectric
projects, a big part of the business environment for the
parties relates to the construction law regime in the province or territory in question. The Prompt Payment and
Construction Lien Act came into force in Alberta on August 29,
2022, introducing amendments to its predecessor legislation,
The Builders Lien Act (“BLA”). The BLA enabled contractors
and subcontractors to lien lands for work done, or materials
furnished for the improvement of real property. It also established procedures to file a lien against such property in order
to collect accounts that were owing.The intent of the BLA was
two-fold. Firstly, holdback requirements ensured a guaranteed
pool of money for contractors and subcontractors to claim
against. Secondly, owner and contractor liability was limited to
amounts that should have been held back pursuant to the legislation.The amendments put forward in the Prompt Payment and
Construction Lien Act and ancillary regulations (collectively the
“PPCLA”) aim to facilitate the prompt flow of funds among
owners, contractors and subcontractors. It also establishes an
adjudication process to enforce said payment obligations. These
changes address longstanding issues surrounding timely payments and dispute resolution in Alberta’s construction industry
and followed similar legislation previously introduced in Ontario, Saskatchewan, and Nova Scotia. To promote the timely
flow of funds, the PPCLA now requires contractors to provide
a “proper invoice” to owners every 31 days. Further, unless a
notice of dispute is filed in accordance with the requirements of
the PPCLA, owners must pay contractors within 28 days after
receipt of such proper invoice; and contractors must pay each
subcontractor within seven days of receipt of payment from the
owner. Along with the foregoing changes, the PPCLA increased
the holdback period on most projects from 45 to 60 days, with
an exception for oil and gas well projects which remain at 90
days.The PPCLA outlines necessary information that must
be included with each proper invoice, which, when satisfied,
triggers the payment obligation. Contracting parties are able
to contractually expand on this definition; often resulting in
F
Lauren Toreson
is a corporate and commercial lawyer
working in Edmonton and Calgary
primarily in merger and acquisitions,
construction law, securities law, and
secured lending transactions.
Emma Johnston
is a litigator who advises Canadian and
international clients on construction,
insurance, agriculture, and general
commercial litigation.
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WATER C AN ADA • M AY/JUNE 2024
WAT E R C A N A D A . N E T
