Alberta Introduces Prompt Payment Legislation for the Construction Industry

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On October 28, 2020, Bill 37, the Builders’ Lien (Prompt Payment) Amendment Act, 2020 passed a second reading and is expected to come into force in July 2021. For a detailed summary of the key changes within Bill 37 and its impacts on construction projects in Alberta, please see our recent blog post which can be found here.

If passed, Bill 37 will result in significant changes to construction projects in Alberta, including work performed on oil and gas wells and well sites. Recognizing the economic uncertainty arising from COVID-19, organizations should understand this complex legislative scheme in order to quickly and effectively respond to disputes under the new regime.  

Some of the significant changes Bill 37 will introduce include:

  • owners, contractors and subcontractors will be required to pay “proper invoices” within 28 days;
  • the deadline for filing liens against a project will increase from 45 to 60 days for most projects,
    • for improvements to oil and gas wells and well sites, the statutory lien period will remain 90 days;
  • there will be a prohibition on ‘pay-when-paid’ clauses in contracts; and
  • a new, faster statutory adjudication system for contract disputes will be established.

These amendments will only apply to contracts entered after the proclamation date.

To discuss how you or your organization might be impacted by these amendments or if you have any questions related to the new regime, the lawyers at McCarthy Tétrault have extensive experience in the construction industry and can help navigate the complex legislative scheme. We will continue to monitor the progress of Bill 37 and will provide further updates as they become available.

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