Amendments coming to Alberta’s Prompt Payment and Construction Lien Act and Public Works Act

The Prompt Payment and Construction Lien Act (PPCLA) came into force in Alberta on August 29, 2022. In an effort to facilitate prompt payment of all parties involved in a construction project, all the way down to subcontractors, the PPCLA sets definitive deadlines for the prompt payment of owners, contractors, and subcontractors for work and supplies. It also establishes procedures for placing a lien on property or initiating an adjudication. The Public Works Act (PWA) governs similar matters for projects administered by the Crown.            

On December 5, 2024, the Service Alberta Statutes Amendment Act, 2024 (Bill 30) received Royal Assent. Bill 30 introduces amendments to both the PPCLA and the PWA, to bring Alberta’s prompt payment legislation more in line with industry expectations and have similar payment and adjudication rules apply across public construction projects.

Consultants

Any consulting professional (i.e., architects and engineers) will have the option to, in accordance with and subject to the regulations, waive their lien rights and holdback requirements on a project-by-project basis. Such waiver must be expressly set out in the contract or the subcontract.

Adjudication

Under the PPCLA, an adjudication may not be commenced if the notice of adjudication was given after the date the contract or subcontract was completed, unless the parties agreed otherwise. Bill 30 proposes to change this deadline to 30 days after the date of final payment under the contract or subcontract. The date of final payment is the earlier of the date on which the complete payment of the amount set out in the contract or subcontract is made or required to be made in accordance with the prompt payment timelines set out in the PPCLA. For the purposes of determining the date of final payment, Bill 30 proposes to exclude certain items from amounts which constitute final payment such as payment of major and minor lien fund and payment for work done or material furnished after certificate of substantial performance is issued.

Currently, adjudication ceases when a party commences a court action. Bill 30 will allow concurrent methods of dispute resolution for parties. This change will prevent a court action from slowing down an adjudication process. However, if the court makes an order on the merits of the claim while an adjudication of the matter is ongoing, the adjudication is automatically terminated.

Under the PPCLA, an adjudicator’s determination is binding except under certain circumstances such as when a party applies for a judicial review of the decision. Further, one of the requirements for registration of the adjudicator’s order by the court clerk is that neither party should have applied for judicial review. Bill 30 proposes removing such requirement for registration and clarifies that an application for judicial review will not stay the determination of a matter by an adjudicator unless the court directs otherwise.

Public works

Bill 30 proposes the application of a parallel set of rules to those under the PPCLA to apply to public works as defined in the PWA. Bill 30 introduces amendments to the PWA to incorporate a prompt payment and adjudication regime similarly modelled after the PPCLA to apply to Alberta government projects under the PWA, including proper invoice requirements, 28-day payment terms and adjudication procedures.  

There are specific carve-outs from the application of prompt payment and adjudication regime to capital asset upkeep contracts, special scope contracts, and any contracts or subcontracts related thereto. There would appear to be an expectation in the market that Design Build Finance Maintain P3 projects will be excluded from the prompt payment and adjudication regime. We believe this is partly based on ministerial responses during the debates in the Alberta legislature. However, it is not possible to be definitive on this point until the release of updated Alberta template P3 documents.

Bill 30 comes into force upon proclamation which is expected in spring 2025. This will align the mandated payment timelines and adjudication regimes under the PPCLA across public and private construction projects. We will continue to track Bill 30 as it moves through the legislative process and are available to answer any questions about how these changes may impact any proposed or ongoing projects.