Bill 37: Builders’ Lien (Prompt Payment) Amendment Act, 2020 (“Bill 37”) passed its first reading at the Alberta Legislature yesterday, October 21, 2020. If passed, Bill 37 will introduce important changes to the Builders’ Lien Act (Alberta), RSA 2000, c B-7 (the “Act“), including renaming the Act the “Prompt Payment and Construction Lien Act”.

The proposed amendments in Bill 37, if enacted, will have a significant impact on the construction industry, including, among other things, introducing timelines and rules for payment to contractors, subcontractors, and suppliers on construction projects.

Similar “prompt payment” legislation has already been introduced in other jurisdictions in Canada, including Ontario where it has been in effect since October 1, 2019. However, the current version of the Act does not provide any rules for payment timelines in Alberta.

The amendments proposed by Bill 37 will, among other things:

• change the name of the Act to the Prompt Payment and Construction Lien Act;
• define a “proper invoice” in the construction context;
• set a 28-day timeline for owners, contractors and subcontractors to pay invoices;
• make invalid any “pay-when-paid” clauses in construction contracts;
• extend timelines for registering liens:
  • in the construction industry from 45 days to 60 days;
  • in the concrete industry from 45 days to 90 days;
  • note that the timeline for registering a lien with respect to improvements to an oil or gas well or well site will remain 90 days;
• increase the minimum lien amount to $700 from $300;
• allow dispute resolution through final and binding adjudication;
• introduce new rules permitting the release of holdback money where certain conditions are met; and
• improve subcontractors’ access to payment information.

Further information about the proposed changes in Bill 37 can be found here. Please follow the Carscallen Blog for future updates regarding Bill 37, and subscribe here for further Construction Law updates.

Carscallen LLP’s Construction Law Expertise

Carscallen LLP has an experienced team of constructions lawyers. We have experience in all forms of dispute resolution, including mediation, arbitration and litigation, with respect to various construction projects, including large oil sands projects, commercial high-rise buildings, commercial complexes, residential high-rise buildings, and condominium complexes. Our team also has experience in drafting and reviewing construction contracts for various types of projects. If you have questions about how Bill 37 may affect your business, or any other construction law-related questions, please contact any member of our team.