structure. Any dispute related to payment
must occur within the stipulated
time period. If a dispute cannot be
resolved, it can be disputed in a formal
adjudication process.
Adjudication
In an effort to limit court interference,
the amendments establish a binding dispute
resolution process. Under this process,
qualified, third-party adjudicators
are selected by government-appointed
Authorized Nominating Authorities.
Judicial review of the adjudication outcome
is limited to grounds enumerated
in the Prompt Payment and Construction
Lien Act.
Further details on the adjudication
process and what can be adjudicated will
likely be established in the regulations.
Holdbacks
Bill 37 creates new mechanisms for
the release of holdback funds. Under
the amendments, if certain conditions
are met, holdbacks must be released
at pre-set release times (either annually
for multi-year projects or at predetermined
project milestones).
While this modification is beneficial
to contractors who will see increased
cash flow in large multi-year projects, it
will also reduce the amount of security
in the lien fund.
Application to Crown contracts
As under the current Builders’ Lien Act,
the Prompt Payment and Construction
Lien Act will not apply to contracts
with the Government of Alberta,
such as Alberta Transportation and
Infrastructure projects. Contracts with
the Alberta government continue to be
governed under the Public Works Act.
Notwithstanding this exclusion from
the amendments, the Alberta government
has expressed that it will continue
to hold itself to the standards of
prompt payment in Bill 37.
Those in the construction industry
should be aware that while the Alberta
government has expressed their intent to
uphold the prompt payment standards,
a contractor cannot enforce this legislation
against the Alberta government.
Next steps
Bill 37 is scheduled to receive proclamation
in July 2021, at which time
the Prompt Payment and Construction Lien
Act and the aforementioned changes
will become law. These amendments
will not apply to contracts drafted and
entered into prior to the proclamation
of Bill 37. n
P R O M P T PAYMENT
James J. Heelan, Q.C. is a partner at
Bennett Jones LLP and Amy Deprato is
a student at law with Bennett Jones LLP.
If your business or organization has any
questions on the potential implications
that Bill 37 may have on a construction
arrangement, please contact the authors of
this blog or a member of the Bennett Jones
Construction group.
References
1. Builders’ Lien Act, RSA 2000, c B-7,
s 7(1).
2. Bill 37, The Builders’ Lien (Prompt
Payment) Amendment Act, 2nd Sess,
30th Leg, Alta, 2020 (assented to
9 December 2020), SA 2020, c 30.
The general
time limit
of 45 days
to file a lien
is extended
to 60 days
under the
amendments.
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