Amendments to the Alberta Prompt Payment and Construction Lien Act (the PPCLA) and to the Public Works Act (the PWA) are on the Legislative agenda this fall sitting.

On November 4, 2024, the Minister of Service introduced Bill 30 (the Bill), the Service Alberta Statutes Amendment Act, 2024,¹ which will amend the PPCLA and the PWA.

The proposed amendments to the PPCLA will clarify the adjudication process and allow certain professional services consultants to “opt out” of the PPCLA. The amendments to the PWA include two significant changes to bring public-sector projects in line with the prompt payment requirements set forth in the PPCLA and to provide for adjudication of public sector disputes

1. Status of amendments

The Bill has been debated in the Assembly, passed Third Reading and is proceeding to Royal Assent. We expect that the Bill will receive Royal Asset and become law within this sitting of the Legislature, which ends December 5, 2024.

2. Prompt Payment and Construction Lien Act amendments

The PPCLA establishes payment deadlines for owners, contractors and subcontractors who perform work or supply materials for the improvement of real property. It establishes the procedure for filing a lien claim against such property, and for initiating adjudication of payment disputes.

1. The amendments allow consulting professionals, such as architects and engineering firms, the ability to opt out of the holdback requirements set out in the PPCLA on a project-by-project basis. This amendment will allow consulting professionals to receive full payment for their work, instead of being subject to the standard 10% holdback for work on or in respect of an improvement.²
2. Under the existing PPCLA, contractors and subcontractors are permitted to advance a payment dispute to adjudication at any time before the contract is completed. This process has been criticized as it fails to account for instances where a contract is completed but final payment under such contract has not been made. The proposed amendments allow for adjudication at any time prior to the date that is 30 days after the date of final payment, unless the parties to the adjudication agree otherwise, and clarify that adjudication may be commenced if a final payment has not been made within the prescribed timeline set out in the legislation.³

Pursuant to the Bill, the date of “final payment” will be set as the earlier of:

1. The date that complete payment of the amount set out in the contract or subcontract is made; and   
2. The date that complete payment of the amount set out in the contract or subcontract is required to be made under Sections 32.2, 32.3 or 32.5.⁴

This process will apply throughout the contractual chain with contractors and subcontractors.⁵

The amendments further clarify that certain payments, including for example payment of the major or minor lien fund, do not constitute final payment. ⁶

While this clarification will certainly be helpful, a paying party who disputes a final payment may take the position that a payment is not “required to be made” pursuant to Section 32.2, 32.3 or 32.5 if such payment is being disputed.

3. Currently, adjudication ceases when a party commences a court action, which has been used by some parties to slow down the dispute resolution process. The PPCLA amendments will enable construction parties to seek concurrent dispute mechanisms – a party may commence proceedings simultaneously with the Courts and adjudicators.⁷ 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.⁸


3. Public Works Act amendments
1. The amendments to the PWA align the timing for payment on public-sector projects to the prompt payment timelines and regulations outlined in the PPCLA.⁹ Government of Alberta construction contracts will now follow the same prompt payment timelines as private-sector projects, including proper invoicing provisions, 31-day billing cycles and payment due dates of 28 days for contractors and seven days for subcontractors. This will provide consistent and timely payments to contractors and sub-contractors who work on public-sector projects.
2. The amendments will also extend the adjudication rules from the PPCLA to public-sector projects.¹⁰ However, adjudication under the PWA will only consider a dispute about payment¹¹ and adjudication is not available to contracts and subcontracts that encompass capital asset upkeep and special scopes.¹² These limitations are in contrast to the PPCLA, which allows adjudication of any matter that the parties to the contract agree to.¹³

Assuming Bill 30 receives Royal Assent, the prompt payment and adjudication changes in the PWA will come into force in spring 2025.¹⁴ At that time, all new contracts must align with the updated legislative requirements. Any existing contracts would continue as written until project completion.

The legislature debated whether P3 projects should be included in the amendments. The UCP argued that P3s are complex projects which typically include maintenance; however, the principles of prompt payment are intended to be written into P3 contracts. Unfortunately, Minister Nally of Service Alberta and Red Tape Reduction did not clarify how the principles will be written into P3 contracts or enforced.

Following the publication of this insight, on December 5, 2024, Bill 30 received Royal Assent. The changes to the PPCLA will come into effect on proclamation. The amendments to the Public Works Act are anticipated to come into effect in the spring of 2025.

For more information on this topic, please reach out to Alexis Barr-Gusa or Chelsea Wilson.

[1] Service Alberta Statutes Amendment Act, 2024. [Bill 30]

[2] Ibid at s. 5(2) and (3).

[3] PPCLA at s.32.2

[4] Bill 30 at s. 33.4(3).

[5] PPCLA at s. 32

[6] Bill 30 at s.33.4(4).

[7] Ibid at s.33.4(5).

[8] Ibid at s.33.4(6).

[9] Ibid at s. 13(1)-(4).

[10] Ibid at s.14.1-14.6.

[11] Ibid at s.14.3(2).

[12] Ibid at s.14.5(2).

[13] s.19, Prompt Payment and Adjudication Regulation, Alta Reg 23/2022.

[14] Bill 30 at s.14.6.