The Government of Alberta is seeking to introduce amendments to the Builders Lien Act. Included as part of this work is the development of what is referred to ‘Prompt Payment’. Prompt Payment is being considered in multiple provinces and is already active in Ontario. It involves stricter requirements for payment timelines (potentially 28-days) from owners to trades / suppliers and onto subtrades. This legislation is being developed at the request of numerous trade and supplier organizations who have indicated payment timelines have begun stretching beyond 70 days.
BILD Alberta has been engaging with members as part of a broader provincial consultation process. Ultimately, the success of home builders and land developers depends on strong trade and supplier partners. If trades and suppliers are struggling, the rest of the industry suffers. The solutions are not straightforward but BILD Alberta is committed to working with members and the Government of Alberta to develop legislation that protects the payment of trades and suppliers in a manner that considers the modern nature of project financing and delivery.
Preliminary recommendations BILD Alberta has provided to government include:
- Retain freedom to contract provisions.
- Assess the viability of a lengthened lien period and adjust holdbacks to provide increased protections to trades and suppliers while not overly restricting cashflow.
- We are open to a prompt payment period, but 28-days may not work for all projects, specifically when they are utilizing various financing tools.
- Any adjudication process must be developed carefully and administered by those who understand construction.
Service Alberta is looking for feedback on their review of Prompt Payment and the Builders Lien Act. If you would like to provide input, you can access their online survey through the below link.