History of Prompt Payment in Alberta
Discussions surrounding prompt payment were initiated by the NDP Government in late-2018 and the current government has decided to move forward with legislation due to a growing number of complaints related to late payments on construction projects. This has been supported by multiple trade and construction associations.
From the onset of BILD Alberta’s engagement with Service Alberta on Prompt Payment, the government’s direction and intent was clear:
- They were fully committed to introducing Prompt Payment as part of an overall review of the Builders’ Lien Act.
- Exemptions for residential construction would not be considered.
- Policies would be largely modelled off Ontario’s legislation.
- They would not delay development of the legislation to review the functionality / implications of Prompt Payment in Ontario.
In early 2019, BILD Alberta members completed a survey where more than half of the respondents identified issues with delayed payments. Many commented they had experienced demand for payment terms outside of the 45-day lien period as part of their contracts. Other members indicated that a 28-day pay period does not work with standard invoicing / payment cycles. They stressed concerns that a shorter payment period would increase administrative burden and pose a challenge when dealing with lenders.