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Holding Pattern: Alberta Awaits Prompt Payment and Adjudication Regime

Provincial legislatures across Canada are finally heeding the call from industry to implement prompt payment and adjudication regimes. As of the writing of this post however, only Ontario’s Construction Act [1]RSO 1990 c C.30 has in-force prompt payment and adjudication provisions. Elsewhere in Canada, legislatures are at various stages of implementation. In Alberta, Bills 37 and 62 introduced amendments (and then revised those amendments) to the Builders’ Lien Act,[2]RSA 2000 c B-7 to introduce prompt payment and adjudication – amendments so significant, that the Builders’ Lien Act will be renamed to become the Prompt Payment and Construction Lien Act (the “PPCLA“). The authors have previously written regarding the PPCLA and the introduction and passing of Bills 37 and 62 here and here, respectively.

July 1, 2021 was the anticipated proclamation date for the PPCLA when Bill 37 was introduced in October 2020.[3]Protecting jobs in the construction industry – October 21, 2020 – YouTube This ambitious timeline gave industry only a few months to prepare for the substantial changes brought about by the new legislation. Unfortunately, the line between ambition and folly is often best perceived in hindsight, which appears to have been the case here. Following what the Minister’s office describes as “overwhelming feedback from stakeholders”, the July 1, 2021 effective date has come and gone without the PPCLA having been proclaimed into force, and without an alternate effective date being announced.

As of the writing of this post, industry stakeholders continue to engage with the government over the details of how this new legislative framework will operate in practice. Those details are anticipated to be fleshed out in the PPCLA‘s  yet-to-be-released regulations.

In addition to requiring the finalization of the regulations, the PPCLA will require the Minister to appoint an authorized “Nominating Authority” who will be empowered to appoint adjudicators to decide disputes subject to the adjudication regime. As of the date of this blog post, only the ADR Institute of Canada (ADRIC), in collaboration with the Royal Institute of Chartered Surveyors (RICS), has publicly announced an intention to submit a bid to become a Nominating Authority. An ADRIC-RICS Nominating Authority does not appear to be in a position to appoint adjudicators until at least 2022 however, when it has had an opportunity to qualify adjudicators according to its standards.[4]https://adric.ca/construction-adjudication/construction-adjudication-training/  It therefore appears unlikely that the PPCLA will be able to be proclaimed until at least spring 2022.

In the meantime, contracts or subcontracts entered into before the PPCLA is in force will continue to be subject to the existing provisions of the Builders’ Lien Act, subject to the yet-to-be-released regulations.[5]See Bill 37 s.26, PPCLA s. 74

For more information regarding the major consequences of the PPCLA, not just for the construction industry, but for any industry that is involved directly or indirectly in the buying, selling, drilling, mining, developing, maintaining or financing of land in Alberta, please see our team’s presentation that can be accessed here.

We will continue to monitor the progress of the PPCLA and other prompt payment and adjudication regimes across the country, and will provide further updates as they become available.

References

References
1 RSO 1990 c C.30
2 RSA 2000 c B-7
3 Protecting jobs in the construction industry – October 21, 2020 – YouTube
4 https://adric.ca/construction-adjudication/construction-adjudication-training/
5 See Bill 37 s.26, PPCLA s. 74
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