Alberta’s Bill 37 replaces the Builders’ Lien Act with the Prompt Payment and Construction Lien Act. It creates a statutory payment process built around defined “proper invoices,” a 28-day payment deadline, limited invoice disputes, interest on overdue amounts, and a prohibition on pay-when-paid clauses.
The bill also establishes construction dispute adjudication, changes lien-retention and registration periods, and creates special rules for concrete work. The result is a broader construction-payment framework: payment timing, lien security, information rights, and dispute resolution now operate as connected parts of the same statute.
At a Glance
What It Does
The bill requires an owner, contractor, or subcontractor who owes money under a proper invoice to pay within 28 days. A party disputing an invoice must issue a prescribed notice within 14 days, identify the unpaid amount, and explain the reasons for non-payment. The bill also voids pay-when-paid clauses and adds a statutory adjudication process for prescribed construction disputes.
Who It Affects
Owners, contractors, subcontractors, lienholders, mortgagees, suppliers, and workers involved in Alberta improvements face changes. Contract administrators must adjust invoice content, payment calendars, dispute notices, retention procedures, and dispute-resolution provisions, with additional rules for concrete-related work.
Why It Matters
The legislation shifts construction payment disputes away from indefinite contractual delay and toward fixed statutory deadlines. It also gives parties a faster interim forum through adjudication while preserving lien remedies, making payment administration and documentation central risk controls on construction projects.
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What This Bill Actually Does
Bill 37 restructures Alberta’s construction lien statute into separate parts covering general rules, lien creation, prompt payment, information rights, adjudication, registration, enforcement, and regulations. The prompt-payment system begins with the “proper invoice.” A proper invoice must identify the issuer, billing period, contractual authority, work or materials supplied, amount and payment terms, recipient, and the fact that it is intended to qualify as a proper invoice.
Contracts may add requirements, but they cannot make delivery of the invoice conditional on prior certification or owner approval, except for provisions dealing with testing and commissioning, subject to regulations.
Once a proper invoice is received, the party responsible for payment generally has 28 days to pay. A party that disputes the invoice must send a notice in the prescribed form and manner within 14 days, specify the amount being withheld, and give reasons.
Any undisputed portion remains subject to the 28-day payment obligation. Unpaid amounts accrue interest at prescribed rates.
The bill also invalidates contractual terms that make a contractor’s or subcontractor’s payment obligation dependent on first receiving payment from another party. That rule reaches down the payment chain rather than allowing upstream non-payment to become an automatic defence.The legislation adds an adjudication framework for disputes between parties to a contract or subcontract.
A minister-designated Nominating Authority qualifies and appoints adjudicators, arranges hearings, trains adjudicators, and maintains a public registry. The minister may act as the interim authority if no entity has been designated.
Adjudication is available only for prescribed matters and must follow regulatory or Nominating Authority procedures. An adjudicator’s determination is final and binding subject to judicial review, but the review grounds are defined and filing an application does not automatically suspend the determination.Bill 37 also changes the security supporting payment.
It extends several ordinary lien periods from 45 to 60 days, while establishing 90-day rules for improvements primarily related to furnishing concrete or concrete work. Owners must retain 10% for specified concrete-related work, and the statute coordinates those retainage rules with major and minor lien funds.
It also permits payment of certain retained amounts under long-term or phased contracts if the contract contains the required payment structure, exceeds the prescribed price threshold, and the lien conditions are satisfied.Finally, the bill expands project information rights beyond lienholders to include trust beneficiaries and contractors or subcontractors currently working on a project. It updates related references in Alberta’s condominium, land titles, and mines and minerals legislation, raises the minimum registrable lien claim from $300 to $700, and provides transitional treatment: new contracts must conform to the new provisions, while earlier contracts generally remain governed by the former provisions until they expire, terminate, or are amended, subject to regulations.
The Five Things You Need to Know
A proper invoice must contain specified information, including the billing period, contractual authority, description of work or materials, amount claimed, payment recipient, and a statement that it is intended to be a proper invoice.
The payment deadline is 28 days after receipt of a proper invoice. A dispute notice must be given within 14 days and must identify both the unpaid amount and the reasons for withholding it.
Pay-when-paid provisions are unenforceable. A contractor or subcontractor cannot make its payment obligation to a downstream party conditional solely on receiving payment from upstream.
Judicial review of an adjudicator’s determination does not automatically stay the determination. A court must order a stay, and review is limited to specified grounds such as jurisdictional error, procedural non-compliance, bias, fraud, or mistake of law.
The minimum amount for registering a lien rises from $300 to $700, while ordinary lien-registration periods increase from 45 to 60 days and specified concrete-related periods use 90 days.
Section-by-Section Breakdown
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Renaming and reorganizing the lien statute
The bill renames the Builders’ Lien Act as the Prompt Payment and Construction Lien Act and reorganizes it into Parts dealing with general provisions, lien creation, prompt payment, information, adjudication, registration, enforcement, regulations, and transition. Cross-references to retention and lien-fund provisions are updated so the new concrete rules operate within the existing lien structure.
Concrete retainage and lien-fund rules
For improvements primarily related to furnishing concrete or work involving concrete, owners must retain 10% of the value of work actually done and materials actually furnished for 90 days. The applicable starting point differs depending on whether a certificate of substantial performance exists. Related provisions govern when major and minor lien funds may be paid out and prevent those payments from discharging lien exposure if a statement of lien has been registered.
The bill also creates a conditional path for paying retained amounts under long-term or phased contracts. The contract must provide for annual or specified phased payments, exceed the prescribed price threshold, and have no unresolved lien filings as of the relevant payment date, along with any additional prescribed conditions.
Proper invoices and mandatory payment timing
Part 3 establishes the core prompt-payment process. It prescribes the contents of a proper invoice, prevents approval or certification preconditions from delaying invoice delivery except for permitted testing and commissioning provisions, and allows revisions only where the parties agree and the revised document continues to meet the statutory requirements.
The recipient must pay within 28 days unless it gives a compliant dispute notice within 14 days. The framework separates disputed and undisputed amounts, imposes interest on unpaid amounts, and preserves wage obligations. It also eliminates pay-when-paid terms, placing payment risk on the party that owes the downstream obligation rather than automatically passing that risk along.
Expanded access to project information
The amended information provisions allow lienholders, trust beneficiaries, and contractors or subcontractors currently working under a project contract to demand inspection of relevant contracts and account statements. The recipient generally has six days to produce the information or provide the required written details where a contract is not written.
Failure to respond, or knowingly making a false statement, can create liability for loss suffered by the person making the demand. Courts may also order production of contracts, mortgages, statements, and other relevant documents before or after lien-enforcement proceedings.
Construction adjudication system
Part 5 authorizes parties to refer prescribed disputes to adjudication. A designated Nominating Authority qualifies and appoints adjudicators, arranges hearings, trains adjudicators, and maintains a public registry. The minister may perform those functions temporarily if no authority has been designated.
Adjudicators may refer matters to court where they lack jurisdiction or court is the more appropriate forum, and they may reject frivolous or vexatious disputes. Determinations are final and binding subject to judicial review. The bill lists the review grounds and states that an application does not stay the determination unless the court orders otherwise. It also provides good-faith immunity for Nominating Authorities, adjudicators, and their employees, and protects adjudicators from being compelled to testify about an adjudication.
Registration thresholds and lien deadlines
The bill raises the minimum lien claim eligible for registration from $300 to $700. It extends ordinary retention and lien-related periods from 45 to 60 days in specified provisions, while using 90-day periods for concrete-related improvements.
For concrete work, the 90-day registration period is measured from the completion or abandonment of the relevant materials, services, wages, contract, or subcontract, depending on the type of lien claim. These timing changes require parties to align payment close-out, certificate, and lien-monitoring processes with the type of improvement involved.
Regulation-making and transition rules
The bill gives the Lieutenant Governor in Council authority to prescribe rules for prompt payment, adjudication, forms, fees, procedures, adjudicator qualifications, available remedies, service, and Nominating Authority functions. It also authorizes rules addressing confusion, inconsistency, and transitional issues.
Contracts and subcontracts entered into after the new provisions come into force must conform to them. Earlier contracts generally remain subject to the former provisions until expiry, termination, or amendment to conform, subject to regulations. This makes contract date and any later amendment important in determining which regime governs.
Consequential amendments and commencement
The bill updates references to the renamed statute in the Condominium Property Act, Land Titles Act, and Mines and Minerals Act. The final provision brings the legislation into force by proclamation, leaving the operative commencement date to the proclamation process.
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Who Benefits
- Subcontractors and suppliers that face upstream payment delays benefit from fixed payment deadlines, protection for undisputed invoice amounts, interest on overdue sums, and the elimination of pay-when-paid clauses.
- Owners and contractors with legitimate invoice disputes gain a defined process for withholding payment, provided they meet the 14-day notice requirement and explain the disputed amount and reasons.
- Parties seeking a rapid construction-payment decision gain access to adjudication without waiting for a full court proceeding or final lien litigation.
- Trust beneficiaries, contractors, and subcontractors working on a project gain broader rights to inspect contracts and account information, improving their ability to assess payment and lien risk.
- Workers retain their existing wage entitlements because the prompt-payment provisions expressly do not reduce statutory, contractual, or collective-agreement wage obligations.
Who Bears the Cost
- Owners, contractors, and subcontractors must redesign invoicing and payment controls to track proper-invoice content, 28-day deadlines, 14-day dispute notices, interest, and statutory retention.
- Owners carrying out concrete-related improvements face specialized 10% retainage and 90-day lien-fund rules that can keep funds tied up longer than ordinary projects.
- Contractors and subcontractors can no longer rely on pay-when-paid clauses to transfer upstream collection risk to downstream parties, increasing the need for working capital and credit controls.
- Nominating Authorities and adjudicators will carry administrative, training, registry, hearing, and procedural responsibilities, with details and costs shaped partly by regulations.
- Parties pursuing lien claims of less than $700 may lose access to lien registration even though other contractual or collection remedies may remain available.
Key Issues
The Core Tension
Bill 37 tries to protect construction cash flow by making payment fast and adjudication immediately effective, but speed reduces the time available to investigate complex claims and increases the consequences of procedural mistakes. The central trade-off is between getting money to the party performing the work and preserving enough process for owners and upstream contractors to withhold payment when the work, invoice, or entitlement is genuinely disputed.
The statute creates speed, but it does so through formal deadlines and documentation. A party that receives an invoice must identify a dispute within 14 days or risk owing the amount under the 28-day rule.
That structure can improve payment discipline, but it also makes invoice classification, receipt dates, authorized recipients, and notice service potential points of contention. The bill leaves important operational details—such as prescribed forms, payment terms, adjudicable matters, fees, and procedures—to regulations and Nominating Authorities.
Adjudication is designed to produce a binding result quickly, yet its relationship with court proceedings is deliberately uneven. Judicial review is available on specified grounds, but it does not automatically pause enforcement.
That can provide cash-flow certainty to the successful party while exposing the other party to the practical difficulty of recovering money after a later court intervention. The bill’s immunity protections and limits on compelling adjudicators to testify may also narrow the avenues for challenging how an adjudication was conducted.
The transition rules create a second layer of complexity. New contracts must use the new regime, while earlier contracts generally remain under the former rules unless they are amended or otherwise reach an endpoint.
Projects involving multiple tiers of contracts, amendments, concrete work, or certificates of substantial performance may therefore contain different payment and lien timelines within a single project.
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