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Holding Pattern: PPCLA

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Holding Pattern: Alberta Awaits Prompt Payment and Construction Lien Updates

OCTOBER 18, 2021

Participants and stakeholders in Alberta’s construction industry continue to await the coming into force of the province’s new prompt payment and construction lien system. Our team has written previously regarding the Prompt Payment and Construction Lien Act (the “PPCLA”) and the introduction and passing of Bills 37 and 62 here and here, respectively.

In our last update, the prevailing understanding, based on announcements by Service Alberta and the Minister, was that the prompt payment and adjudication regimes introduced in the PPCLA would take effect on July 1, 2021. This date has since come and gone as industry stakeholders continue to engage with the government over the details of how this new legislative framework will operate in practice. While the PPCLA outlines many of the high level changes, the accompanying yet-to-be-released regulations are anticipated to contain the necessary detail to bring the new regimes (particularly adjudication) to life.

As of the writing of this blog post, Service Alberta still has no official date for the publication of the regulations, or for when the PPCLA will be proclaimed into force. 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 publically 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.[1] It therefore appears unlikely that the PPCLA will be able to be proclaimed until at least spring 2022.

In the meantime, subject to the yet-to-be-released regulations, 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.

Further to our previous blog posts, our team recently provided a presentation 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. That presentation can be accessed here.

We will continue to monitor the progress of the PPCLA and will provide further updates as they become available.

With proclamation of the PPCLA looming, it is incredibly important to have competent counsel with a deep understanding of construction law and the prompt payment and adjudication regime to ensure your business is prepared to thrive in this new legislative environment. The lawyers at McCarthy Tétrault have extensive experience in the construction industry and can help you navigate this complex legislative scheme.

  • https://www.mccarthy.ca/en/insights/blogs/lay-land/holding-pattern-alberta-awaits-prompt-payment-and-construction-lien-updates
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