Geoff Stenger, Jason Roth, Parker Mckibbon and Evan Hall write in Piling Canada on the major changes the Canadian construction and infrastructure sector is experiencing with the introduction of new prompt payment and adjudication legislation. They look at how these changes will impact alternative financed procurement projects and projects procured under a private public partnership model (collectively, AFP projects) for infrastructure delivery.
Changes are in effect or are in the process of being implemented federally and in a number of Canadian provinces.
Summary of Prompt Payment and Adjudication Legislation Across Canada
| Ontario | Alberta | Nova Scotia | Saskatchewan | New Brunswick | Federal | |
| Name of Legislation | Construction Act, RSO 1990, c C30 (Ontario Construction Act). | Prompt Payment and Construction Lien Act, c P-26.4 (Alberta Prompt Payment and Construction Lien Act). | Builders’ Lien and Prompt Payment Act, RSNS 1989, c 277. | Builder’s Lien Act, SS 1984-85-86, c B-7.1. | Construction Remedies Act, SNB 2020, c 29. | Federal Prompt Payment for Construction Work Act, SC 2019, c 29, s 387. |
| Status of Legislation | In force. | Received Royal Assent, but not in force. | Received Royal Assent, but not in force. | Received Royal Assent, but not in force. | Received Royal Assent, but not in force. | Received Royal Assent, but not in force. |
| Payment Timeline | Payment from Owner to Contractor: 28 days after receipt of proper invoice. Payment from Contractor to Subcontractor: seven days after payment received from Owner. Payment from Subcontractor to Subcontractor: seven days after payment received from Contractor. Proper Invoices: shall be provided to the Owner on a monthly basis, unless the contract provides otherwise. |
Payment from Owner to Contractor: 28 days after receipt of proper invoice. Payment from Contractor to Subcontractor: seven days after payment received from Owner. Payment from Subcontractor to Subcontractor: seven days after payment received from Contractor. Proper Invoices: shall be provided to the Owner every 31 days (subject to upcoming regulations). |
To be determined. | Payment from Owner to Contractor: 28 days after receipt of proper invoice. Payment from Contractor to Subcontractor: seven days after payment received from Owner. Payment from Subcontractor to Subcontractor: seven days after payment received from Contractor. Proper Invoices: shall be provided to the Owner on a monthly basis, unless the contract provides otherwise. |
To be determined. | Payment from Owner to Contractor: 28 days after receipt of proper invoice. Payment from Contractor to Subcontractor: seven days after payment received from Owner. Payment from Subcontractor to Subcontractor: seven days after payment received from Contractor. Proper Invoices: shall be provided to the Owner on a monthly basis, unless the contract provides otherwise. |
| Timeline to Dispute Payment | Owner: 14 days after receipt of proper invoice. Contractor: seven days from receipt of invoice or notice of non-payment from Owner. Subcontractor: seven days from receipt of invoice or notice of non-payment from Contractor. |
Owner: 14 days after receipt of proper invoice. Contractor: seven days from receipt of invoice or notice of non-payment from Owner. Subcontractor: seven days from receipt of invoice or notice of non-payment from Contractor. |
To be determined. | Owner: 14 days after receipt of proper invoice. Contractor: seven days from receipt of invoice or notice of non-payment from Owner. Subcontractor: seven days from receipt of invoice or notice of non-payment from Contractor. |
To be determined. | Owner: 21 days after receipt of proper invoice. Contractor: seven days from receipt of invoice or notice of non-payment from Owner. Subcontractor: seven days from receipt of invoice or notice of non-payment from Contractor. |
| Summary of Adjudication provisions | Adjudication is a mandatory requirement. Decision rendered within 30 days of first documents received. |
Adjudication is not a mandatory requirement. Adjudication requirements are to be determined. |
Adjudication specifics (including whether it is mandatory) shall be specified within the Regulations, which have not been released. Adjudication is only available for non-payment disputes and is not mandatory; all other disputes are referred to the Courts |
Adjudication is a mandatory requirement. Adjudication is available for any dispute the parties to the adjudication agree to. Decision shall be rendered within 30 days. |
To be determined. | Notice of Adjudication must be provided within 21 days of dispute. Adjudication requirements are to be determined. Adjudication is only available for contract payment disputes. |
| Changes to lien mechanics | Builders’ liens can be preserved within 60 days and perfected within 90 days from date of the certificate of substantial performance, termination of the contract, or from the last day that materials or services were provided on the project or improvement. Minor errors and irregularities are no longer fatal. |
Liens can now be registered within 60 days from the last day materials or services were provided for the project or improvement generally and 90 days from the last day materials or services were provided on the project for concrete projects. | No changes are applicable at this time | No changes are applicable at this time. | Liens can be registered within 60 days of a certificate of substantial completion or the last day materials or services were provided on the project or improvement. | No federal lien legislation. |
Bennett Jones