New Alberta law to pay contractors on time

[2Legit2Quit]

Interested to see how this plays out down the road, you see/hear stories of contractors getting paid and never to be heard from again when there's issues or they get paid and never complete the work.

https://www.cbc.ca/news/canada/calgary/alberta-prompt-payment-legislation-construction-1.6567464

"After years of advocacy by the construction industry, Alberta now has legislation in effect to help contractors and subcontractors get paid on time.

The province's new Prompt Payment and Construction Lien Act is intended to address ballooning wait times for payment on construction contracts, said Service Alberta Minister Nate Glubish.

Over the years, Glubish said the average time frame for payment on a contract has grown from 40 days to 75 days. At times, contractors and subcontractors have had to wait more than three months to get paid for their work, Glubish said.

"What we've had here in Alberta up until now was the Wild West," Glubish told CBC Calgary. "Now that we have a clear set of rules, everyone's going to play by the same rules, and I'm cautiously optimistic that we will be in a very good position going forward."

The new legislation, which was formerly known as the Builders' Lien Act, requires owners to pay contractors within 28 days of receiving an invoice. "


There are definite scumbags out there who have to be hunted down to pay so I see why this is coming forth, but interested to see how this pans out for both sides of the customer/contractor

FYI in general regarding this as well I suppose.

[killramos]

Nothing like the government getting in the way of a contract between two consenting parties.

[vengie]

I'd prefer to see legislation for the multiple companies who build a shit product with many deficiencies, declare bankruptcy to avoid having to repair anything, only to open another business under another name and do the same thing.

[ExtraSlow]

is this for B2B payments? That's going to fuck up a lot of companies plans.

[Ca_Silvia13]

I am all for this if it will actually make a difference. Historically the City of Calgary was one of the worst offenders often paying contracts out in 90+ days.

[suntan]

I am all for this if it will actually make a difference. Historically the City of Calgary was one of the worst offenders often paying contracts out in 90+ days.

Apparently they ran out of money in 2020. They were mega late paying our invoice.

[Maxx Mazda]

Nothing like the government getting in the way of a contract between two consenting parties.

What good is a contract when there is nobody enforcing it?

[Buster]

What good is a contract when there is nobody enforcing it?

reputation risk is a much better driver of contract compliance than gov't intervention

[Xtrema]

Rules for thee but not for me


Both he and Milot pointed out the province's legislation doesn't apply to provincial government projects.

[Brent.ff]

Its not just contractors, consultants now considered contractors and get hit with it too.. God i love sending clients invoices for $300 work in progress..

[suntan]

Rules for thee but not for me

There's already legislation that forces them to pay on time.

[Cagare]

The construction lobby is incredibly strong and they pushed for this. There are typically only two levers to get a job done, or to get deficiencies address, rely on the contractor caring about their reputation or holding money back (whether legally or not). In an environment where the low bidder always wins there is no incentive to maintain reputation. On a personal scale if you were hiring a contractor to do work on your property maybe you can rely on reputation, but as the saying goes money talks.

[suntan]

The construction lobby is incredibly strong and they pushed for this. There are typically only two levers to get a job done, or to get deficiencies address, rely on the contractor caring about their reputation or holding money back (whether legally or not). In an environment where the low bidder always wins there is no incentive to maintain reputation. On a personal scale if you were hiring a contractor to do work on your property maybe you can rely on reputation, but as the saying goes money talks.

I think it's mostly so that CNRL and Cenovus pay.

[Cagare]

I think it's mostly so that CNRL and Cenovus pay.

What percentage of their contracts do you think they haven't paid?

[ThePenIsMightier]

Anyone could already put a lien, on anyway. It's painfully easy and liens are often a terrible way of obtaining payment.

108675

[killramos]

Apparently contracting payable terms and assessing counter party risk is too hard for common people to manage so they need nanny state to hold their hands.

Basically this is no different than the “I want to buy parts from some guy in Ontario is PayPal ok?” Threads

[suntan]

What percentage of their contracts do you think they haven't paid?

Well CNRL's standard supplier contract states they don't have to pay invoices.

[Cagare]

Well CNRL's standard supplier contract states they don't have to pay invoices.

Man I love free market capitalism.

[suntan]

Man I love free market capitalism.

A functioning society is often based on good faith.

[killramos]

Having CNRL owe me money goes against my policy of always having alignment with Murray Edwards.

[eblend]

So where are the laws about contractors doing shit on time? My contractor went MIA...he better have a good excuse. Luckily I still owe him some money so I am sure he will turn up.

[ZenOps]

Been waiting three months for an asphalter to finish a job. Insane queues to get anything done nowadays.

[zechs]

So where are the laws about contractors doing shit on time? My contractor went MIA...he better have a good excuse. Luckily I still owe him some money so I am sure he will turn up.

Definitely just wait him out. Really he has done you a favour.

Easy thing is to remember with trades, a good rule of thumb is to keep in mind it is WHEN, not IF a bender occurs.

Oh yea, and never pay them before weekends/long weekends.

[pheoxs]

If this applies to consumers getting home work done ... feels like this is just going to lead to more scams by shit contractors. Do small bit of the work, push hard to get their invoice paid now at 28 days and then disappear. Hopefully there's some reasonable rules to it in terms of not applying to partial work.

[suntan]

I don't think this really applies to plebs, those aren't construction contracts you're signing.

[Cagare]

I don't think this really applies to plebs, those aren't construction contracts you're signing.

Correct, mostly as it relates to monthly draws on longer term contracts.

[Maxt]

Anyone could already put a lien, on anyway. It's painfully easy and liens are often a terrible way of obtaining payment.

108675
That's known as the nuclear option, I don't know anyone that has that and then been called back for more work afterwards. The other problem with the lien is that there is a window of time to apply it which is often shorter than the time some companies payment terms are. You wait it out past the 45 days hoping they are going to be honourable and nothing comes and you're SOL. I am glad to see this, tired of being used as bank by companies much larger than my own.

[ThePenIsMightier]

That's known as the nuclear option, I don't know anyone that has that and then been called back for more work afterwards. The other problem with the lien is that there is a window of time to apply it which is often shorter than the time some companies payment terms are. You wait it out past the 45 days hoping they are going to be honourable and nothing comes and you're SOL. I am glad to see this, tired of being used as bank by companies much larger than my own.

You would know that portion far better than I.
My experience has been with larger~ish companies and they slap liens on as a precursor to lawsuits (so as you said, "nuclear option") but their claims were crazy.

I recall a concrete contractor small biz that used to lien shitty builders that didn't pay him and it did precisely fuck all.

[AndyL]

Did they throw in anything to address the 10% holdback discount?

Deficiencies holdback - but half the companies out there just took it as a discount and you'd be fighting for it's release for years, even if your punchlist was cleared.

[arcticcat522]

Did they throw in anything to address the 10% holdback discount?

Deficiencies holdback - but half the companies out there just took it as a discount and you'd be fighting for it's release for years, even if your punchlist was cleared.

Extended hold back from 45 days to 60 days......this is a big piss off for small/medium business who can have a large chunk of money tied up due to the hold back.

[Misterman]

Interested to see how this plays out down the road, you see/hear stories of contractors getting paid and never to be heard from again when there's issues or they get paid and never complete the work.

https://www.cbc.ca/news/canada/calgary/alberta-prompt-payment-legislation-construction-1.6567464

"After years of advocacy by the construction industry, Alberta now has legislation in effect to help contractors and subcontractors get paid on time.

The province's new Prompt Payment and Construction Lien Act is intended to address ballooning wait times for payment on construction contracts, said Service Alberta Minister Nate Glubish.

Over the years, Glubish said the average time frame for payment on a contract has grown from 40 days to 75 days. At times, contractors and subcontractors have had to wait more than three months to get paid for their work, Glubish said.

"What we've had here in Alberta up until now was the Wild West," Glubish told CBC Calgary. "Now that we have a clear set of rules, everyone's going to play by the same rules, and I'm cautiously optimistic that we will be in a very good position going forward."

The new legislation, which was formerly known as the Builders' Lien Act, requires owners to pay contractors within 28 days of receiving an invoice. "


There are definite scumbags out there who have to be hunted down to pay so I see why this is coming forth, but interested to see how this pans out for both sides of the customer/contractor

FYI in general regarding this as well I suppose.

I haven't read into this much yet, but I viewed it as a good thing initially. As a once contractor myself, I know plenty of guys and companies getting screwed because corporations take 6 months to pay some times. When you are a small business and relying on being paid every 2 weeks when you invoice, this can hurt pretty bad when you go do a job at some site that all of a sudden puts a 6 month wait on your income when you're not prepared for it. And worse yet, some corporations just flat out don't pay, because they know the little guy is going to struggle to come after them for it.

If anything this bill seems like one of the few things the government actually should do. Protect the average persons rights and livelihood from large corporations.