Prompt payment, holdbacks and liens on Alberta electrical contracts

CCT 01What the Act covers and when it applies

The Prompt Payment and Construction Lien Act is the renamed and expanded Builders’ Lien Act. The Government of Alberta describes the new rules as applying to the construction projects, materials and work the Builders’ Lien Act covered.¹ All new construction contracts in Alberta must follow it from August 29, 2022.¹ Older contracts that ran past August 29, 2024 had to become compliant by that date.¹

For electrical work that captures the usual chain: an owner or developer, a general contractor, the electrical contractor as a subcontractor, and its own subcontractors, such as a fire alarm or low-voltage trade. When the owner hires the electrical contractor directly, as on many service upgrades and tenant work, the electrical contractor is the “contractor” in the Act’s terms. The tenant improvement process guide shows where these contracts sit in a typical fit-out.

The Act cannot be contracted out of. An agreement that it does not apply, or that its remedies are unavailable, is void, with limited exceptions for consulting professionals.² A subcontract clause that pushes payment past the statutory dates does not change them.

Whether a particular maintenance or service agreement counts as a construction contract depends on the work. If your repeat service work is significant, ask a lawyer how the Act treats it.

CCT 02The proper invoice starts every clock

Every payment deadline runs from a proper invoice: an invoice that meets the Act’s content requirements. An invoice that does not qualify may not start the clock, so check your template against the Act before the first billing.

Proper invoices must be given to an owner at least every 31 days, unless the contract makes payment conditional on testing and commissioning.² That exception matters in electrical work, where commissioning of switchgear, generators, fire alarm and controls often sits at the end of the job. If your contract ties a payment to commissioning, write down exactly which tests, witnessed by whom, release which amount.

Practical points for electrical billing:

• Agree the billing date, the schedule of values and how stored materials are valued before the first invoice.
• Bill change work on the same cycle; do not hold it for a final invoice.
• Keep proof of the date each proper invoice was given. The downstream deadlines are counted from that date.

CCT 03The payment timeline, owner to sub-subcontractor

The day-35 obligation has one way out. A contractor that has not been paid can instead give its subcontractor a notice of non-payment together with an undertaking to refer the matter to adjudication within 21 days.² Late amounts carry interest at the contract rate or, if the contract names none, the rate in the Judgment Interest Regulation.³

Two counting traps catch people. The 14-day and 28-day deadlines run from the owner’s receipt of the invoice, while days 35 and 42 run from when the proper invoice was given to the owner, not from the subcontractor’s own invoice. An electrical subcontractor cannot see the owner’s dates unless it asks, so the subcontract should require the contractor to tell it when invoices go in and payments arrive.

CCT 04Disputes: two notices with confusingly similar names

An owner who disputes a proper invoice must give the contractor a notice of dispute no later than 14 days after receiving it, specifying the amount not being paid and all the reasons; undisputed amounts remain due at 28 days.² Further down the chain, the contractor’s notice to its subcontractor is a notice of non-payment, backed by the undertaking to adjudicate within 21 days.²

For electrical contracts, most disputes are about change work: extra circuits, relocated equipment, a utility requirement nobody priced, or an after-hours shutdown. Price and document changes as they happen, and give reasons in any notice that tie to the contract documents.

CCT 05The 10% holdback and when it is released

The owner must retain a holdback, the major lien fund, of 10% of the value of work actually done and materials actually furnished, for 60 days from the certificate of substantial performance or, if there is none, from completion of the contract.² The holdback is what protects the trades if a lien is registered, which is why owners hold it until the lien period has passed.

On large projects the wait can be long. For contracts priced above $10,000,000 that meet the Act’s other conditions, the holdback can be released annually or by phase instead of only at the end.³

What electrical contractors and owners should settle in writing:

• whether the prime contract provides for a certificate of substantial performance, and how the electrical contractor learns its date;
• whether the subcontract passes the owner’s holdback release through promptly;
• how deficiencies, as-built drawings, test reports and warranty documents relate to holdback release, since these are often the last electrical items outstanding;
• how holdback is tracked on each invoice, so the amount retained is never in doubt.

CCT 06Liens: two 60-day clocks that start at different times

A contractor or subcontractor may register a lien within 60 days from the day its contract or subcontract is completed or abandoned. That is the general case, which covers electrical work.² A lien that is not registered within that time ceases to exist.² There is no late registration.

“60 days” therefore means two different things. The holdback period counts from the certificate of substantial performance or completion of the prime contract. The lien period counts from completion or abandonment of your own contract or subcontract. An electrical subcontractor that finishes and walks away months before the building is complete can lose its lien while the owner still holds holdback on the project.

What “completed” means for a subcontract with trailing deficiency or warranty work is a legal question. If you are unpaid and near the end of your work, get advice early rather than counting on a later completion date.

Reel 04 · Conduit and tray · illustrative film

CCT 07Adjudication: a fast decision on payment disputes

Adjudication is a quick, binding-for-now process for construction payment disputes. Adjudicable disputes include the valuation of work and materials, payment including approved, unapproved or proposed change orders, notices of non-payment, and payment of holdback.³

• Start in time. Adjudication cannot be started if the notice of adjudication is given more than 30 days after the date of final payment, unless the parties agree otherwise.²
• A fast decision. The adjudicator must issue a determination within 30 days of receiving the documents (extendable), may order payment, and may allow the unpaid party to stop work if the payment deadline then passes.³
• Who appoints. Two Nominating Authorities currently operate in Alberta: ARCANA (AB) and ADACC (Alberta Dispute Adjudication for Construction Contract).¹ Each sets its own fees.
• Court in parallel. The 2024 amendments let adjudication run in parallel with court proceedings.⁴

For an electrical contractor, the practical value is on unpaid change orders, which adjudication can decide without waiting for the end of the project.

CCT 08Government of Alberta projects, and a contract checklist

The Government of Alberta’s June 2025 fact sheet on the 2024 amendments says prompt payment timelines and adjudication rules were extended to Government of Alberta projects under the Public Works Act, including a 31-day proper invoicing cycle from prime contractor to owner.⁴ The main alberta.ca prompt payment page still says Alberta government project contracts are subject to the Public Works Act and exempt from the Act’s timelines.¹ This guide follows the newer fact sheet. On a provincial project, confirm the current position with the contracting department before relying on either. Municipal and private projects are not affected by this point.

Before signing an electrical contract or subcontract, check:

1. billing date, schedule of values and the proper-invoice template;
2. how the contractor tells the electrical subcontractor when owner invoices are given and paid;
3. any testing and commissioning conditions, and exactly what they release;
4. holdback tracking, the certificate of substantial performance and the release route;
5. how change work is priced, approved and billed;
6. the interest rate on late amounts, if any is named.

Payment terms are one line in a wider comparison; comparing electrical bids and hiring a commercial electrical contractor cover the rest. The payment rules apply the same way on tenant improvements, new construction and design-build work, and holdback is one reason contractors’ rates carry financing costs, as the commercial electrician rates guide explains.