PPCLA flow-down: what Alberta GCs owe their subcontractors.

The most common question I get from general contractors after the PPCLA came into force isn't about the 28-day owner payment window. It's this: does it apply to what I owe my subcontractors?

It does. And the obligations are more specific - and more exposed - than most GC sub-agreements currently reflect.

Alberta's Prompt Payment and Construction Lien Act (PPCLA) established a downstream payment chain that runs from owner to GC to sub, all the way down to sub-sub and trade-tier contractors. The Act's payment deadlines override pay-when-paid clauses. It put a hard 7-day payment clock on every GC-to-sub payment. And it created a 35-day backstop: if the owner hasn't paid you, you may still owe your subcontractor - and unless you give a proper notice of non-payment, the clock is running regardless.

If your sub-agreements still contain a pay-when-paid clause, or if your sub payment process depends on receiving the owner's cheque first, you have live adjudication exposure right now. Here's what the Act requires and what your sub-agreement needs to say about it.

Pay-when-paid now runs on the Act's terms - not your contract's

Before the PPCLA, pay-when-paid clauses in Alberta sub-agreements were generally enforceable if the language was sufficiently clear. A clause that said "payment to the subcontractor is contingent upon receipt of payment from the owner for the same work" could be used to defer sub-payments until the GC collected from the owner.

That position is gone. The PPCLA's payment timelines apply to every construction contract in its scope, and you can't contract out of them. Once you're paid, you have 7 days to pay the sub. If you haven't been paid, the only way to hold back the sub's payment is a notice of non-payment in the prescribed form - and if that notice is based on the owner not paying you, you must also undertake to start adjudication against the owner within 21 days. It doesn't matter how the clause is drafted, how specific it is, or how many years it's been the industry standard in your template sub-agreement. A contractual pay-when-paid clause on its own no longer defers payment past the Act's deadlines.

The payment chain from owner to sub

The PPCLA payment chain flows in three stages. Each stage has its own timeline. Understanding the chain tells you where your obligations start and where your exposure is.

The chain continues. A subcontractor who has received payment from the GC has 7 days to pay their own sub-subcontractors. The same backstop structure applies one tier down, with an outer limit of 42 days from the proper invoice to the owner. PPCLA obligations flow through the entire payment chain, not just the top two levels.

The notice of non-payment: on time, in writing, specific

If a subcontractor delivers an invoice that you dispute - wrong quantities, defective work, back-charge outstanding, scope disagreement - the PPCLA does not let you simply hold payment until the dispute is resolved. The dispute process has its own obligations.

To dispute a subcontractor invoice under the PPCLA, the GC must:

• Deliver a written notice of non-payment in the prescribed form within the Act's deadlines (tied to receipt of owner payment, the owner's notice of dispute, and the 35-day outer limit)
• Identify the specific amount in dispute (not just a general objection to the invoice)
• Explain the basis for the dispute - the reason payment is being withheld for that amount
• Pay the undisputed portion of the invoice on time - the dispute notice does not suspend the full payment obligation

If the GC misses the notice deadline, the right to withhold that payment is gone. A late dispute notice is treated the same as no dispute notice. This is a significant procedural change from pre-PPCLA practice, where dispute and withholding timelines were largely set by the sub-agreement. Under the PPCLA, the dispute clock is statutory - it runs whether or not your sub-agreement addresses it.

If you dispute a sub's invoice but don't deliver a notice of non-payment on time - specific, identified, in writing - you've lost the right to withhold. The PPCLA gives you the mechanism to dispute. It requires you to use it on time or forfeit it.

What happens when a sub goes to adjudication

The PPCLA created a fast-track adjudication process for payment disputes. A subcontractor who hasn't been paid - or whose invoice was disputed without proper notice - can initiate adjudication. The process runs on a compressed timeline measured in weeks, not years. It is faster, cheaper, and more accessible than litigation. Adjudicators are appointed through a government-approved Nominating Authority. The adjudicator's decision is binding unless it's set aside or the parties resolve the dispute another way, and it can be filed with the court and enforced.

For a GC whose sub-payment obligations are non-compliant, adjudication is not a hypothetical risk. A subcontractor with a $150,000 unpaid invoice who knows you missed the notice of non-payment deadline has a strong adjudication case and a fast path to an enforceable decision. The cost is well below litigation and the threshold to initiate is low. Subcontractors can use adjudication not just as a last resort, but as a first step when a GC is slow to pay or ignores the notice requirements.

What your sub-agreement needs to say

Most standard-form sub-agreements - including those based on older CCDC templates or GC-issued templates written before August 2022 - do not reflect the PPCLA's downstream obligations. Updating them isn't optional; it's necessary to align the sub-agreement with statute. Here's what the sub-agreement needs to address:

The GC's AP workflow: where things go wrong

The most common compliance failure I see isn't a sub-agreement problem - it's an internal process problem. The sub-agreement is updated, but the accounts payable workflow still runs on a monthly cycle. When the owner pays on Day 28 and the AP team processes sub-payments in their next batch, which happens to be Day 17 from the owner's payment date, the GC has already missed the 7-day window by 10 days on every sub that was paid in that draw.

PPCLA compliance requires AP process changes, not just contract language changes. The practical steps:

• Identify which sub invoices correspond to each owner draw at the time of draw submission - don't reconstruct this after the owner pays
• Flag sub-payment obligations immediately when owner payment is received - the 7-day clock starts on receipt date, not invoice date
• Build the sub-payment batch around the owner payment date, not your standard AP cycle
• Calendar the 35-day backstop from the date you gave the owner each proper invoice - if the owner hasn't paid by Day 28, decide right away whether to pay the sub or issue a notice of non-payment. Don't wait until Day 35
• Document all notices of dispute and non-payment with date, delivery method, and content - the notice deadlines create a paper trail requirement

One more thing: adjudication covers more than unpaid invoices

Adjudication under the PPCLA isn't limited to a simple "you didn't pay me" claim. It covers disputes over the valuation of work, change orders, non-payment, and holdback (lien fund) amounts, and the parties can agree to adjudicate other matters. The Act has also been amended since 2022 - the Bill 30 changes took effect April 1, 2025, and further regulation amendments followed in late 2025. A GC who disputes a sub's invoice late, then disagrees on a change order in the same dispute, can face adjudication on both issues. If your sub-agreement template hasn't been reviewed since early 2025, it's due.