Mon–Fri 8:00am – 5:00pm 135, 5065 13 St SE, Calgary (403) 217-4888
COR Certified · BBB A+
Get a Free Quote

Construction Holdback Rules in Alberta: What the 10% Really Costs a Concrete Subcontract

Construction Holdback

Table of Contents

Construction Holdback

On an Alberta project, the owner is required to hold back 10% of every payment that would otherwise go to the general contractor. That money is not a negotiating chip and it is not the owner’s to keep — it is a statutory fund that exists to protect everyone below the owner on the job, including the crew that poured your foundations. The rules that govern it changed in 2022, and the part most concrete scopes still get wrong is not the percentage. It is the calendar.

After 38 years pouring concrete in Calgary, we have watched more money go sideways on holdback timing than on unit price. A crew can bid the work correctly, pour it correctly, and still be short at the end of the job because nobody diarized the right date. This is what the current rules actually say, and where a concrete scope sits inside them.

What the holdback is, in one paragraph

The holdback is a fixed slice of the contract price the owner must retain rather than pay out. Under Alberta’s Prompt Payment and Construction Lien Act, the owner “must retain an amount equal to 10% as a holdback” from each payment made under the prime contract. That retained money forms what the Act calls the major lien fund — a pool available to lien claimants at or below the subcontractor level who worked on the improvement before a certificate of substantial performance was issued.

Two things follow from that definition, and both matter to a concrete sub.

First, the 10% is a floor, not a ceiling. As the Alberta Construction Association’s plain language guide puts it, “If an Owner holds back more than 10%, then the applicable lien fund will be as much as the full amount held back by the owner.” An owner who retains 15% has enlarged the fund, not created a private reserve.

Second, the fund is there for people below the general contractor. If the GC is paid and does not pass the money down, the fund is the mechanism that still reaches the sub. That is the whole point of the structure.

The three clocks that run on every Alberta job

Most disputes we see are not about entitlement. They are about which clock someone was watching. There are three, and they run at different speeds.

Clock one — the payment clock. Once a proper invoice reaches the owner, the owner “must pay the amount payable to contractors within 28 calendar days of receiving a proper invoice.” If the owner disputes the invoice, they “must give notice to the contractor within 14 calendar days of receiving the invoice.” Then the money moves down: contractors “must pay each subcontractor the amount owed within 7 calendar days of receiving payment from the owner.”

That is the sequence a concrete sub should be able to recite: 28 days to the GC, 7 days from the GC to you. If your invoice was proper and 35 days have passed with no notice of dispute, something has broken upstream.

Clock two — the holdback release clock. The holdback is not released when the work is finished. It is released after the lien period expires. In practical terms, the major lien fund “must be held back for a minimum of 60 days from the date that a certificate of substantial performance is issued.” An owner, as the association guide puts it plainly, “may not safely release final holdbacks until the 60 day period has elapsed.”

For longer jobs there is relief. Where the contract provides for it, holdback may be released progressively on projects over a year in duration and worth over $10,000,000. Without that contract language, the default is annual release. If you are a concrete sub on an eighteen-month build, whether your holdback sits for four months or fourteen is decided by wording in a contract you may never have read.

Clock three — the lien clock. This is the one that ends careers. The registration window moved from 45 days to 60 days in 2022. Miss it and the security disappears; the debt may survive, but the leverage does not.

The 90-day question, and why you should not rely on it

Here is the wrinkle that generic construction-law explainers state confidently and in opposite directions.

Alongside the standard 60 days, the Act creates a 90-day registration period. Everyone agrees it covers oil and gas wells and related site improvements. Everyone also agrees it touches concrete. What the published guidance does not agree on is which concrete parties are inside it.

One reading, from Miller Thomson, is that liens “for the production and provision of concrete (except for ready-mix concrete), must be registered within 90 days.” McCarthy Tétrault describes the same 90-day requirement as applying to projects involving concrete work. The Alberta Construction Association’s plain language guide reads it the other way around entirely: “all suppliers of ready-mix concrete on any improvement – but not the installers of that concrete – will also have a 90 day timeline.”

Read those three sentences again. A supplier is inside in one version and the only one inside in another. The installer is inside in one version and expressly outside in another.

We are not going to resolve that here, and neither should your project coordinator at 4:30 on a Friday. The operational answer is the conservative one:

Diarize 60 days. Argue 90 only if you have already missed 60.

A lien registered on day 55 is good under every reading. A lien registered on day 80 depends entirely on which interpretation a court adopts for your particular scope, and on whether you were supplying the material or installing it. That is not a position to choose on purpose. Put the 60-day date in the calendar the day the last truck leaves, and treat any extra time as a lifeboat rather than a schedule.

What “proper invoice” means in practice

The 28-day clock does not start when you send something. It starts when a proper invoice arrives. If your invoice is missing the information the contract requires, the clock has not started and you are waiting on nothing.

Before an invoice leaves on a concrete scope, it should carry:

  • The contract or purchase order reference, exactly as the GC’s accounting system expects it
  • The period covered and a description of the work performed in that period
  • Quantities placed, tied to the same units used in the bid — cubic metres, square metres, linear metres of wall
  • Approved change order numbers, priced separately rather than folded into base scope
  • The holdback shown as a separate line, calculated at the contract percentage
  • Any certification or document the contract makes a condition of payment

That last point is where concrete scopes stall most often. If the contract conditions payment on a delivery of test results or an inspection sign-off, and that paperwork is outstanding, the invoice is arguably not proper. We cover the bid-side version of this problem in our guide to the line items that belong on a Calgary foundation quote — the same discipline that makes a quote comparable makes an invoice payable.

Where the money actually gets stuck on a concrete scope

A few patterns repeat often enough to name.

Substantial performance is never certified. The 60-day holdback clock starts from the certificate. No certificate, no start. On projects where nobody chases certification, holdback simply sits.

The lien stops everything. This surprises people. As McCarthy Tétrault describes it, “The very moment that a lien is registered, the ‘hand of the paymaster is stayed’ under the prime contract and the owner must halt all payments relevant to the contract until the lien is resolved.” A lien filed by one trade can freeze payments to trades who did nothing wrong. If another sub liens the job, your unrelated progress draw may stop with it.

Deficiency holdback is confused with statutory holdback. They are different pots. An owner may hold statutory holdback and separately withhold for deficiencies. A concrete sub who assumes the 10% covers a punch list will be surprised twice.

Scope changes were verbal. Concrete work moves fast, and a stair detail or thickened edge gets added in the field. If it is not a priced change order, it is not on the invoice, and it is not in the lien claim either. Field changes are a scheduling problem as much as a paperwork one — we wrote about how those coordination failures delay projects in more detail.

A short table for the project binder

EventDeadlineRuns from
Owner pays contractor28 calendar daysReceipt of a proper invoice
Owner disputes invoice14 calendar daysReceipt of the invoice
Contractor pays subcontractor7 calendar daysReceipt of payment from the owner
Register a lien (standard)60 daysLast day worked or materials supplied
Owner may release holdback60 days minimumCertificate of substantial performance
Progressive holdback releaseAvailable by contractProjects over 1 year and over $10,000,000

Frequently asked questions

Is the 10% holdback mandatory, or can it be negotiated away? It is mandatory. The owner must retain 10% of amounts otherwise payable. A contract cannot lower it. A contract can, however, cause the owner to hold more, which enlarges the lien fund rather than shrinking it.

Does the holdback apply to a small residential concrete job? The Act applies broadly to improvements on land in Alberta, not only to large commercial projects. The practical difference is that small jobs are often paid in full on completion, so the holdback question never surfaces. It surfaces the moment payment stops.

If the general contractor is paid but does not pay us, what is the remedy? Two paths run in parallel. The prompt payment rules require the contractor to pay within 7 calendar days of receiving payment from the owner, and a subcontractor may issue a notice of adjudication to start the adjudication process when payment is late. Separately, the lien clock is still running — adjudication does not pause it.

Does registering a lien mean we are suing the owner? No. A lien is a registration against title that secures a claim. It is a preservation step, not a lawsuit, though it does have the immediate effect of stopping payments under the prime contract until it is resolved.

Our contract says holdback is released on final completion. Is that valid? Contracts frequently describe release in their own language, but the statutory minimum retention period still governs what an owner can safely do. An owner who releases early is exposed if a lien lands inside the window.

Does a labour shortage change any of these deadlines? Not one of them. Crew availability changes when work gets done, not when money is owed. That gap is precisely why the dates matter on a tight market — we looked at the staffing side of it in our piece on the Calgary construction labour shortage.

Getting the concrete scope right before the paperwork matters

Holdback rules only become interesting when a job goes badly. The better protection is upstream: a scope that is priced completely, a schedule that survives contact with the other trades, and a crew that finishes when it said it would. Across 52,000+ projects, the jobs where holdback became a fight were almost always the jobs where the scope was ambiguous on day one.

If you are assembling a concrete package for a commercial build in Calgary and want the scope defined tightly enough that the payment conversation stays boring, talk to our commercial concrete team. If you are still at the pricing stage, start with our guide to getting accurate concrete quotes in Calgary — a quote you can actually compare is the first line of defence against a holdback dispute eighteen months later.

This article describes general requirements under Alberta legislation and is not legal advice. For a specific contract or a live payment dispute, speak with a construction lawyer.

Sources