Construction adjudication in Canada

For most of construction history, a subcontractor who was not getting paid had two options: absorb it, or sue. Litigation is slow and expensive enough that plenty of legitimate claims just got written off. Canada's prompt-payment reforms changed that by adding a third option built specifically for the trades: construction adjudication, a fast-track process that produces a binding interim decision in a matter of weeks instead of years.

If you work in Alberta, Ontario, or another province with prompt-payment legislation, this is the most useful enforcement tool you probably are not using. We run a commercial drywall business, Quality Gypsum Services, out of Calgary, Alberta, so this is home turf. Here is what adjudication is and how a sub actually starts one.

What construction adjudication is

Adjudication is a streamlined dispute process that runs alongside the prompt-payment payment clock. Instead of filing a lawsuit and waiting, you refer the dispute to an independent, trained adjudicator who reviews the documents and issues a determination on a tight statutory timeline.

The key word is interim. An adjudicator's determination is binding right away: the losing party has to comply and pay. It can still be revisited later in court or arbitration, but in the meantime the money moves. That reverses the old dynamic, where a payer could sit on your money and let delay do the work. Under adjudication, the default is that you get paid now and they argue later, not the other way around.

It is deliberately fast and cheap compared to litigation. There is no drawn-out discovery, the process is document-driven, and the whole thing is designed to wrap up in about a month once the adjudicator has your materials.

When a sub reaches for it

Adjudication is the enforcement tool for exactly the situations where subs usually just eat the loss.

The clearest trigger is prompt-payment non-payment. In Alberta an owner has 28 days to pay a proper invoice and a contractor has 7 days to pay its subs after being paid, with a Notice of Non-Payment required to dispute. When those deadlines pass and the money does not come, adjudication is how you force the issue. For the payment deadlines and the notice mechanics behind this, see our guide to construction holdback by province.

It is also a route for the two things subs lose the most money on. Unapproved or unsigned change orders can be adjudicated as a valuation dispute, which is a real answer to the extras problem covered in recovering unsigned change orders. And a holdback that is due but not being released can go to adjudication too, which is one of the fixes in our list of reasons holdback gets released late.

What can actually be adjudicated

The scope is broad, but not unlimited. In Alberta, an adjudicator can decide disputes over:

• The valuation of services or materials, including unapproved change orders
• Payment obligations under the contract, including whether an amount is due
• Payments out of the lien fund, which covers holdback disputes
• Any other construction matter the parties both agree to put to adjudication

That covers most of what a sub fights about. The one thing to know is that adjudication generally has to happen while the contract is still live or shortly after, not years down the road, so it rewards acting promptly rather than letting a dispute age.

How a subcontractor starts one

The process is designed so a sub can initiate it without a litigation team behind them. In Alberta it runs like this.

1. Serve a Notice of Adjudication

You start by giving written notice of adjudication to the other party and to the nominating authority. In Alberta that authority is ARCANA, run by the ADR Institute of Alberta, which has been the designated construction adjudication nominating authority under the Prompt Payment and Construction Lien Act since 2023. The notice sets out the dispute and what you are claiming.

2. Get an adjudicator appointed

For a short window, four days in Alberta, the parties can agree on an adjudicator from the authorized roster. If you cannot agree, the nominating authority selects one for you, within seven days of that deadline. Only adjudicators on the official roster are allowed to hear these disputes, so you are getting someone trained for it.

3. Submit your materials

You put your case to the adjudicator in documents: the contract, the invoices, the change directives, the photos, the payment history. This is where good records win. An adjudication is decided largely on the paper you can produce, which is why keeping your change order management and your draw records clean pays off long before a dispute.

4. Get a determination, fast

Once the adjudicator has your materials, they have 30 days to issue a written determination, extendable by up to 10 days when needed. The determination is binding on an interim basis, and the party ordered to pay must comply. If they still do not, you have enforcement routes, and your lien rights remain available in parallel.

Province by province, in brief

Adjudication came in with each province's prompt-payment regime, so the details vary by where the work is.

Ontario was first, and its authority, ODACC, has years of determinations behind it. Alberta followed with ARCANA. Other provinces are at various stages, so if you work outside Alberta and Ontario, confirm the current status before you rely on it. None of this is legal advice, and the rules do change, so check the specific regime for your province and consider advice on a significant claim.

Why it is worth knowing even if you never use it

Most of the value of adjudication shows up before you ever file. A payer who knows you understand the process, keep clean records, and are willing to serve a Notice of Adjudication treats your invoices differently from one who assumes you will absorb a late payment. The tool works partly by existing.

That leverage only holds if your paperwork backs it up. Adjudication is won on documents, so the same habits that keep your business running, dated photos, coded labour, priced change orders, and a clean draw history, are exactly what make a claim credible. You can see how we assemble that record in our construction management features, and you can size up a holdback dispute in seconds with our free construction holdback calculator.

SubTrade starts at $299/month CAD with a 14-day free trial and no credit card required, because the shops that get paid on time are usually the ones who can produce the paper on demand.

FAQ

What is construction adjudication?

It is a fast-track dispute process introduced with Canada's prompt-payment laws. An independent adjudicator reviews the documents and issues a binding interim determination in roughly a month, so payment disputes get resolved in weeks instead of the years litigation can take.

How does a subcontractor start an adjudication?

You serve a written Notice of Adjudication on the other party and the nominating authority, such as ARCANA in Alberta or ODACC in Ontario. An adjudicator is appointed within days, you submit your documents, and the adjudicator issues a determination on a statutory timeline.

How long does construction adjudication take?

Once the adjudicator has your materials, they generally have 30 days to issue a determination in Alberta, extendable by up to 10 days. The full process from notice to decision usually runs a few weeks, far faster than litigation.

What disputes can be adjudicated?

Valuation of work and materials including unapproved change orders, payment obligations under the contract, and holdback or lien-fund payments, plus anything else both parties agree to adjudicate. It covers most of what subs actually fight about.

Is an adjudicator's decision final?

It is binding on an interim basis, meaning the party ordered to pay must comply now. The dispute can still be taken to court or arbitration later, but the money moves in the meantime, which is the point.

Can I adjudicate a withheld holdback?

Yes. Disputes over payments out of the lien fund, which includes holdback, are within an adjudicator's scope. If a holdback is due and the payer will not release it, adjudication is a route to a binding interim determination.