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Effective January 1, 2026, employers must provide a longer period of long term illness and injury leave to their employees.
The Alberta government has made a substantial change to the Employment Standards Code, increasing the maximum period of long term illness and injury leave from 16 weeks to 27 weeks per calendar year. This change brings the length of this job- protected leave into alignment with other Canadian provinces, including British Columbia, Ontario and Saskatchewan.
To qualify for long term illness and injury leave, employees must have completed at least 90 days of employment with the same employer and must provide a medical certificate confirming the need for the leave due to illness or injury. Employers are not obligated to pay employees during this leave but are obligated to reinstate employees to their previous position or an equivalent one after the leave.
As a result of this extension of the period of long term illness and injury leave, employers are encouraged to review their policies and procedures to ensure compliance with this new legislative requirement. The Employment Law team at Walsh LLP is ready and available to assist.
Employment Team
Carmelle Hunka and Brody Sikstrom
Article | admin | December 2, 2025
Cost Series: Settlement Practices in Alberta: Understanding the Cost Consequences (Part 5)
Settlement offers play a crucial role in civil litigation by enabling parties to resolve disputes without resorting to trial. In Alberta, settlement offers can be made under the common law via Calderbank offers or as formal offers governed by the Alberta Rules of Court, Alta. Reg. 124/2010 (“ARC”). While both avenues are designed to encourage early resolution, they diverge significantly with respect to procedural formalities, legal effect, and cost consequences.
Common Law – Calderbank Offers
Originating from the decision of the English Court of Appeal in Calderbank v. Calderbank, [1976] Fam. 93 (Eng. C.A.)[“Calderbank”], a Calderbank offer is term used to describe a settlement proposal made pursuant to the common law. While historically framed as an offer made “with prejudice as to costs,” the modern articulation of this phrase has evolved to the current formulation ,which settlement offers are tendered on a “without prejudice except as to costs” basis.
The purpose of a Calderbank offer is to promote settlement while preserving the offering party’s ability to rely on the offer in support of a subsequent costs award, should the matter proceed to trial or adjudication.
While Calderbank offers are not governed by the ARC, they remain influential in the Court’s exercise of its broad discretion regarding costs. A party who unreasonably rejects a Calderbank offer, where the offer was objectively reasonable and its rejection resulted in unnecessary litigation, may be subject to adverse cost consequences.
Calderbank offers are a well-established and effective mechanism for preserving a party’s entitlement to enhanced costs in circumstances where a Rule 4.24 Formal Offer is either impractical or procedurally inappropriate.
The salient features of Calderbank offers include the following:
Absence of Automatic Cost Consequences: Unlike formal offers under the ARC, Calderbank offers do not trigger the cost-shifting presumptions codified in Rule 4.29.
Application of Traditional Contract Principles: Counteroffers operate to extinguish the original offer, and an offer may be revoked at any time prior to acceptance unless consideration is provided to keep it open.
Flexible Form of Communication: Offers can be made through letters, emails, or informal discussions.
Strategic Utility: Time-limited offers can create pressure for settlement.
Utilizing the Alberta Rules of Court to Settle
Relying on the ARC, Formal Offers are governed by Rule 4.24 of the ARC and engage the cost consequences delineated in Rule 4.29. These rules establish a more structured framework that incentivizes early resolution by attaching specific cost implications to the rejection of reasonable offers. The essential features of formal offers under the ARC include:
Formal Requirements of Form and Service:
Offers must be made in accordance with Form 22 and properly served on the opposing party; and
The offer must remain open for acceptance for at least two months or until the commencement of the hearing, whichever occurs earlier.
Restriction on Withdrawal:
Unlike Calderbank offers, formal offers may not be withdrawn unilaterally. Court approval is required to withdraw a formal offer once it has been served.
Cost Consequences Pursuant to Rule 4.29:
Plaintiff’s Offer: Where a plaintiff’s offer is rejected, and the plaintiff subsequently obtains a judgment equal to or more favourable than the offer, the court may award the plaintiff double costs from the date of the offer onward; and
Defendant’s Offer: Where a defendant’s offer is rejected and the plaintiff obtains a judgment less favourable than the offer, the defendant may be entitled to costs from the date of the offer forward.
Strategic Advantages:
Formal offers encourage parties to engage in meaningful negotiations at an early stage, and deter unreasonable litigation conduct through the threat of adverse cost consequences; and
The court retains discretion to decline enforcement of cost penalties where the offer was not a genuine compromise or was otherwise unreasonable in the circumstances.
Court Retains Discretion
When parties exchange settlement offers, whether as formal offers pursuant to Rule 4.29 of the ARC or as Calderbank offers, the courts retain discretion to consider these offers in the assessment of costs. A formal offer to settle that is not accepted, and is ultimately more favourable than the judgment obtained, may entitle the offering party to “double costs” under Rule 4.29 of the ARC, subject to judicial discretion. Although not automatic, this rule creates a rebuttable presumption in favour of such an award, thereby encouraging litigants to make reasonable settlement proposals and to seriously consider those received.
Comparative Analysis
Feature
Calderbank Offers
Formal Offers (Rule 4.24)
Authority
Common law – contract
Alberta Rules of Court
Cost Consequences
Discretionary (via Calderbank principles)
Defined and presumptive under Rule 4.29
Withdrawal
May be revoked at any time before acceptance
Requires court permission to withdraw
Effect of Counteroffer
Terminates original offer
Does not terminate original offer
Flexibility
Highly: oral or written
Must be in writing using prescribed form
Court Consideration
Considered as part of litigation strategy
Engages presumptive costs consequences
Conclusion
Settlement offers, whether made at common law or pursuant to the formal structure under the ARC, constitute powerful instruments within the litigation process. Common law offers offer flexibility and strategic value, particularly where informality is preferred or formal compliance is impractical. By contrast, formal offers create a defined procedural regime with the potential for substantial cost consequences, thereby incentivizing parties to assess the risks of continued litigation.
In determining which approach to adopt, litigants and counsel must consider a range of factors including procedural posture, litigation strategy, risk tolerance, and the likelihood of success at trial. Above all, parties must remain cognizant of the cost implications that may arise from either making or rejecting a settlement offer, particularly where such offers are objectively reasonable and consistent with the principle of proportionality.
You’re reading Part 5 of our Costs series. Continue below:
Over the past several decades, successful litigants have routinely argued that Schedule C of the Alberta Rules of Court does not adequately reflect the true costs of litigation and have sought enhanced costs awards as a result.
As discussed in our prior publications on costs (see Parts 1, 2, and 3 of our Costs Series), the Court retains broad discretion in determining an appropriate costs award following a trial or application. While Schedule C provides a standardized framework for partial indemnification of legal fees and disbursements, it often fails to capture the full financial burden borne by a litigant engaged in contested proceedings.
Historically, Alberta courts applied Schedule C in a relatively rigid fashion. However, the Alberta Court of Appeal’s decision in McAllister v Calgary (City), 2021 ABCA 25 (“McAllister”), marked a significant shift from that approach.
In McAllister, the trial judge declined the plaintiff’s request for an award representing 40-50% of his actual legal fees and instead awarded costs under Column 3 of Schedule C in the amount of $70,294.70. This figure stood in sharp contrast to the plaintiff’s total legal fees of $389,711.78. On appeal, the Court of Appeal held that Schedule C is only one of several methods available for assessing costs and cautioned against its routine and uncritical application. The Court confirmed that trial judges may, in the exercise of their discretion, award 40-50% of reasonably incurred legal fees, provided that the fees were properly incurred and no aggravating or mitigating factors are present.
The rationale underlying the Court’s departure from Schedule C in McAllister was its conclusion that Schedule C did not adequately reflect the reasonable and necessary costs incurred by Mr. McAllister in the litigation. The Court reaffirmed that the central consideration in deciding whether to depart from Schedule C remains whether the costs claimed by the successful party constitute “reasonable costs, reasonably incurred.” A departure from Schedule C must therefore be justified by exceptional circumstances, such as the complexity of the matter or misconduct by one of the parties during the litigation process.
Two years later, following in the wake of McAllister, the Alberta Court of Appeal further refined this analytical framework in Barkwell v McDonald, 2023 ABCA 87 (“Barkwell”). Building upon the principles articulated in McAllister, the Court reaffirmed that judges retain broad discretion to award “reasonable and proper costs,” which may be calculated under Schedule C, as a lump sum, or as a percentage of the legal fees incurred. The decision in Barkwell provided additional clarity for litigants regarding the framework governing lump sum and percentage-based costs awards.
Importantly, the Court in Barkwell clarified that the frequently cited 40-50% guideline is not necessarily tied to the actual legal fees paid by the client. Rather, it reflects what legal costs would have been reasonably incurred in the circumstances of the case. Although the Court acknowledged that the prevailing “rule of thumb” suggests that an award of costs should typically fall within 40-50% of the legal fees incurred by the successful party, it emphasized that this benchmark must rest on an objective assessment of what fees were reasonable, rather than what amounts happened to be paid.
The Court also emphasized that proportionality remains the overarching consideration in any costs award. A party seeking a lump sum or percentage-based award must demonstrate that the costs claimed are both reasonable and proportionate, having regard to the circumstances of the case. This assessment must be guided by the factors enumerated in Rules 10.2 and 10.33 of the Alberta Rules of Court, including the importance and complexity of the issues, the nature and extent of the legal services provided, the conduct of the parties, counsel’s rates, and the manner in which the legal work was performed. The Court reiterated that success in litigation, while relevant, cannot justify an excessive or disproportionate award of costs: “success is not a justification for disproportionate litigation.”
The decision in Barkwell further reinforced the procedural expectation that a draft Bill of Costs based on Schedule C should be provided, even when a party seeks an elevated or percentage- based award. Schedule C continues to serve as a foundational reference point that enables the Court to assess whether the quantum of costs claimed is both reasonable and proportionate. In Barkwell, the trial judge erred by awarding 50% of the respondent’s legal fees without undertaking a sufficiently rigorous inquiry into the reasonableness of those fees or engaging with Schedule C. The Court of Appeal stressed that McAllister does not authorize percentage- based awards in the absence of a principled and analytical framework.
Conclusion The decisions in McAllister and Barkwell represent a meaningful evolution in the jurisprudence governing costs awards in Alberta. While Schedule C remains the starting point for assessing costs, the courts have shown a growing willingness to depart from its strict parameters where circumstances justify enhanced compensation. McAllister confirmed the availability of costs awards representing 40-50% of reasonably incurred legal fees as a general guideline, while Barkwell clarified the evidentiary and procedural foundations required to support such awards.
Going forward, counsel seeking elevated costs must ensure that their submissions rest on compelling arguments supported by a proper evidentiary foundation, as articulated by the Court of Appeal. Absent adherence to these principles, efforts to obtain enhanced costs are unlikely to succeed.
For further details or specific inquiries please contact:
The transition from a developer-controlled board of directors to an owner-controlled board of directors is one of the most important milestones in a condominium project. In Alberta, this “turnover” process is governed by the Condominium Property Act, RSA 2000, c C-22 (the “Act”) and the Condominium Property Regulation, AR 168/2000 (the “Regulation”). Developers, owners, lenders, and condo boards all have a stake in ensuring that the first annual general meeting (the “AGM”) is conducted properly and in accordance with the Act and Regulation, as failure to comply can lead to costly disputes.
The Act requires that when a developer registers a condominium plan, the developer shall, within 90 days from the day that the certificates of title to units representing 50% of unit factors have been issued in the name of the purchasers, convene a meeting of the condominium corporation at which a board must be elected. This is referred to as the “Turnover Meeting”. If the developer does not convene a meeting of the condominium corporation within the aforementioned time period, an owner may convene the meeting. At the Turnover Meeting, the developer must hand over the following documents and records that the newly elected condo board needs to govern the condominium effectively:
all warranties and guarantees on the real and personal property of the condominium corporation, the common property and managed property;
structural, electrical, mechanical, and architectural working drawings and specifications;
all agreements to which the condominium corporation is a party;
any building assessment reports and reserve fund reports;
proposed budget and financial statements of the condominium corporation;
condominium plan and bylaws; and
any other prescribed document under the Regulation.*
*please note the above list is not an exhaustive list of items that need to be provided at the Turnover Meeting. For a list of all items required to be delivered, please refer to section 16.1(1) of the Act and section 20.2(1) of the Regulation.
Common issues related to Turnover Meetings include: failing to call the AGM on time, incomplete financials, not disclosing all contracts, and failing to provide the technical building documents. The best way to avoid costly disputes and litigation for a developer is to ensure transparency and compliance. Such transparency and compliance suggests that a developer should keeping clear and separate financial records from day one, engaging qualified auditors and reserve fund consultants early, providing disclosure as per the Act, etc.
The Turnover Meeting is more than just a formality, it is the legal and practical handoff of responsibility from the developer to the owners. Done properly, it builds trust and sets the foundation for a well-run condominium corporation. Done poorly, issues may arise.
For more information, please contact Usama (Sam) Rashid at urashid@walshlaw.ca or any member of our Walsh team and we would be happy to answer your questions.
Note: This article is of a general nature only. Tax laws may change over time and should be interpreted only in the context of particular circumstances. These materials are not intended to be relied upon or taken as legal advice or opinion.
The use of a trust in any estate plan can be a helpful tool. Clients ask about trusts, what they are, how they are created, and how they can be used to achieve estate planning objectives.
What is a Trust?
A trust is a legal relationship between a person (the “Settlor”) who transfers property to someone else (the “Trustee”) to manage the property for another person (the “Beneficiary”). There are three certainties which must be met to establish a trust:
Certainty of Intention – clear intention of settlor to “settle” the trust;
Certainty of Subject Matter – trust property must be certain; and
Certainty of Object – beneficiaries must be certain.
If any of the certainties are missing, a trust will not be created. Settlor incapacity, unclear terms about who is a beneficiary, or failure to identify trust property are examples where a trust may not be created.
Types of Trusts
An “inter vivos”trust is created when the settlor is alive and involves a trust instrument to create the trust. A “testamentary”trust is created on the death of the testator, pursuant to the terms of the deceased’s Will. Trusts can also be “discretionary” or “non-discretionary” giving more or less discretion to the Trustee as to how the trust property is managed.
Common Uses
While not exhaustive, some common uses of trusts are:
Manage assets for minors or dependent (i.e. disabled) beneficiaries;
Control distribution of assets to an “irresponsible” or “unsophisticated” beneficiary;
Hold business or corporate assets to manage income and capital distributions and achieve tax savings (including multiplication of lifetime capital gains exemption);
Provide support to spouse while protecting assets for children of the settlor/testator; and
Provide privacy or avoidance of probate disclosure and fees.
Taxation of Trusts
Generally, transfer of property to a trust will trigger a disposition for tax purposes1. Trusts must report annual trust filings in a T3 trust return. Trusts are taxable at the highest marginal rate, unless they qualify as a Graduated Rate Estate (“GRE”)2. Many trusts are deemed to dispose of property every 21 years, subject to exceptions.3 Trust residency issues must be considered, including avoidance of appointing non-resident trustees.
Despite these complexities, certain tax benefits can be achieved. These include income distributions to beneficiaries (including those in a lower income bracket), using a trust in an estate freeze to enable deferral of capital gains tax on corporate shares, or the multiplication of the lifetime capital gains exemption (“LCGE”) on a disposition of shares.
Proper planning should be conducted including reviewing varied tax considerations in setting up a trust.
Conclusion
There are many considerations in setting up a trust, including settling a trust during your lifetime or in your Will. Legal and accounting advice should be consulted throughout the process to best reflect your wishes and protect your assets.
For more information, please contact Eric Dalke at edalke@walshlaw.ca / 403-267-8454 or any member of our Walsh Tax & Estates team and we would be happy to answer your questions.
Note: This article is of a general nature only. Tax laws may change over time and should be interpreted only in the context of particular circumstances. These materials are not intended to be relied upon or taken as legal advice or opinion.
1 Exceptions to this rule exist including transfers to alter ego or spousal trusts.
2 Subsection 122(1), Income Tax Act, RSC 1985, c 1 (5th Supp) (“ITA”).
3 Exceptions to this rule include spousal trusts or alter ego trusts; deemed disposition of property can also be managed through a tax-deferred transfer to beneficiaries under subsection 107(2), ITA.
Article | Locklyn Price | July 14, 2025
(More) Swift Justice – The Alberta Court of King’s Bench Introduces Measures to Reduce Civil Trial Duration and Delay
The Alberta Court of King’s Bench has long contended with extended wait times in civil matters—often a year or more between the conclusion of pre-trial steps and the trial itself. In a decisive move to address this backlog, the Court has issued a Notice to the Profession and Public1 and an Announcement2 aimed at accelerating litigation and compelling parties to set trial dates much earlier in the process.
New Expectations: A 36-Month Backstop
Effective immediately, the Court now expects all civil actions to be set down for trial within 36 months of the service of the first Statement of Defence. This new “backstop” is intended to push actions forward more efficiently, limiting the previous flexibility often granted due to party or counsel availability. Extensions beyond the 36-month period will only be considered in “exceptional circumstances.”
Litigation Plans Now Mandatory
As of September 1, 2025, all litigants are expected to agree on a litigation plan within four months of the service of the first Statement of Defence. These litigation plans must chart a course for resolving the matter within the 36-month timeframe. The requirement promotes early cooperation between parties and ensures that the timeline to trial is top of mind from the outset of litigation.
Court Deadlines: Compliance or Consequences
The Court has reiterated that parties are expected to meet deadlines under the Alberta Rules of Court or as otherwise agreed between counsel. The announcement signals a shift toward stricter enforcement, with potential consequences for delay, particularly where the delay results from failure to meet procedural obligations. The message is clear: litigants and their counsel must treat timelines as mandatory, not aspirational.
Conclusion
These new measures mark a significant cultural and procedural shift in Alberta civil litigation. With the Court taking a firmer stance on delay, counsel must proactively develop litigation plans and prepare for trial scheduling earlier than before. The reforms are aimed at delivering timelier access to justice and reducing the inertia that has historically plagued the civil system. The impact on client’s, and litigants in general, is that matters which would traditionally take several years now will be compelled to be resolved quicker and, at the latest, within 3 years.
1 The Alberta Court of King’s Bench, Notice to the Profession and Public NPP2025-02, July 10, 2025.
2 The Alberta Court of King’s Bench, Announcement – Reducing Civil Trial Delay, July 20, 2025.
For further details or specific inquiries as to how these changes will impact your current or future litigation please contact:
Court of Justice and the Recovery of Costs and Disbursements
As detailed in our prior article, Understanding Costs in Alberta’s Litigation Process (Part 1), litigation costs in the Court of King’s Bench are typically awarded on a partial indemnity basis, guided by Schedule C of the Alberta Rules of Court (“ARC”).
Effective January 1, 2019, the Alberta Court of Justice instituted its own Tariff of Recoverable Costs (the “Tariff“), which serves as a guideline for determining the costs that may be awarded in its proceedings.
On July 31, 2023, the Court of Justice updated its Tariff of Recoverable Costs, which is detailed in Practice Note 3 – Costs in the Alberta Court of Justice Civil Division. The Tariff remains “a guide to costs that may be awarded”.
In alignment with the Court of King’s Bench, the Alberta Court of Justice (formerly known as the Provincial Court) has four general types of costs:
Party and Party costs;
Lump Sum costs;
Solicitor Client costs; and
Enhanced costs.
Party and Party Costs
Party and Party costs are governed by the 2023 Tariff of Recoverable Costs, which assigns specific cost amounts for various stages of litigation based on the claim value.
Typically, these costs allow a litigant to recover between 20-25% of the actual legal expenses (see Legare v Acme (Village), 2023 ABKB 278).
The award of such costs is discretionary and is influenced by factors such as:
The outcome of the case;
The complexity of the litigation;
The conduct of the parties during the proceedings; and
Whether the litigation was unnecessarily prolonged.
Lump Sum Costs
Lump sum costs represent fixed amounts awarded in lieu of calculated costs under the Tariff. They provide a streamlined approach to awarding costs, without requiring extensive itemized calculations.
Such costs are typically awarded where:
The court deems the calculation of individual costs impractical;
There is a desire to encourage a cost-effective resolution of disputes; and
The lump sum award is at the court’s discretion (see Varshney v 864475 Alberta Ltd., 2025 ABCJ 26).
Solicitor-Client Costs
Solicitor-client costs are awarded on a full-indemnity basis, covering all reasonable legal fees and disbursements incurred by the prevailing party. However, these costs are rarely granted and are generally reserved for cases involving egregious misconduct (see Aman Carrier Ltd. v. 1746446 Alberta Inc., 2015 ABQB 344).
Solicitor-client costs may be awarded in exceptional circumstances, such as:
Litigation misconduct (e.g., delay tactics, false testimony, and failure to comply with court orders);
Fraudulent conduct (e.g., falsification of documents or deceitful claims);
Obstruction of justice (e.g., concealing evidence); or
Malicious or vexatious litigation, where a party abuses the legal process.
Enhanced Costs: A Special Category
Enhanced costs may be awarded in certain cases where a party’s conduct:
Causes significant delays in the proceedings;
Involves bad faith litigation; or
Unnecessarily increases costs for the opposing party.
Enhanced costs exceed the standard tariff rates, but do not provide the full indemnity granted by solicitor-client costs (see Cyr v Bryce-Burns, 2025 ABCJ 6).
Examples of Conduct Leading to Enhanced Costs:
Refusing to provide disclosure or evidence;
Making unsubstantiated claims of fraud or misconduct; or
Filing frivolous lawsuits or counterclaims to harass the other party.
Recoverable Litigation Expenses (Disbursements)
In addition to legal costs, certain disbursements (out-of-pocket litigation expenses) are recoverable under Section 39 of the Provincial Court Civil Procedure Regulation. These expenses include:
Mandatory Court Fees
Filing fees as per the Provincial Court Fees Regulation; and
Fees for issuing subpoenas, court transcripts, and trial-related documentation.
Service Fees
Fees paid to process servers for delivering court documents to the opposing party.
Government Registry Searches
Fees for conducting searches at the Land Titles Office, Corporate Registry, or Personal Property Registry.
Expert Witness Fees
Preparation of expert reports;
Time spent in court by expert witnesses; and
Reasonable expenses incurred by expert witnesses for attending trial.
Witness Attendance Allowance
Regular witnesses: $25 per day plus travel and accommodation costs; and
Expert witnesses: $50 per day plus travel and accommodation costs.
Additional Litigation Expenses
Photocopying and document preparation fees;
Court-ordered costs for translations or transcriptions; and
Reasonable costs of travel and accommodation if a witness or party had to travel for the hearing.
Judicial Discretion in Awarding Disbursements:
The court may reduce or disallow expert witness fees if:
The expert’s testimony was unnecessary or redundant;
The expert was not properly qualified; or
The expert failed to provide useful or relevant evidence.
Conclusion
The Alberta Court of Justice employs a structured approach to awarding costs, with the 2023 Tariff of Recoverable Costs providing guidance for party and party cost calculations. The court retains discretion to award enhanced or solicitor-client costs in cases of misconduct, while recoverable disbursements cover necessary litigation expenses.
If you have any questions or concerns after reading this article, or if you need guidance regarding costs and disbursements in the Alberta Court of Justice, please contact Walsh LLP and speak with a member of our litigation team. We are here to help you navigate the litigation process with clarity and confidence.
For further details or specific inquiries please contact:
A review assessment of costs is the process by which a review officer evaluates the reasonableness and propriety of costs incurred by a party in legal proceedings. This process ensures that parties are compensated fairly for their legal expenses while promoting efficiency and accountability in litigation. The Alberta Rules of Court (“ARC”) provide the framework for this critical procedure, offering detailed guidance for both litigants and legal professionals.
Role of the Review Officer
Previously referred to as the “Taxation Officer” under the old rules, the ARC now designates this role as the “review officer.” A review officer is a court-appointed individual tasked with evaluating the Bill of Costs submitted by the successful party in a case. The Bill of Costs must itemize all expenses, including legal fees, disbursements, and other charges. The review officer ensures these costs are reasonable, necessary, and compliant with the ARC, particularly the guidelines outlined in Schedule C.
Disputing the Bill of Costs
When a party disputes the Bill of Costs, an appointment for assessment is arranged using Form 45, ensuring all affected parties can participate in the review process. Guided by Rule 10.41, the review officer has the authority to adjust or disallow costs deemed excessive, unnecessary, or improperly claimed.
Factors Considered in Cost Assessments
A variety of factors influence the assessment process, including the complexity of the case, the conduct of the parties, and the necessity of incurred costs. Misconduct, procedural inefficiencies, or unnecessary actions can lead to disallowances or reductions in claimed amounts. Additionally, costs related to dispute resolution or expert fees are generally excluded unless exceptional circumstances apply.
Outcome of the Assessment
The final outcome of this process is a certified Bill of Costs, which serves as definitive proof of the amount owed under the costs award. This certification conclusively establishes the amount the responsible party is required to pay.
Conclusion
Whether you’re preparing a Bill of Costs or navigating a contested assessment, understanding the review process is essential to achieving fair and equitable outcomes in civil litigation. For professional advice and guidance on cost-related matters, consult Walsh LLP to ensure compliance and make informed decisions.
For further details or specific inquiries please contact:
The imposition of tariffs between the U.S. and Canada significantly impacts the construction industry and its regular supply chains. Contractors and subcontractors should anticipate how tariffs will impact their contract pricing and schedule.
Where tariffs are likely to impact a construction contract, contractors and subcontractors can mitigate risks and navigate the uncertainty of tariffs by considering and complying with common contractual provisions.
Contract Type and Risk Exposure
The contractual provisions engaged by tariff-related risks will vary substantially depending on the form of contract. Construction contract types likely to be significantly impacted by tariffs include:
Fixed-Price Contracts;
Design-Build Contracts; and
Unit-Price Contracts.
Regardless of contract type, understanding how the risk of cost escalation is allocated in your contract is crucial to avoiding or navigating any disputes which could arise as a result of tariffs.
Managing Tariff-Related Risks
Tariff-related risks are most likely to take the form of cost escalations and/or project schedule delays.
Whether tariffs are causally related to cost escalation, project schedule delays, or other issues, most construction contracts, including CCDC standard-form contracts, include provisions for dispute resolution, change orders, or schedule extensions.
If subcontractors or contractors anticipate that their contract may encounter price escalations or schedule delays, subcontractors and contractors should review their contracts’ dispute-resolution, change-order, and schedule-extension provisions.
Dispute-resolution, change-order, or schedule-extension provisions almost always have notice requirements, which require notice be given within a short period after price escalation or delay issues arise. These notice periods can be as short as two days from when an issue arises.
Courts interpret contractual notice provisions strictly.1 This means that if a contractor or subcontractor is not aware of the contractual notice requirements of a change order provision, and they do not provide notice of a claim for a change order after the notice provision is triggered due to a tariff related price escalation, a subcontractor’s or contractor’s entire claim may be barred, and any loss may need to be shouldered entirely by the subcontractor or contractor.
It is paramount that contractors or subcontractors that believe their contracts will be impacted by tariffs review their contracts and/or consult with a lawyer to review their contractual provisions to ensure contractual compliance and preservation of contractual rights.
More Severe Tariff Impacts
In addition to price escalations or delays, tariffs may also lead to more severe impacts on construction contracts which make a contract fundamentally different or impossible to perform.
Most construction contracts and CCDC contracts account for fundamental changes or impossibility using force majeure clauses.
Force majeure clauses require that performance of a contract be impossible and not just difficult or unprofitable.2 Further, force majeure clauses have strict notice requirements similar to those for change orders and are typically limited to certain occurrences, which may or may not include tariffs.
Proactive Legal and Contractual Strategies
Contractors and subcontractors ought to take proactive steps to protect their interests in light of U.S.-Canada tariffs. Understanding your contracts, ensuring compliance with notice provisions, and addressing delays will help mitigate financial and legal risks. Consulting Walsh LLP’s construction lawyers when facing potential tariff related price escalations, delays, or tariff-related disputes can mitigate the risk of bearing the full loss of tariff-related price escalations and delays.
For further details or specific inquiries please contact:
Termination clauses in employment contracts are a crucial component in defining the rights and obligations of both employers and employees. These clauses often outline the conditions under which an employer may terminate an employee and may offer clarity regarding the compensation an employee is entitled to receive upon such termination. These clauses can significantly limit an employer’s liability in cases of termination without cause, but their enforceability is subject to strict legal scrutiny, especially when it comes to ensuring compliance with both statutory and common law principles. Recent case law, including Dufault v The Corporation of the Township of Ignace, 2024 ONSC 1029, Baker v Van Dolder’s Home Team Inc., 2025 ONSC 952, and Singh v Clark Builders 2025 ABKB 3, provides important insights into the evolving legal landscape concerning the enforceability of termination clauses in Canada, including in Alberta.
The Legal Framework for Termination Clauses in Alberta
In Alberta, the enforceability of termination clauses in employment contracts is governed by both common law and statutory provisions under the Employment Standards Code (ESC). Under the ESC, employees are entitled to certain minimum standards regarding termination, such as notice or pay in lieu of notice, based on their length of service. Employment contracts that attempt to reduce an employee’s statutory entitlements below these minimums are typically unenforceable.
Common law principles further stipulate that an employee who is dismissed without cause is entitled to “reasonable notice,” which is determined by factors such as the length of employment, the employee’s age, the nature of their job, and other relevant factors. Employers often seek to limit their liability by including termination clauses that provide for severance or notice in accordance with the statutory minimums, which, if enforceable, would reduce the employer’s obligations under common law.
However, for a termination clause to be enforceable, it must be clear, precise, and unambiguous. Vague or imprecise clauses that do not clearly outline the scope of entitlements upon termination, or clauses that are inconsistent with the Code, will likely be found unenforceable.
The Dufault Decision (2024)
In Dufault v The Corporation of the Township of Ignace, 2024 ONSC 1029, which was affirmed by the Ontario Court of Appeal (Dufault v Ignace (Township) 2024, ONCA 915), the termination clause in the employment contract sought to limit the employee’s severance to the statutory minimums required under the Employment Standards Act, 2000, SO 2000, c 41. The plaintiff argued that the clause was unenforceable because it failed to clearly exclude his entitlement to common law notice, despite the contract’s attempt to limit his severance to statutory minimums.
In finding in favour of the plaintiff, the Court in Dufault held that since the with-cause provision of the termination clause violated the Employment Standards Act, the entire termination framework was invalid and unenforceable. The Cout found in favour of the plaintiff, even though the Defendants were not seeking to rely on the with-cause provision.
Specifically, the Court held that the wording in the with-cause termination clause, which allowed the employer to terminate the Employee’s employment “at any time” is prohibited by the Ontario Employment Standards Act, as there are certain circumstances and times, which the employer would be prohibited from terminating an employee’s employment.
Although Dufault has not yet been applied in Alberta, Dufault established that termination clauses may be looked at as an entire termination framework, and any ambiguity or inconsistencies may result in an entire termination framework being deemed invalid and unenforceable. While the Ontario Employment Standards Act differs from the Alberta Employment Standards Code, the Code and Alberta common law restricts when an employer can terminate an employee, such as when an employee is on a leave granted by the Code.
The Township of Ignace, disagreeing with the outcome of the appeal, has filed an application for leave to appeal to the Supreme Court of Canada. If accepted, a Supreme Court of Canada decision would become binding in Alberta, to the extent that it is applicable.
The Baker Decision (2025)
The Ontario case Baker v Van Dolder’s Home Team Inc., 2025 ONSC 952, dealt with the enforceability of a termination clause that sought to limit an employee’s entitlement to severance or notice in the event of dismissal without cause. In this case, the plaintiff, Mr. Baker, argued that the termination clause in his contract was unenforceable because it did not explicitly address his right to common law notice and failed to make it clear that he was waiving any entitlement to amounts beyond the statutory minimums.
The Court sided with Mr. Baker, stating that the termination clause was ambiguous and lacked sufficient clarity regarding the employee’s entitlement to severance. The ruling underscored that employers must ensure that their contracts clearly outline any limits to statutory entitlements.
Further, in relying on Dufault, the Court held that the without-cause provision was unenforceable since the Ontario Employment Standards Act does not permit an employer to terminate employment “at any time”, as the without-cause provision stated. General language stating that the employer will comply with the Employment Standards Act did not save the clause.
Baker reiterates that vague termination clauses that fail to specify a limitation of common law rights, or clauses that fail to comply with employment legislation will be deemed unenforceable. Employers must take care to ensure that their termination clauses are both compliant with the Employment Standards Code and clear enough to avoid disputes over common law entitlements.
The Singh Decision (2025)
The Alberta case Singh v Clark Builders, 2025 ABKB 3, directly addresses the enforceability of termination clauses in Alberta and is of particular importance given its jurisdictional relevance. In this case, the plaintiff, Mr. Singh, argued that the termination clause in his contract was unenforceable because it limited his entitlements to the statutory minimums under the Employment Standards Code, without sufficiently limiting his right to common law notice.
The Alberta Court of King’s Bench found that the termination clause was ambiguous and unenforceable because it did not make clear whether the employee’s entitlements were limited to statutory severance or whether the employee retained a right to claim common law severance. The Court emphasized that the employee’s right to reasonable notice under the common law could not be waived unless the contract explicitly and clearly stated that such a waiver was intended.
The Court reaffirmed the principle that termination clauses that do not clearly limit the scope of severance entitlements are unenforceable in Alberta, aligning with the principles set out in Baker.
Implications for Employers in Alberta
Clarity and Precision: The decisions in Dufault, Baker, and Singh underscore the importance of clarity and precision when drafting termination clauses. Alberta employers must ensure that their termination clauses specifically address both statutory and common law entitlements. Failure to do so may result in the clause being deemed unenforceable, leaving the employer exposed to the risk of higher severance costs under common law principles.
Common Law Rights: All three decisions make it clear that an employee’s entitlement to common law notice is not easily waived through vague language. A termination clause must explicitly state that the employee’s rights to reasonable notice under common law are being excluded. Employers who intend to limit their liability to the statutory minimums must do so with clear and unequivocal language that will withstand judicial scrutiny.
Compliance with the ESC: Employers in Alberta must also ensure that termination clauses comply with all requirements and minimum standards set out in the Employment Standards Code. A termination clause in which any aspect is inconsistent or contrary to the Employment Standards Code may render the entire termination framework unenforceable. This may include wording which, contrary to the Employment Standards Code, permits the employer to terminate an employee’s employment “at any time” or “for any reason”.
In light of these recent decisions, it is crucial for employers to review their employment agreements to ensure compliance with the most recent legal standards. These decisions may impact the enforceability of various clauses. Employers should take proactive steps to assess and update their contracts to mitigate the risk of potential legal challenges.
At Walsh LLP, Carmelle Hunka and Brody Sikstrom are available to assist businesses in reviewing and revising their employment agreements, ensuring they are both compliant with current laws and, if necessary, enforceable in court.
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