JUDGMENT INTEREST IN ALBERTA

Published: June 12, 2026 | Updated: July 7, 2026 | By: Roger Baker 8 min read

In Alberta, a money judgment ordinarily carries interest as of right. The Judgment Interest Act, RSA 2000, c J-1 requires the court to award pre-judgment interest from the date the cause of action arose to the date of judgment, and the judgment debt then continues to earn post-judgment interest until it is paid. Rates, exceptions, and the court's discretion all come from the Act and its regulation. This guide explains how the two phases of judgment interest work, drawing on the Act itself and four decisions that show the rules in action. If you want the numbers for a specific claim, our judgment interest calculator applies the prescribed rates year by year and handles both pre-judgment and post-judgment calculations.

Pre-Judgment Interest Is an Entitlement, Not a Bonus

Pre-judgment interest is mandatory. It was not recoverable at common law, which makes the entitlement a creature of statute. Section 2(1) of the Act leaves the court no choice in the ordinary case:

"Where a person obtains a judgment for the payment of money or a judgment that money is owing, the court shall award interest in accordance with this Part from the date the cause of action arose to the date of the judgment." (Judgment Interest Act, s 2(1))

The Alberta Court of Appeal has confirmed that this entitlement is a substantive right rather than a procedural add-on (Jackson v Cooper, 2024 ABCA 272 ("Jackson") at paras 7 and 22). The purpose is compensation for time, not punishment. As the Court of King's Bench put it, the rationale "is that the winning party could not earn a return on the money in question between when the cause of action arose and the date of judgment" (Chemtrade Electrochem Inc v Superior Plus Corporation, 2023 ABKB 186 ("Chemtrade") at para 4). A defendant who holds onto money for years before judgment has had the use of it. Pre-judgment interest hands that value back.

The Two Rates: 4% and the Prescribed Rate

The Act sets two different rates depending on the kind of damages awarded. Under section 4(1), interest on non-pecuniary damages, meaning compensation for losses that have no market value such as pain and suffering, is calculated at 4% per year. Under section 4(2), interest on pecuniary damages, debts, and other money claims runs at the prescribed rate for each year of the interest period.

Under section 4(3) of the Act, the prescribed rate is set before the start of each year by the Lieutenant Governor in Council under the Judgment Interest Regulation, Alta Reg 215/2011. If no rate is prescribed for a year, section 4(4) carries the previous year's rate forward. Because the rate changes annually and the calculation must be done "for each year or part of a year" in the interest period, a claim that has been outstanding for several years involves several different rates. That is the arithmetic our calculator automates.

Motor vehicle accident claims are the exception. Since December 9, 2020, section 585.2(2) of the Insurance Act requires interest on non-pecuniary damages in automobile injury claims to be calculated at the prescribed rate rather than 4%. In Jackson, the Court of Appeal held that the change operates prospectively only. The lower rate applies to the period after the amendment came into force, while the 4% rate still governs the period before it (Jackson at paras 2, 35, and 41–42).

When Interest Is Not Awarded

The mandatory rule in section 2(1) has a defined list of carve-outs. Under section 2(2), the court does not award pre-judgment interest on exemplary or punitive damages, on costs, or on interest itself, so there is no compounding under the Act. The list also excludes situations the parties have already dealt with. Where there is an agreement between the parties respecting interest, or where a judgment is given on consent, the statutory scheme steps back.

A formal offer can also stop the interest clock. Under section 3, where a party pays money into court or makes an offer of judgment, and the other side rejects it but ultimately recovers an amount equal to or less than the offer, pre-judgment interest runs only to the date the payment was made or the offer was served. A well-placed offer is therefore a real bargaining tool. From the day it is served, a plaintiff who cannot beat it at trial is no longer accruing interest on their claim.

Can the Court Depart From the Default Rates?

Yes. The mandatory award under section 2(1) is the default, not an absolute rule. Section 2(3) gives the court a discretion over pre-judgment interest that covers the rate, the period, and even the entitlement itself:

"If it considers it just to do so having regard to changes in market interest rates, the circumstances of the case or the conduct of the action, the court may (a) refuse to award interest under this Part, (b) award interest under this Part at a rate higher or lower than the rate set out in this Part, or (c) award interest under this Part for a period other than the period provided for in this Part." (Judgment Interest Act, s 2(3))

Chemtrade shows the market-rates ground in action. The prescribed rate for 2022 was 0.2%, set in December 2021 when the Bank of Canada's overnight rate was 0.25%. Over 2022, the Bank raised its rate seven times, and the average overnight rate for the year was 1.92% (Chemtrade at paras 5–6). Justice Price found that the prescribed rate was "not commensurate with 2022 market interest rates" and awarded pre-judgment interest on a $25 million judgment at 1.87% instead (Chemtrade at para 12). Neither party had proven what it actually earned or lost on the money. That did not matter. The Court accepted that the winning party "could have earned some benefit" from the funds and exercised the discretion without proof of actual loss (Chemtrade at para 11).

Clarke v Bean, 2009 ABQB 755 ("Clarke") shows the conduct ground. A business dispute went through a lengthy arbitration, and the applicant, who had been kept out of his money since the relationship ended, borrowed $231,000 from a bank to keep operating (Clarke at para 19). Citing the respondent's delay and the drawn-out process, the Court varied the interest award "to reflect the bank interest rate at which the Applicant's loan was obtained" (Clarke at para 24). The party whose conduct stretched out the litigation paid for the borrowing costs that delay caused.

The discretion is not a free-for-all. It must be exercised judicially (Chemtrade at para 8), and the default rates govern unless something about market rates, the case, or the parties' conduct makes a departure just. But in years when prescribed rates lag far behind market rates, or where one side's conduct has forced the other to borrow, section 2(3) is worth arguing.

Post-Judgment Interest: The Clock Keeps Running

Judgment does not stop the meter; it resets it. Under section 6(2) of the Act, a judgment debt bears interest from the day it is payable under the judgment until it is satisfied, at the prescribed rate for each year it remains unpaid. The section applies even where entry of judgment has been suspended by a proceeding "including an appeal," so appealing does not pause the accrual.

The judgment debt is bigger than the damages award. Section 6(1) defines it to include "any costs, charges or expenses made payable by or under a judgment," so a costs award earns interest the same way the judgment itself does. In Clay v Petro-Canada, 2006 ABCA 104 ("Clay"), the Court of Appeal confirmed that costs bear interest from the date they become payable under the judgment and that the court "has no power to suspend interest" under Part 2 of the Act (Clay at para 5). The dispute in Clay was about timing. A settlement accepted in February 2004 included costs, but the amount was not fixed until a year later, and roughly $152,000 in interest turned on which date counted (Clay at paras 2–3). The Court held that the settlement operated as the judgment, so interest on the costs ran from the date the offer was accepted, not the date the amount was fixed (Clay at paras 6–8).

Arbitration awards work the same way. Under section 54 of the Arbitration Act, RSA 2000, c A-43, an arbitral tribunal has the same powers over interest as a court has under the Judgment Interest Act. An award is itself a judgment debt for the purposes of the Act, a point the Court walked through in Clarke at para 20.

What This Means If You Hold (or Owe) a Judgment

Judgment interest is part of the value of a claim, not an afterthought. In Chemtrade, the parties litigated the rate itself, because on a $25 million judgment the difference between 0.2% and 1.87% for a single year was worth litigating. On any sizable commercial claim, the interest position should be priced into settlement discussions from the start, and a formal offer under section 3 can change that position from the day it is served.

Delay has a price tag on both sides. A defendant who pays later pays more, an appeal does not stop post-judgment interest from running, and conduct that drags out the proceedings may justify an award at actual borrowing rates, as it did in Clarke. A plaintiff, for their part, cannot count on the default rates being generous. In low-rate years the prescribed rate can sit well below what the money would have earned, and any uplift under section 2(3) has to be asked for and justified.