Prompt payment is coming to British Columbia construction projects
On Nov. 27, 2025, the Construction Prompt Payment Act (the Prompt Payment Act, or CPPA) received Royal Assent. When it comes into force, the Prompt Payment Act will introduce a province-wide prompt payment system and bring several updates to the Builders Lien Act. The Prompt Payment Act, alosng with the related amendments to the Builders Lien Act and the Strata Property Act, will come into force on a date set by regulation.
The Prompt Payment Act is aimed at improving cash flow on construction projects. It will introduce mandatory payment deadlines, strict notice requirements, and a fast adjudication process to resolve construction payment disputes. Owners must pay within 28 days of a proper invoice, contractors must pay subcontractors within seven days, and payment disputes can be adjudicated quickly outside the courts. Contracts entered into on or after the Prompt Payment Act’s effective date must comply with its provisions.
It is anticipated that the regulations will offer additional guidance on the transition, as seen in other prompt payment jurisdictions.
How prompt payment works in British Columbia construction projects
1. Prompt payment deadlines for owners, contractors and subcontractors
Payments move downward through the contractual chain. Generally speaking, the owner pays the contractor, the contractor pays its subcontractors, and these subcontractors then pay their own sub‑subcontractors and suppliers, and so forth.
A single payment dispute or delay in making payment often disrupts or halts cash flow, causes work stoppages, and creates financial pressure on all parties in the contractual chain. Because of this, the Prompt Payment Act establishes firm payment timelines that owners, contractors, and subcontractors must follow.
Under the Prompt Payment Act, owners must pay contractors within 28 days of receiving a “proper invoice.” Contractors and subcontractors must pay their respective sub- and sub-subcontractors within seven days of receipt of payment, or within the time frame determined by their position in the chain of contracts (based on increments of seven days). If the contractor instead receives only partial payment from the owner, it must rateably pay its subcontractors within seven days, based on the amounts the owner actually paid for their work or materials.
2. What is a “proper invoice” under British Columbia’s Prompt Payment Act?
The Prompt Payment Act sets out the minimum requirements of a “proper invoice” as follows:
- There must be a written bill or other request for payment for the work done or materials furnished in respect of an improvement under a contract.
- That bill or request must be given to an owner at least every month unless the contract provides for a different period or provides for a proper invoice to be given on a milestone or other basis.
- The bill or request must include:
- the contractor’s name and business address;
- the date of issuance and the relevant period, milestone or other basis for which payment is sought;
- information identifying the authority, whether in the contract or otherwise, under which the work was done or materials were furnished;
- a description of the work done or materials furnished, including quantity if appropriate;
- the amount requested for payment and the corresponding payment terms broken down for the work done or materials furnished;
- the name, title and contact information of the person to whom payment is to be sent;
- any other requirements as specified in the contract; and
- any other information that may be prescribed by the regulations.
3. Notices of non‑payment in British Columbia construction disputes
If an owner disputes any amount in a contractor’s invoice, the owner must issue a notice of non‑payment within 14 days of receiving the proper invoice. However, if the owner’s position is that the invoice is not a “proper invoice,” the owner must deliver the notice within seven days of receipt. After this seven-day period expires, the invoice is deemed to be a proper invoice.
The notice of non-payment must specify the amount of non-payment, the reason for non-payment, and anything else that may be prescribed by regulation.
If a contractor disputes any portion of a subcontractor’s invoice or receives a notice of non‑payment from the owner, the contractor must issue its own notice of non‑payment to the subcontractor. This notice must be delivered no later than the earlier of seven days after receiving the owner’s notice of non‑payment, or the deadline tied to the subcontractor’s position in the contractual chain.
While the contractor may withhold payment from a subcontractor based on the owner’s notice of non-payment, the contractor must provide the subcontractor with a copy of the owner’s notice and undertake to refer the matter to adjudication.
Construction payment disputes that can be adjudicated under the Prompt Payment Act
Adjudication is a streamlined dispute resolution process that takes place outside the court system. The introduction of adjudication alongside the prompt payment regime is intended to give contracting parties a fast, construction‑focused mechanism for resolving payment disputes. The Prompt Payment Act sets out the types of disputes that may be referred to adjudication. These include, among other things:
- whether a payment is required under a contract, including disputes relating to change orders, whether approved or not;
- a failure to make payment in whole or in part;
- the valuation of services or materials supplied to the project;
- whether a proper invoice has been delivered in accordance with the Prompt Payment Act;
- issues relating to notices of non‑payment;
- any matters prescribed by regulation; and
- any other matters the parties agree to submit to adjudication.
Parties may choose to terminate an adjudication after the notice of adjudication has been issued but before the adjudicator releases a determination. In addition, the adjudicator may resign or may be terminated in accordance with the procedures set out in the regulations.
1. How to start an adjudication for a construction payment dispute
A party may begin adjudication by delivering a notice of adjudication to the other party. Adjudication becomes mandatory once a party issues a notice of adjudication.
The notice of adjudication must be delivered within 90 days of specific triggering events, failing which adjudication cannot proceed. For disputes relating to the head contract, the notice must be delivered within 90 days after the head contract is completed, abandoned, or terminated. For disputes relating to a subcontract, the notice must be delivered within 90 days of the earliest of:
- the date the head contract was completed, abandoned, or terminated;
- the date the subcontract was certified as complete; or
- the date the subcontractor last supplied services or materials to the improvement under that subcontract.
As noted above, if a contractor issues a notice of non‑payment to a subcontractor based on the owner’s non‑payment, the contractor must also commit to commencing adjudication against the owner within 21 days after giving that notice of non‑payment.
2. Who can be an adjudicator?
An adjudication authority will be established by regulation. An adjudicator must be registered as such by the authority, and will be appointed to hear a dispute either by consent or by the authority. However, the parties will not be permitted to contract in advance to name a specific adjudicator in the event of an adjudication.
The adjudicator, once appointed, may conduct the adjudication in any manner considered appropriate by the adjudicator under the circumstances and has been granted several powers for this purpose, including, but not limited to:
- issuing directions regarding the conduct of the adjudication;
- drawing inferences from the parties’ conduct;
- obtaining the assistance of an expert; and
- conducting on-site inspections.
An adjudicator’s decision will be binding on the parties unless:
- a court order is made;
- a party applies for judicial review;
- the parties agree in writing to resolve the dispute; or
- the parties enter into a written agreement to appoint an arbitrator.
The adjudicator’s written decision must be issued within 30 days of receiving certain records prescribed by the Prompt Payment Act, or as otherwise agreed by the parties and the adjudicator.
Changes to the British Columbia Builders Lien Act affecting construction payments
The Prompt Payment Act is bringing a number of amendments to the Builders Lien Act.
The holdback period will be shortened from 55 days to 46 days. This change would also apply to the holdback on condominium purchases under the Strata Property Act. The CPPA does not bring any changes to the lien period.
The Prompt Payment Act makes it explicit that “a person does not have a lien under this Act against a required holdback.” While the holdback will still secure payment of lien claims filed by parties engaged by or under the person retaining that holdback, these amendments eliminate the standalone lien against the holdback that had previously been recognized in British Columbia under the Shimco Metal Erectors Ltd. v. Design Steel Constructors Ltd. decision.
Further, demolition work is now expressly included in the definition of an “improvement” in section 1(1) of the Builders Lien Act.
What issues remain unsolved?
What do we not know yet? An obvious, outstanding question is: when will the Prompt Payment Act come into force? That said, several other important questions remain unanswered.
Will the Prompt Payment Act apply to architects and engineers?
Based on the Prompt Payment Act’s definition of a “contractor” as a person who supplies services or materials for an improvement, it appears that professional service providers, such as architects and engineers, as well as materials suppliers will fall within the scope of the prompt payment regime.
These groups would therefore be required to follow the Prompt Payment Act’s payment timelines unless they are specifically exempt by regulation. However, at this stage, no such exemptions have been announced.
What will the adjudication body look like?
While the regulations will provide the structure of British Columbia’s adjudication body, we can look to other provinces for guidance. Across Canada, jurisdictions with prompt payment and adjudication regimes have designated Authorized or Recognized Nominating Authorities to oversee their systems, maintain adjudicator rosters, and administer adjudications. Examples include:
- Ontario: Ontario Dispute Adjudication for Construction Contracts (ODACC) is the Authorized Nominating Authority under the Construction Act.
- Alberta: ARCANA is a partnership between the Alternative Dispute Institute of Alberta (ADRIA), Alternative Dispute Resolution Institutes of Canada (ADRIC), and Royal Institute of Chartered Surveyors (RICS) in partnership as the ADR Institute / RICS Construction Adjudication Nominating Authority (Alberta).
- Saskatchewan: The Construction Dispute Resolution Office (SCDRO) is appointed by the Government of Saskatchewan to serve as the Adjudication Authority for Saskatchewan’s construction industry under the Builders’ Lien Act.
Will the new legislation prohibit the use of a contractual paid when paid clause?
Section 47(2) of the Prompt Payment Act states that “a provision in a contract that provides that this Act is not to apply, or that the remedies provided by this Act are not to be available for a person’s benefit, is void.” Given this, the short answer is likely yes. That said, parties may still have some ability to contractually moderate how certain aspects of the new regime apply. The extent of this flexibility will ultimately depend on the regulations and how courts interpret the legislation once in force.
What projects will be exempt from prompt payment?
The Prompt Payment Act provides that it will not apply to certain “prescribed” projects, but those exemptions will be set out in the regulations. At this stage, it remains unclear which types of projects will be excluded from the prompt payment regime in British Columbia. However, other jurisdictions offer some guidance.
For example, several provinces have carved out largescale or “mega‑projects” by exempting projects that exceed a defined capital expenditure threshold. Whether British Columbia will adopt similar exemptions has not yet been announced.
What does this mean for British Columbia construction projects?
With strict prompt payment deadlines and mandatory adjudication, construction payment disputes in British Columbia should move faster than ever. Early preparation is essential. Key steps to prepare for this change should include the following.
- Updating all contract documents, including construction contracts, subcontracts, purchase orders, and consulting agreements, to reflect the prompt payment and adjudication requirements.
- Revising invoice templates so they meet the Prompt Payment Act’s requirements for a “proper invoice” and contain all mandatory information.
- Preparing template notices, including notices of dispute and notices of non‑payment, so they can be issued quickly and within statutory deadlines.
- Providing training on the prescribed forms and timelines required by the Prompt Payment Act.
- Implementing or updating reminder and tracking systems to monitor the delivery and receipt of proper invoices, along with all corresponding payment and notice deadlines.
- Staying aware of invoicing and payment timing up the contractual chain, since key timelines are triggered by the first proper invoice submitted to the owner.
- Adjusting internal accounting processes to ensure payments can be reviewed, approved, and issued within the required timeframes.
- Maintaining organized, accurate project records to support or defend potential adjudication claims.
- Establishing claims or commercial response teams capable of reacting promptly to notices of non‑payment or notices of adjudication.
Strong record keeping and close attention to project activity will be more important than ever under the Prompt Payment Act. Subcontractors in particular will need to stay informed about when the contractor submits a proper invoice to the owner, as many of the Prompt Payment Act’s payment and notice deadlines begin running from that date. Without this visibility, subcontractors risk missing the statutory window to issue a notice of non‑payment, or to make payment further down the chain.
In addition, parties must be prepared to commence or respond to adjudications on very short notice. Given the accelerated timelines and documentary requirements in the adjudication process, maintaining organized, comprehensive, and up-to-date project records will be critical. Good record keeping is no longer simply best practice. It will be essential to protecting a party’s rights and meeting the CPPA’s mandatory timelines.
BLG can assist
Please contact a BLG Construction lawyer with any questions about how the Prompt Payment Act may affect your business. See also our Canada's Prompt Payment Legislation - A national perspective page for more details about prompt payment and adjudication regimes across the country, which includes an interactive map.
