The Construction Prompt Payment Act creates a statutory framework for invoicing and mandatory payment timing in construction contracts in British Columbia, and it pairs that framework with a fast interim adjudication system for payment disputes. The Act prescribes what counts as a proper invoice, makes certain contract clauses void (for example, those that make invoicing conditional on owner approval), and requires payments to move down the contracting chain on a fixed schedule.
The law also sets up an adjudication regime with short timelines, limited judicial review, and an adjudication authority to register and oversee adjudicators, and it amends the Builders Lien Act and Strata Property Act to shorten holdback periods and remove certain types of liens. The combination of payment timing, enforcement remedies and adjudication is designed to improve subcontractor cash flow and reduce stop–start work caused by payment delays — while creating new administrative and compliance obligations for contracting parties and regulators.
At a Glance
What It Does
The Act requires regular proper invoices, sets statutory payment deadlines for owners and downstream payees, and allows parties to refer payment and valuation disputes to a short-track adjudication process whose determinations are binding until set aside. It also creates an adjudication authority to qualify adjudicators and administer the process.
Who It Affects
Owners, prime contractors and subcontractors at every tier on construction projects in BC (subject to prescribed exceptions), public procuring entities, adjudicators and any body that administers holdbacks (including strata purchasers and trustees). The Lieutenant Governor in Council and the designated adjudication authority will exercise rule‑making and administrative roles.
Why It Matters
The Act changes cash‑flow dynamics across the industry by imposing statutory payment timing, limiting the waiting game that often delays subcontractor pay, and by offering a quick enforcement channel. It also modifies builders' lien and holdback rules, which affects risk allocation, surety and financing arrangements on projects.
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What This Bill Actually Does
The Act obliges contractors to issue a "proper invoice" on a regular basis (monthly unless the contract provides otherwise), and sets out the minimum content for those invoices — contractor identity, invoice date, the period or milestone billed, contract identifiers, a description and amount for the services or materials, payment terms and routing information. An invoice that meets those requirements is deemed proper unless the owner gives a written non‑conformity notice within seven days identifying what is missing.
Importantly, the Act voids contract provisions that require owner approval or payment certifier certification before an invoice can be given; approval can only follow an invoice, not gate it.
Once a proper invoice is issued, the Act fixes payment timing to force money down the chain. Owners must pay the contractor within 28 days of the invoice date.
Downstream payees are to be paid either seven days after their immediate payer receives payment or by that payer's calculated payment date, which the Act computes by adding 28 days to seven times the payer's contract position in the chain (owner = 0, contractor = 1, subcontractors numbered sequentially). The statute contains rules for partial payments (rateable distribution), permits formal notices of non‑payment with prescribed timelines and requires parties to provide certain project payment information on request.Disputes about invoices, payment, valuation or other prescribed matters may be referred to interim adjudication.
The adjudication track is proceduralized: a notice of adjudication starts the process, an adjudicator must be selected or appointed, records must be delivered quickly, and determinations must be issued in writing with summary reasons — generally within 30 days of the adjudicator receiving records (with limited extensions). Determinations are binding on the parties until displaced by a court or arbitration; they must be paid within 15 days, and a prevailing party can suspend work or file a certified determination in the Supreme Court (it then has judgment force) if payment is not made.
Judicial review is time‑limited and confined largely to jurisdictional or procedural‑fairness grounds.The Act empowers the minister to designate an adjudication authority (or act as one) to train, qualify and register adjudicators, handle appointments and collect administrative fees. Adjudicators get strong immunities for acts done in good faith, and the rules allocate adjudication and administrative fees (fees are generally split equally among parties unless the adjudicator orders costs for misconduct).
The Act does not apply retroactively to contracts entered before it comes into force and provides for phased regulatory rollout by sector or class. It also amends the Builders Lien Act and Strata Property Act — shortening certain holdback timelines and removing some lien claims against required holdbacks — which changes the interplay between prompt payment and lien protections.
The Five Things You Need to Know
Owners must pay contractors within 28 days of a proper invoice; downstream payors must pay subcontractors either 7 days after they receive payment or by their "calculated payment date.", A person's calculated payment date equals 28 days plus 7 days multiplied by that person's contract position in the chain (owner=0, contractor=1, subcontractor positions counted sequentially).
An adjudicator must issue a written determination with summary reasons within 30 days after receiving records; a late determination is void unless the parties and adjudicator agree to a permitted short extension.
A determination requiring payment is enforceable as a Supreme Court judgment (if filed within two years) and the recipient of a determination must be paid within 15 days or may suspend work and recover suspension/resumption costs.
The Act amends the Builders Lien Act and Strata Property Act to shorten certain holdback periods (references to 55 days become 46 days) and abolishes liens against required holdbacks (so-called "shimco liens").
Section-by-Section Breakdown
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Regular invoicing and what counts as a proper invoice
Sections 5–8 require contractors to give proper invoices regularly (monthly by default) and list the minimum fields an invoice must include. The Act creates a short seven‑day cure window: an invoice is deemed proper unless the owner gives a written notice within seven days saying what is lacking. Contract clauses that make invoicing conditional on pre‑approval or certification are void, though certification or testing may occur after invoices are issued. Practically, owners will need to adjust accounts‑payable workflows to accept statutory form invoices and to use the seven‑day notice mechanism rather than blanket rejection.
Statutory payment timing, partial payments and information rights
Section 9 sets the prompt payment clock and the chain‑payment mechanics, and section 10 governs proportional allocation of partial payments. Section 11 prescribes the form and timing for notices of non‑payment and requires recipients who claim prior non‑payment to undertake to refer that prior dispute to adjudication. Section 12 gives subcontractors a statutory right to request payment information from contractors (and between subcontractors), with a 10‑day response window and potential liability for false statements. Interest on overdue amounts accrues at the higher of a prescribed or contract rate. These provisions reassign operational risk: payors must document non‑payment reasons precisely or face interest and enforcement exposure.
Interim adjudication: scope, procedure, timelines and finality
Part 4 establishes a short‑form adjudication process for a defined set of disputes (invoicing, payment, valuation, change orders and anything parties agree to include). The Act prescribes notice content, limits an adjudication to a single dispute unless consolidated, and allows consolidation only by regulation or agreement. Selection rules force parties to pick an adjudicator quickly or have one appointed within prescribed days; the adjudicator has broad fact‑finding powers, may inspect sites, and can obtain expert assistance. Determinations must be written and issued within 30 days (extensions narrowly regulated) and are binding until a court or an arbitration displaces them. Judicial review is tightly cabined to jurisdictional or procedural‑fairness defects and must be brought within 35 days.
Adjudication authority, fees and adjudicator protections
The minister may designate (or act as) an adjudication authority that trains, qualifies and registers adjudicators, maintains a public registry, appoints adjudicators and sets administrative fees. Parties split adjudication fees equally by default, though adjudicators can shift costs for misconduct. Adjudicators receive immunity from damages for acts done in good faith, and cannot be compelled to testify about an adjudication they conducted. These institutional rules aim to professionalize and standardize adjudication but require a new administrative layer (or ministry capacity) to stand up quickly.
General provisions, transition and changes to lien/holdback law
General clauses void contractual attempts to exclude the Act and allow the Lieutenant Governor in Council to make extensive regulations. Transition rules exclude contracts entered before commencement and permit phased implementation. The Bill amends the Builders Lien Act and Strata Property Act to shorten certain holdback timelines (from 55 to 46 days in the cited provisions), disallow certain liens against required holdbacks, and adjust how holdbacks are distributed after the holdback period — altering collateral and timing dynamics that owners, developers, trustees and lenders rely on.
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Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Subcontractors and lower‑tier suppliers — they gain faster, enforceable cash flow and a statutory remedy (adjudication) for delayed payments that often cause insolvency risk for small firms.
- Small and mid‑size contractors — more predictable invoicing rules and a quick adjudication path reduce the time and cost of chasing unpaid work and may lower financing expense tied to delayed receivables.
- Owners and project financiers — by shortening holdback timelines and abolishing certain lien claims against required holdbacks, owners and purchasers (including strata) get clearer holdback release timing and reduced exposure to lingering liens.
- Project teams and construction managers — clearer invoice content, statutory timelines and access to rapid determinations reduce project-level disputes and planning uncertainty, aiding scheduling and cash‑flow forecasting.
Who Bears the Cost
- Prime contractors and owners — they must accelerate payment flows, rework accounts‑payable and may carry short‑term liquidity burdens; owners may need to pay earlier than their present cash‑management allows.
- Adjudication authority and provincial administration — government or a designated authority must stand up training, registration, appointment and administrative systems, which carries fiscal and operational costs.
- Parties to adjudications — even with fee‑splitting rules, small firms may face up‑front adjudicator fees, expert costs and legal drafting burdens; losing parties can be ordered to pay costs for bad‑faith conduct.
- Insurers, sureties and lenders — faster payments and shortened holdback periods change collateral timing and may require contract and underwriting adjustments; surety claims and bonding products may need redesign.
Key Issues
The Core Tension
The central dilemma is between accelerating payments to protect cash flow for lower‑tier suppliers and preserving owners' and financiers' ability to withhold funds to cover latent defects, completion risks or competing lien claims — a trade‑off between liquidity and security where a faster, cheaper adjudication process reduces delays but risks short‑term decisions that later prove legally or technically incorrect.
The Act prioritizes speed and cash flow but leaves several implementation risks unresolved. The substantive accuracy of an adjudicator's short‑form determination may be hard to revisit later; determinations are binding until displaced, yet courts and arbitrators retain full authority to revisit the merits — creating potential for temporary windfalls and subsequent reversals that complicate recovery and reconciliation.
The limited grounds and tight windows for judicial review will increase pressure on parties to use the adjudication record to protect long‑term rights, which can elevate costs and encourage tactical behaviour at the front end of disputes.
The interaction with builders' lien protections is also delicate. Shortening holdback periods and removing liens against required holdbacks reduces the security subcontractors historically used to ensure payment; at the same time the prompt‑payment and adjudication mechanisms provide alternative remedies.
Whether those remedies fully replace lien leverage — particularly for insolvent payors or complex chain failures — depends on practical enforcement, the willingness of adjudicators to award interim relief, and how strictly notice and undertaking requirements are policed. Finally, the Act delegates wide regulation‑making power to government (including phased application by sector), which creates legal and business uncertainty during rollout and may produce uneven application across project types.
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