British Columbia enacted the Construction Prompt Payment Act, SBC 2025, c 24 (the “Act”), which received Royal Assent on November 27, 2025. It will come into force on a date to be prescribed by regulation. The Act will apply to new contracts and subcontracts made after the legislation comes into force.
Until the Act comes into force, there is much speculation of the application of the Act in the construction industry. While the Act is new to British Columbia, similar legislative regime exists in other provinces. With many provinces having adopted the prompt payment legislative regime prior to British Columbia, review of other jurisdictions’ application of this legislative regime provides guidance on what British Columbia may expect once the Act comes into force.
Ontario's original prompt payment regime under the Construction Act, R.S.O. 1990, c. C.30 came into effect on October 1, 2019, with further major updates and refinements taking effect more recently on January 1, 2026. Alberta's Prompt Payment and Construction Lien Act, RSA 2000, c P-26.4. took effect on August 29, 2022. British Columbia, Ontario and Alberta regimes share many common features, including mandatory payment deadlines, the use of proper invoices to trigger payment obligations, and adjudication of payment disputes. British Columbia also adopted several notable departures from the Ontario and Alberta models. These differences include treatment of proper invoices and holdback releases.
Proper invoice
Payment obligation in the act is triggered by delivery of a “proper invoice”, with prescribed requirements within the legislation.
In provinces such as Alberta, this means that an invoice that fails to satisfy the prescribed requirements does not qualify as a proper invoice, and the statutory payment timelines do not begin until a compliant invoice has been submitted.
This was also the case previously in Ontario. There were discussions of the rigid invoicing requirements that deterred payments of invoices that were previously paid. There were also instances of owners and contractors attempting to delay payments by claiming that an invoice was not "proper" which led to frequent unnecessary adjudications.
British Columbia’s Act adopts a deeming provision, where the invoice is deemed to be a proper invoice unless a written notice is delivered within seven (7) days identifying any deficiencies and explaining how those deficiencies may be resolved. If no such notice is delivered within that period, the invoice is treated as compliant and the obligation to pay arises within 28 days of receipt. Ontario now follows the same approach adopting the statutory deeming provision in the recent legislative amendment.
Owners disputing a payment must provide a notice of non-payment within 14 days after receiving a proper invoice. Contractors and subcontractors must then provide a notice of non-payment within seven (7) days after receiving a notice of non-payment or within their own calculated payment date introduced by the act by adding seven (7) days at each contractual tier.
Holdback requirements
There are areas of the Act where British Columbia departs from the existing prompt payment regimes in other provinces. The most substantive distinction between British Columbia and the other jurisdictions concerns the treatment of statutory holdback.
Unlike Ontario and Alberta, British Columbia did not introduce mandatory annual release of holdback. Instead, the Act preserves the traditional holdback regime under the Builders Lien Act while making several targeted amendments intended to improve the efficiency of the lien system. Notably, the legislation shortens the holdback retention period from 55 days to 46 days following substantial performance or completion. It also expressly abolishes the stand-alone “Shimco lien” against the holdback.
Adjudication
The act establishes adjudication as an expedited dispute resolution mechanism designed to keep funds flowing during construction projects. The Act requires owners to deliver a notice of adjudication within 90 days after the head contract is completed, abandoned, or terminated. Similarly, the Act requires the subcontractor to deliver a notice of adjudication within 90 days after head contract is completed, abandoned, terminated, the date subcontract was certified, or the date the subcontract last supplied services or materials to the improvement under the subcontract, whichever is earlier. The Act also requires that in the case of a subcontractor’s non-payment arising from an owner’s non-payment, the subcontractor is required to commence an adjudication against the owner for non-payment no later than 21 days after giving notice to the sub-subcontractor.
The Act prescribes a short turnaround for producing of records for adjudications. The parties are required to send the notice of adjudication, contract and other records to be relied upon to the adjudicator within five (5) days after the adjudicator consents to adjudicate. The expedited timeline also falls on the adjudicator requiring the adjudicator to provide a written determination within 30 days after receiving the records unless agreed upon otherwise. Upon delivery of the written determination, the outstanding invoice is then due to be paid within 15 days.
One of the main discussions concerning the adjudicative system for the prompt payment legislation in Ontario, for example, has been that there have not been sufficient adjudicators, especially experts in the area, joining the adjudicator’s roster. It has been speculated that this may be due to the limits on the adjudicative fees which were incorporated in an attempt to keep costs low for the payment disputes. The lack of adjudicators, however, is causing delays. The Act permits the parties and the adjudicator to agree on a fee. It is yet to be seen whether this will assist in creating a more robust adjudicator roster to avoid delays in the adjudicative system.
Key takeaways
While awaiting the announcement of the regulations for the Act, it is helpful to note the existing similar legislative scheme in other provinces and how it has been applied. However, it is important to note that there are differences in the Act. Regardless of the similarities and differences between the provinces, it is certain that once British Columbia's Construction Prompt Payment Act comes into force, whether owner, contractor or subcontractor, an organized record-keeping system as well as a system to follow the key deadlines in the timeline prescribed in the Act will become imperative in order to apply the Act to resolve payment disputes.
For a more detailed review of British Columbia, Ontario and Alberta as well as other provinces’ respective enactment of the prompt payment legislation, a recent article Canada's Prompt Payment Legislation - A national perspective | BLG provides an overview of the prompt payment legislation in each of the provinces.
