British Columbia’s Construction Prompt Payment Act: from cash-flow friction to clear framework British Columbia’s Construction Prompt Payment Act: from cash-flow friction to clear framework

On October 7, 2025, British Columbia tabled Bill 20, the Construction Prompt Payment Act. In doing so, B.C. moves towards implementing a prompt payment and adjudication framework like those established over the past several years in other Canadian provinces.

The proposed changes are similar to legislative amendments implemented in other Canadian provinces. These “prompt payment” regimes are aimed at protecting stakeholders in the construction industry both by ensuring timely payment to contractors and subcontractors, and by affording an opportunity for rapid adjudication of payment disputes to those within the construction pyramid (i.e., including owners, contractors, and subcontractors).

Bill 20 contemplates that any contract entered into on or after the coming into force of the legislation must conform to the new requirements. It further contemplates that the Regulations, which have not yet been introduced, may provide for the gradual application of the requirements to different sectors of the construction industry or to projects based on their public or private ownership, nature or purpose.

Bill 20 is not yet in force; however, we note that the bill passed second reading on October 21, 2025, third reading on November 20, 2025, and passed Royal Assent on November 27, 2025, meaning it has passed legislature.

Once in force, the legislation will, among other things, impose standardized payment timelines anchored to proper invoicing protocols, and it will create an interim binding dispute adjudication process designed to keep money flowing downstream in the construction pyramid.

The prompt payment system

At the heart of Bill 20 is the “proper invoice”, which contractors are required to submit monthly, unless otherwise provided in the contract. Once a contractor submits a proper invoice to an owner that meets the requirements of the legislation, the clock starts for the owner to respond: to provide written notice that the proper invoice does not conform to the requirements within the legislation within seven days, to deliver a “notice of non-payment” within 14 days, or to make payment within 28 days.

Once payment is made by the owner, the contractor has seven days to pay its subcontractors whose invoices were included in the proper invoice. Payment similarly cascades down the chain from the subcontractor to any sub-subcontractors, and onwards through each tier. If payment stalls at some stage of this chain within the required timelines, the legislation includes a backstop in the form of the “calculated payment date”. This means that if money stops flowing, every party in the chain must still make payment by its own calculated payment date, which falls seven days after the calculated payment date of the prior party in the chain.

If an owner delivers a “notice of non-payment”, it must be in the prescribed form and manner, and must specify the amount being withheld and the reasons for the non-payment. Undisputed portions of an invoice must still be paid on time. The notice of non-payment cascades down the chain of subcontractors as well: the contractor receiving such notice must give notice to its subcontractors by the earlier of seven days after receiving an upstream notice of non-payment or by their calculated payment date. If the contractor (or subcontractor) is relying on non-payment to them as a reason for their own non-payment to a subcontractor, they must attach the upstream notice of non-payment and undertake to refer that non-payment to adjudication within 21 days after the notice is given.

Fast-track adjudication

Bill 20 introduces an expedited dispute resolution process designed to quickly resolve payment disputes without lengthy court or arbitration proceedings.

A party to a contract can only refer a dispute to adjudication under the legislation if it falls within one of the matters outlined in the legislation. These include a failure to make a payment required under the prompt payment framework; the valuation of services or materials supplied under the contract; and whether a payment is required under the contract.

Once a party refers a dispute to adjudication by providing written notice to the other party, the process moves quickly. If the parties cannot agree to an adjudicator within four days, the party who gave the notice of adjudication must request the appointment of an adjudicator by the adjudication authority, who must in turn appoint an adjudicator within seven days. Within five days of an adjudicator agreeing to act, the referring party must deliver the contract and the records on which it intends to rely to the adjudicator and the other party to the adjudication.

The adjudicator must issue a written determination within 30 days of receiving the parties’ records, unless both sides agree to or the adjudicator requests a limited extension. If the adjudicator is late in making their determination, the determination is void. When a determination is issued, it is binding on the parties to the adjudication on an interim basis until the matter is further litigated or the parties agree otherwise. Any amount ordered to be paid must be paid within 15 days. The determination may also be filed with the court and enforced as a court judgment.

If payment is still not made, the unpaid party may suspend work and recover reasonable costs related to the suspension and resumption of work. Judicial review is only allowed on narrow grounds, such as lack of jurisdiction or procedural unfairness, and must be commenced within 35 days after the determination is issued.

Importantly, parties maintain their rights to take the underlying dispute to court or arbitration for a final determination at a later date. However, an interim adjudication determination is binding until (or if) such a final determination is made. Following an interim adjudication, parties may also reach a different written agreement.

Changes to the Builders Lien Act

Bill 20 also proposes targeted amendments to the Builders Lien Act, including abolishing B.C.’s unique “Shimco” lien and shortening the statutory holdback period from 55 days to 46 days (with matching changes to the Strata Property Act). In addition, the bill clarifies the definition of “improvement” in the Builders Lien Act to expressly include demolition and removal work, and it confirms that such activities will be subject to liens.

Key takeaways

Bill 20 represents a major shift for B.C.’s construction industry. It sets clear, mandatory timelines for invoicing and payment, creates strict notice requirements for rejecting invoices and withholding funds, and provides a rapid adjudication process to resolve payment disputes.

Bill 20 is not yet in force. The framework will not apply to existing contracts and is expected to be implemented in stages. Once in force, it will change how every affected construction project in the province manages payment.

Prompt payment and adjudication have been in force in jurisdictions across Canada now for several years, and we continue to track relevant legislative and case law developments in other jurisdictions on our blog. 

Osler’s National Construction and Infrastructure Group has extensive experience with prompt payment and adjudication regimes across Canada. We have developed various service offerings to smooth the transition process for our clients, including transition provision analysis and training, cost-effective construction contract review services, a wide range of adjudication support services, and best practices training.

We will continue to track updates relating to Bill 20 as they are released.