BC plans prompt payment for construction

Summary#

• This bill sets clear, short deadlines for paying people on construction projects in British Columbia. It aims to improve cash flow for contractors and subcontractors and to resolve payment fights quickly.

• It creates a standard way to invoice, timelines for payment down the contracting chain, interest on late payments, and a fast “interim adjudication” process to decide most payment disputes in about a month.

• Owners must pay a proper invoice within 28 days. Payments to subcontractors then flow down the chain in 7‑day steps tied to their place in the chain.

• A “proper invoice” is presumed valid unless the owner points out problems in writing within 7 days. Invoices cannot be held back waiting for prior certification or owner approval.

• Payers can send a written notice of non‑payment with reasons if they are withholding money (including because they were not paid by the party above them).

• Partial payments must be shared fairly among the subcontractors whose work is in the invoice.

• Subcontractors have a right to basic information about invoice timing and what was billed so they know when to expect payment.

• Late payments earn interest. If someone does not pay an adjudicator’s award on time, the other side can suspend work and recover reasonable restart costs.

• Fast, independent adjudication is available for most payment and change‑order disputes. Decisions are binding unless a court or arbitration later decides otherwise.

• Builders Lien holdbacks still apply. The bill also removes a legal rule known as “Shimco liens” (extra claims against the holdback).

• The rules apply to new contracts signed after the law takes effect. Government can phase in coverage by sector or type of project.

What it means for you#

• Owners and developers

  • You must pay a valid invoice within 28 days or send a timely written notice explaining why you are not paying (in full or in part).
  • You cannot require certification or approval before an invoice can be issued, though you can review work after the invoice is sent.
  • You still retain the usual Builders Lien holdback. Keeping the holdback can be a valid reason for non‑payment of that portion.
  • If you lose an adjudication, you must pay within 15 days or risk a work stoppage and added restart costs, plus interest.
  • Expect to adjust internal approval and payment workflows to meet tight timelines.

• General contractors

  • By default, you must issue proper invoices monthly (unless the contract sets a different schedule or uses milestones).
  • If paid by the owner, you must pay your subcontractors on time. Deadlines step down the chain in 7‑day intervals; missing them triggers interest.
  • If you are not paying a sub (for example, because you were not paid by the owner), you must send a written notice of non‑payment with reasons by the deadline.
  • If you receive only part of what was billed, you must share that amount fairly among the subs whose work was in the invoice.
  • You can use fast adjudication to resolve fights over proper invoices, valuation of work, change orders, or non‑payment.

• Subcontractors and trades

  • You gain clear payment dates tied to the original invoice, rather than open‑ended waits.
  • You can ask for key information (invoice timing, which work was billed) and must receive it in writing within 10 days, or the contractor may be liable for your losses.
  • If you are not paid, you can start adjudication and, if you win, get paid within 15 days. If not paid then, you may suspend work and recover reasonable restart costs.
  • If the payer was not paid by the party above them and gives proper notice, your payment may be delayed, but interest can accrue and adjudication is available.
  • Normal lien holdbacks still reduce what is immediately payable.

• Workers

  • This law does not change employment contracts or the duty to pay wages. Wage rights remain the same.

• Homeowners and small property owners

  • If you hire a contractor after the law takes effect, you may have to follow these prompt‑payment rules, unless your type of project is later exempted by regulation.

Expenses#

No publicly available information.

Proponents' View#

• Faster, predictable payment will help small and medium trades cover payroll, buy materials, and reduce business failures.
• Clear timelines and interest penalties encourage everyone to process invoices and pay on time.
• A quick, low‑cost adjudication process keeps projects moving by settling most payment fights in about 30 days, instead of long court cases.
• The system increases transparency by giving subcontractors the right to key billing information.
• It balances speed with existing protections by keeping Builders Lien holdbacks and not changing wage rights.

Opponents' View#

• Rigid timelines may be hard for complex projects or public bodies with multi‑step approvals.
• More paperwork and short 7‑day windows to dispute invoices could lead to rushed reviews and mistakes.
• “Pay now, argue later” concerns: owners may feel pressure to pay before all defects or testing are fully checked.
• Adjudication adds new costs and may produce inconsistent or hurried decisions, with limited grounds to challenge them.
• Because non‑payment can be passed down with notice when an upper‑tier party has not paid, some “pay‑when‑paid” risk remains for subcontractors.
• Uncertainty remains until regulations define the exact forms, fees, and any project types that are excluded or phased in.