BC plans prompt payment for construction

Summary#

• This bill sets strict timelines for paying people on construction projects in British Columbia. It also creates a fast, low-cost way to resolve payment fights while work continues.

• It applies to most construction contracts signed after the law takes effect, with possible phased rollout by sector.

• Key changes:

  • Owners must pay contractors within 28 days of a proper invoice. Payments then flow down the chain in set weekly steps.
  • If someone won’t pay, they must send a written notice with reasons by the deadline.
  • Interest starts on late payments at the higher of a set rate or the contract rate.
  • “Proper invoices” must include required information; owners cannot delay an invoice until they “approve” it.
  • A quick adjudication (decision in about 30 days) can settle payment disputes. Decisions are binding for now and can be enforced in court. If not paid, work can be paused.
  • Contractors and subcontractors must share invoicing details with those below them. Builders Lien holdbacks still apply. Employment contracts and wages are not affected.

What it means for you#

• Owners and developers

  • Must pay proper invoices within 28 days.
  • If you dispute an amount, you must send a timely notice that explains why and how much you’re not paying.
  • You cannot make issuing an invoice depend on your approval or a payment certifier’s sign‑off. Approval can come after the invoice.
  • If you lose an adjudication, you must pay within 15 days or risk work stoppages and added restart costs.
  • Builders Lien holdbacks still apply and can be a valid reason for not paying part of an invoice.

• Prime contractors

  • Expect regular invoicing (usually monthly) and faster payment from owners.
  • After you’re paid, you must pay your subcontractors on a set timeline (generally in 7‑day steps down the chain).
  • If you’re not paid, you can send a notice of non‑payment to your subs, but you have to explain the reason and follow deadlines.
  • Late payments accrue interest. Missing payments after an adjudication can lead to work suspensions and court enforcement.
  • You must share invoicing schedules and which work was included in each invoice with subs who ask, within 10 days.

• Subcontractors and suppliers

  • Clear, faster payment timelines tied to when the owner was invoiced and where you sit in the contract chain.
  • Partial payments must be shared fairly among subs whose work is included in the invoice.
  • You can ask for invoicing information and must get it within 10 days; if it’s wrong or late and you’re harmed, you can claim losses.
  • You can trigger quick adjudication for issues like whether an invoice is “proper,” valuation of work, change orders, or non‑payment.

• Workers

  • The bill does not change employment contracts or wage rights. Wage payments are governed by existing laws and agreements.

• Public sector bodies and institutions

  • Must meet the same prompt‑payment timelines and notice rules.
  • May face more frequent quick adjudications on payment disputes.

• Homeowners and small property owners

  • If covered, you’ll have to meet invoice and payment timelines and use the adjudication process if disputes arise. Some types of projects may be excluded by future regulations.

• Timing

  • Applies to new contracts after the law comes into force (by regulation). Existing contracts are not covered. The government can phase in the law by sector.

Expenses#

No publicly available information.

• Government will need to set up or designate an adjudication authority, train adjudicators, and run a registry.
• Parties to a dispute split adjudication fees equally unless an adjudicator orders otherwise for bad‑faith conduct.
• Owners and contractors may face new admin costs to manage invoice formats, notices, and deadlines.
• Late payers will owe interest; faster resolutions may reduce lengthy court costs.

Proponents' View#

• Ensures small and mid‑sized construction businesses get paid on time, improving cash flow and reducing bankruptcies.
• Limits “pay‑when‑paid” delays and forces clear reasons when money is withheld.
• Creates a fast, practical way to resolve disputes so projects keep moving.
• Cuts legal costs by avoiding long lawsuits over interim payments.
• Brings B.C. in line with other provinces that have prompt‑payment and adjudication systems.

Opponents' View#

• Tight timelines could force payment before quality concerns or defects are fully reviewed.
• Adds paperwork and compliance costs for owners and primes (invoice formats, notices, tracking deadlines).
• May increase the number of disputes moved into adjudication, adding fee and time pressures.
• Interest penalties and required payment flows could strain cash for owners on complex or thin‑margin projects.
• Some worry the rules may not fit well with very large, complex jobs unless regulations add flexibility.