Prompt Payment Becomes Law: Key Takeaways and What’s Next

Press release courtesy of the Mechanical Contractors’ Association of BC

On November 27, the Construction Prompt Payment Act received Royal Assent and was officially enacted as law. This milestone brings BC’s construction industry one step closer to a standardized payment system—keeping cash flowing, crews working, and projects moving forward.

But what will it mean for contractors on the ground, and what happens next?

Key Takeaways

Now that the Act has passed through the House and received Royal Assent, we know that the following key provisions will form part of its legal framework:

Regular and Proper Invoicing

1. Contractors will be required to submit a proper invoice to owners on a monthly basis unless otherwise specified in the contract, e.g. milestone-based invoicing (s.5).

2. Proper invoices must include the information specified in s.7(1)(a) and will be deemed proper unless the owner objects, in writing, within 7 days after the invoice date (s.7).

Prompt Payment

1. Owners must pay contractors within 28 days after the invoice date (s.9)(1)(a)).

2. Contractors must pay subcontractors within 7 days after they receive payment from the owner or before the subcontractor’s payment due date—whichever comes first (s.9).

3. Notices of non-payment from owners to contractors must be given within 14 days after the invoice date (s.11(2)(b)(i)).

4. Notices of non-payment from contractors to subcontractors must be given within 7 days after the contractor receives a notice of non-payment from the owner or before the subcontractor’s payment due date—whichever comes first (s.11(2)(b)(ii)).

5. If a contractor receives partial payment more than 7 days before the subcontractor’s payment due date, the contractor must pay the subcontractor rateably from the amount of the partial payment and within 7 days after they receive it (s.10).

6. Interest will begin to accrue on unpaid amounts after the payment due date at the rate specified in the contract or the prescribed rate—whichever is higher (s.15).

Adjudication

1. Notices of adjudication regarding owner-contractor contracts must be given within 90 days after a contract is completed, abandoned, or terminated (s.19(2)).

2. An adjudicator must be appointed by the adjudication authority within 7 days after a request is made by one or more of the parties (s.23)(2)).

What’s Next?

Currently the Act exists as a legislative framework—it needs to be fleshed out before it can begin being implemented and enforced. In this next phase, the regulatory phase, the Ministry of Attorney General will work closely with industry stakeholders to develop the regulations needed to implement the law. This phase is expected to last between 12 and 18 months.

“The Mechanical Contractors’ Association of BC was the first organization in BC to call for this reform over a decade ago,” says MCABC CEO Kim Barbero. “Commitment and collaboration are what have gotten us to this point, and we look forward to partnering with government and other stakeholders on development of the regulations which, I expect, will further strengthen the mechanical contracting industry.”

Read the Act in Full here >> https://www.bclaws.gov.bc.ca/civix/document/id/lc/billscurrent/1st43rd:gov20-3