Bill 20, The Construction Prompt Payment Act

Overview

Bill 20, The Construction Prompt Payment Act, was introduced on Oct 7, 2025 and is currently at first reading. The aim of the bill is to limit delays and litigation in construction projects in BC by:

  • Imposing strict timelines for payment of services or materials supplied as agreed to in a contract between a contractor and owner.
  • Introducing a streamlined adjudication process for resolving payment related disputes between contractors and owners.

Application

The effects of the legislation will be applicable to new contracts and subcontracts entered into after the law comes into force, following a phased implementation for industry adaptation. The legislation will apply when “a contractor supplies services or material that contribute to an improvement to land or building under a contract”, which is similar to the scope of work covered by the Builders Lien Act. There are limited exclusions and the legislation will apply to most conventional construction projects, including both public and private projects.

What BC’s Non-Profit Housing Providers Need to Know

  • “Owners” in the legislation include housing societies that are developing or doing major renovations on non-profit housing.
  • Owners must pay contractors within 28 days of receiving “proper invoice” and contractors then have seven days to pay subcontractors. If owners dispute the amount of the contract, they have 14 days to issue a notice of non-payment to the contractor.
  • The legislation defines “proper invoice” in section 7(1), and includes seven factors that must be included to be considered proper invoice.
  • A new adjudication authority will be created in BC to oversee an interim adjudication process to manage the dispute resolution process outside of court.
  • Decisions made through adjudication are binding unless overturned through legal or arbitration processes.
  • If owners determine they did not receive a proper invoice, they have seven days to dispute the validity of an invoice, otherwise it will be considered proper invoice.

Implications for Sector

In most cases, non-profit housing providers are reliant on BC Housing, CMHC, and other funders’ payment schedules to provide payment to contractors’ invoices. Currently, the existing payment schedules do not reflect the 28-day period set forth in the prompt payment legislation and, therefore, there are concerns that the sector will not be able to fulfill the requirements of the legislation. If payment is not received on or before 28 days, a contractor can provide written notice to initiate the adjudication process. If an adjudicator issues a determination that requires payment, the owner has 15 days to provide payment otherwise suspension of work is permitted and the contractor could be entitled to payment of costs related to stopping and resuming work. BCNPHA encourages non-profit housing providers to review the new legislation to see how it might apply for their housing societies.

Consultation

The legislation was highly anticipated in the building and construction sector and was informed by a large table consultation with the construction industry through summer and fall of 2024. The legislation was also closely modeled after existing legislation in Ontario.

Driving Factors

The driving factors for the legislation were:

  • To support the government mandate to grow the economy by creating assurance that businesses receive prompt payment for work performed in the construction sector.
  • Increasing adoption of prompt payment legislation in other provinces and evidence suggesting the success of the policies.
  • Ensuring the costs of dispute resolution mechanisms will be borne by the construction industry and not by government.

Jurisdictional Scan

Prompt payment legislation exists in Ontario, Alberta, Saskatchewan, New Brunswick, Manitoba, and Nova Scotia. There is also federal legislation that governs federal construction projects, which has been in effect since 2023. Among the provinces, there are three models for prompt payment legislation:

  • The Ontario model has a broad application of the legislation across projects.
  • The Alberta model has exemptions for public works projects.
  • The Saskatchewan model has exemptions for certain actors including, but not limited to, architects, engineers, and land surveyors.

The broad application of the legislation in Ontario has been modeled by many other provinces, including the new BC legislation. Ontario was the first province to introduce prompt payment legislation in 2019 and although there are ongoing adjustments being called for, the legislation has been well received by the construction industry.

Key Sources

Join BCNPHA for great benefits.

Become a Member