BC Construction Prompt Payment Act Receives Royal Assent

On November 27, 2025, the British Columbia Construction Prompt Payment Act (the "CPPA") received Royal Assent. With this legislation, British Columbia joins other Canadian jurisdictions, such as Alberta and Ontario, that have implemented prompt payment regimes aimed at improving cash flow and providing an efficient way to resolve disputes in the construction industry.

The CPPA will come into effect at a date to be set through regulation. Additionally, regulations under the CPPA have not yet been developed, including those describing projects that will not be subject to the CPPA.

Key features of the CPPA include:

1. Establishment of a prompt payment framework;
2. Timely interim adjudication; and
3. Amendments to the Builders Lien Act, including the abolition of Shimco liens.

Prompt Payment Framework

Under the CPPA, contractors are required to submit proper invoices to owners monthly unless the contract specifies otherwise. A proper invoice must include:

• The name and address of the contractor;
• The invoice date;
• The invoice period or basis;
• Information identifying the contract or authorization under which services or materials were supplied;
• A description of the services or materials, including quantities where applicable;
• The amount payable and payment terms; and
• The information specified in the contract relating to how payment is to be made, or if none are specified, the name of the person or office to which payment should be sent.

Contracts may include additional requirements for proper invoices other than those listed above, but the CPPA prohibits subjecting proper invoices to certification by a payment certifier or approval of the owner.

Once a contractor submits an invoice, it is deemed a proper invoice unless the owner issues a written notice of non-compliance within seven days of the invoice date. This notice must identify deficiencies in the invoice and specify the steps necessary to bring it into compliance.

The prompt payment framework establishes timelines for payment obligations throughout the construction pyramid. Unless a proper invoice is disputed:

• An owner must pay the contractor within 28 days of the invoice date; and
• Contractors must pay their subcontractors by the earlier of: (a) seven days after the contractor receives payment of the invoice; or (b) the contractor's calculated payment date for the invoice, which provides an additional seven days for each step down the contractual chain.

The CPPA also provides mechanisms to address situations where payment may be withheld. Any party in the construction pyramid may withhold payment by issuing a notice of non-payment. This notice must specify the amount being withheld and the reasons for non-payment.

Owners are required to issue a notice of non-payment in the prescribed form and manner within 14 days of the invoice date.

Contractors and subcontractors must issue their notices of non-payment by the earlier of: (a) seven days after receiving a notice of non-payment; or (b) their calculated payment date for the invoice.

Interim Adjudication

The CPPA introduces an interim adjudication process aimed at providing efficient resolution. Disputes that may be referred to adjudication include:

• Failure to issue a proper invoice;
• Whether an invoice meets the requirements of a proper invoice;
• Failure to make a required payment;
• Issuance of a notice of non-payment;
• Valuation of services or materials supplied under the contract;
• Whether payment is required under the contract, including disputes related to a change order or proposed change orders; and
• Any other matter agreed upon by the parties.

For disputes between an owner and a contractor, adjudication must be commenced within 90 days of contract completion.

For subcontractors, an adjudication must be commenced within 90 days of the earlier of: (a) the date the owner-contractor contract is completed; (b) the date the subcontract is certified as complete; or (c) the date the subcontractor last supplied services or materials under the contract.

The adjudicator's determination is binding unless displaced by a court, arbitration, or a written agreement between the parties. Payment required under the determination must be made within 15 days of the decision being issued. Failure to comply may result in the suspension of work under the relevant contract.

Amendments to the Builders Lien Act

Significantly, consequential amendments to the Builders Lien Act abolish Shimco liens, which allowed a lien to be claimed against statutory holdback without filing a lien against the land. The CPPA explicitly states that no lien exists against a required holdback. This amendment will be a welcomed development from many industry stakeholders, as Shimco liens have created confusion and uncertainty for years.

Other notable amendments include expanding the definition of "improvement" in the Builders Lien Act to include demolition and removal work, and a reduction in the holdback period from 55 days to 46 days.

Next Steps for Industry Stakeholders

To prepare for the implementation of the CPPA, industry participants should consider taking the following actions:

• Review contract provisions to ensure payment terms and invoicing procedures align with CPPA requirements.
• Develop procedures for handling interim adjudication efficiently.
• Provide training on new payment timelines and dispute resolution mechanisms.
• Stay informed about forthcoming regulations, including exemptions and prescribed forms.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.