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Introduction
In early October 2025, the British Columbia provincial government introduced Bill 20: Construction Prompt Payment Act ("Bill 20") in an effort to streamline payments across the construction industry and increase project efficiency. Bill 20 received Royal Assent on November 27, 2025, but is not yet in force.
Bill 20 represents British Columbia's move towards aligning with Ontario and Alberta in providing a robust legal framework to secure timely payments, reduce disputes and streamline project delivery. It introduces strict payment timelines, a fast-tracked adjudication process, standardized invoice forms and amendments to the British Columbia Builders Lien Act. These changes aim to create a more efficient and transparent payment process for both private and public sector construction projects, impacting stakeholders throughout the construction supply chain. However, forthcoming regulations may introduce certain exceptions, particularly for public sector projects, which could affect how the legislation will apply.
Proper Invoicing & Payment Timelines
The legislation will implement mandatory monthly invoicing, unless otherwise contractually agreed between the parties. What constitutes a "proper" invoice is legislatively prescribed and specifies components such as the invoice date, description and value of the work, with exact criteria to be defined further in the regulations.
Once a contractor submits an invoice to an owner, the owner is required to pay the contractor within 28 days of receiving the invoice. After receiving payment, contractors and subcontractors further down the supply chain must pay their respective subcontractors within seven days or by their "calculated payment date." The calculated payment date adds seven extra days for each tier in the supply chain. For example, the owner has 28 days to pay the contractor and the contractor then has up to 35 days from the date the invoice was submitted to pay the next subcontractor. Late payments will accrue interest on the outstanding amount at the higher of the prescribed interest rate or the rate specified in the applicable contract.
An invoice can be challenged by an owner if such owner serves a written notice of non-payment to the relevant contractor within 14 days after the billing date specified in the invoice. Contractors and subcontractors, on the other hand, have until the earlier of seven days after they receive the notice of non-payment or their calculated payment date to issue a notice of non-payment to challenge an invoice.
Adjudication - Fast Track Dispute Resolution
The legislation introduces a fast track dispute resolution process for payment-related disputes falling within the scope of the legislation, with the adjudicator providing a written determination no more than 30 days after receiving the contracting parties' records. A party initiating an adjudication process must do so within 90 days after contract completion, abandonment or termination, and may be refer a dispute to adjudication during the project.
If an adjudicator determines that a party is required to pay an amount, that party must do so within 15 days of receiving the adjudicator's decision. An adjudicator's determination is binding unless later overridden in a final determination by the court or through arbitration or written agreement between the parties.
The parties are not permitted to name an adjudicator within their contract, but may mutually agree on an adjudicator to oversee the dispute. The legislation also seeks to establish an adjudication authority to train and qualify adjudicators and appoint an adjudicator in the event the parties cannot come to a mutual agreement.
Amendments to the Builders Lien Act
The Construction Prompt Payment Act will also amend the British Columbia Builders Lien Act (the "BLA"). Amendments to the BLA will include reducing the holdback period from 55 to 46 days and clarifying the definition of "improvement" to include the "demolition and removal" of an improvement.
The legislation will also abolish "Shimco liens", named for the 2002 British Columbia Supreme Court decision1 that established that the BLA provides for a lien on holdback funds that is separate from the lien on land and improvements created in section 2 of that Act. For many years, Shimco liens have been a source of uncertainty and confusion. The legislation will amend the BLA to add a section expressly providing that a person does not have a lien under the BLA against a required holdback, eliminating that uncertainty and confusion.
Going Forward
Bill 20 expressly provides for the possibility of gradual phased implementation of the legislation's application to different sectors of the construction industry and for the introduction of different regulations for different sectors. As a result, the implications of Bill 20 on the construction industry and its stakeholders will be better understood once the legislation and related regulations come into force.
Although the legislation will not apply in relation to a contract entered into before the transitional provisions in Bill 20 come into force—or a subcontract relating to such a contract—moving forward, all parties will need to pay close attention to mandatory payment timelines and ensure their contractual agreements address any notable permitted deviations from the legislation, such as the mandatory monthly invoice requirements or applicable interest rates to late payments, to better align with their project objectives.
Footnote
1 Shimco Metal Erectors Ltd. v. Design Steel Constructors Ltd., 2002 BCSC 238, affirmed Shimco Metal Erectors Ltd. v. North Vancouver (District), 2003 BCCA 193.
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