What does BC’s Prompt Payment Law Mean for Builders and Trades?
The BC government recently unveiled new legislation which aims to help builders and trades get paid faster by requiring “prompt payment,” or if a dispute emerges about payment by having parties go through an adjudication process separate from the courts. This legislation will have a massive impact on the construction industry but will also require industry professionals to adapt to new requirements and procedures. In this blog post, we break down the importance of the act, outline its major features, and highlight potential areas of concern for the industry.
The construction industry is one of the largest industries in British Columbia, with a report earlier this year finding that the industry accounted for 10% of the province’s GDP. Given its size, issues that emerge because of non-payment don’t just impact contractors, but entire communities that rely on them. The province has known about this issue for years and seems to be finally recognizing the need to give builders a better and faster way to resolve payment disputes.
In their press release on October 7, 2025, the BC government unveiled Bill 20 – The Construction Prompt Payment Act. The press release sets out three objectives of the new law, which are:
• Set clear timelines for payment on construction projects;
• Establish a fast-track adjudication process to resolve payment-related disputes; and
• Improve cash flow and stability across the construction industry.
Largely based on Ontario’s Construction Act prompt payment scheme, BC’s Construction Prompt Payment Act has 6 parts:
1. Part 1 – Interpretation and Application – This section sets out the key definitions and interpretations for the rest of the act. Importantly, it defines the “Contract Position,” which is a key element of the prompt payment mechanism that Builders need to be aware of.
2. Part 2 – Regular Invoicing – this section sets out what a “proper invoice” is, which is a critical part of the prompt payment mechanism. If a builder fails to issue a proper invoice, it may trigger a dispute or justify non-payment.
3. Part 3 – Prompt Payment – This section sets out the requirements on the owner or receiver of a proper invoice, that they must pay a proper invoice within 28 days, or alternatively issue a notice of non-payment and engage with the adjudication process under the act.
4. Part 4 – Interim Adjudication – This section outlines the required procedure and steps in an adjudication process that parties must follow, including:
a. The fees;
b. The required notices and responses in the adjudication process;
c. The manner in which an adjudication is conducted;
d. The jurisdiction of an adjudication;
e. The determinations which result from an adjudication; and
f. The enforcement of a determination.
5. Part 5 – Adjudication Authority – This section establishes the adjudication authority that will conduct the adjudications.
6. Part 6 – General – This section amends the Builders Lien Act by changing the definition of improvement, altering the holdback release to 46 days instead of 55, and explicitly abolishes the Shimco lien, meaning there is no loophole for failing to file a lien on time.
This act will significantly impact the construction industry in BC. However, this impact will not occur overnight. The legislation is still in its infancy. Further, looking to Ontario shows that prompt payment and adjudication schemes will require some iterations before achieving their intended effect. A review of the Construction Act assessing prompt payment and adjudication in Ontario found that prompt payment took a step in the right direction, though in some cases it overcomplicated resolving disputes or created pitfalls for industry professionals. It is unclear whether the BC Government will address these issues before enforcing the new act.
For Builders and Trades, this is a critical moment to start understanding the act and how it will affect you. At Pihl Law Corporation, we pride ourselves on helping the industry prepare for the future. For more information or advice regarding the Prompt Payment Act, contact our Construction Law Practice group today.
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