Prompt Payment Introduced in British Columbia

[ Photo by Josh Olalde on Unsplash ]

If you have any involvement in construction in British Columbia, you may soon see major changes to how and when payments flow through a construction project.

On October 7, 2025, the Province introduced Bill 20, the Construction Prompt Payment Act, a proposed law that will set firm payment timelines and create a faster process for resolving payment disputes. The Bill also makes key amendments to the Builders Lien Act, including abolishing the Shimco lien. A Shimco lien is a type of construction lien, that is filed specifically against the holdback funds owed on a project.

Modeled after Ontario’s prompt payment laws, Bill 20 is designed to work alongside the Builders Lien Act to promote timely payment and better cash flow in the construction industry. The new law will apply only to new contracts once it comes into force, with the start date to be set by upcoming government regulations.

How Prompt Payment Will Work

The Construction Prompt Payment Act establishes clear payment deadlines for every level of the construction chain:

• Owners must pay contractors within 28 days of receiving a proper invoice.
• Contractors must pay subcontractors within 7 days after being paid.
• Each level below has another 7 days to pay the next tier.

A proper invoice must include details such as what was supplied, the related contract or purchase order, and the stage of work being billed. Invoices are to be issued monthly unless the contract specifies otherwise, and interest will accrue on late payments.

Owners can dispute an invoice by sending a notice of nonpayment within 14 days of the invoice date. Contractors and subcontractors must send their own notices within 7 days of their payment due date. Each level down the contract chain adds 7 additional days to the payment timeline, meaning a head contractor’s payment date is 35 days and a first-tier subcontractor’s is 42 days.

Fast, Interim Adjudication

One of the most important features of Bill 20 is the introduction of adjudication, a quick interim process to resolve payment issues and keep projects moving. Disputes that can be adjudicated include nonpayment and valuation of work or materials. An adjudication must begin within 90 days of the project’s completion, termination, or the applicable subcontract event. An adjudicator will issue a written decision within about 35 days of appointment. Any payment ordered must be made within 15 days, and the decision can be filed in the Supreme Court of British Columbia and enforced like a court judgment. Decisions are temporarily binding, meaning they remain in effect unless overturned later by a court or through arbitration. Judicial review is limited to questions of fairness or jurisdiction.

A new adjudication authority will be established by the Province to certify and appoint adjudicators. Parties will not pre-select adjudicators in their contracts.

Changes To The Builders Lien Act

Bill 20 also proposes targeted updates to the Builders Lien Act to improve cash flow and reduce uncertainty in construction projects:

• The holdback release period will shorten from 55 to 46 days, and partial release will be allowed for amounts exceeding any filed liens.
• The definition of improvement will expand to include demolition and removal work.
• The Shimco lien, a separate lien against holdback funds, will be abolished.

These updates simplify holdback management and align lien timelines with the new prompt payment regime.

What To Do Now

Although Bill 20 is not yet law, now is the time for owners, contractors, and suppliers to start preparing. Review your contract templates and invoicing systems, to make sure they can meet the new payment timelines. Train staff on what a proper invoice requires and consider how the adjudication process might change the way you handle dispute resolution on projects.

How Our Litigation Team Can Help

Bill 20 will reshape how payment disputes are managed in BC. Our Litigation team can help you understand the new timelines, respond to or start adjudications, and enforce or challenge determinations in court.

If you have questions about how BC Construction Prompt Payment Act (Bill 20) could affect your projects, contact our Litigation team. We are ready to help you navigate the new framework from day one.