British Columbia is catching up with the rest of Canada, and the impact will be felt across every construction project in the province. On October 7, 2025, the Government of British Columbia introduced Bill 20, the Construction Prompt Payment Act (the “Bill”), which includes several amendments to the Builders Lien Act (the “BLA”) and marks a significant shift in how payment disputes will be handled on construction projects throughout the province. If enacted, this legislation will significantly change and reform payment practices and dispute resolution processes in ways all stakeholders need to be aware of.
What is the BC Construction Prompt Payment Act (Bill 20)?
BC joins other Canadian provinces in adopting prompt payment legislation, following frameworks established in Ontario and Alberta. The goal is straightforward: to ensure that businesses are paid promptly for work performed and materials supplied on construction projects, while providing a fast-track mechanism to resolve payment disputes before they derail projects.
What are the major changes coming to BC’s Builders Lien Act
Notably, the Bill proposes two key amendments to the BLA:
- expanding the definition of “improvement” to expressly include demolition and removal work; and
- eliminating the existing dual lien structure and the concept of “Shimco” liens in BC.
In Shimco Metal Erectors Ltd. v. North Vancouver, 2003 BCCA 193, the Court of Appeal held that a lien claimant under the BLA could maintain a separate lien against the holdback, even after the lien against the land had been extinguished. This interpretation effectively created two types of liens in British Columbia—one against the land and another against the holdback. This approach was recently upheld by the British Columbia Court of Appeal earlier this year. If enacted, Bill 20 will abolish the Shimco lien, clarifying that only a single lien right against the land will remain under the BLA.
How the new BC prompt payment framework protects your cash flow
Payments on construction projects generally flow down a chain—from owners to contractors, then to subcontractors and suppliers, and further down to their subcontractors and suppliers. A dispute at any point in this payment structure could impact the project by causing delays, work stoppages, contract terminations, and insolvency situations for some participants. Because court or arbitration processes can take years to resolve, the last participants in the chain—often those with the least financial resilience—bear a greater risk of non-payment.
Key payment timelines for BC construction projects
Prompt payment laws were developed to resolve payment disputes in real time to keep money flowing and keep projects on track. Prompt payment legislation enacts expedited payment and adjudication processes to resolve payment disputes quickly.
- Owner to contractor: Under the Bill, when a contractor or supplier provides work or materials for a project and submits a proper invoice, the owner must pay the contractor within 28 days of the invoice date.
- Down the chain: Payment must then flow down the contractual chain, with subcontractors and suppliers to be paid within 7 days of their contracting party receiving payment.
What qualifies as a “proper invoice” in BC?
To expedite the payment and dispute resolution processes, the Bill mandates that a contractor (and subcontractors) provides a “proper invoice,” which must include, among other things:
- the amount owed;
- a description of the work or materials supplied;
- the contractor’s name and address;
- the invoice date;
- the relevant project milestone; and
- reference to the applicable contract or purchase order.
How should payment disputes be handled under BC’s new prompt payment legislation?
If a party disputes an invoice, they may issue a notice of non-payment in accordance with the Bill, within prescribed timelines.
- An owner may withhold payment only if they deliver the required notice, in the required form, within 14 days of the invoice date.
- Contractors and subcontractors further down the chain must provide notice of non-payment either within 7 days of receiving such a notice themselves or by the date their own payment would otherwise be due, whichever is earlier.
Without proper notice, payment must be made in full within the statutory timelines.
How does the BC prompt payment adjudication process work?
One of the most significant aspects of the Bill is the introduction of mandatory adjudication for payment disputes. This process is designed to resolve disputes in real time rather than letting them fester for months or years in court or arbitration.
A party to a construction project would have a right to refer the following disputes to adjudication:
- failure to provide a proper invoice;
- whether an invoice is a proper invoice;
- whether there was a failure to make payment on a proper invoice;
- whether notice of non-payment applies to the holdback funds;
- the valuation of the services or materials supplied under the relevant contract;
- whether payment is required under the contract (i.e., change orders or change directives); and
- other matters as may be agreed by the parties.
Timeline for adjudication
A party disputing an invoice may refer the matter to adjudication by providing written notice as required by the Bill. Once adjudication commences, the Bill requires that it proceed quickly.
- Initiation: Adjudication may be initiated during the project but must commence no later than 90 days after the contract between the owner and the contractor is completed, abandoned, or terminated. For subcontracts, the 90-day period runs from the earlier of:
- completion, abandonment, or termination of the contract between the owner and the contractor;
- the certification of the subcontract as complete under the BLA; or
- the date the subcontractor last provided services or materials for the project.
- Appointment: An adjudicator must be appointed within 11 days of commencement of the adjudication.
- Decision: The adjudicators must issue a decision within 35 days of appointment, or such other dates as may be agreed by the parties.
- Payment: The adjudicator’s decision is binding and must be paid within 15 days after the determination is issued.
Can you contract out of the prompt payment legislation?
No. Critically, parties will not be able to contract out of the prompt payment legislation, and the Bill expressly voids any contractual provisions that state that the new legislation does not apply. The Bill may, however, leave open the possibility that parties might be able to contractually moderate some of the harsher provisions of the legislation in unique circumstances.
What should construction stakeholders do now?
While the Bill does provide a starting point for what to expect in the legislation, many things can change between the first reading of the Bill and the actual legislation enacted. According to the Government’s press release, the Bill is to apply broadly to both private- and public-sector projects, including government contracts. The Bill indicates that “prescribed” projects will be excluded from the scope of the Bill, but the types of projects, contracts, services, or materials deemed “prescribed” is not yet clear. However, other Canadian jurisdictions have excluded mega-projects with capital budgets in the billions of dollars.
Even before the Bill becomes law, companies should:
- Review and update standard CCDC contracts and supplementary conditions;
- Adjust payment workflows and accounting systems; and
- Train teams on “proper invoice” requirements and non-payment notices
Most standard form CCDC contracts contain provisions addressing prompt payment legislation, but parties should be aware that there may be a need to amend their standard form agreements, supplementary conditions, and other practices to comport with the proposed legislation.
If you require any guidance or information about how new prompt payment legislation may impact your projects or your contracts, please do not hesitate to contact a member of Miller Thomson’s Construction Group.
The most significant changes are the introduction of prompt payment rules and timelines and mandatory adjudication. These changes create a legally binding, fast-track process to improve payment timelines between stakeholders and resolve payment disputes, preventing such disputes from stalling projects and crippling cash flow for months or years through traditional litigation.
Yes. The Act will cover both public and private-sector projects, though certain “prescribed” mega-projects may eventually be excluded.
The law legally enforces payment timelines down the entire contracting chain. Once the contractor above you gets paid, they have only 7 days to pay you. Furthermore, the adjudication process gives you a powerful and relatively inexpensive tool to dispute non-payment without resorting to a costly lawsuit.
The consequences can be severe. If you fail to issue a compliant notice within the strict statutory deadlines (14 days for owners, 7 days for others), you lose the right to withhold payment. The invoice must be paid in full, even if the work is disputed. You would then have to pursue adjudication or legal action to recover the funds.
Your contracts almost certainly need to be reviewed and likely updated. While some standard forms acknowledge prompt payment, your supplementary conditions and specific payment terms must align with the new mandatory timelines and procedures in Bill 20. Any clauses that conflict with the legislation will be void.
The Bill allows for “prescribed” projects to be excluded, but the government has not yet defined what those are. Based on other provinces like Ontario and Alberta, it is possible that certain mega-projects with multi-billion-dollar budgets may be exempt, but we must wait for the final regulations to be sure. For now, assume the law will apply to all standard public and private projects.
Start aligning contract templates and internal systems with the new payment rules to avoid compliance issues once the law is enacted.
