Publications

By: Nicholas W. Peterson

On November 27, 2025, the Construction Prompt Payment Act, S.B.C. 2025, c. 24 [“CPPA“] became new law in BC, impacting the construction industry and its payment practices.

What is the CPPA?

The CPPA creates mandatory prompt payment timelines between owners, contractors and subcontractors for proper invoices issued for the supply of services or materials.

The CPPA also creates a new dispute resolution process (adjudication) for payment-related disputes.

Does the CPPA Apply to Your Project?

While the CPPA is now law, it is not yet in force and will only take effect once accompanying regulations are introduced which trigger its application to future projects. There is no date set yet for that next step.

The CPPA will not apply retroactively, meaning, it will only apply to “contracts” (which includes subcontracts) entered into after the CPPA takes effect.

The triggering regulations are also expected to identify projects that are not subject to the CPPA.

There may also be a phased implementation of the CPPA, meaning the application of the legislation may be rolled out in a gradual fashion.

What are the Key Impacts and Changes?

1. “Proper” Invoices

The CPPA requires all invoices for payment issued under a contract (which includes subcontracts) to be issued in a proper form.

If a contractor fails to comply with these requirements, payment can be delayed. If a contractor fails to comply, there is a timeline for owners to dispute the non-compliance.

Subject to a contract specifying a different invoicing timeline (e.g. certain milestones for invoicing), contractors must issue invoices on a monthly basis.

To meet the proper form, invoices must include the following:

• the name and address of the contractor;
• the date of the invoice;
• the period of time, milestone or other basis to which the invoice relates;
• information identifying the contract or other authorization under which the services or materials were supplied, such as a contract number, contract line item number or purchase order number;
• a description, including quantity if appropriate, of the services or materials that were supplied;
• the amount payable and the payment terms;
• how payment is to be made or, if none, the name of the person or office to which payment is to be sent;
• any prescribed information (i.e. new requirements introduced through regulation).

If an invoice fails to comply with these requirements, an owner has only 7 days to provide written notice to the contractor of the non-compliance and identify what is required to make the invoice comply.

If a non-compliance notice is not given within this 7-day period, the invoice is deemed to be proper.

2. Mandatory Timelines

Payments

If a proper invoice is issued, the CPPA then requires certain things be done by mandatory deadlines:

• within 28 days of the proper invoice’s date, the owner must pay the contractor; and
• for down-chain payments, within 7 days of the contractor being paid for the invoice, the contractor must pay the subcontractors (any person who supplies work or materials under a contract with a contractor or another subcontractor which were included in the invoice) and then each payment in turn triggers a 7-day payment window down the chain).

If a partial payment is made and received, a subcontractor down the chain must still be paid within 7 days but only rateably in proportion to the partial payment made.

Dispute Notices – Notice of Non-payment

If an owner wants to dispute payment for a proper invoice, it must issue a formal notice of non-payment within 14 days of the invoice date. In turn, if a contractor in the chain receives a dispute notice and wishes to itself dispute a payment owing by them to a subcontractor, the contractor must issue a notice of non-payment within 7 days after they receive a notice of non-payment person’s calculated payment date (i.e. where they are in the chain) for the invoice, whichever date is earlier.

The notice of non-payment must specify the amount not being paid and reasons for non-payment. If the amount is not being paid because of an earlier non-payment in the chain (e.g. the contractor not paying a subcontractor in turn), the notice must include a copy of any earlier notice of non-payment given to that person and provide an undertaking to refer the prior notice of non-payment to adjudication within 21 days after the notice is given.

If an amount related to a disputed amount is later paid, payments to subcontractors are still required to be paid within 7 days of that later payment based on their position in the contractual chain.

All timelines are based on calendar days.

3. Adjudication

Once a dispute is properly initiated by notice, the next step is adjudication through a new Adjudication Authority.

This new adjudication model is intended to be fast and efficient. Whether that aim is achieved in practice remains to be seen.

Under the CPPA, a dispute may be referred to adjudication even if the dispute is the subject of a legal proceeding or an arbitration. Adjudication can be pursued by a party to a contract (which includes a subcontract) by giving proper notice in relation to any of the following matters:

• a failure to give a proper invoice;
• whether an invoice is a proper invoice;
• a failure to make a payment;
• a notice of non-payment;
• the valuation of services or materials supplied;
• whether a payment is required under the contract, including, in relation to a change order, whether approved or not, or a proposed change order; and
• a matter agreed to by the parties.

In terms of timelines, no adjudication may be started if the notice of adjudication is given more than 90 days after the contract is completed, terminated or abandoned (if the notice relates to a contract between an owner and contractor) or, if related to a subcontract, the earlier of the date the contract between the owner and the contractor is completed, abandoned or terminated; the date the subcontract is certified completed; or the date the subcontractor last supplied services or materials under the subcontract.

Written adjudication determinations will be issued within 30 days of receiving the parties’ submissions. The determination is binding on an interim basis unless displaced by a court order, arbitration, or a written agreement between the parties, and is subject to limited grounds for appeal (i.e. judicial review). If a party fails to pay an adjudicated amount within 15 days of the determination, the other party may suspend further work until paid and this may include reasonable costs incurred associated with the resumption of work.

A party to an adjudication can challenge whether the dispute falls within the jurisdiction of the CPPA adjudication process.

4. Further Application of the CPPA

Certain other issues emerge from the new CPPA:

• Within 10 days of a request by a subcontractor, a contractor must provide information to that subcontractor regarding the timeline required for the contractor giving proper invoicing, the invoice’s date, and which services and materials are included in the invoice. This right to information then applies to all subcontractors down the chain.
• The CPPA does not apply to employment contracts or an obligation to pay wages.
• a requirement to pay an invoice amount is still subject to the required holdback under the Builders Lien Act and the holdback period is reduced from 55 days to 46 days.
• Shimco liens, being separate lien claims against the statutory holdback, are abolished.

Practical Considerations

Industry stakeholders should consider the following as we await the implementation of the CPPA:

• ensure invoices issued or received meet the proper invoice requirements to trigger the prompt payment and dispute timelines. Review existing contracts to ensure payment terms and invoicing procedures meet CPPA requirements. Given there is a 7-day time limit to dispute an invoice’s compliance with the requirements, timely review of invoices received is critical.
• create internal procedures and systems to diarize important dates to ensure compliance with all mandatory deadlines and to preserve rights.
• create systems and a procedure to handle interim adjudications efficiently.
• This prompt payment legislation modifies the Builders Lien Act but does not override builder’s lien rights and obligations generally. Steps should be taken to ensure rights are still protected under the Builders Lien Act.
• consider making amendments to construction contracts to account for and address the impacts of the CPPA.
• No contracting out: a provision in a contract that provides this legislation does not apply is void.

If you have any questions regarding this new prompt payment legislation and its impact and application to your business, please contact the author, or any member of our Construction Law Group.