Construction projects are complex, fast-moving, and often stressful. Tight timelines, multiple subcontractors, and shifting project demands leave little room for uncertainty, especially when it comes to payment. Late or withheld payments can quickly snowball into delayed work, strained relationships, and legal disputes that halt progress on site.
To address these longstanding challenges, British Columbia has introduced Bill 20, the Construction Prompt Payment Act, designed to bring fairness, predictability, and efficiency to the construction payment system. For many owners, contractors, and trades, this represents one of the most significant changes to BC’s construction law in decades.
At Pathfinder Law, we help businesses navigate these changes with clarity and confidence. Here’s what Bill 20 means for you and how to prepare.
Why Prompt Payment Matters
Payment delays are one of the most common sources of conflict in construction projects. When funds don’t flow down the contractual chain, small and mid-sized businesses often operating on thin margins suffer the most. Work slows down, subcontractors struggle to cover labour and materials, and disputes escalate.
New Rules for Invoicing and Payment
Under Bill 20, payment practices across the industry will become far more structured. Here is what project stakeholders can expect:
1. Monthly “Proper Invoices”
Contractors must submit a proper invoice every month, unless the parties agree to a different schedule.
2. Owners Must Pay Within 28 Days
Once a proper invoice is received, owners must:
- Pay the invoice within 28 days, or
- Issue a notice of non-payment within 14 days.
3. Contractors Must Pay Subcontractors Promptly
Contractors and subcontractors must:
- Pay their subcontractors within 7 days of receiving payment, or
- Pay by the “calculated payment date” if payment has not flowed down yet.
4. Notices of Non-Payment Must Flow Downstream
If a contractor isn’t paid by the owner and intends to withhold payment from subcontractors, the contractor must provide the same notice of non-payment to those subcontractors.
5. Late Payments Still Trigger Liability
If a disputed amount is eventually paid, the contractor has just 7 days to pay subcontractors after receiving those funds.
Mandatory Adjudication: A Faster Way to Resolve Disputes
One of the most transformative aspects of Bill 20 is the introduction of mandatory adjudication. Instead of waiting months (or years) for litigation or arbitration, payment disputes will be resolved quickly by a qualified adjudicator.
Issues That Can Go to Adjudication Include:
- Whether a “proper invoice” was issued,
- 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 contracts.
- Whether payment is required under the contract (i.e., change orders or change directives).
- Other matters as may be agreed by the parties.
Adjudication Timelines
The process is intentionally fast:
1. Initiation:
Must start no later than 90 days after the prime contract is completed, abandoned, or terminated. For subcontracts, the 90-day period runs from the earlier of:
Completion/abandonment/termination of the prime contract
Certification of the subcontract as complete under the BLA
The date the subcontractor last provided work or materials
2. Adjudicator Appointment: Within 11 days of starting the process
3. Decision issued: Within 35 days of appointment (unless parties agree otherwise)
4. Payment Deadline: Determination must be paid within 15 days
This system is designed to keep projects moving and resolve disputes mid-construction.
Changes to the Builders’ Lien Act: What’s Being Eliminated and Expanded
Bill 20 is also making significant changes to the Builders’ Lien Act (BLA).
1. The “Shimco Lien” Is Being Abolished
Previously, BC recognized two types of lien rights:
- A lien against the land
- A separate lien against the holdback (the “Shimco lien”)
Bill 20 eliminates the Shimco lien, confirming that only a single lien right against the land will remain.
2. Holdback Period Reduced
The holdback period under s.8 of the BLA will be shortened:
- From 55 days to 46 days
- Applies also to strata lot purchasers from owner-developers
This change means holdbacks can be released one day after the lien period expires, speeding up cash flow.
3. “Improvement” Definition Expanded
Demolition and removal work will now count as an “improvement” under the BLA, extending lien rights to more types of work.
When Will Bill 20 Take Effect
Not immediately.
Bill 20 will not come into force until supporting regulations are enacted, likely in spring 2026 at the earliest. Even then, implementation may occur in phases, applying to different sectors or types of projects over time.
Importantly:
- Only contracts and subcontracts entered into after the legislation is in force will be affected.
This means businesses have time to prepare, update processes, and seek legal guidance.
Stay Ahead of the Changes
BC’s construction industry is entering a new era, one focused on fairness, accountability, and efficiency. Understanding Bill 20 now will help your business transition smoothly when the legislation ultimately takes effect.
If you have questions about how Bill 20 may impact your contracts or projects, contact Pathfinder Law for a free 20-minute consultation. Our experienced legal team in Abbotsford is here to help you, prepare, adapt, and thrive under the new rules
Disclaimer – The information contained herein is of a general nature. It is not intended to be legal advice and it is not intended to address the exact circumstances of any particular individual or entity. You should not rely on or act upon such information without receiving appropriate professional advice and without a thorough examination of your particular situation.