B.C. Prompt Payment Act: Industry Experts Call for Detailed Regulations Before Implementation

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Industry experts emphasize the need for clarity and detail in the regulations surrounding British Columbia's new Prompt Payment Act, which has yet to take effect.

The ongoing saga surrounding prompt payment legislation in British Columbia continues, as industry experts assert that further work is essential to finalize the details before the law can be put into action. The Construction Prompt Payment Act (CPPA) has been enacted but remains inactive pending the establishment of its regulatory framework. The deadline for feedback on a discussion paper released by the government was July 7. Chris Atchison, president of the British Columbia Construction Association (BCCA), stated, "This was a discussion paper on preparing for the regulatory framework now that we have the legislation." He emphasized the importance of ensuring that the prompt payment regulations apply comprehensively across the construction industry, ideally implemented simultaneously for all stakeholders.
Atchison noted that several critical aspects still need clarification, such as the definition of a proper invoice and the timing of when the payment process begins—whether it commences upon sending or receiving an invoice. He expressed a preference for the latter, stating, "We’re of the mind it should be when an invoice or payment is received." On the same day the feedback deadline was announced, the BCCA released a statement highlighting its submission, which represents over 5,000 companies spanning various sectors within the construction industry. Atchison reiterated the shared commitment to ensuring the legislation is properly executed, stating, "We all share the passion of getting this right for British Columbia."
The legislation currently outlines fundamental guidelines regarding invoices, but Atchison cautioned against being overly prescriptive at this stage. He underscored the need for common sense and opportunities for discussion, allowing practices that have been successful in other jurisdictions to guide the development of the B.C. framework until proven otherwise. Katy Fairley, principal consultant at Fairley Strategies and a key collaborator with the BCCA, was highlighted for her efforts in engaging with the industry as a subject matter expert. Fairley pointed out a significant topic from the discussion paper—the interest rate stipulated by regulation, which will be determined by whichever is higher: the regulator interest rate or the contract interest rate. She remarked, "We know the way contracts work in construction. There’s a power differential, and making sure there’s a proper interest rate that captures the cost of delay or non-payment is crucial to the functioning of the act."
Several provinces across Canada have adopted some form of prompt payment legislation, and Atchison referenced a previous analysis conducted by a working group from B.C. that examined successful practices in other jurisdictions and consulted with experts in the field. He explained, "It’s a matter of sanity checking what was put forth in the (B.C.) discussion paper, to make sure we weren’t going down a path that wasn’t working in another jurisdiction."
Currently, contacts across Canada are observing B.C.’s progress and generally agree that the province is on a promising path, encouraging stakeholders to remain steadfast. Adjudication is another critical topic addressed in the discussion paper, which suggests that other provinces require adjudicators to have a minimum of 10 years of relevant experience in the construction industry. Fairley noted that during consultations, there was a consensus that the clarity of language used in Ontario’s approach could serve as a beneficial model for B.C., albeit with the discretion of the appointed adjudication authority.
However, Fairley also recognized that not all individuals with a decade of construction experience may possess the qualifications to act as adjudicators. She remarked, "The provincial government’s act differs from Ontario and other jurisdictions in that some of the really tough decisions, they’ve left to now." Issues such as interest rates and adjudicator qualifications have been deferred, and Fairley emphasized the importance of continued feedback from the BCCA as decisions are made.
Atchison expressed a tempered enthusiasm regarding the progress made, acknowledging that B.C. businesses continue to face challenges due to the lack of payment certainty. He stated, "Now that we’ve got this over the start line, we’ve got to get it over the finish line. Once we see regulations, the next phase will involve discussing an implementation date and the selection and establishment of an adjudication authority. We need to start putting the line in the sand so we can deliver on this hope for the B.C. construction industry."

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