Prompt Payment and Adjudication Toolkit in Canada

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Prompt Payment and Adjudication Toolkit in Canada

Prompt Payment and Adjudication Toolkit in Canada

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We have developed this Prompt Payment and Adjudication Toolkit to help Canadian companies with some of the issues they may face as provinces rollout prompt payment, adjudication, and construction lien reforms across the country. Please note that the information provided in this Toolkit does not constitute legal or professional advice or a legal opinion. We hope this Toolkit will provide you with some of the background information you need to navigate these changes. If you have any questions, please reach out to one of the members of Dentons Canada Construction and Infrastructure groups.

Prompt payment, adjudication, and construction lien reforms spread across Canada in recent years. The changes are meant to improve issues related to perceived payment delays in the construction industry and to provide a framework for the timing of construction payments in the construction industry. While new to Canada, similar regimes have been in effect in other jurisdictions for many years, such as in the United Kingdom. These legislative reforms aim to ensure timely payments are made to contractors, sub-contractors, and suppliers working on construction projects.

Where enacted, prompt payment legislation in Canada shares certain general characteristics, such as mandatory payment deadlines, requirements for the issuance of a “proper invoice” by the contractor, timelines by which parties must deliver notices of non-payment, and the format in which notices must be delivered. For example, in all jurisdictions where prompt payment legislation is in force in Canada, the party who is disputing an invoice must deliver a notice of non-payment to the other party by the deadline under the applicable legislation, otherwise they risk an order being made by an adjudicator requiring payment. The prompt payment framework is accompanied by a process to quickly adjudicate disputes with an authorized authority under the legislation. Adjudicators have the power to make binding interim orders for immediate payment, regardless of whether the parties seek resolution of the same claim through civil litigation or arbitration. A different determination may be made regarding a disputed invoice or payment by a court or an arbitrator, who are not bound by an adjudicator’s interim order.

Capitalizing on Dentons’ extensive national reach and experience, the Construction and Infrastructure groups have launched our Prompt Payment and Adjudication Toolkit which allows companies to compare these legislative reforms in various jurisdictions in a one-stop shop online platform.

Note that this information is current as at the time of publication and we will continue to monitor the changes and their impact on the industry. As new developments arise in the sector, we will update the content – so please check back regularly.

To download the full PDF prompt payment and adjudication tool kit please click here.

Future Updates

The Federal Prompt Payment for Construction Work Act¹ (the “Federal Act”) was passed on June 21, 2019, and effectively replicates Ontario’s Construction Act, which created a new prompt payment and adjudication regime. Although the Federal Act was passed, it is still not in effect and will come into force on a day to be fixed by order of the Governor in Council.

[1] Federal Prompt Payment for Construction Work Act, SC 2019, c 29, s 387 (not yet in force).

If you would like further information regarding any of the above, please reach out to your trusted legal advisors in Dentons Canada's Construction group or Dentons Canada’s Infrastructure group.

Insights

Legislative amendments to Alberta’s Prompt Payment and Construction Lien Act and Public Works Act

December 3, 2024

Amendments to the Alberta Prompt Payment and Construction Lien Act (the PPCLA) and to the Public Works Act (the PWA) are on the Legislative agenda this fall sitting.

British Columbia Court of Appeal clarifies owner’s right to pay holdback into court to discharge liens on title

June 10, 2024

If an owner agrees to pay amounts owed by a contractor to its subcontractors to avoid lien claims being filed, how does this affect the owner's right to pay the holdback into court under section 23 of the Builders Lien Act, S.B.C. 1997, c. 45 (the Act) to discharge lien claims?