In October 2019, the prompt payment rules were introduced to
Ontario's construction industry as part of the province's
updated Construction Act.
The rules mark a significant shift with respect to when payments
must be made and how payment disputes get resolved on Ontario
construction projects.
At a high level, the rules impose mandatory payment obligations
on those involved in construction projects. For most sectors
of the industry, the rules represent a significant shortening of
payment deadlines. Owners are required to pay contractors
within 28 days of receiving a "proper invoice".
Contractors must pay subcontractors within 7 days of receiving
payment from the owner and subcontractors must pay their
sub-subcontractors within 7 days of receiving payment (and so on).
If a party does not want to make payment, it must issue certain
"notices of non-payment" within defined periods of
time. For example, if a contractor does not receive payment
from the owner, it
