ARTICLE · 18 AUGUST 2022

Prompt Payment Legislation – Update

Alexander Holburn Beaudin + Lang LLP

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The payment terms for construction projects are changing across Canada. Prompt payment legislation includes mandatory payment terms intended to increase the cash flow of contractors...

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Daniel Thompson

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The payment terms for construction projects are changing across Canada. Prompt payment legislation includes mandatory payment terms intended to increase the cash flow of contractors and subcontractors.

Prompt payment legislation is in force in Ontario and Saskatchewan, will be in force in Alberta on August 29, 2022, and is being debated in British Columbia.

ONTARIO

In Ontario, prompt payment requirements were enacted in October 2019 through an amendment to the Construction Act. The amendment is intended to ensure that contractors' and subcontractors' invoices get paid in a timely manner. The amended Construction Act includes:

Invoice requirements: a "proper invoice" is defined in the Construction Act as a written bill or other request for payment that includes specific details.

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