British Columbia’s construction industry is bracing for a significant shift in how payments flow through projects, but one Vancouver lawyer questions whether the very people the law is designed to protect will actually use it.
Lam Legal’s Ada P. Lam says stronger payment protections could benefit BC contractors, but long-standing industry relationships may make enforcement difficult.
VANCOUVER, BRITISH COLUMBIA, CANADA, October 22, 2026 /EINPresswire.com/ — The province’s Construction Prompt Payment Act, which received Royal Assent in November 2025 but hasn’t been activated yet, was designed to accelerate payment timelines and streamline dispute resolution. However, Ada P. Lam, principal lawyer at Lam Legal – Trial Lawyers, suggests the law’s real-world impact may hinge on whether smaller contractors feel empowered to assert their new legal rights without jeopardizing their livelihoods.
Payment delays have long plagued smaller contractors and subcontractors, who sometimes wait 60, 90 or even 120 days for payment while still covering labour, materials and operating expenses. “For smaller contractors, waiting months to get paid can create serious cash-flow problems,” says Lam. “They’re still expected to pay their employees and suppliers, and often to keep working on the project. Essentially, they can end up financing construction projects out of their own pockets.”
How the new payment timelines will work
Under the new legislation, owners generally must pay contractors within 28 days of the invoice date, which is defined as the date a “proper invoice” is submitted to the owner. Further down the contractual chain, contractors generally must pay subcontractors within seven days of receiving payment, and subcontractors must pay their own subcontractors within another seven days. The law also introduces interim adjudication, a dispute resolution mechanism designed to settle payment conflicts much faster than traditional court proceedings. The prompt payment regime will operate alongside the Builders Lien Act, including its statutory holdback requirements.
Why relationship concerns could weaken enforcement
Lam welcomes the changes but worries that commercial dynamics could complicate their implementation. “A subcontractor might depend on a developer for work on three or four different projects,” Lam explains. “If that developer is late making a payment, the subcontractor has to decide whether pushing for payment is worth potentially damaging that relationship.”
That concern isn’t hypothetical. A 2022 survey by the Construction Design Alliance of Ontario found that 42% of respondents who were unwilling to consider adjudication cited worries about damaging business relationships. The findings suggest comparable challenges could emerge in BC.
Another potential obstacle involves written agreements with supplementary conditions that attempt to preserve existing payment terms. Lam says she has anecdotally heard of contractors in other prompt payment jurisdictions complaining about owners or developers trying to circumvent the legislation. As currently set out in the Act, any contractual attempt to waive or override the Act’s protections is void.
Strict deadlines could create new friction points
Lam also anticipates companies struggling with administrative deadlines, particularly the requirement for owners to provide written notices of non-payment within the prescribed period. “What happens when an owner has legitimate concerns about the work but issues its notice of non-payment late?” Lam asks. “That’s the kind of situation where the parties may have to decide whether to insist on strict compliance or accommodate the delay to preserve their working relationship.”
Despite these obstacles, Lam believes the legislation could ultimately benefit construction industry participants by encouraging fair and timely payment. “Owners and developers don’t want projects stopping because of payment disputes either,” she says. “If the industry as a whole gets behind prompt payment, I think everyone stands to benefit.”
Lam’s full commentary, Will BC’s Prompt Payment Act Actually Work? A Construction Lawyer’s Perspective, examines the challenges of implementing the legislation and what contractors, subcontractors and developers should consider before it takes effect.
About Lam Legal
Lam Legal is a British Columbia litigation law firm based in Vancouver, providing legal representation in business and commercial disputes, construction litigation and estate litigation.
Herman Cheng
Lam Legal – Trial Lawyers
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Why it matters: The success of BC’s prompt payment legislation will depend not just on its legal framework but on whether contractors are willing to enforce their rights in an industry built on relationships. If fear of retaliation keeps subcontractors from using the new protections, the law could fall short of its promise — and the cash-flow problems that have long plagued smaller players may persist.
