Prompt payment is the statutory framework introduced into Canadian construction law to fix the slow-payment problem that contractors and subcontractors face. It sets fixed maximum periods within which a payer must pay a proper invoice or issue a notice of non-payment. In Ontario, the owner has 28 days to pay the general contractor after receiving a proper invoice. The GC then has 7 days to pay subcontractors after receiving the owner's payment. Saskatchewan went live with prompt payment on March 1, 2022; Alberta on August 29, 2022; New Brunswick on April 1, 2022; Manitoba on April 1, 2024 (Bill 38). British Columbia's Construction Prompt Payment Act received Royal Assent November 27, 2025 and awaits proclamation. Atlantic provinces other than NB have no prompt-payment regime in force.
Why it matters to Canadian contractors
- Before prompt payment, payers could withhold payment indefinitely with no statutory deadline. Subcontractors at the bottom of the chain often waited 90 to 180 days for routine work.
- Prompt payment is mechanism, not outcome: it gives you a clock and an enforcement mechanism (adjudication), but you still have to invoice correctly and follow up.
- The clock only starts on a proper invoice. A non-qualifying invoice gives you no protection at all under the rule.
- Each province's regime has its own deadlines, dispute windows, and adjudication procedures. The Ontario 28-day rule is the most-cited template, but the rules differ in BC, AB, SK, MB, and NB.
Common mistakes and pitfalls
- Many contractors assume prompt payment applies everywhere in Canada. It does not: BC, NS, NL, PE, NT, NU, and YT have no regime in force as of 2026.
- The 28-day clock is owner-to-GC. Downstream subs are paid via a 7-day passthrough after the GC receives payment, not 28 days from the sub's invoice date.
- If a payer disputes any portion of an invoice, they must issue a notice of non-payment within 14 days (ON). The undisputed amount must still be paid on the 28-day clock; only the disputed portion may be held back.
- Prompt payment does not override your contract. If your contract has milestone-based billing, the clock starts only on each milestone's proper invoice.
- Adjudication is fast (30 to 50 days typically) but binding only on an interim basis. The losing party can still litigate the underlying dispute through normal courts.
Related
- Ontario Construction Act guide→
- Glossary: Proper invoice→
- Glossary: Adjudication→
- Glossary: Notice of non-payment→
This glossary entry is for general information only and does not constitute legal or tax advice. Canadian tax and construction law rules vary by province and contract. For advice specific to your situation, consult a licensed professional.