How Recent Developments are Impacting the Canadian Construction and Infrastructure Sector
Updated on: April 30, 2025
The Canadian construction and infrastructure sector is witnessing significant transformations thanks to a wave of new legislation aimed at enhancing payment practices and resolving disputes efficiently. At the forefront is the introduction of prompt payment and adjudication laws, which seek to alleviate prevalent payment delays faced by contractors and subcontractors. This article provides an overview of these crucial developments across various Canadian provinces, examining their implications and anticipated results.
Legislative Developments: A Regional Overview
Ontario
Ontario spearheaded these changes with revisions to the Construction Act (formerly the Construction Lien Act), effective October 1, 2019. Under the prompt payment regime, owners must pay contractors within 28 days or contest non-payment within 14 days, providing clear reasons. Contractors must also pay subcontractors within seven days.
Adjudication, a quick dispute resolution option, is similarly facilitated. Mandated to occur before contract completion unless agreed otherwise, adjudication in Ontario is overseen by the Ontario Dispute Adjudication for Construction Contracts (ODACC). The anticipated Bill 216, Building Ontario For You Act, amends this act further by allowing parties to choose private adjudicators and expanding the adjudication window.
Nova Scotia
Nova Scotia’s legislative changes, namely the Builders’ Lien Act (amended), received royal assent on April 12, 2019; however, the provisions are not yet in force. Once enacted, it will rebrand the current lien legislation to the Builders’ Lien and Prompt Payment Act, aligning some of its terms with Ontario’s prompt payment laws while adopting a more restricted adjudication approach.
Saskatchewan
The Builders’ Lien (Prompt Payment) Amendment Act, 2019, and Builders’ Lien Amendment Regulations, 2020, introduced a parallel regime to that of Ontario, effective March 1, 2022. The Saskatchewan Construction Dispute Resolution Office (SCDRO) is tasked with overseeing adjudication, providing stakeholders in construction with essential tools for resolving disputes.
Alberta
Alberta enacted its Builders’ Lien (Prompt Payment) Amendment Act, 2020, effective August 29, 2022. This legislation marks a significant reform, mandating monthly billings and reforms to the lien registration periods. Unlike Ontario, Alberta requires invoices to be issued no less frequently than every 31 days. Only certain provisions apply to public works, reflecting a tailored approach to risk management across various contracts.
British Columbia
In British Columbia, exploration of prompt payment legislation is ongoing, highlighted by a report from the British Columbia Law Institute identifying 86 recommendations for clarifying the Builders Lien Act. Initiatives are underway to engage stakeholders through consultations aimed at facilitating a prompt payment structure.
Manitoba
Manitoba is set to join the movement with its Builders’ Liens Amendment Act (Prompt Payment), coming into force on April 1, 2025. This new framework introduces prompt payment and adjudication regimes for new contracts and subcontracts, reinforcing timely payment practices and providing for disputes resolution mechanisms.
New Brunswick and Quebec
New Brunswick is also making strides with the Construction Prompt Payment and Adjudication Act, received royal assent in June 2023. In Quebec, facilitation of prompt payment is linked to pilot projects showcasing effective dispute resolution, leading to recommendations that reinforce timelines for payments and establish third-party resolution mechanisms.
Federal Level
On a national scale, the Federal Prompt Payment for Construction Work Act came into effect on December 9, 2023. Addressing non-payment for contractors on federal projects, this act mandates strict compliance timelines, potentially impacting ongoing contracts with its one-year deferral period provision.
Preparing Your Organization for Change
Amidst these transformative developments, it is crucial for organizations within the construction sector to proactively adapt. By staying informed and engaging legal experts, stakeholders can mitigate risks associated with sudden legislative changes that could disrupt project performance.
Osler’s National Construction and Infrastructure Group, recognized for its expertise, offers a suite of services tailored to help organizations transition seamlessly to new prompt payment legislations. Some key offerings include:
- Osler Review: Comprehensive evaluations of existing contracts to ensure compliance with the latest amendments.
- Osler DIY: Online resources for self-managing key payment deadlines and notices.
- Learn from Osler: Training to establish a “playbook” for managing payment-related processes and dispute resolution.
- Osler Compare: Tools to contrast existing and newly proposed legislation provisions.
- Osler Support: Specialized assistance in navigating adjudications, arbitration, and litigation.
In conclusion, the evolving landscape of the Canadian construction and infrastructure sector necessitates that organizations remain agile, informed, and strategically positioned to manage new legal realities while continuing to thrive in their projects. With effective preparedness, stakeholders can not only adapt but also leverage these changes for smoother operations and enhanced collaboration across the industry.
