Prompt Payment Act comes into force to address construction industry concerns about timeliness of payments

The Prompt Payment Act came into force in December 2023, to help address concerns about the timeliness of payments from construction industry professionals.

Photo by Ono Kosuki from Pexels

The federal government announced in December 2023 that under legislation, the federal government will now have 28 days to pay after contractors submit a proper invoice.

The federal government’s release states that the contractor will then have seven days to pay its subcontractors and subcontractors will have another seven days to pay their subcontractors.

Following the announcement, the Canadian Roofing Contractors Association (CRCA) released a statement welcoming the news.

“It was a long time coming, after many years of work and the 2019 Royal Assent of the Federal Prompt Payment for Construction Act, we can finally say it has now come into force” said Jim Facette, Executive Director of the Canadian Roofing Contractors Association (CRCA) in a statement. “Many people, including Senator Don Plett and Minister Duclos, worked hard to get
us where we are today, a place that assures roofing contractors will be paid on time for federal government construction programs.”

The Canadian Institute of Quantity Surveyors (CIQS) also released a statement welcoming the enactment of the Federal Prompt Payment for Construction Work Act by the Honourable Jean-Yves Duclos, Minister of Public Services and Procurement.

“This legislation is a crucial step towards fostering a fair and transparent construction industry,” said CIQS. “The new regulations will address long-standing challenges related to delayed payments, providing much-needed relief to contractors, sub-contractors, and suppliers across the country. We believe that this positive step will have a lasting impact on the construction sector, benefitting all stakeholders involved.”

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