Federal Prompt Payment for Construction Work Act

The proper invoice is a document that initiates payment for construction work. A contractor must provide Her Majesty or the service provider with a proper invoice within 28 days after the completion of the project. Once received, a notice of non-payment will be issued if any part of the payment cannot be made.

If not fully paid, contractors and subcontractors can request adjudication to determine disputes over non-payment. This process involves providing a notice of adjudication, which must include details about the dispute, requested payments, and proposed adjudicators. The Adjudicator Authority maintains a list of eligible adjudicators for selection.

Interest will accrue on unpaid amounts, starting from the time limit for payment or contractually stipulated periods. Holdbacks are also permitted under specific conditions, with maximum limits tied to provincial construction laws.

The flow of payments within the subcontracting chain is as follows:

• Contractors must pay subcontractors 35 days after receiving a proper invoice.
• Subcontractors must pay further subcontractors 42 days after receiving payment from their immediate contractor.
• Payments are distributed on a rateable basis, with any necessary holdbacks applied according to contract terms or provincial construction laws.

Each party in the chain may decline payments if they receive notice of non-payment and can inform subcontractors about deadlines and notices. Disputes over non-payments can be resolved through adjudication, initiated by providing a notice of adjudication that outlines details of the dispute, requested payment, proposed adjudicator, and other required information.

Interest on unpaid amounts will accrue starting from the time limit for payment or contractually stipulated periods. Holdbacks may also be applied under specific conditions, with maximum limits tied to provincial construction laws.