Federal Prompt Payment for Construction Work Act (S.C. 2019, c. 29, s. 387)

Marginal note:Duty to pay

• 10 (1) A contractor that is paid by Her Majesty or a service provider under subsection 9(2) must, no later than the 35th day after the day on which the proper invoice is received by Her Majesty or a service provider, pay each of its subcontractors for the construction work that they invoiced and that was covered by the proper invoice and paid for by Her Majesty or the service provider.

• Marginal note:Partial payment

  (2) For the purposes of subsection (1), if the contractor is only paid in part, it must distribute the amount received from Her Majesty or the service provider in the following manner:

  • (a) on a rateable basis, the contractor must pay any of its subcontractors whose construction work is not covered by a notice of non-payment provided under subsection 9(3) and may retain any amount owed to the contractor by Her Majesty or the service provider for any of the contractor’s own construction work that is not covered by such a notice; and

  • (b) then, from any remaining amount and on a rateable basis, the contractor must pay any of its subcontractors whose work is partly covered by a notice of non-payment provided under subsection 9(3) and may retain any amount owed to the contractor by Her Majesty or the service provider for any of the contractor’s own construction work that is partly covered by such a notice.

• Marginal note:Non-payment

  (3) Despite subsection (1), the contractor may decline to pay for some or all of the construction work if, no later than the 28th day after the day on which the proper invoice is received, the contractor provides the subcontractor with a notice of non-payment.