How fast must a construction invoice be paid in Ontario?
Under the prompt payment provisions of the Construction Act, an owner must pay a contractor's proper invoice within 28 days of receiving it, unless the owner delivers a valid notice of non-payment within 14 days. A contractor must then pay its subcontractors within 7 days of being paid.
What is a 'proper invoice'?
A proper invoice is a written bill that contains the information required by the Construction Act (and any contract requirements), such as the contractor's name and address, the period and description of work, the amount, and payment terms. The 28-day clock starts when a proper invoice is submitted.
What interest applies to late construction payments?
If payment is late, interest accrues at the greater of the rate specified in the contract and the prejudgment interest rate under the Courts of Justice Act. The prompt payment regime is designed to make late payment expensive for owners and general contractors.
What is a notice of non-payment?
If an owner disputes all or part of a proper invoice, it can refuse to pay by delivering a notice of non-payment within 14 days specifying the amount not being paid and why. Amounts not disputed must still be paid within the 28-day window.