New Brunswick Prompt Payment Law Passed in 2023, Still Not Enforced — And Contractors Are Paying the Price

New Brunswick Prompt Payment Law Passed in 2023, Still Not Enforced — And Contractors Are Paying the Price

According to the Daily Commercial News, New Brunswick’s prompt payment legislation passed into law in June 2023 but remains unenforceable more than two years later, with no firm implementation timeline and no draft regulations released for public review. The Construction Association of New Brunswick (CANB) says the provincial government is dragging its heels, and the people paying the price are the small and medium-sized contractors waiting months to collect on completed work.

Background

Prompt payment legislation received Royal Assent in New Brunswick on June 16, 2023, following a sustained lobbying effort that drew support from all three of the province’s political parties, according to the Daily Commercial News. Despite that cross-party support, the act has not been brought into force.

CANB executive director John-Ryan Morrison told the publication that neither he nor other industry stakeholders have seen draft regulations, and there has been no formal public review process. While the province has suggested implementation is expected in 2027, a written statement from Jadesola Emmanuel, a communications officer with the department of justice and public safety, confirmed there is no timeline for full implementation, though draft regulations are expected to be released for public review in 2026.

The numbers behind the delay are stark. A recent CANB member survey found roughly 80% of respondents still experience late payments, and 51% report frequent or consistent delays. CANB’s own research puts the total amount owed to small and medium-sized contractors in New Brunswick at $165 million every month, for work already completed.

Morrison put it plainly: “It shouldn’t take three years to pass a piece of legislation that exists in six other provinces. We’re not trying to reinvent the wheel. There is a clear gap between government commitments and action, and a growing sense of frustration within the industry.”

Analysis

New Brunswick’s situation is a textbook example of a policy gap: the political will to pass legislation exists, but the administrative follow-through does not. Prompt payment frameworks are not novel in North America. In the United States, the federal Prompt Payment Act has governed federal contractor payments since the 1980s, and states including Texas have their own statutes, such as the Texas Prompt Payment Act under the Property Code, establishing enforceable timelines and interest penalties. Six Canadian provinces already have working frameworks as well, and Morrison points out that Nova Scotia’s model has been offered as a ready-made template that New Brunswick could align with, which would streamline implementation further. The fact that the province still hasn’t produced draft regulations after more than two years suggests something beyond ordinary bureaucratic slowness.

The economic consequences Morrison describes are concrete and compounding. When $165 million per month is locked up in unpaid invoices, that is capital that cannot be recycled into payroll, equipment, training, or bonding capacity. For a small contractor, a single large unpaid invoice can make it impossible to bid the next job. That is not a cash flow inconvenience; it is a business viability issue.

There is also a labor market dimension here. Morrison noted that at a time when it is already difficult to find contractors for available work, the payment environment makes the industry less attractive. Subcontractors operating on thin margins cannot absorb financing costs that should be the owner’s or general contractor’s responsibility. When the risk of slow payment is priced in, bids go up, project costs increase, and the problem ripples outward.

The province’s written response, that work is “ongoing” with no firm timeline, is precisely the kind of answer that erodes trust in regulatory commitments. If a government cannot implement legislation that already has working models next door, contractors are reasonable to conclude that formal legal protections are not something they can plan around.

What It Means for Subcontractors

This article addresses a Canadian provincial issue. US-based subcontractors should reference their applicable federal or state prompt payment statutes. For subcontractors operating in New Brunswick right now, the practical reality is straightforward: the law on the books does not protect your cash flow yet. Plan accordingly.

• Don’t assume the law protects you. Prompt payment legislation in New Brunswick has no enforcement mechanism yet. Until regulations are finalized and the act is brought into force, you have no statutory right to trigger adjudication or claim interest on late payments under this framework.

• Tighten your contract language now. In the absence of statutory protection, your payment terms, dispute escalation clauses, and interest provisions in your own contracts carry all the weight. Review them with legal counsel and make sure they are enforceable.

• Track your receivables with the same discipline you track your schedule. The CANB survey found 51% of contractors experiencing frequent or consistent delays. If you are in that group, the problem is structural, not a one-off. Build your cash flow projections around realistic collection timelines, not invoice due dates.

• Know your lien rights. New Brunswick’s Construction Lien Act remains your most immediate statutory tool for securing payment on completed work. Lien deadlines are strict and unforgiving. Missing them can eliminate your only legal leverage.

• Engage your association. CANB’s advocacy pushed this legislation across the finish line once. Industry pressure is the most direct way to accelerate the regulatory process. If you’re a member, make sure your experience is captured in any formal consultation when draft regulations are released.

• Price the payment risk into your bids. Until enforcement arrives, the financing cost of carrying unpaid receivables for 60, 90, or 120 days is a real project cost. If your bid assumes prompt payment and you don’t receive it, you’re effectively subsidizing your