Short answer: wash the cedar, let it dry, scrape and sand anything loose, replace or epoxy soft wood, prime bare spots with a stain-blocking primer, caulk after priming, then two coats. In Vancouver the step people skip is waiting for the wood to actually dry.
Table of Contents

Western red cedar is the most common exterior wood on the houses we paint - siding, shingles, soffits, fascia and trim. It is stable and rot-resistant, but it has two habits that ruin paint jobs: it bleeds tannins, and it soaks up water. Siding, shingles and fascia appear in most of our exterior quotes, so this is the prep we do more than any other.
1. Wash first
Every exterior job we quote starts with a wash to the MPI standard for repainting. In our climate the north side of a house is usually green - mildew and algae. Paint over it and it grows back through the new coat. We wash, rinse, and treat mildew where we find it.
2. Let it dry - properly
Cedar holds water. After washing, or after a wet week, we give it dry days before primer goes on. Painting damp cedar is the fastest way to get blistering by next summer. In Vancouver this is why most exterior painting runs from late spring to early fall.
3. Scrape, sand and feather
Loose paint comes off with scrapers, then edges are sanded so the old paint feathers into the bare wood. The standard we write into our proposals is a basic level of prep - remove what is loose, sand what is rough, so the new coat sits on something sound. If you want a near-perfect surface on old siding, that is a different, slower level of prep and it is priced as such.

4. Fix soft wood before you paint it
Push a screwdriver into suspect spots - sills, the bottom of boards, around windows. Soft wood gets cut out and replaced, or filled with two-part epoxy if the board is otherwise sound. On a Kitsilano strata we repaired the siding with epoxy instead of replacing boards, and replaced the rotting caps with new ones primed on all six sides. See that job.
5. Prime with a stain-blocking primer
Bare cedar needs a primer made to block tannins. Without it, brown streaks show through light colours within weeks, especially after rain. New boards get primed on all sides and cut ends before they go up.
6. Caulk after priming
Caulk sticks better to primed wood, so we caulk joints, corner boards and window casings after the primer. We do not caulk the bottom laps of siding - that is where water needs to get out.
7. Two coats, in the right weather
Our exterior spec is two coats: a spot coat where the primer went, then a full top coat. Most of our exterior work uses Sherwin-Williams Duration or Benjamin Moore Aura. Most latex paints should not go on below 10°C; Duration is rated down to 2°C, which helps in shoulder season - but the wood still has to be dry.

Shingles are different
Cedar shingles have a lot more edges and gaps than lap siding. They take longer to prep and to coat, and a brush gets paint into the butt ends better than a roller. If you are pricing shingles against lap siding, expect the shingles to cost more per square foot.
Painting new cedar
Do not leave new cedar to grey for a season before painting - sunlight breaks down the surface fibres and the paint has less to grip. Prime it within a few weeks of installation, and scuff smooth, shiny faces so the primer bonds.
Frequently asked questions
How long should cedar dry after rain before painting?
At least a dry day or two in summer, longer in spring and fall. If the wood feels cool and damp, wait.
Can you paint cedar with latex?
Yes, over a stain-blocking primer. A good acrylic topcoat flexes with the wood better than oil.
Do I have to remove all the old paint?
No. Loose paint must come off and edges must be feathered. Sound paint stays.
Why is brown showing through my new white paint?
Tannin bleed from cedar that was not primed with a stain-blocking primer, or was painted while wet.