Category: Economy

Key Takeaways:

• On Nov. 25, 2024, president-elect Trump proposed tariffs of 25% on all Canadian and Mexican imports to the United States, and an additional 10% on imports from China.
• Premier David Eby has met with several state governors and impressed upon them the devastating impacts tariffs would bring on both sides of the border. He and other premiers will travel to Washington, D.C., on Feb. 12 to continue to make the case against unjustified tariffs for all Canadians.
• The ministry’s preliminary assessment is based on internal planning assumptions, including that a 25% U.S. tariff would remain in place for the duration of the Trump presidency and that Canada retaliates as well as key economic indicators and inputs, including economic activity, trade, the labour market and demographics.

The Whole Story:

How much are 25% tariffs on all Canadian imports going to cost British Columbians?

The province has done a preliminary assessment of potential impacts to the B.C. economy.

In president-elect Donald Trump’s tariffs scenario, B.C. could see a cumulative loss of $69 billion in economic activity between 2025 and 2028. The province’s real GDP is projected to potentially decline by 0.6% year over year in both 2025 and 2026.

Job losses are estimated at 124,000 by 2028 with the largest declines in natural-resource sector export industries and associated manufacturing. Losses would also be felt in the transportation and retail sectors. The unemployment rate could increase to 6.7% in 2025 and 7.1% in 2026, and corporate profits could see an annual decline in the range of $3.6 billion to $6.1 billion.

Tariffs imposed by the United States, along with potential retaliatory measures, could impact many of the p rovince’s key revenue streams, such as personal and corporate income taxes. Preliminary analysis indicates this could reduce annual revenues by between $1.6 billion and $2.5 billion.

Officials noted that the preliminary assessment, done by the Ministry of Finance, is one of many possibilities as there is considerable uncertainty about the exact nature, magnitude and timing of United States policies that may be implemented.

In 2019, the Bank of Canada estimated the impacts of a 25% tariff. National Bank recently reported that the Bank of Canada’s estimate of the Canadian GDP impact “would exceed that of any previous recession, barring the temporary setback at the onset of the COVID-19 pandemic.”

To prepare, the province plans to use a three-part strategy: respond, strengthen and diversify.

To respond to these tariffs, B.C. is engaged in contingency planning across government and will participate in nationally co-ordinated retaliation if and when required. B.C. aims to strengthen its domestic position by growing the economy to create high-paying jobs to generate the wealth needed to support people through strong public services, such as health care and education. This includes fast-tracking permitting in B.C. and reducing trade barriers between provinces. Lastly, B.C. will focus on diversifying its trade relationships, using the Asia-Pacific network to become less reliant on exports to the United States.

Key Takeaways:

• GFL Environmental Inc. is selling its Environmental Services business to Apollo Funds and BC Partners for an enterprise value of $8 billion. GFL will retain a 44% equity interest, expecting$6.2 billion in net cash proceeds after equity retention and taxes.
• GFL plans to allocate up to $3.75 billion of the proceeds to repay debt, reducing its net leverage to 3.0x.
• This will cut annual cash interest expenses by approximately $200 million, enhance free cash flow, and support share repurchases, dividend increases, and growth investments.

The Whole Story:

GFL Environmental Inc. announced that it has entered into a definitive agreement with funds managed by affiliates of Apollo and BC Partners for the sale of its Environmental Services business for an enterprise value of $8 billion.

GFL will retain a $1.7 billion equity interest in the Environmental Services business and expects to realize cash proceeds from the transaction of approximately $6.2 billion net of the retained equity and taxes.

GFL intends to use up to $3.75 billion of the net proceeds from the transaction to repay debt, making available up to $2.25 billion for the repurchase of GFL shares, subject to market conditions, and the balance for transaction fees and general corporate purposes. Net Leverage, pro forma for the planned use of proceeds, is expected to be 3.0x.

“The sale of our Environmental Services business at an enterprise value of $8 billion is substantially above our initial expectations and is a testament to the quality of the business that we have built,” said Patrick Dovigi, Founder and Chief Executive Officer of GFL. “The transaction will allow us to materially delever our balance sheet which will accelerate our path to an investment grade credit rating. A deleveraged balance sheet will provide ultimate financial flexibility to deploy incremental capital into organic growth initiatives and solid waste M&A and allow for a greater return of capital to shareholders through opportunistic share repurchases and dividend increases, while maintaining a targeted Net Leverage in the low 3’s.”

Dovigi continued, “The transaction allows us to monetize the Environmental Services business in a tax efficient manner while retaining an equity interest that will allow us to participate in what we expect to be continued value creation from these high-quality assets. In addition, GFL will maintain an option, not an obligation, to repurchase the Environmental Services business within five years of closing.”

He explained that the repayment of debt is expected to reduce GFL’s annualized cash interest expense by approximately $200 million, resulting in significantly improved free cash flow conversion.

The company plans to provide more details on the financial impact of the transaction when it reports its 2024 full year results in February and hosts its Investor Day on February 27 at the New York Stock Exchange.

“After a long, robust and highly competitive process, we are excited to have selected the Apollo Funds and BC Funds to partner with on this transaction,” Dovigi concluded. “We have a long-standing relationship with BC Partners, to whom we have delivered significant returns on their capital. We also look forward to working with Apollo, a leading alternative asset manager, with deep expertise and a demonstrated track record of value creation for its stakeholders.”

Craig Horton, Partner at Apollo stated that GFL Environmental Services is a leading North American provider of increasingly essential industrial and waste management services, with a broad customer base and exposure to attractive and growing end markets. \

“We believe this transaction will provide the Environmental Services business with greater flexibility to pursue organic and inorganic growth opportunities as an independent business, while also taking advantage of the strategic, value-added resources and structuring capability of the Apollo platform,” said Horton. “This is a great example of partnership capital from the Apollo Funds, including our Hybrid Value and Infrastructure strategies, and we look forward to working with the talented management team as well as GFL and BC Partners to accelerate growth and drive value creation.”

Paolo Notarnicola, Partner and Co-Head of Services at BC Partners noted that their long and successful relationship with Patrick and the GFL team underlines BC Partners’ true partnership approach, supporting entrepreneurial leaders at high-growth businesses in defensive sectors to scale and grow.

“Under Patrick’s leadership we have seen GFL’s Environmental Services business grow from a small franchise in Ontario in 2018 to a leading operator with over $500 million in Adjusted EBITDA,” said Notarnicola. “Going forward, we are excited about the growth potential of this business, which is best placed to capitalize on the significant consolidation opportunity in the environmental services industry, including further expansion in the United States. In addition, we look forward to working with the management team of GFL Environmental Services and our partners at GFL and Apollo to accelerate the delivery of the margin-enhancing and growth opportunities we have identified together.”

Pursuant to the Transaction Agreement, GFL will retain a 44% equity interest in the Environmental Services business and the Apollo Funds and BC Funds will each hold a 28% equity interest. The Transaction is expected to close in the first quarter of 2025 and is subject to certain customary closing conditions. The Transaction is not subject to any financing conditions.

Key Takeaways:

• Canada’s construction sector is anticipated to recover from a 3.1% output decline in 2024, growing at an annual average rate of 2.2% from 2025 onward.
• This growth will likely be driven by government investments in transport, renewable energy, healthcare, education, and a gradual recovery in the residential market.
• Declining interest rates, stabilizing inflation, and increased efforts to recruit younger workers have improved the sector’s outlook. However, uncertainties such as economic volatility, geopolitical tensions, and fluctuating market conditions continue to pose risks, particularly in financing new housing projects and addressing supply chain disruptions.
• The return of Donald Trump as U.S. President and related trade policies, such as a threatened 25% tariff on Canadian imports, could severely impact Canada’s economy and the construction sector.
• Additionally, geopolitical challenges, including war in Ukraine, tensions in the Middle East, and the renewal of the Canada-U.S.-Mexico trade agreement in 2026, add layers of uncertainty to the industry’s future.

The Whole Story:

Is Canada’s construction sector on track to soar in 2025 or crash and burn?

As we peer into the future, some experts believe a rebound is on the horizon. But others feel the next 12 months will be a mixed bag of growth and risk. However, all agree that our neighbours down south will play a large role. 

Here are some of the key themes experts have their eyes on for the coming year:

Donald Trump and the U.S.

Don’t expect to see incoming president Donald Trump disappear from headlines anytime soon. All construction experts we spoke with cited the U.S. as a huge factor for 2025.

Jock Finlayson, Chief Economist with the Independent Contractors and Businesses Association (ICBA), had this to say about Trump: 

“Should he carry forward with the threat to levy a 25% across-the-board tariff on all goods imported from Canada (and Mexico), the Canadian economy will quickly be catapulted into a recession. Looking a little further ahead, the Canada-U.S.-Mexico trade agreement (CUSMA) is up for renegotiation/renewal in 2026.  That, too, represents a risk for Canada, as with Trump in the White House there is a chance the agreement itself could be scrapped.”

Canadian Construction Association President Rodrigue Gilbert also expressed concerns about developments in U.S. politics. 

“It’s hard to not focus on the American election and the impact this will have on our industry. With just a few weeks before his inauguration, President Trump has been able to create uncertainty, economic disruption and sow division amongst our governments,” he said. “Between tariffs, border management, a nationalistic economic policy, it’s safe to say the Canadian Government was not prepared and it affected our industry. We are hopeful that this will be handled in the new year and that the effect on Canada’s construction industry will be minimal.”

Interest rates

Interest rates have been a ray of sunshine during 2024 and experts believe the warmth could continue into 2025. 

“Over the past 18 months, the construction sector has benefited from several positive developments,” said Bill Ferreira, Executive Director of BuildForce Canada. “One of the most significant has been the steady decline in interest rates, which has started to ease financing pressures on new projects and investments.”

Finlayson called it the main reason for optimism about the economic environment in the coming year. 

“This should be helpful in setting the stage for increased investment across all segments of the construction business – homebuilding, the industrial sector, engineering infrastructure, etc.,” he said. “The outlook for new office development is less favourable, given the stickiness of the work-from-home phenomenon and significantly higher office vacancy rates in many cities.” 

However, Linesight Executive Vice President Patrick Ryan noted that while decreased construction activity in some sectors has alleviated demand temporarily, a potential rise in activity due to falling interest rates could push labor costs back up. Regions with significant high-tech and mission-critical projects still struggle with a lack of skilled labor, particularly in the MEP trades.

Rebounding

Linesight anticipates the residential sector is to rebound in 2025, supported by lower interest rates and government initiatives aimed at reducing the housing deficit. These include affordable housing programs, tax incentives like the removal of the Goods and Services Tax on new rental projects, and significant investments to increase the housing stock. 

From 2025 onwards, the construction industry is expected to recover and grow at an annual average rate of 2.2%. This growth will be fueled by substantial government investments in transportation infrastructure, renewable energy projects targeting carbon neutrality by 2050, and the expansion of healthcare and educational facilities. The largest infrastructure project in the pipeline is the US$17bn Alberta to Alaska rail line development project.

Some believe this recovery will be slow to pick up steam. 

“It will take time for companies to get settled again, and not only feel more confident in the market – but start executing in a way that reflects that confidence,” shares Raymond Wong, Vice President of Client Delivery at Altus Group. “Canada is facing a significant challenge on the employment side, and I think that will take some time for the labour market – and the economy at large – to reflect the positive impact of the rate-cutting cycle.”

Labour unrest 

In 2024, Canada experienced significant labour unrest, with major strikes affecting postal services and ports. The Canada Post strike, which began on November 15 and lasted 32 days, involved approximately 55,000 postal workers demanding better wages and working conditions. It ended on December 17 after government intervention. 

Concurrently, port strikes hit Canada’s major maritime hubs, with lockouts at the Ports of Montreal and Vancouver starting in early November. These disputes involved dockworkers, the Maritime Employers’ Association, and the International Longshoremen’s Association, centering on issues of scheduling and wage increases. The strikes at Canada’s two busiest ports, along with actions at East Coast terminals, severely disrupted supply chains. On November 13, Labour Minister Steve MacKinnon ordered the Industrial Relations Board to intervene, citing daily economic impacts of $1.3 billion. These labour disputes significantly disrupted Canada’s postal and port operations.

With the rise of artificial intelligence threatening to shrink some industries and the overall challenging economic climate, it is likely that we could see more labour unrest going into 2025. And depending on which sector its in, major supply chains could be impacted. 

Optimism

Despite the challenges and uncertainty ahead, many experts believe builders will rise to meet them.

“2025 is gearing up to be another interesting year,” said Gilbert. “With our neighbours to the south welcoming a new (old) President to the White House and as we prepare for the certainty of a federal election here at home, I’m optimistic because I know that no matter the challenges ahead, our industry is resilient, ready and willing to work.

He also noted that there is significant momentum within the Canadian government to finally tackle real challenges, like workforce and the reduction of red tape, which will allow the industry to build the infrastructure and projects Canadians need.

Key Takeaways:

• Tla’amin Nation is set to reacquire nearly half of the former mill site at tiskwat.
• The Asset Purchase Agreement (APA) between Tla’amin Nation and Domtar includes provisions for Tla’amin to assume responsibility for maintenance, taxes, and insurance upon ownership. The Nation is prioritizing archaeological and environmental stewardship, with Domtar expressing commitment to collaborative solutions and respect for Tla’amin interests.
• Extensive community engagement showed overwhelming support (94%) among Tla’amin citizens for the reacquisition, with youth support even higher at 97%.

The Whole Story:

Following nearly two years of due diligence and negotiations, Tla’amin Nation is set to reacquire close to half of the former mill site at tisk^wat.

The Nation stated in a release that the reacquisition will come 146 years after the lands were alienated from the Nation through the illegal sale of Lot 450 in 1878 and one year after the federal government accepted Tla’amin’s specific claim for Lot 450 for negotiation.

Last month, Tla’amin Nation and Domtar initialed an Asset Purchase Agreement (APA). The agreement is subject to approval by Tla’amin Executive Council within 60 days.

Under the terms of the APA, Domtar (formerly Paper Excellence) will return the lands to Tla’amin for the Nation’s use. Tla’amin will assume responsibility for carrying costs such as maintenance, taxes and insurance upon taking ownership. 

“This agreement is a step in the right direction for us to regain our rightful place at tisk^wat,” said Hegus (Chief) John Hackett. “We will continue to work with Domtar and Brookfield to protect Tla’amin archaeological and stewardship interests across the entire site.”

Sixteen parcels comprise the 120 acres of Tla’amin reacquisition lands. The reacquired lands primarily front the river and ocean and are among the least industrialized areas at tisk^wat. Notably, Tla’amin assumes responsibility for most of the riverfront lands. However, the reacquisition does not include the dam, which is encumbered by a bare land trust between Domtar and Brookfield Power.

“We raise our hands in deep respect for the Tla’amin elected council and their staff for their collaboration in our ongoing work together,” says Lana Wilhelm, Director of Indigenous Relations, Domtar. “The entire Domtar team is deeply committed to working with the Tla’amin Nation to do the right thing. We continue to work on solutions for the entirety of the site.”

To build a negotiations mandate, Tla’amin Nation engaged its citizens through a series of six public engagement sessions and a survey conducted between October 2023 and May 2024.

94% of Tla’amin citizens who participated in the engagement process supported the reacquisition of tisk^wat, with support among youth even higher at 97%. At the same time, 98% of Citizens were concerned about the environmental legacy at tisk^wat following a century of industrial activity. These concerns and risks are addressed in the agreement being presented to the community.

The Nation stated that the reacquisition of tisk^wat not only represents a historic step toward rectifying past injustices but also serves as a cornerstone of Tla’amin’s vision for economic prosperity.

Nation representatives explained that reacquisition lands will support Tla’amin Management Services LP’s (TMSLP) current business interests while creating opportunities for future development aligned with Tla’amin goals for employment, revenue generation, and sustainability.

The APA and accompanying business plan will be reviewed for recommendation by the Tla’amin Finance Committee and Tla’amin Economic Development Committee before being approved by Tla’amin Executive Council.

Pomerleau Capital Inc., the financial arm of Pomerleau Inc., has completed the second round of financing for its PCap Real Assets Fund L.P., raising the fund’s total value to over $200 million with support from CDPQ and six new financial partners. The fund, established in 2021, aims to reach $500 million and focuses on long-term investments in infrastructure, energy transition, and building projects across Canada, guided by ESG criteria.

Given the growing needs of communities, private enterprise has a vital role to play in financing the construction of sustainable infrastructure. We would like to thank the CDPQ for their renewed confidence, and the commitments of our six new partners. They are firmly rooted in the Québec business community and undertake major activities reaching right across Canada. Our PCap Fund now exceeds $200 million, strengthening our room for manoeuvre and diversifying our business opportunities.

Philippe Adam, Pomerleau CEO

Procore Technologies announced its acquisition of Edmonton-based Intelliwave Technologies during its Groundbreak 2024 conference, where it also unveiled new innovations, including its Resource Management system. This all-in-one solution integrates labour, equipment, and materials tracking with Procore’s AI Agents for enhanced visibility, forecasting, and risk management to boost productivity and profitability. The acquisition of Intelliwave adds its materials management software, SiteSense, to Procore’s platform, strengthening Resource Management’s capabilities for end-to-end control of project resources.

Bothwell Accurate Co. Inc. announced the amalgamation of itself and Glastech Glazing Contractors. The company said the move represented two industry leaders coming together to build a stronger future in construction and glazing services.

NuFrame Group has officially opened its NuFrame Panels facility in Chilliwack, B.C. Officials stated that new facility represents a major step forward for NuFrame and its commitment to quality, efficiency, and innovation in construction.

Quikrete plans to acquire Summit Materials in a deal valued at $11.5 billion. The transaction combines Summit’s aggregates, cement and ready-mix concrete businesses with Quikrete’s concrete and cement-based products business to create a vertically integrated, North American construction materials solution.

EllisDon Corporation and Impulse Partners have announced a successful second round of its ConTech Accelerator program. From over 165 submissions, 30 were selected as the top contenders. Following a series of interviews, representatives from the eight finalist startups traveled to EllisDon’s Mississauga office to pitch their innovative ideas in person. The ultimate winners were SALUS, EHAB and Specter Automation.

CustomAir, has successfully completed two acquisitions: Power Plus Electric Ltd. and assets of I.C.R. Air Inc. ICR strengthens CustomAir’s presence in the British Columbia interior, where the Company already has a significant foothold. Power Plus’ electrical expertise expands CustomAir’s core HVAC capabilities, positioning the company to address the increasing demand for decarbonization and electrification.

The growing demand for decarbonization and the shift away from fossil fuels for environmental comfort and process efficiency has accelerated the push towards electrification. CustomAir is at the forefront in developing electrically driven solutions as the main option for interconnected systems, making electrical expertise essential to delivering comprehensive services. With Power Plus’ expertise, we are well positioned to meet the evolving needs of our customers.

Peter Harteveld, CustomAir’s founder and CEO

Stack Modular has unveiled its rebranding. The company says its rebranding reflects its commitment to growth and cutting-edge technology. The rebrand features a new logo and updated visuals.

Our new brand is a testament to our unwavering commitment to innovation and excellence in modular construction. It reflects our journey, growth, and vision for the future. We’re excited to keep turning heads and transforming how the world builds.

Jim Dunn, CEO, Stack Modular

Aecon Utilities Group Inc. has announced it has acquired Ainsworth Power Construction (APC), which is an electrical services and power systems business unit of Ainsworth, headquartered in Toronto, from GDI Integrated Facility Services. APC’s management and operational teams are joining Aecon Utilities through the transaction. APC has over 80 employees and 80 years experience as a technical services contractor for electrical utility clients, primarily in Ontario.

CAI Capital Partners announced that its portfolio company, the Universal Group, and its related companies has successfully closed the acquisition of Barricades and Signs Ltd. Barricades, headquartered near Edmonton, Alberta, was founded in 2004 by Robert and Fran van Bruggen and has grown into a leading traffic control company with operations across Alberta, British Columbia, Manitoba, and Saskatchewan.

Coquitlam Ridge Constructors, Emil Anderson Construction, Conwest Contracting, Lafarge Canada, Yellowhead Road & Bridge (Fort George) and Cutting Edge Consulting have all recieved recognition for this year’s B.C. Transportation Contractor of they Year awards.

These awards are a spotlight on the tremendous contributions that construction and maintenance contractors make to life in British Columbia. By supporting our world-class highway system, they keep travellers safe, our communities connected and our economy strong. The stories behind this year’s winners point to the entire sector’s commitment to public service, effective partnerships and excellence in road construction and maintenance.

Mike Farnworth, Minister of Transportation and Transit

CIMA+ has acquired Vancouver-based Recollective Consulting, which specializes in sustainable site management strategies, green building guidelines, Leadership in Energy and Environmental Design (LEED) and zero-carbon building design. The acquisition expands CIMA+’s expertise in sustainable development and presence in British Columbia. Recollective has worked on more than 750 green buildings and completed more than 100 LEED certifications, more than 20 energy models and more than 75 embodied carbon analyses.

Falcon Equipment has partnered with RELAM Inc. as a new strategic equity partner. Officials noted that Falcon’s focus does not change. Its name, people, products and how it does things remains the same. They added that with RELAM as our long-term strategic partner, it is poised to supercharge growth and broaden market presence.”

ConstructionClock announced the successful completion of a $1 million pre-seed raise. ConstructionClock is an app that automatically clocks workers in and out of job sites based on their geo-location without ever taking out a phone or opening the app.

Key Takeaways:

• The MOU includes plans for three significant hydroelectric initiatives: the 2,250 MW Gull Island facility, a new 1,100 MW expansion near Churchill Falls, and a 550 MW capacity increase at the existing facility.
• The agreement ensures $1 billion annually for Newfoundland and Labrador starting in 2025 through dividends, water rentals, and energy sales.
• Construction plans emphasize respect for existing agreements with Indigenous communities and require meaningful consultation throughout the project lifecycle.

The Whole Story:

Newfoundland and Labrador and Quebec have signed a significant Memorandum of Understanding (MOU) to expand hydroelectric generation in Labrador, setting the stage for economic and energy benefits across both provinces. The agreement includes new contracts for the Churchill Falls facility and plans for additional projects that will deliver renewable energy for generations.

“Today represents a significant milestone for every Newfoundlander and Labradorian,” said Dr. Andrew Furey, Premier of Newfoundland and Labrador. “Over the life of the agreement, we will generate dividends to the province of more than $200 billion by 2075, have access to nearly four times the electricity we do today to support industrial growth in Labrador, and realize the development of Gull Island without the financial and construction risks.”

Quebec Premier François Legault praised the MOU as a “win-win” agreement.

“This agreement will generate savings of over $200 billion over 50 years,” he said. “It allows us to secure a major energy block for several generations while ensuring a price far lower than the alternatives. It will help us keep electricity rates as low as possible for Quebecers.”

Agreement Highlights

The MOU outlines two primary components:

1. New Contracts for Existing Churchill Falls Generation: Hydro-Québec will replace the current contract with payments to Churchill Falls (Labrador) Corporation (CF(L)Co) totaling $33.8 billion in net present value from 2025 to 2075. Energy prices will rise over time, linked to market indices.
2. New Generation Projects in Labrador: The agreement includes three major initiatives:
   • Gull Island Facility: A 2,250 MW hydroelectric project on the Churchill River.
   • Churchill Falls Expansion: A new 1,100 MW facility near the existing site.
   • Capacity Increase at Churchill Falls: Adding 550 MW to the current facility.

Hydro-Québec will also pay Newfoundland and Labrador Hydro $3.5 billion as an option payment for co-developing these projects. Combined revenues, including dividends and water rentals, are expected to bring $1 billion annually to Newfoundland and Labrador starting in 2025.

Renewable Energy for the Future

“This memorandum secures access for Quebec to a large quantity of renewable energy for 50 years at the lowest price possible,” said Michael Sabia, CEO of Hydro-Québec.

Energy costs from existing Churchill Falls generation will average 6 cents/kWh, with new developments priced at approximately 11 cents/kWh. The collaboration aims to support decarbonization while driving economic growth in both provinces.

Indigenous Engagement

The agreement emphasizes respect for existing agreements with Indigenous communities and commits to meaningful consultation throughout project development. Both provinces aim to ensure transparency and collaboration at every stage.

Path Forward

The MOU sets the foundation for detailed planning and project analyses, with construction expected to begin following permitting approvals. The existing Churchill Falls contract remains in force until definitive agreements are finalized.

“This agreement allows us to secure a major energy block for several generations,” said Premier Legault, underscoring the historic nature of the partnership.

Key Takeaways:

• The average tax burden on a newly constructed home in Ontario has risen to 36% of the purchase price, up from 31% just three years ago, driven largely by increased development charges. For an average new home costing $1,070,000, this translates to a tax burden of nearly $381,000, a 16% increase since 2021.
• The escalating tax burden significantly affects housing affordability, disproportionately impacting first-time buyers and lower-income households. For homes priced at $450,000—aligned with median household incomes—the tax burden rises sharply to 45.2%. RESCON says these high costs deter developers from investing in new projects, exacerbating Ontario’s housing crisis.
• RESCON says the data underscores the need for federal and provincial governments to provide more funding for municipal infrastructure to reduce reliance on development charges.

The Whole Story:

The average tax burden on a newly constructed home in Ontario has jumped to almost 36% of the purchase price, up from 31% just three years ago, a report commissioned by the Residential Construction Council of Ontario (RESCON) has revealed.

On the average price of a new home in Ontario, which is about $1,070,000, that means consumers are now paying nearly $381,000 in income taxes, corporate, sales and transfer taxes, and development charges and fees. The new number is a 16% increase over 2021 and highlights a troubling trend.

“These taxes are out of control and pushing the cost of new housing beyond the reach of most working families,” says RESCON president Richard Lyall. “The tax burden is significantly raising the price tag of a new home and directly contributing to the housing crisis we are facing by affecting the ability of developers to invest in new housing projects. This escalation presents substantial challenges to housing affordability and economic stability.

“The situation simply can not be allowed to continue. The huge increases have occurred over the last decade in large part because municipalities have hiked their development charges to pay for municipal infrastructure. The findings of this research indicate a critical need for the federal and provincial governments to get more involved in funding public infrastructure at local levels to support growth and ease the tax burden on housing in Ontario.”

The report, called Increasing Tax Burden on New Ontario Homes: 2024, was done by the Canadian Centre for Economic Analysis. Research revealed that the tax and fee burden on new homes continues to be more than twice that of the rest of the economy and governments now derive nearly four times more revenue from the sale of a new home than builders, further exacerbating the challenges faced by the residential construction sector.

According to the research, the tax and fee burden is significantly higher because of recent surges in development charges and the escalation presents considerable challenges for market stability. Of the total tax and fee burden on new housing, 70% consists of direct fees on the home, such as development charges and other fees, while the remaining 30% arises from indirect taxes paid during the development process, including income and corporate taxes paid during the ordinary course of a residential construction business.

Across the province, the tax burden varies by dwelling type and municipality. Rates in some jurisdictions are higher than the provincial average. In the GTA, excluding Toronto, the average tax and fee burden on a new home is 35.9%, a large apartment is 37%, and a small apartment is 36.9%. In Toronto, the average tax and fee burden on a new home is 35.1%, a large apartment is 34.2%, and a small apartment is 35.3%.

The system disproportionately affects first-time buyers and lower-income households. For homes priced at $450,000, an amount which aligns with what many households could afford based on median pre-tax household incomes, the average tax burden rises sharply to 45.2%. 

The report calls for immediate reform of the taxation and fee structures affecting new housing and notes there is a critical need for the federal and provincial governments to take a more active role in funding municipal infrastructure.

“Much of our economic success depends on a robust housing supply so it is critical that we address the tax burden,” says Lyall. “Municipalities lack the revenue streams to fund the infrastructure necessary for new housing and end up loading the cost onto new homeowners via development charges. This must change if we are to incentivize more homebuilding.”

Key Takeaways:

• The City of Vaughan has approved massive cuts to its development charges for residential developments, which historically were among the highest in the Greater Toronto Area (GTA).
• Overall reductions range from 88% to 92% across various residential types, translating into substantial cost savings for developers and potentially for homebuyers.
• Mayor Steven Del Duca emphasized that high development charges were an unfair tax burden on homebuyers, particularly affecting young families wanting to live near where they grew up.

The Whole Story:

The City of Vaughan has approved massive development charge reductions, which historically have been among the highest in the Greater Toronto Area. 

From 2009 to 2021, the city’s development charge rates increased by 229%, and, since 2018, rates have increased another 66%. 

For example, prior to the changes, the city’s published development charge rate for low-rise residential was $94,466. The new City development charge rate applicable to low-rise residential will now be $50,193.

This step, which comes following a Member’s Resolution from Mayor Steven Del Duca to find solutions to this housing crisis, positions the city to address affordability challenges and to make life easier, particularly for young families.

What is changing

The council-approved staff report calls for the following: 

• That staff revise the development charge rates on all residential development applications to the rates in effect on Sept. 21, 2018, until Nov. 19, 2029, through the use of section 27 agreements.
• That staff lower development charge rates on low-rise residential developments through the use of section 27 agreements.
• That staff initiate a new development charge background study and Development Charge By-law.
• That Council approve a new Development Charges Rate Reduction and Deferral for Residential Development Policy.
• That staff stop charging development charge interest on residential developments.

“Development charges have become an unfair tax burden on homebuyers,” said Mayor Steven Del Duca. “Too many of our residents, in particular young families in our community, have seen their dream of buying a home close to where they grew up, disappear completely as housing prices have spiraled out of control.  We have a housing affordability crisis and it’s time for us to get real about the solutions needed to solve it. Today’s decision by Vaughan Council to dramatically reduce our development charges for the foreseeable future is a strong step in the right direction. I urge other municipalities to follow our lead and do the right thing.”

How big are the cuts

These adjustments apply to various types of residential developments, including high rise, low-rise and mixed-use buildings. According to the City of Vaughan, the reductions, which range from 88% to 92%, translate into substantial cost savings: $44,273 for single-detached and semi-detached homes, $36,318 for multiples, and $28,092 and $20,243 for large and small apartment units, respectively.

The policy also suspends development charge interest on residential developments. This announcement from Vaughan is one of the most comprehensive and leading measures taken to address the cost to build and development charges. 

According to Building Industry Land Development Association (BILD), in the GTA, fees, taxes and charges from all levels of government account for almost 25 per cent of the cost of a new home for the new homebuyer.

Based on BILD’s 2024 Municipal Benchmarking Study, Vaughan’s municipally added fees and development charges on new homes had been the highest in the GTA. These new DC rate reductions by the City of Vaughan, effective as of November 19, 2024, will lower the city’s DC rate to well below comparable towns and cities in the region.

“BILD recognizes and commends Mayor Del Duca and the City of Vaughan for taking bold action to address housing supply and the cost to build by lowering development charges,” said Dave Wilkes, President and CEO of BILD. “This will enhance the financial viability of future projects, unlocking potential investment and stimulating supply.”

Canada’s construction and industrial sectors are buzzing with significant business moves and milestones. From hcma’s expansion into Calgary and SiteTechnology’s strategic acquisition of Quicktech to Corfix’s successful Series A funding and Carbon Upcycling Technologies’ breakthrough in low-carbon cement, the industry is witnessing transformative growth and innovation. Major developments also include the Calgary Construction Association’s 80th anniversary celebration, Candu Energy’s international reactor project, and the Government of Canada’s ownership restoration of the historic Québec Bridge. These updates highlight the dynamic evolution of Canada’s construction landscape and its growing impact both domestically and abroad. Check out all the biggest business moves from the past few weeks below:

Architecture firm hcma has landed in Calgary. The company’s new Alberta office is being led by Darin Harding, Associate Principal at hcma. The firm noted that its Edmonton office has grown steadily since 2020 with Associate Principal Michael Rivest at the helm. Officials noted that with major southern Alberta projects now on the go, it only made sense to establish a permanent base in Calgary and further cement their presence in Alberta.

SiteTechnology has completed the acquisition of Quicktech, a Managed IT Services provider with a 20-year track record of serving businesses across Canada. This brings SiteTech’s headcount to nearly 40 technology professionals. SiteTech stated that the acquisition is a strategic move that dramatically expands its ability to support mid-market, growth-oriented businesses.

Calgary is a place committed to advancing accessible and inclusive design, exploring pathways toward green building, and maximizing positive social impact. We’ve experienced it firsthand, as both residents and visitors. We’re excited to be part of this creative force, to nurture relationships, and discover new opportunities to spark lasting change in Alberta’s Blue-Sky City.

Darin Harding, Associate Principal, hcma

Eeffective November 1, 2024, Alta West Capital will begin its strategic partnership with TriWest Capital Partners (TWCP), marking a pivotal moment in the company’s tenure. AWC’s growth in recent years—driven by rigorous underwriting, competitive rates, and a dedicated team—has drawn the attention of TWCP, one of Canada’s leading private equity firms. This partnership will strengthen our foundation, enhance scalability, and expand our ability to serve stakeholders.

Aecon Group Inc. has announced its acquisition of United Engineers & Constructors Inc., a U.S.-based nuclear and conventional power contractor, for US$33 million, payable in cash. Founded in 1905, United specializes in nuclear power plant life extensions, small modular reactor projects, and recurring work under Master Service Agreements.

Construction and infrastructure company Acres Enterprises has entered into an MOU with the Sugar Cane Development Corporation, the economic arm of the Williams Lake First Nation.

The Calgary Construction Association celebrated its 80th anniversery with a special gala. The group noted that from modest beginnings, the association has grown alongside Calgary, adapting, and advancing to support a dynamic, ambitious city. They added that the milestone is more than a passage of time; it stands as a tribute to the hard work and vision of all who have contributed to this journey—the builders, leaders, and every professional committed to shaping this industry.

Carbon Upcycling Technologies, Inc. (Carbon Upcycling), a Calgary-based decarbonization and carbon capture & utilization (CCU) company, along with the Minnesota Department of Transportation (MnDOT) and the National Road Research Alliance (NRRA) has completed a three-year study on the use of low-carbon cement in highways. Carbon Upcycling’s CO2-enhanced mix achieved a 12.5% reduction in cement content while matching the workability of traditional concrete.

Candu Energy Inc., an AtkinsRéalis company, in a joint venture with Fluor Corporation, Ansaldo Nucleare and Sargent & Lundy, has been awarded a contract from EnergoNuclear S.A., to build two new CANDU reactors at the Cernavoda Nuclear Generating Station in Romania; the first in the world since 2007.

This is a game changing contract for AtkinsRéalis and Romania. As the sole commercial licensee of world-renowned CANDU technology, we are uniquely positioned to contribute to the vast expansion of the world’s clean power

Ian L. Edwards, President and Chief Executive Officer, AtkinsRéalis

 Deep Sky, the Canadian carbon removal project developer, has sold carbon removal credits to its founding buyers including Royal Bank of Canada and Microsoft. In return, Deep Sky intends to facilitate the removal of 10,000 tonnes of CO₂ from the atmosphere over a 10-year period via Deep Sky Labs, the world’s first carbon removal innovation and commercialization center. 

Ottawa-based Corfix, a provider of all-in-one construction management software, announced the close of its Series A funding round, securing investment from US-based Reformation Partners. This strategic partnership will enable Corfix to accelerate product development, increase presence in the U.S., and advance its mission to modernize construction project management through worker-focused technology.

The Government of Canada has officially regained ownership of the historic Québec Bridge, following an agreement with Canadian National Railway (CN). Management of the bridge, including its rehabilitation plan, will be overseen by the federal Crown corporation Jacques Cartier and Champlain Bridges Incorporated (JCCBI), leveraging its expertise from managing other major Canadian bridges. A $40 million annual investment over 25 years will fund inspections, steel and pier repairs, corrosion protection, and painting.

Toronto-based SolarBank Corporation, a provider of renewable energy solutions, announced its strategic expansion into the rapidly growing data center market. In alignment with its commitment to harnessing clean energy technologies, SolarBank says it intends to pursue opportunities as a developer, owner, and strategic partner in data center infrastructure, supporting the demand for high-performance, sustainable energy solutions within the sector.

Baker Real Estate is launching a dedicated Purpose-Built Rental Division. It will offer developers, many of whom are increasingly focused on purpose-built rentals, an opportunity to achieve stabilized buildings with full occupancy faster.

Xypex Chemical Corporation has announced that, effective November 1, 2024, Concrete Waterproofing Manufacturing Pty. Ltd. (CWM), trading as Xypex Australia, which also includes CWM’s subsidiary XMS (Thailand), and, National Concrete Solutions (NCS) will become wholly owned subsidiaries of Xypex Chemical Corporation, headquartered in Vancouver, B.C.

Alberta-based Empire Drywall has launched has launched a new siding division. Officials say the goal is to reduce contractor scheduling challenges at the jobsite. he siding division is the latest new venture for the 55-year-old company, joining a new roofing service that was added earlier this year. 

Key Takeaways:

• Alberta’s government has launched the Stop Housing Delays portal to expedite housing development by allowing developers, municipalities, and partners to report construction delays and bureaucratic red tape, aiming to speed up home-building projects.
• The government will use a collaborative, cross-departmental approach to address issues raised, potentially implementing solutions ranging from minor adjustments to larger policy reforms, ensuring that obstacles in the housing construction process are minimized.
• Alberta is experiencing a historic high in housing starts, with 33,577 new units from January to September 2024, a 35% increase over the previous year.

The Whole Story:

Alberta has launched an online portal intended to speed up housing construction across the province.

Officials say the new Stop Housing Delays online portal will allow developers, municipalities and other housing partners to report red tape and unnecessary home-building delays.

“The Stop Housing Delays portal will allow Alberta’s government to hear directly from developers, municipalities and other partners on where delays are happening in the construction process,” said Jason Nixson, Minister of Seniors, Community and Social Services. “This will help identify and remove barriers, ultimately getting homes built faster and continuing Alberta’s record home-building pace.”

Once developers, municipalities or industry partners have submitted their issue using the online form, government will collect and assess the information provided. Alberta’s government says it will be taking a collaborative, cross-ministry approach to ensure the appropriate departments are working together to find solutions where possible. Solutions may range from minor changes to policy reform.

“This webpage is an excellent opportunity to gather knowledge and further eliminate red tape,” said Dale Nally, Minister of Service Alberta and Red Tape Reduction. “Government has been persistent in our approach of cutting red tape and removing roadblocks, and this will help to speed up residential construction. I look forward to hearing from developers and our other partners on how we can help get projects moving and Albertans in homes.”

Officials noted that the province continues to see strong housing starts and increases. The first half of 2024 saw 9,903 apartment unit starts in the province. This marks the highest amount in any half year in Alberta’s history, breaking the previous record of 9,750 set in 1977. Albertans will benefit from 33,577 new housing starts from January through September 2024, up 35% from the same period last year. Alberta’s government remains focused on working with industry and non-profit partners to ensure that the province’s growing population has access to the housing it needs.

Key Takeaways:

• The Residential Construction Council of Ontario (RESCON) report forecasts a significant weakening in housing starts and residential construction employment through 2025, with only a slow recovery projected between 2026 and 2028.
• They argue that rising costs from land values, government-imposed fees and delays in land use approvals are major barriers to building affordable housing.
• RESCON stresses the urgent need for governments to address the crisis by reducing taxes, fees, and bureaucracy to lower construction costs and improve affordability.

The Whole Story:

Housing starts over the next few years will likely weaken and the already-dire supply shortage could get even worse, warns a comprehensive report released by the Residential Construction Council of Ontario (RESCON), which represents new home builders.

The report also indicates that employment in new residential construction has peaked and will probably fall quite a lot in the years ahead. The scenario is worrying as many people rely on the industry for employment and there could be significant economic repercussions.

The report, titled Housing Market Outlooks in Ontario, was prepared for RESCON by a Toronto-based economic research firm led by Will Dunning who has been analyzing housing markets for more than 40 years for clients in the private, public and not-for-profit sectors. It provides an overview of the housing market and develops forecasts covering 2024 to 2028 for Ontario, as well as municipalities in the Census Metropolitan Areas of Toronto, Hamilton and Oshawa. 

The report provides two sets of scenarios. In both, a further weakening of employment and new housing starts continues well into 2025, followed by a slow recovery of the economy and housing activity during 2026 to 2028. By the end of 2028, conditions will not have fully recovered.

We need to reduce the bureaucracy associated with getting new homes built. If we don’t take these steps the consequences could be catastrophic for our industry and the economy.

Richard Lyall, President, RESCON

“The findings of this report are particularly worrisome for builders as they point to a weakening residential construction market at the very time we need to build more housing,” explains RESCON president Richard Lyall. “Equally concerning, the outlook envisions a scenario whereby reduction in residential construction employment and job losses in associated industries could become a second substantive issue weighing on the broader economy.

“With a critical need for new housing, it is imperative that all levels of government take immediate action to boost construction by lowering the taxes, fees and levies and reducing the red tape and bureaucracy which slows the industry and adds to the cost of housing. To spur the market, we need conditions that allow builders to build houses that people can afford. Otherwise, we may be in dire straits as new home construction stalls and unemployment in the industry rises.”

The report notes that housing price increases have largely been absorbed by hikes in land values and government-imposed costs such as development charges. Due to the higher costs, the viability of building new low-rise housing, in particular, does not make financial sense.

RESCON stated that removing government-imposed costs from the prices of new homes would impact prices. In the GTA, the average municipal charge for new homes is $164,920 – about $42,000 higher than in 2022.  For apartments, the current figure is $122,387 – about $32,000 higher than in 2022. The costs of delays in approvals varies by municipality within the GTA from $2,672 to $5,576 per month. When applied to the typical delay period, it can add $43,000 to $90,000 per unit.

For new home sales to recover, the report notes that affordability needs to be returned to prior levels via a combination of interest rate decreases and reduction in government-imposed costs and land prices, although both scenarios seem unlikely to happen. The report cites other factors that need to be addressed, such as delays in land use approvals and infrastructure, the amount of developable land available for purchase by builders, and escalation of mortgage regulations which have reduced mortgage amounts that can be obtained by buyers.

“The bottom line is that all governments need to get their act together and work in unison to tackle the problems that are affecting construction of new homes,” adds Lyall. “Governments have made some inroads and the recent plan floated by the federal Conservatives to remove the sales taxes on new housing sold for under $1 million is a good start. We hope the province follows suit, and we need to reduce the bureaucracy associated with getting new homes built. If we don’t take these steps the consequences could be catastrophic for our industry and the economy.”

Key Takeaways:

• Manitoba has introduced the “Housing Starts Here” online portal, streamlining the application process for a new $26-million capital grant program aimed at helping non-profits, Indigenous governments, and municipalities develop affordable housing.
• The program allows for forgivable loans to repurpose or construct housing units and includes rent supplements and funding for support services, addressing housing affordability and the needs of those at risk of homelessness.
• The Manitoba government increased the PDF to $5 million, providing non-profits with grants and loans to cover professional services and support projects from the proposal stage to financing, boosting the capacity to develop affordable housing.

The Whole Story:

The Manitoba government is making it easier for organizations to secure funding to build affordable housing so more Manitobans can find a home.

“Manitoba is growing, and the affordable housing challenge we face today calls for a fresh new approach and the ability to quickly respond to the needs of our partners in the non-profit housing sector including Indigenous governing bodies and municipalities,” said Housing, Addictions and Homelessness Minister Bernadette Smith. “By focusing on new investments and program enhancements, our government is accelerating the creation of more affordable housing options for Manitobans who need them.”

The new Housing Starts Here online portal is simplifying the application process for a new $26-million capital grant program for non-profit organizations, Indigenous governments and municipalities, which will support the development of 350 social housing units in 2024-25, noted the minister.

Through the new ongoing intake application portal, interested organizations can apply for forgivable loans to acquire existing buildings that could be renovated into new social housing units, renovate derelict stock or construct new units. The portal will also include applications for rent supplements to ensure rents remain low and funding for support services to ensure people experiencing or at risk of homelessness have access to the services they need to stay housed, the minister noted.

“The new portal, along with the increase in funding, will make it easier for non-profits such as Westminster Housing to meet the need for deeply affordable housing in our communities,” said Brian Pincott, chair, Westminster Housing Society. “This program not only provides more funding, but it facilitates processes that work for the housing providers, giving us the flexibility to take advantage of opportunities as they arise to help meet the growing need for safe, secure and affordable housing.”

In addition to the $26 million for Housing Starts Here portal, the province is also increasing the Proposal Development Fund (PDF) to $5 million for non-profit organizations to access capital grant funding. PDF loans assist organizations to engage professional services to help bring their affordable housing proposals to the financing stage. Grants of up to $250,000 will be available through the fund, which will also offer repayable loans of up to $50,000.

Key Takeaways:

• Umicore has decided to continue the pause on its new battery materials plant in Ontario, prioritizing the maximization of capacity at existing facilities before expanding further.
• Umicore has outlined significant cost-saving initiatives, including a potential impact on 260 positions across the company, workforce reductions in its China battery materials plant, and restructuring of R&D activities to enhance efficiency.
• These measures are projected to save approximately $60 million annually by 2025.

The Whole Story:

Belgian materials technology company Umicore has announced a continued pause on the construction of its new battery materials plant in Loyalist, Ont. as part of an ongoing strategic review of its battery materials business. The decision comes as the company aims to maximize capacity utilization of existing plants before pursuing further expansion.

Strategic Realignment

Officials say the pause in construction was made in close alignment with Umicore’s customers. The company’s long-term supply agreement with AESC for high-nickel cathode active materials for the North American market will now be fulfilled from Umicore’s plant in Cheonan, Korea.

Umicore has not drawn on the incentives offered by the Canadian and Ontario governments for the Loyalist plant. Should construction resume in the future, the company will retain access to these incentives under the same conditions, including employment commitments.

Cost-Saving Measures

In addition to the construction pause, Umicore has unveiled details of its cost-saving initiatives:

• Approximately 260 positions may be impacted across select parts of the organization
• Workforce resizing in the Battery Materials production plant in Jiangmen, China
• Downsizing of Group Corporate Functions
• Restructuring of R&D activities for improved efficiency and customer focus
• Transfer of Heavy-Duty Diesel R&D work to Hanau, Germany, and discontinuation of R&D activities in Hørsholm, Denmark.

These measures are expected to generate approximately $60 million in annualized savings by 2025.

Industry Challenges

Bart Sap, CEO of Umicore, acknowledged the challenging environment facing the company: “Umicore is navigating a complex transitioning of the automotive industry towards electric mobility. Serving our North American customers out of Korea is now clearly the most effective use of our assets.”

Umicore has begun consultations with trade unions and works councils representatives to ensure support for affected employees. In Belgium, where approximately 100 positions may be impacted, the company has initiated the information and consultation process in accordance with legal requirements.

The company’s decision to pause the Canadian plant construction and implement cost-saving measures reflects the broader challenges facing the electric vehicle (EV) industry. Earlier this year, Umicore had already lowered its 2024 outlook for the Battery Materials Business Group due to a sharp slowdown in EV demand growth.

Key Takeaways:

• The proposed amendments will align prompt payment rules for all construction projects in Alberta, extending the 2021 Prompt Payment and Construction Lien Act (PPCLA) rules beyond private sector projects to include public projects.
• The amendments introduce clear deadlines for payments and define “proper invoice” guidelines. This ensures timely payments from contractors to subcontractors and suppliers, fostering financial stability across all levels of construction projects.
• The bill includes updates to the Condominium Property Act, such as creating a Condominium Dispute Resolution Tribunal, simplifying voting processes, and protecting against structural defects in new condos.

The Whole Story:

Alberta has tabled amendments to strengthen prompt payment for construction projects and improve governance in condominium communities

Amendments would result in all construction projects following the same set of prompt payment rules, which were established in legislation in 2021. Before now, Alberta’s government always prioritized prompt payment for government contracts, but the rules in the PPCLA only applied to private sector projects.

The Calgary Construction Association (CCA) stated that it is optimistic about the recently proposed amendments, saying the changes represent a promising step toward strengthening fairness and efficiency in Alberta’s construction sector.

In a press release the group said that the amendments introduce clearer definitions for payment deadlines and adjudication processes, fostering a smoother payment cycle across all project levels. Specifically the CCA noted that the revisions will enable prompt payment from contractors to subcontractors and suppliers, enhancing cash flow and stability throughout the industry. The CCA added that it is pleased to see the addition of “proper invoice” guidelines for public works projects, which sets a consistent and timely payment schedule, allowing contractors to focus on delivering high-quality work rather than navigating lengthy payment disputes.

The CCA stated that by committing to timely payments on public projects, Alberta is setting an example and fostering a more equitable construction landscape. They believe this shift signals a dedication to providing consistent and reliable payments, ensuring that the public sector maintains the same accountability expected in the private sector.

“Reliable, timely payments are essential to maintaining a thriving construction industry,” says Bill Black, President and CEO of the Calgary Construction Association. “These amendments signify Alberta’s commitment to supporting our construction workforce and ensuring they can focus on building the infrastructure that our province relies on.”

The changes also drew comment from the Edmonton Construction Association, which urged legislators to support them.

“Our industry is built on folks who honour their words. We committed to members that this issue would be a priority. The Government of Alberta committed the same to us, and it kept its promise. We’re grateful for the change, and we want to recognize all of those in government who listened to our concerns and proposals for solutions, including many members of Cabinet and senior civil servants,” said ECA President David Johnson. “This is a testament to the value of collaboration with government, and with our provincial association. These amendments are a critical step toward ensuring the Government of Alberta remains a preferred customer for our members, by ensuring equitable treatment for businesses and the skilled trades workers we rely on.”

Key Takeaways:

• The BCCA’s Fall 2024 report highlights a 5% decrease in the value of proposed major infrastructure projects since Spring 2024 and nearly a 20% drop over the past five years.
• The industry struggles with persistent workforce shortages, high labor costs, and payment uncertainties, which are exacerbating difficulties in meeting demand. The BCCA emphasizes the need for policies that support workforce development and establish payment certainty to stabilize the construction sector.
• With commitments from political leaders during the recent election campaign, the BCCA urges them to deliver on promises to support the construction sector by facilitating infrastructure investments, improving project approval processes, and providing stronger industry support mechanisms.

The Whole Story:

Statistics in the BC Construction Association’s (BCCA) Fall 2024 Construction Industry Stat Pack demonstrate that while the value of existing projects continues to grow, the threat of poor industry support and declining investments in major projects is alarming.

The association noted that the industry faces intense pressure to meet the current demand due to persistent workforce shortages, high labour costs, and lack of payment certainty.

According to the BCCA, the issue facing the industry is two-pronged. Firstly, the construction industry seeks increased investments in major infrastructure projects. Since Spring 2024, the value of proposed major infrastructure projects has decreased in value by 5% and nearly 20% over the past five years, which makes the future of the industry look problematic as current major projects begin to wind down with no guarantee of being adequately replaced.

“British Columbia’s construction industry will be paramount to building our province’s critical infrastructure and alleviating the housing crisis,” said Chris Atchison, President of the BC Construction Association. “During the election campaign, B.C.’s political party leaders committed to supporting the construction industry. Now that the results have been finalized, we need the government and opposition caucuses to work together to implement policies geared towards payment certainty and workforce development to ensure the construction industry can meet the current and future demand to build BC better.”

Atchison noted that the province is in high demand for major infrastructure projects. Hospitals, schools, multi-unit housing, bridges, and supporting infrastructure across the province must be built. He believes the decreasing value of proposed construction projects suggests that the province is not invested in making these a reality.

The association stated that this decrease in investments is coupled with the concurrent need for more robust support mechanisms to ensure that said projects can be delivered. The underlying factors of payment uncertainty, workforce shortage, and high labour costs pose significant strains on the construction industry, which need to be addressed by political leaders.

The association conluded that despite the need for major infrastructure investments and commitments from every party in that regard during this recently completed election, British Columbians cannot wait and need our political leaders to work together to recommit advancing major projects, attracting external investment, and creating more favourable conditions for significant projects to get approved.

“With the election now behind us, it’s time to get B.C.’s political leaders back to the legislature and to work with industry on the pressing issues impacting construction and the building of B.C.,” said the association.

To consult the Fall 2024 BC Construction Industry Stat Pack, visit www.bccassn.com/2024FallStatPack/

Details regarding data sources can be found at www.bccassn.com/2024FallStatPackSources/.

Key B.C. construction statistics:

• Construction is the No. 1 employer in B.C.’s goods sector.
• B.C.’s construction industry accounts for 10% of the province’s GDP. A 16% increase over the past 5 years.
• 243,000 people rely directly on B.C.’s construction industry for a paycheque.
• Number of workers in trades jobs: 167,300, an increase of 3,400 since Fall 2023 but still a 5-year trend decrease of 7%
• The number of women in construction trades is 9,536 (5.7%), an increase of over 2,100 since Fall 2023 and a 5-year trend increase of nearly 15%.
• Number of construction companies in B.C.: 28,065, an increase of over 200 since Fall 2023.
• The average yearly wage of BC construction employees is $72,200 ($17.5B cumulative annual wage), a slight decrease since Spring 2024 but a 5-year trend increase of 17%.
• Value of proposed construction projects in B.C.: $166 billion, a decrease of $4 billion since Spring 2024.
• The estimated value of current major construction projects underway in B.C.: $170 billion, an increase of $10 billion since Spring 2024 and a 5-year trend increase of nearly 50%.
• Number of construction jobs in B.C. that will be unfilled due to labour shortages by 2033: 6,600, an increase of 600 compared to 2032 forecasts made in Fall 2023.

Key Takeaways:

• The Professional Engineers Government of Ontario (PEGO) is in a bargaining dispute with the Treasury Board Secretariat (TBS), citing insufficient progress in addressing resourcing challenges and inadequate compensation for engineers working on Ontario’s infrastructure projects.
• Engineers are preparing to withdraw services from crucial infrastructure projects, such as Highway 413 and the Bradford Bypass, due to concerns over recruitment, retention, and compensation disparities, potentially leading to delays and disruptions.
• PEGO highlights that its members earn 30% to 50% less than their counterparts in municipalities, other government agencies, or the private sector, and argues that this pay gap is contributing to staffing shortages and jeopardizing Ontario’s infrastructure priorities.

The Whole Story:

A group of professional engineers is preparing to withdraw their services from key Ontario infrastructure projects, including Highway 413 and the Bradford Bypass, due to an ongoing bargaining dispute with the provincial government.

The Professional Engineers Government of Ontario (PEGO), the union representing Professional Engineers and Land Surveyors employed by the Ontario Public Service (OPS), says that progress in collective bargaining with the Treasury Board Secretariat (TBS) continues to be stalled.

Earlier this month PEGO, representing about 600 senior government engineers, began their first strike action in 35 years. The union initiated a work-to-rule campaign on Oct. 8, with members stopping unpaid overtime and ceasing to cover other staff’s responsibilities.

According to PEGO, on October 18 during a mediator-assisted bargaining session, TBS representatives presented a substantially unchanged offer that does not address the resourcing challenge within the OPS to support Ontario’s infrastructure plans.

“The intransigence of Treasury Board negotiators continues to be frustrating and inexplicable to our members. Its latest proposal runs directly counter to the needs of Ontario’s infrastructure development and maintenance agenda.” said PEGO President, Nihar Bhatt, P.Eng. “Without proper investment in Ontario’s vital engineering and surveying functions, this government’s key infrastructure priorities cannot be met on a cost-effective and timely basis.”

PEGO officials argued that the difference between PEGO and TBS bargaining positions is a very small fraction of Ontario’s annual engineering spending of $1 billion and an even smaller fraction of the $20 billion in overall infrastructure costs spent by Ontario every year. They added that they believe a deal is possible and PEGO would strongly prefer this, but to do so “TBS needs to do much better, recognizing the value of Ontario’s engineering and land surveying expertise.”

PEGO stated that it has provided the Treasury Board with an analysis showing that PEGO members earn at least 30% to 50% less than they could earn in the broader Ontario market for their skills by working for municipalities, other government agencies, or in the private sector. 

PEGO officials explained that they are deeply concerned about the challenge Ontario faces in recruiting and retaining expert engineering and land surveying staff. They argued that mounting vacancies could result in impacts and delays on key priorities of the government, including Highway 413, the Bradford Bypass, and others – some of which have been recently designated as priority projects for construction.

Bhatt continued: “The latest proposal from the Treasury Board negotiators is not getting us any closer to a fair deal. Instead, the current proposal ignores the pleas of OPS engineering and land surveying managers for adequate resources as well as the mountain of evidence showing that Ontario will continue to lose highly skilled engineers and surveyors as they find higher-paying opportunities with other levels of government or the private sector.  It will continue to be tough for OPS managers to hire the excellent engineers and surveyors that it needs.”

PEGO says it stands ready to negotiate for a fair deal, but the next step rests with the Treasury Board negotiators to bring back to the table a “significantly improved offer”.  

They advised that the union’s legal work-to-rule action will remain in place, and will shortly escalate to the withdrawal of labour by select PEGO represented employees. 

“While this labour dispute will impact the delivery of Ontario’s key infrastructure commitments and the management of existing infrastructure and operations, PEGO is ensuring its strike is both tightly focused and responsible, reflecting PEGO’s commitment to the people of Ontario and our members’ preference to bargain in good faith towards a new contract that addresses the critical shortage in engineering and land surveying expertise in the OPS,” said the group. 

Key Takeaways:

• Statistics Canada estimates that replacing road and water systems in “poor” or “very poor” condition will require $356.7 billion, highlighting the urgent need for infrastructure investment.
• Local and regional governments are responsible for 72% of Canada’s $2.6 trillion transportation and water infrastructure, owning the majority of roads (64%) and public transit assets (76%).
• With Canada experiencing its highest population growth rate since 1957, there has been a marked increase in the installation of water pipes and road construction, yet a significant portion of public transit and active transportation assets remain in unknown condition.

The Whole Story:

Statistics Canada estimates $356.7 billion will be required to replace road and water systems classified as being in “poor” or “very poor” condition, underscoring the urgent need for infrastructure investment across the country.

Their latest data shows that the total replacement value of Canada’s transportation and water infrastructure reached $2.6 trillion at the end of 2022, with local and regional government organizations responsible for nearly three-quarters (72%) of this critical framework.

The survey reveals that local and regional governments own 64% of the replacement value of roads, 76% of public transit assets, and 82% of active transportation infrastructure. However, responsibility for bridges and tunnels predominantly rests with provincial and territorial governments, which hold 69% of these structures.

Public transit is undergoing a significant transformation, with municipalities of 200,000 residents or more owning 58% of public transit assets by current replacement value, while provincial governments account for 24%. Other local authorities hold the remaining 18%. From 2020 to 2022, the number of electric buses in public transit rose by 31%, alongside notable increases in biodiesel (+64%), natural gas (+30%), and hybrid buses (+15%). In contrast, the use of diesel buses declined by 16%, reflecting a shift towards greener alternatives.

Statistics Canada noted that as Canada grapples with its highest population growth rate since 1957, the demand for upgraded infrastructure has become increasingly critical. Between July 2022 and June 2023, there was a notable surge in the installation of drinking water, wastewater, and stormwater pipes, with 29,100 km added—an average of 9,700 km per year. This pace surpasses the previous decades, where annual installations were significantly lower.

The pace of road construction has similarly increased, with an average of 12,396 two-lane equivalent kilometres completed annually from 2020 to 2022—exceeding previous periods by more than 25%. Rural municipalities own 57% of road lengths, while urban municipalities control the majority (62%) of active transportation infrastructure, including vital bikeways. As of the end of 2022, Canada had 28,122 km of bikeways, with nearly a quarter (23%) completed between 2020 and 2022. However, one-third of Canadian neighborhoods still lack adequate cycling infrastructure.

A significant concern emerges regarding the condition of public transit and active transportation assets. Approximately 17% of public transit assets and 42% of active transportation infrastructure are classified as being in unknown physical condition, with an estimated total replacement value of $45.7 billion. When combined with roads, bridges, and tunnels, this figure climbs to $141.7 billion. The road transportation infrastructure, encompassing roads, bridges, tunnels, and cycling paths, is valued at $1.63 trillion, with $250.2 billion (15%) estimated to be in poor or very poor condition.

Water infrastructure also faces challenges, with its current replacement value estimated at $963.0 billion. Over one-tenth (11%) of this infrastructure is rated as being in poor or very poor condition, amounting to $106.5 billion.

From substantial government investments in critical minerals infrastructure to groundbreaking advancements in sustainable building technology, companies are actively pushing the boundaries of efficiency, environmental responsibility, and expansion. It has been a busy few weeks for the industry.

Notable deals include Giatec’s advancement in AI-powered concrete solutions, Englobe’s strategic acquisition to broaden its services, and Anthem Properties’ pioneering real estate IPO. These updates reflect a dynamic sector, driven by cutting-edge technologies, strategic partnerships, and ambitious infrastructure projects that promise to boost both the economy and sustainable development in Canada. Check out all the business moves below:

Canada has announced up to $60 million in conditional funding through the Critical Minerals Infrastructure Fund (CMIF) to support two significant infrastructure projects in British Columbia’s Golden Triangle and Yukon. One project involves the Galore Creek Mining Corporation’s plan to build a 43-kilometre access road to its copper mine in Tahltan Territory. The second project focuses on pre-feasibility activities for a 765-kilometre high-voltage transmission line network in Yukon.

Concrete technology company Giatec has secured $17.5 million from the Strategic Innovation Fund (SIF) to advance sensor technologies and AI-based software solutions aimed at reducing carbon emissions in the concrete industry. This funding will enhance the Giatec SmartMix digital platform, which optimizes concrete mixes for cost efficiency and lower CO2 emissions. Giatec plans to implement these technologies in the world’s first smart ready-mix concrete plant, featuring automated production equipped with sensors and AI solutions.

Engineering and environmental services firm Englobe Corporation has announced the acquisition of Goodkey, Weedmark & Associates Ltd. (GWAL), an Ottawa-based, employee-owned consulting firm specializing in mechanical and electrical engineering. Following the successful close of this transaction, all 100 GWAL employees and leaders will join the Englobe family.

This transaction represents a major milestone in our company’s history, as it will help us expand our reach from local to national. Our team is delighted to join this highly reputed Canadian firm whose client approach and genuine caring for its people, communities and clients closely reflect our own values.

Frank Bann, P.Eng., Managing Principal at GWAL

CAI Capital Partners has announced the successful closing of CAI Capital Partners VII, L.P. and CAI Capital Partners VII (Sponsor), L.P. (collectively known as CAI Fund VII) at $153 million, surpassing its target of $150 million and previous fund size of $125 million. The fundraising, which began with its first close in June 2023 and concluded in September 2024, attracted over 90 investors, including institutional investors, financial institutions, family offices, and individuals.

We are grateful for the tremendous support we received from our existing limited partners as well as from new investors. Raising capital during this cycle has been challenging, but it is in precisely this type of environment that great funds are built. We are very proud to have exceeded our target under difficult market conditions.

Tracey McVicar, Partner, CAI Capital Partners

Vancouver-based Anthem Properties Group Ltd. is set to launch an initial public offering (IPO) aimed at raising up to $82 million for its Citizen project, a 66-storey mixed-use development in Burnaby’s Metrotown. This offering will complement the $269 million already secured from pre-sales for the project, making it the first real estate IPO of its kind in Canada.

31 construction-related businesses made this year’s list of Fastest Growing Companies in Canada, organized by the Globe & Mail.

Egis has announced a strategic partnership with SvN, a Toronto-based multidisciplinary design firm, to enhance its global Architecture Line, which now includes bespoke brands that provide a wide range of architectural services. This collaboration aims to address the climate emergency by promoting sustainable urban design, complementing the existing offerings of award-winning practices like WW+P, 10 Design, Omrania, and U+A.

Sam The Concrete Man, the largest residential concrete company in North America, recently announced they have expanded their operations into Canada. With the opening of franchises in Vancouver and Toronto, Sam The Concrete Man continues its steady growth. 

Spectra Precision has announced its acquisition of Unicontrol, a machine control technology company that has been active in 27 countries since its founding in 2018. The deal brings Unicontrol into Spectra Precision’s portfolio, alongside Seco and Loadrite, under parent company Precisional LLC. The acquisition aims to enhance construction efficiency through a broader range of machine control solutions.

The Canadian Equipment Dealers Association (CEDA) has approved a merger with the Associated Equipment Distributors (AED), set to be finalized by Nov. 1. CEDA President Beverly J. Leavitt, who will become AED’s Vice President, emphasized that AED’s robust dealer education and industry advocacy were key factors in the decision. The merger will grant CEDA’s 160 members access to AED’s extensive resources, including educational programs, industry reports, and advocacy efforts, while maintaining provincial representation in Ontario. Both organizations see the merger as a strategic alignment to strengthen dealer support across Canada.

Monster Industries and First Nations partner, Kitsumkalum, collectively the Monster Kitsumkalum JV (MKJV) has been awarded a 3-year Brownfield Mechanical Contract with LNG Canada. Working alongside the LNG Canada Team, Members of the MKJV will provide safety oversight, quality control, subcontractor coordination, project management and a variety of skilled mechanical tradespeople to support scopes of work involving mechanical fabrication, mechanical installations, support for emergency repairs and general labour as and when requested.

Slate Asset Management, a global alternative investment platform targeting real assets, announced the firm is accelerating its focus on essential real estate. Slate will continue to invest globally across asset classes and the risk spectrum in real estate that supports the non-discretionary needs of day-to-day life, including grocery, residential, industrial and logistics, and healthcare.

Our decision to sharpen Slate’s focus on the theme of essential real estate will allow us to redeploy capital, expertise, and resources to asset classes within our portfolio that we believe are highly defensive and generate the best risk adjusted returns for our investors

Brady Welch, Co-Founding Partner of Slate

AngloAmerican has sold its Peace River Coal operation in northeast B.C. to Conuma Resources, marking a notable shift in Canada’s coal industry. The mine, which has been inactive since 2014 due to declining coal prices, was AngloAmerican’s only coal asset in Canada. The sale also reflects a commitment to sustainability, as AngloAmerican partnered with Conuma and First Nations to contribute to the Caribou Recovery Project, relinquishing part of the mine to protect wildlife habitat. While the sale price and production timeline remain undisclosed, the deal is expected to boost the local economy and job creation.

Grosvenor is moving forward with Phase 1 of its Brentwood Block master-planned project in Vancouver, partnering in a joint venture with an unnamed Canadian pension fund and Westerkirk Capital Inc. This joint venture completes the capital needed for the $1.5-billion development, which will include 1,730 housing units, a multi-storey community centre, and 200,000 square feet of commercial space.

PCL Construction has signed a multi-year deal with safety intelligence software company HammerTech to help make job sites safer and boost efficiencies across global operations. Built on the premise that efficient and effective workflows are key to robust safety programs, HammerTech’s safety intelligence platform will provide PCL with agility and adaptability to changing processes, enhanced reporting and data management, and greater efficiencies when collecting and analyzing safety documentation.

EnviCore, a Calgary-based sustainable materials technology company, announced the successful closing of its seed funding round, raising $4.2 million. The round was led by prominent industry investors, including CSN Inova Ventures (the corporate venture capital arm of Companhia Siderúrgica Nacional, Brazil’s largest fully integrated steel producer), Heidelberg Materials, Techstars, Hillside Ventures, and Angel Investor Mark and Faye McGregor.

Premier Construction Software, a global leader in financial cloud ERP solutions for the construction industry, announced a strategic partnership with Lumber, a modern payroll and workforce management platform.

In today’s fast-moving construction landscape, successful project delivery relies on accurate, real-time data flow and seamless software integration. Partnering with Lumber allows us to build a powerful, well-architected API that drives both efficiency and scalability, ensuring that clients are empowered to make timely, informed decisions across their operations.

Karoline Lapko, CEO of Premier Construction Software

RSG International has announced a new partnership with Mark’s Commercial aimed at providing inclusive personal protective equipment (PPE) to all field employees across its businesses. As part of this initiative, RSG International has been trialling women’s shirts in the Health and Safety department at Powell Contracting, which has achieved accreditation under ISO 45001:2018, the global standard for occupational health and safety.

CDPQ, a global investment group, and Nuveen Green Capital (NGC), a leader in sustainable commercial real estate financing solutions, announced today the launch of a USD 600-million (CAD 830-million) integrated sustainable commercial real estate financing program. This offering combines Commercial Property Assessed Clean Energy (C-PACE) financing and senior bridge and construction financing aimed at the U.S. commercial real estate (CRE) market.

Canada-based AtkinsRéalis Group Inc. is set to work with the UK’s largest listed water company to deliver a major environmental program. United Utilities has appointed three design and development partners (DDP) in a contract worth a potential £90 million for each DDP over 11 years. AtkinsRéalis’ local delivery teams will create detailed designs for schemes across United Utilities’ water and wastewater sites, as well as bio resource and rainwater management projects.

Lafarge Canada and Geocycle Canada, part of Holcim Group, along with Natural Resources Canada, have opened Geocycle’s first low-carbon fuel plant at Lafarge’s Brookfield Cement Plant in Nova Scotia. The $10-million facility, supported by $3.53 million from Canada’s Energy Innovation Program, will divert 14,000 tonnes of waste annually from landfills to produce low-carbon fuel, reducing the plant’s carbon emissions by over 12,000 tonnes per year.

Canada’s latest Labour Force Survey for September reports an overall employment increase of 47,000 (+0.2%). Employment increased in sectors such as information, culture, and recreation (+22,000; +2.6%) and wholesale and retail trade (+22,000; +0.8%), but there was no specific mention of growth in construction or industrial jobs.

Employment in professional, scientific, and technical services also grew by 21,000 (+1.1%) in September, offsetting a prior decline in August.

Employment gains were strongest in Ontario (+43,000; +0.5%) and Quebec (+22,000; +0.5%), regions. Employment did decline in British Columbia (-18,000; -0.6%) and New Brunswick (-4,100; -1.0%).

Wage Growth and Full-Time Employment Up

Average hourly wages for all employees rose 4.6% year-over-year to $35.59 in September, a positive indicator for workers. Full-time employment saw a robust increase of 112,000 jobs (+0.7%), the largest gain since May 2022. However, part-time work fell by 65,000 (-1.7%).

Broader Labour Market Trends

The unemployment rate edged down to 6.5% in September, driven by lower unemployment among youth, which fell 1.0 percentage points to 13.5%. Despite the slight decline, the overall youth unemployment rate was still up 2.8 percentage points compared to September 2023.

Private sector employment continued to rise, increasing by 61,000 (+0.5%), while public sector employment fell by 24,000 (-0.5%).