Category: Economy

Key Takeaways:

• 87% of B.C. construction contractors expect 2024 to be as busy – or even busier – than last year.
• In 2025, the industry’s average hourly wage – before any bonuses, benefits, profit-sharing or overtime – will reach $37.51, or about $78,000 annually.
• Wages for refrigeration and HVAC mechanics are expected to go up the most.

The Whole Story:

Despite economic uncertainty both domestic and international, 87% of B.C. construction contractors expect 2024 to be as busy – or even busier – than last year, according to the results of a new survey of Independent Contractors and Businesses Association (ICBA) member companies.

The nearly 250,000 men and women who work in construction in B.C. will benefit from this growth – with ICBA employers reporting that the average construction hourly wage will grow 5% this year, and another 6% in 2025. With these increases, in 2025, the industry’s average hourly wage – before any bonuses, benefits, profit-sharing or overtime – will reach $37.51, or about $78,000 annually.

“Construction is dynamic, fast-paced, and rewarding – people wake up every day and go to a job site to build everything around us, creating inspiring legacies that shape our communities and the way we will live for generations,” said ICBA President Chris Gardner, who released ICBA’s annual Wage and Benefits Survey of its member companies today. “It’s a message we have to convey to young people in a more convincing way than we have in the past.”

Despite record levels of immigration, B.C. builders flag labour shortages of people (79% of contractors say there aren’t enough skilled workers), as a major challenge. Said Gardner: “Fewer than 2% of permanent immigrants entering Canada pursue a construction trade, so as a country we are failing to identify the gaps in our economy and recruiting people to move to Canada with the skills to fill those gaps – we have to do better and quickly.”

Other major issues include supply chain constraints (62% say they are experiencing supply delays), and government red tape (only 4% say government is on the right track in dealing with them) cited as major drags on their work – and this is driving up costs and impeding the efforts to tackle housing affordability.

“We have not moved the needle on housing supply for the past 50 years – we are building fewer homes today than we did in 1972. Reams of new regulations and convoluted approval processes have choked the supply we need to keep home prices affordable for first time homebuyers and young families,” said Gardner. “All three levels of government need to stop the finger-pointing and working at cross-purposes, and collaborate meaningfully to fast track housing, cut red tape, and put in place practical policies that will make a real difference for home buyers.”

The ICBA Wage and Benefits Survey also noted:

• Interior: 42% of contractors expect more work in 2024 than last year; 83% say they are short of workers.
• North: 47% of contractors expect more work in 2024 than last year; 88% say they are short of workers.
• Vancouver Island: 32% of contractors expect more work in 2024 than last year; 77% say they are short of workers.
• Lower Mainland: 50% of contractors expect more work in 2024 than last year; 66% say they are short of workers.

Key Takeaways:

• The $194 million primarily comes from the federal government and Nunavut.
• Some of the projects that will be funded are a long term care facility in Rankin Inlet and several water treatment facilities for other communities. 
• The funds will also purchase transit vehicles for Pond Inlet and Resolute Bay.

The Whole Story:

The federal and territorial governments are investing $194 million for infrastructure and to establish vital services for Nunavut. 

Minister Sean Fraser, Premier P.J. Akeeagok and Minister David Joanasie announced that these projects will help advance Canada’s transition to a low-carbon future, while enabling the delivery of essential services such as health care, public transportation, and a safe and reliable supply of drinking water for Nunavummiut.

Funding will support the completion of a 24-bed seniors long term care facility in Rankin Inlet, which will provide essential personal care and health services to Nunavummiut Elders. The new facility will enable residents to age closer to home, while supporting the unique values and lifestyles of Nunavummiut. Once complete, the new space will operate in an energy efficient manner with low greenhouse gas emissions.

From increasing public transportation options in northern communities to improving critical water access, long-term care facilities, and more energy-efficient infrastructure, these projects support our commitment improving the health and well-being of Nunavummiut, while protecting the environment. By working hand-in-hand with our partners, we are building livable and sustainable communities now and into the future.

Sean Fraser, minister of housing, infrastructure and communities

The Municipality of Sanikiluaq will also benefit from the creation of a new water treatment facility. This work will consist of the design and construction of a building that will support the growing needs of this Inuit community and ensure compliance with public health standards. Furthermore, several other communities will see the addition of new water treatment facilities, such as the hamlets of Pond Inlet, Arctic Bay, and Grise Fiord. These projects will ensure the effective treatment of water and the availability of a safe and reliable drinking water supply for these communities for generations to come.

In addition, direct funding to municipalities will support the purchase of transit vehicles for the hamlets of Pond Inlet and Resolute Bay. These new transportation options will better connect residents, including seniors and persons with disabilities, to essential services in their communities such as medical appointments, along with other day-to-day activities.

The federal funding comes from various programs including the Green and Inclusive Community Buildings (GICB) program, the Rural Transit Solutions Fund (RTSF), as well as the Green Infrastructure Stream (GIS) of the Investing in Canada Infrastructure Program (ICIP). The Government of Nunavut is investing $64,863,750 while the hamlets of Pond Inlet and Resolute Bay are contributing a combined $76,755.

Key Takeaways:

• Morrison Hershfield is one of the few large Canadian-based engineering firms with core strengths, business lines, and clients that are additive to its presence in multiple key growth markets.
• The addition of Morrison Hershfield’s Horizontal Infrastructure business will double Stantec’s transportation presence in Ontario.
• The acquisition will increase Stantec’s Canadian workforce by approximately 10%.
• Morrison Hershfield’s portfolio includes work on the Gardiner Expressway,  the Microsoft Redmond Campus Renovation and the NextStar EV battery plant in Windsor, Ont.
• The acquisition is expected to be finalized this quarter.  

The Whole Story: 

Global engineering firm Stantec has signed an agreement to acquire Morrison Hershfield, a 1,150-person engineering and management firm headquartered in Markham, Ont. Founded in 1946 and employee-owned, Morrison Hershfield specializes in transportation, buildings, and environmental services. Morrison Hershfield has offices in 22 cities in Canada and the United States, and one office in India. With a particularly strong presence in Canada, Morrison Hershfield will increase Stantec’s Canadian workforce by approximately 10%.

The acquisition, which is being completed by way of a court approved plan of arrangement, is subject to Morrison Hershfield shareholder approval, court approvals, and certain regulatory approvals and is expected to close in Q1 2024. The terms of the transaction are not disclosed.

Stantec stated that the acquisition expands its presence in most major Canadian markets, and further strengthens its U.S. presence in buildings engineering. Stantec officials explained that Morrison Hershfield is one of the few large Canadian-based engineering firms with core strengths, business lines, and clients that are additive to its presence in multiple key growth markets, including the Greater Toronto Area. Similarly, Stantec’s global market presence and client relationships will accelerate Morrison Hershfield’s business line growth opportunities as part of Stantec.

“We are thrilled to bring a firm of Morrison Hershfield’s stature into the Stantec fold,” said Gord Johnston, president and chief executive officer, Stantec. “Our firms have shared a mutual admiration over many years. Stantec and Morrison Hershfield have a similar history from our roots in the Canadian market, growing and diversifying services both by geography and service line. And, importantly, our values and culture are very well aligned.”

Stantec noted that the addition of Morrison Hershfield’s Horizontal Infrastructure business will double Stantec’s transportation presence in Ontario, bolstering the firm’s bridge, highway, construction administration, program management, and inspection services in a key growth market. 

They added that Morrison Hershfield’s capabilities, geographic strengths, and client mix are complementary to Stantec’s, and combined will result in a formidable player in transportation throughout Canada’s largest province. In Western Canada, Stantec says its strong market presence will be further solidified with the addition of Morrison Hershfield’s diversified transportation services, well positioning the combined practice for upcoming significant infrastructure project opportunities.

Morrison Hershfield is an industry leader in building and facilities engineering design. Stantec says the firm’s capabilities align with and augment its own buildings business in several of its key growth markets, including advanced manufacturing, transit facilities, and industrial building design. Additionally, Morrison Hershfield adds capacity in the high-growth mission critical and data center market space, which will further complement Stantec’s recent acquisition of Environmental Systems Design Inc. 

Morrison Hershfield’s longstanding telecom and technology consulting business will add new capabilities directly tied to smart buildings and 5G implementation. Stantec’s decarbonization and high-performance building design work is expected to be strengthened by Morrison Hershfield’s industry-leading position in building envelope and building science design, as well as code life safety consulting, commissioning, sustainability, and whole building energy modeling consulting, among others.

The company added that Morrison Hershfield’s Environmental Services business will bolster its capacity to support infrastructure projects in key Canadian markets, including Toronto, Vancouver, and in Canada’s North by combining teams in Whitehorse, Yukon. The firm will also support Stantec’s work in the energy transition by providing additional capacity in environmental impact assessment, ecological services, and geosciences. Stantec noted that Morrison Hershfield’s client base will benefit from Stantec’s expertise in nature-based solutions, carbon sequestration, and natural capital. Morrison Hershfield also has a team dedicated to climate change risk, climate resilience assessment and adaptation services, which will augment Stantec’s own expertise in this critical area.

“Joining the Stantec family marks a historic moment for our 78-year-old company. Stantec is a highly successful firm that shares our corporate values and mission, with a unique culture that complements our own,” said Anthony Karakatsanis, president and chief executive officer, Morrison Hershfield. “With access to Stantec’s depth of renowned experts, resources, and cutting-edge technology, we will be able to provide our employees with exciting and meaningful work, growth, and professional development for the long term. This acquisition provides us with access to many high-profile North American and global projects and markets in the communities where our employees live and work.”

Projects in Morrison Hershfield’s portfolio include:

• Engineering services for the Gardiner Expressway East from Cherry Street to the Don Valley Parkway in Toronto. Work included condition assessment, detailed design, and preparation of tender documents for interim repair, as well as preliminary design for the replacement of this section. Morrison Hershfield also led a multi-firm team for contract administration services on the deck replacement from Jarvis to Cherry Streets. The combined construction value of both projects is $748 million.
• Owner’s engineer on the Confederation and Trillium lines of Ottawa’s Light Rail Transit system. Morrison Hershfield provided services for preliminary engineering and procurement, as well as implementation and construction phases. The project involves the construction of 44 kilometres (27 miles) of new light rail running way, as well as 24 stations. Several interchange modifications were also needed on Highway 417.
• Engineer of record for NextStar’s lithium-ion EV battery manufacturing facility in Windsor, Ont. Morrison Hershfield’s services include mechanical, electrical, and civil services on the 418,000 square-metre facility.
• Buildings engineering services for the Microsoft Redmond Campus Renovation in Redmond, Washington. The campus project includes 19 new buildings across four villages, a 6,500-car parking garage, a visitor center and a Central Utility Plant. Morrison Hershfield services include building envelope consulting and commissioning, façade engineering, energy modeling, and field performance testing. Morrison Hershfield’s work on the project is complementary to Stantec’s, which includes technology, acoustics, MEP, and lighting design for multiple buildings on the campus.
• Environmental monitoring for the Ministry of Transportation of Ontario’s stormwater management ponds as part of their West Nile Virus monitoring and treatment program. Services include program planning and resource allocation, land use and hydrological assessment, monitoring and documenting daily results, and analysis of results. Morrison Hershfield has managed this program exclusively for the Ministry since 2004.

You know the names of construction companies and projects, but what about firms behind the secenes providing capital? This week were are taking a look at investment groups that have taken an interest in the construction space, helping seed new ventures or acquiring growing businesses. Some are generalists that have only dipped their toe into construction, while others are specialists steeped in the industrial sector.

Hillcore Group

2023 was a massive year for the Hillcore Group. They made major moves in the construction sector, acquiring Midlite Construction, Ruskin, Zanron Mechanical Services and Thompson Construction Group. They  invest predominantly in the life sciences, real estate, seniors living, financial, logistics, industrial, forestry and energy sectors. Founded in 1995 in Toronto, Hillcore manages more than $5 billion in assets. Since 2005, they have completed acquisitions, directly or indirectly through their investment funds, with an aggregate asset value in excess of $9 billion.

TriWest Capital 

TriWest was founded in 1998 by Ron Jackson, Lorne Jacobson, and Cody Church, following the sale of Burns Foods, a 110-year-old, private Canadian food conglomerate with revenues of $1.1 billion. Today, they are a leading Western Canadian-based private equity firm with 23 years of experience investing in 47 companies, many of them geared towards heavy industrial work. Their portfolio includes heavy construction provider Broda Group, concrete manufacturer Con-Force, Strike Group and many more. Recent activity includes selling ZyTech Building Systems to Dick’s Lumber and selling modular builder Triple M Housing to ATCO Structures. 

Yellow Point Equity Partners 

Co-founded by former Greenlight Power CEO Dave Chapman and investment banking expert Brian Begert, Yellow Point wants to take a more personal approach to investing and partnering with management. Their team says they assist with tough transitions and facilitate growth, succession planning, management, buyouts and more. Each member of Yellow Point has a significant portion of their personal wealth invested in our funds, which makes them committed to a company’s success. Past and current investments in the industrial sector include Remcan, CIMS, Bravo Target and Crossroads CCI Industries, the world’s largest manufacturer of Allan Block concrete retaining wall systems. 

CAI Capital Partners

Vancouver-based CAI has a passion for founder-owned businesses in the lower middle market, many of them serving Canada’s construction sector. Current investments include Midwestern Electric, LineStar Utility Supply, Universal Group, GLM Industries and more. Over the past 30 years, CAI has invested $1.6 billion. The company states that the most important element of their approach is forming meaningful relationships.     

Cassiar Partners

Founded in 2020, Cassiar describes itself as a boutique private investment firm committed to the success of small and medium sized Canadian businesses. Their approach is people-centered and geared towards long-term investments. Current investments in the construction sector include CEL Electrical Contractors, H.H.S. Drilling & Blasting

Business Development Bank of Canada

Technically a crown corporation, BDC is heavily involved in venture capital with the construction sector, particularly green construction technology. It has investments with prefabricated housing tech company Intelligent City, sustainable construction materials provider Carbon Upcycling, AI concrete data company Giatech and green concrete company CarbiCrete.

StandUp Ventures

The goal of Toronto-based StandUp Ventures is clear: To champion breakthrough companies led by women. More specifically, they invest in seed-stage, for-profit technology companies with at least one woman in a C-level leadership position within the company who has an equitable amount of ownership. They also lean heavy into tech. Their portfolio includes jobsite communication platform Bridgit and construction intelligence platform Mercator AI. 

GroundBreak Ventures

Investing has also become an activity that companies can do to help their own industry advance. GroundBreak Ventures, the investment arm of multi-faceted real estate developer Hopewell, is a venture capital firm specializing in real estate and property technology. The Toronto firm invests as early as the pre-seed stage, and provides both the capital and the domain expertise needed to support the growth. Some of their investments include construction materials marketplace TOOLBX, modular construction tech platform Modulous and CAD drawing conversion provider AirWorks.

The start of a new year is often a time for us to reflect on the past and look ahead to the future. We cast a wide net to ask construction leaders for their thoughts. The respondents include CEOs, architects, construction association directors, researchers, unions and more. Here’s what they had to say:

What do you believe was the biggest story to come out of 2023 and why?

The Federal and Provincial Governments are finally listening to the development community and taking steps to address housing supply after years of industry pushing the issue to the forefront.  Also interesting to see the increased attention to automatic rezoning based on distance to transit hubs and missing middle housing strategies.

Mike Maierle, President ETRO Construction Limited

People and opportunities in construction have become a focus of discussion across the industry and beyond. Everyone is recognizing that the industry needs more people to build and maintain the built environment in Canada. There is a driving need to improve productivity, recruit people into the construction industry, and leverage innovative technologies to make it more attractive for everyone.

Dom Costantini, President, BLDR Consulting Corporation

In 2023, one of the most significant stories in the construction industry was the accelerated adoption and advancement of 3D concrete printing technology. This innovation garnered widespread attention due to its potential to revolutionize the construction sector.

Jeff Olafson – CEO, Business Development, Gardon Construction Ltd.

It would be a toss up between the economy and the various labour strikes held in 2023 as a result of the rising cost of living.

Brandon Bird, Chief Executive Officer, Bird Mechanical Ltd.

Affordability defines so much of the discussion we are having in construction. We have not been able to move the needle on our housing supply for the past 50 years. In 1972, 230,000 new homes were built in Canada. In 2022, 220,000 new homes were completed—and this year has trended even lower. Decades of regulations and red tape have choked the supply we need to keep home prices affordable for first time homebuyers and young families. Governments must act with urgency in four key areas: expedite permits and approvals, slash the punitive costs strangling home construction, recalibrate our immigration approach to alleviate undue strain on our resources, and, most critically, all three levels of government need to stop finger-pointing and working at cross-purposes, and instead work together meaningfully. Only through decisive and sustained action can we address this national crisis.

Chris Gardner, President – Independent Contractors and Businesses Association (ICBA)

High interest rates, high inflation, lack of affordable housing and commercial office space is empty!

Zenon Radewych, Principal, WZMH Architects

I think we saw the ripple effect of a few big stories play out in 2023. The housing crisis in B.C. and across the country dominated headlines and debates by government officials, but it also shined a brighter light on the skilled labour shortage in the sense that we can’t build more affordable homes without more boots on the ground.

Jeannine Martin, Vancouver Regional Construction Association (VRCA) President

On October 16th, Premier David Eby announced  his government will bring in a requirement for flush toilets on construction sites with 25 workers or more. The announcement came on the heels of a years-long advocacy push from the BC Building Trades. This is a landmark moment for construction workers in this province. For too long, workers have been forced to deal with undignified washroom facilities on the job.

Brynn Bourke, Executive Director, BC Building Trades

The most impactful narrative of 2023 was the likely stabilization of the interest rate environment by year’s end, a perception that will underpin many investment decisions. This reduction in uncertainty will provide businesses with a clear foundation for strategic planning and encourage long-term investments, providing both investors and companies with a more secure basis for capital allocation. It will also act as a catalyst for executing acquisition/disposition strategies and initiating construction starts.

Andrew Petrozzi, Director and Head of Canada Research, Newmark Canada

Certainly the Bank of Canada policy rate and its effects on rising interest rates. The first increase earlier in 2023 sent shivers throughout the real estate community both in commercial and residential. 2023 was already experiencing the crippling effects of rising costs of construction, coupled with the demands from all levels of government on taxes and levies for new construction and labour increases. The rise of interest rates created a new challenge for the health of our industry.

Mark Fieder, Principal and President, Avison Young Canada

What was the biggest construction innovation to come out of 2023?

I still believe as an industry we are lagging well behind other industries but I finally see more and more organizations focused on LEAN Construction, looking at pre-fabricated elements throughout projects and creating standard work.  Although not really innovative, I believe government mandated “flushable toilets” on construction sites will be a game changer in the long term and help attract more diversity to construction. 

Mike Maierle, President ETRO Construction Limited

Not an easy question to answer. I would say that software, AI, ML, Robotics, and Sensors are going to continue pushing the technology innovation in the industry. However, perhaps the biggest  innovation this year is coming through changes to zoning by-laws to allow more housing units on lots in many cities and municipalities that is being driven by the federal government’s CMHC Housing Accelerator Fund. This will drive increased investment and should increase housing supply. It will change the fabric of communities and neighborhoods.

Dom Costantini, President, BLDR Consulting Corporation

In 2023, the construction industry witnessed several innovations, but the most significant was likely the advancements in autonomous construction robotics. These robots, equipped with AI and machine learning capabilities, have been increasingly integrated into construction sites for tasks like bricklaying, painting, welding, and even complex assembly work.

Jeff Olafson – CEO, Business Development, Gardon Construction Ltd.

It’s hard not to be inspired with how rapidly the construction industry is embracing change in key areas – technology adoption, recruiting women and Indigenous workers, and talking more openly about mental health. Construction has an undeserved bad reputation for not moving faster in these areas. But the pace of change has accelerated, and I can think of no more exciting time to be pursuing a career in construction than today.

Chris Gardner, President – ICBA

We’re looking forward to AI and the impacts it might have on construction and the potential that it might have on fieldwork. We’re also hopeful for the promise of digitized permitting that will help streamline the permitting process in construction.

Jeannine Martin, VRCA President

It should never have been eliminated in the first place, but because it was…the biggest innovation was the return of Skilled Trades Certification in B.C. The Province of B.C. has selected 10 trades for compulsory certification (7 that came into effect on December 1st) including Steamfitter/Pipefitter, Refrigeration and Air Conditioning Mechanic, Gasfitter A & B, Sheet Metal Worker and Electrician. Up to 10 more trades are set to join the program in 2024.

Brynn Bourke, Executive Director, BC Building Trades

The rising prevalence and availability of low-carbon cement/concrete and other alternative wood-derived building materials. Cement production is one of the largest polluting sectors in the world in terms of global greenhouse gas (GHG) emissions. The industry’s increasing efforts to adopt low-carbon and carbon-neutral alternative building materials signifies a crucial stride towards addressing this environmental challenge.

Andrew Petrozzi, Director and Head of Canada Research, Newmark Canada

Although I am consistently impressed by innovations in technology and design, what struck me in 2023 was the people: how we as a commercial real estate industry responded in uncertain times. Our industry is one of resilience and tenacity, built upon the foundation of collaboration. Throughout 2023, we became even more solution-oriented, staying close to our clients and finding creative ways to navigate them through the new roadmap of economic changes. Avison Young’s unique offering of an integrated, cohesive team approach demonstrates how holistic services under one roof can break down siloes – and put people first – by eliminating confusion and adding efficiencies.

Mark Fieder, Principal and President, Avison Young Canada

Do you believe builders will be more or less busy in 2024?

The outlook for ETRO is positive.  We are looking at a significant revenue jump from 2023 to 2024 along with continued hiring of all roles within the company from field operations to leadership roles.

Mike Maierle, President ETRO Construction Limited

I expect builders will be busier than 2023. The push for housing and GST rebate will drive that sector even more. I expect that decarbonization will play a major role in new work for those involved with deep energy retrofits of existing buildings.

Dom Costantini, President, BLDR Consulting Corporation

I think we will continue to see cranes in the sky across the Lower Mainland and have a similar business pace.

Jeannine Martin, VRCA President

We anticipate a busy future for the construction industry. Here’s why: Economic Outlook: A stable or growing economy in Canada and North America likely means sustained or increased construction activities. We’re closely monitoring economic trends and government infrastructure investments, which seem promising.  Technological Advancements: Our commitment to 3D concrete printing and additive manufacturing puts us at the forefront.  These emerging technologies could lead to new projects and improved efficiencies, boosting our workload.  Environmental Focus: The shift towards green building standards aligns with our expertise. This trend could bring more business, especially from clients prioritizing eco-friendly construction practices.  Residential Growth: A strong housing market often boosts commercial construction. If housing demand stays high, we might see a surge in residential and subsequent commercial projects.

Jeff Olafson – CEO, Business Development, Gardon Construction Ltd.

I think this will depend on what markets and industries you work in. I think overall new construction is going to slow with the exception of large infrastructure and hospital work. Retrofit and service industries will likely remain consistent and busy. New developments are slowing with the high cost of borrowing.

Brandon Bird, Chief Executive Officer, Bird Mechanical Ltd.

The past few years have seen compounding crises. First COVID-19, then the shortage of people, then supply chain challenges and the historic escalation in materials costs, and most recently inflation and high interest rates. Through all of this, construction has been remarkably resilient. But economic and regulatory headwinds now slow our progress: Despite the demand for housing, higher interest rates and the impact on the cost of financing projects and mortgages have slowed residential construction. The prospect of interest rates easing in the second half of 2024 will provide some relief. While there is much uncertainty, both internationally and domestically, and a lot of reasons to be concerned about the outlook for 2024, we believe that work volumes, while softer than in the past few years, will remain relatively strong next year.

Chris Gardner, President – ICBA

Excitement is the build-up of innovation starting to take place and the one concern is still the high cost of construction, high interest rates and high inflation that will slow down the construction of new projects.

Zenon Radewych, Principal, WZMH Architects

While the nature of the projects driving construction activity are predicted to change with some major industrial projects winding down, massive public investment in infrastructure projects are expected to keep construction workers very busy for the next few years.

Brynn Bourke, Executive Director, BC Building Trades

I anticipate a busier year for builders in 2024. Labour and construction costs are stabilizing, and there’s a massive push for increased housing construction from the provincial and federal governments. This drive is expected to boost construction activity across Canada. The combination of residential construction, several large-scale rapid transit initiatives nationwide, the construction and refurbishment of Canadian power infrastructure and notable investments in transportation infrastructure, will ensure high demand for builders throughout the entirety of 2024.

Andrew Petrozzi, Director and Head of Canada Research, Newmark Canada

Avison Young expects developers to continue to hold on new construction, with the exception of industrial, multifamily and grocery-anchored retail. Should the industry see interest rate reductions by mid-year, we could see an increase in other sectors, like condo, toward the later part of the year as buyers become comfortable with interest rate levels, and construction and labour costs soften. We also predict that municipalities will help remove roadblocks to new development by streamlining approvals, changing outdated zoning requirements, and reducing taxes, fees, and levies. We also anticipate that investors will pay more attention to opportunities to acquire office assets.

Mark Fieder, Principal and President, Avison Young Canada

What is one thing that makes you excited about being in Canadian construction going into 2024, and one thing that makes you concerned?

I’m excited about the opportunities in all sectors with our continued population growth in Vancouver which is not only driving residential multi-family construction but also intuitional spaces for people to learn, play and create community.  I remain concerned about how interest rates and record high household debt will impact our communities and remain very concerned about housing affordability for middle and lower income families.  

Mike Maierle, President ETRO Construction Limited

I am excited about the big emphasis on innovation and opportunities in the Canadian construction industry. I am concerned, we are not investing enough in building the industry and that the complexity of projects and contracts risk management is not where it needs to be.

Dom Costantini, President, BLDR Consulting Corporation

One exciting aspect for the Canadian construction industry in 2024 is the potential for innovation in sustainable building practices, especially with technologies like 3D concrete printing.  Canada’s commitment to environmental sustainability and the push for green building initiatives can provide a great platform for your company to lead in additive manufacturing in construction.  On the concern side, the rising costs of materials and potential supply chain disruptions could pose significant challenges.  These factors can impact project timelines and overall budgets, requiring careful planning and perhaps even more innovative solutions to mitigate these risks.

Jeff Olafson – CEO, Business Development, Gardon Construction Ltd.

Starting with what makes me concerned, obviously I think the #1 answer anyone will give is the economy and what the future forecast of work will look like as we skirt a potential recession. With that said there is a lot of exciting infrastructure spending that the construction industry will benefit from based on infinitives being taken by the various levels of Government. I’m excited to see many new projects come out and take shape over the next year.

Brandon Bird, Chief Executive Officer, Bird Mechanical Ltd.

Excited: Excitement is an understatement when you consider construction’s massive impact. Nearly 250,000 men and women work in construction in B.C., an unsung hero accounting for 10% of our economy. It also presents endless challenging and inspiring career opportunities. Construction is dynamic and fast-paced – people wake up every day and go to a job site to build everything around us, creating inspiring legacies that shape our communities and the way we will live for generations.   Concerned: However, we should all be concerned about the ongoing shortage of people being acutely felt throughout the industry. For young people, we need to do a much better job of telling the entrepreneurial story of construction, highlighting the exciting ways technology is changing the way we design and build. We also need to do a better job of attracting people to Canada who have a background in the trades – to date we have done a poor job of identifying the skills gaps in our economy and attracting the talent we need to fill those gaps. Currently only about 2% of new immigrants to Canada end up working in a construction trade.

Chris Gardner, President – ICBA

I think the opportunity that collaborative business models bring is something to be excited about in 2024. Also, the opportunity for industry to recognize the significant role women and underrepresented groups can play in advancing construction both by helping to mitigate the labour shortage and improve business. One concern I have is that although the construction industry equates to 7.4% of the national GDP and  10.3% to B.C.’s GDP, it does not get the level of attention from government it deserves.

Jeannine Martin, VRCA President

I’m both excited and concerned about the labour supply challenge we face. On the one hand, there has never been a better time to join the construction industry. Employers are hiring and work is steady making an apprenticeship much more manageable. The benefits of a career in the trades are clear, with high wages and improving working conditions. On the other hand, we will need to work harder than ever as an industry to build new pathways to recruit, assess and properly place a whole new generation of workers. More employers will need to commit to sponsoring apprentices and industry will need to work together to promote construction careers to a more diverse range of workers.

Brynn Bourke, Executive Director, BC Building Trades

I’m excited about the adoption of new technology, especially for improving sustainability in building construction and design. This is critical, as the built environment is a major contributor to greenhouse gas (GHG) emissions, and progress in this area is needed in order to hit emission reduction targets. A significant concern I have is the demographic shift impacting the construction workforce. If not managed effectively, this generational shift could hamper construction activity precisely when it’s most needed – especially in sectors like housing, hotels and infrastructure.

Andrew Petrozzi, Director and Head of Canada Research, Newmark Canada

I am positive about Return to Office efforts – and, as a by product of that, about office leasing and sales. Of late, we are seeing some pent up demand in the market for office space and I see that carrying into 2024. As a matter of fact, for investors with longer-term outlooks and higher risk tolerances, I’d recommend looking at this sector as there are opportunities in the broader Toronto area. For 2024, we continue to keep a close eye on the interest rate environment and the surrounding uncertainty. We predict high interest rates will keep GDP growth in negative territory until spring 2024, creating short-term headwinds for the real estate market. However, we believe that 5.0% marks the peak for interest rates.

Mark Fieder, Principal and President, Avison Young Canada

TPG, a global alternative asset management firm, and global real estate developer Oxford Properties Group, have announced a $1.3 billion deal. 

TPG has acquired a 75% interest in Oxford’s two Class-A industrial business parks in the Greater Toronto Area: Brampton Business Park and Vaughan Business Park. Oxford has retained a 25% interest in the assets and will continue to manage the 5.1 million square-foot portfolio. The transaction values the portfolio at $1.3 billion.

The joint venture, which is the first between TPG and Oxford, represents one of the largest private industrial real estate transactions in Canada to date. TPG Real Estate, TPG’s diversified real estate investment platform, is acquiring the properties through its dedicated real estate equity fund series.

“We see the GTA as one of the most attractive industrial markets globally, with strong real estate fundamentals and population and employment growth outpacing many major U.S. markets,” said Jacob Muller, partner at TPG. “We have followed the Canadian industrial sector for several years, and believe this joint venture provides a unique opportunity to enter the market at scale through the acquisition of some of the highest quality industrial assets in all of Toronto. 

The properties are located in market-leading distribution nodes in the GTA, accessible by several highways and close to intermodal yards, labor, and airports. Each business park includes five buildings, spanning approximately 2.9 million square feet in Brampton and approximately 2.2 million square feet in Vaughan. 

“With this transaction, we generate significant capital to reinvest back into Ontario, which includes 3 million square feet of new GTA industrial developments we are set to deliver by 2026,” said Jeff Miller, head of North American Industrial at Oxford Properties. “We look forward to working together with TPG to create long-term value in the portfolio on behalf of our respective stakeholders.”

Milos Dajic, Vice President of Investments at Oxford Properties explained that the GTA remains one of the best performing industrial markets in North America, and, as of Q3 2023, enjoys a sub 2% availability rate. 

“It remains a high barrier to entry market, with new construction representing less than 2% of the existing stock,” he said. “This bolsters our long-term conviction in this market, which has helped to attract a like-minded investor such as TPG.”

Key Takeaways:

• The city is getting $471 million through the Housing Accelerator Fund (HAF).
• Over three years, the money is expected fast-track nearly 12,000 new housing units.
• The city’s HAF application outlined eight initiatives focused on creating more affordable housing faster.

The Whole Story:

Toronto will receive $471 million in funding through the Housing Accelerator Fund (HAF), the largest payment under the program so far. 

The funds are expected to result in an additional 11,780 homes in Toronto on top of what has already been projected over the next three years. 

“Torontonians are grateful to the Prime Minister Trudeau and Minister Fraser for their $471 million investment in building more housing, quickly, in our city,” said Mayor Olivia Chow. “Toronto is ready to build. We’ve set a new goal of building 65,000 rent-controlled homes, and we’re committed to the provincial target of 285,000 homes by 2031. Housing Accelerator Fund investments are essential to addressing the housing crisis and meeting these targets. Everyone deserves an affordable roof over their heads, and today’s announcement helps make that a reality.”

Officials say the funding will allow the city to increase the supply of new rental homes, protect existing rental homes and people who rent as well as revitalize neighbourhoods. The funding will also help enhance the city’s capacity to accelerate the review and approval of new homes by continuing to streamline processes and introduce new technology.

HAF is delivered by the Government of Canada, through the Canada Mortgage and Housing Corporation (CMHC), as part of the National Housing Strategy. HAF aims to achieve 100,000 new homes across Canada over the next three years.

The city submitted its HAF application to CMHC in June and followed up with a revised submission in August. The city’s HAF application outlines eight initiatives focused on creating more affordable housing faster in neighbourhoods across Toronto that include:

• Transforming organizational structures, processes and technology used to deliver development review and increasing capacity to expedite the approval of development applications.
• Revitalizing Toronto Community Housing buildings and creating net new RGI and affordable rental homes.
•  Protecting rental homes, supporting people who rent and reducing housing speculation.
• Developing City-owned land and expediting delivery of new, permanently affordable rental homes within transit-oriented and complete communities.
• Transforming Toronto’s Waterfront as a catalyst for support of social, economic and cultural growth.
• Implementing a new Rental Housing Supply Incentives program.
• Expanding missing middle housing options and increasing project certainty.
• Optimizing land use and simplifying the planning approvals process to increase purpose-built rental supply in apartment neighbourhood zones.

In addition to scaling up new housing supply, federal HAF investments will enable the city to expand the Multi-Unit Residential Acquisition (MURA) program, which has been successful in supporting the not-for-profit housing sector to acquire and convert market rental properties into permanently affordable rental homes for lower- and moderate-income residents.

HAF supports the implementation of the city’s HousingTO 2020-2030 Action Plan (HousingTO Action Plan) that targets 65,000 new rent-controlled homes across the city by 2030 including 6,500 RGI homes and 18,000 supportive homes with a focus on helping people exit homelessness. Officials say HAF investments will provide Toronto with a predictable funding stream over the next three years. In addition, this funding will contribute towards the federal government’s share of funding, estimated at $500 to $800 million annually, to achieve the city’s 65,000 rent-controlled homes target.

Key Takeaways:

• Wartime Housing was a successful solution to rapidly supply housing to wartime workers and returning veterans.
• The program used prefabrication and standardized designs to build thousands of rental homes.
• The controversy that ultimately led to the halting of the program had less to do with its methods and more to do with disagreements over the level of involvement the government should have in home construction and development.

The Whole Story:

The Government of Canada is reviving an old idea used during WWII to address critical housing shortages: developing a housing design catalogue. 

Housing Minister Sean Fraser announced consultations will begin in early January 2024 on a housing design catalogue initiative.

The initiative’s goal is to accelerate the delivery of homes by standardizing housing designs, starting with low-rise construction. It will explore a potential catalogue to support higher density construction, such as mid-rise buildings, and different forms of housing construction, such as modular and prefabricated homes. The government will also look at ways to support municipalities, provinces and territories looking to implement their own housing design catalogues.

“In order to build more homes faster, we need to change how we build homes in Canada. We are going to take the idea of a housing catalogue which we used the last time Canada faced a housing crisis, and bring it into the 21st century,” said Fraser.

But if it was a good idea back then, what happened to to the original program and why was it stopped? 

The late Jill Wade —  a celebrated academic, author and researcher in B.C. —  dove into the topic in 1980s for her paper “Wartime Housing Limited, 1941 – 1947: Canadian Housing Policy at the Crossroads” which was published in Urban History Review. 

A familiar problem

According to Wade, home-building declined to a disastrous low in the early 1930s before starting a gradual pre-war recovery. Later, between 1942 and 1945, wartime scarcities in skilled labour and building materials resulted in another lag. An Advisory Committee on Reconstruction study, known as the Curtis report, suggested that current building shortages by 1945 would amount to 114,000 units. Wade boiled the crisis down to three main issues: deferred residential construction, overcrowding and doubling up, and substandard accommodation.

A new solution

This crisis led to the creation of Wartime Housing Limited (WHL) which was intended to be a temporary emergency effort to alleviate housing pressure for war workers and veterans. Wade wrote that between 1941 and 1947 WHL successfully built and managed 26,000 rental units, representing a directly interventionist approach to housing problems. Despite being a crown corporation, it functioned more like a large independent builder in the private sector than a federal housing agency.

WHL’s process was to first assessed housing needs in war industry areas. With Privy Council approval, it proceeded with construction, using land obtained through agreements with municipalities, expropriation from private owners, or federal land. Local architects and builders hired by WHL implemented war housing projects based on company designs and specifications. WHL had priority access to building materials from Munitions and Supply.

With a shortage of building materials and the need to build rapidly, WHL employed an inventive semi-prefabricated or “demountable” technique. Instead of using a fully prefabricated, WHL made standardized plywood floor, wall, roof, partition, and ceiling panels in a shop at the project location and erected and finished the house on site. Across Canada, the company used the same standard house types recognized as the “wartime house”.

Dismantling the program 

Wade argued that the program demonstrated the federal government could efficiently meet social needs by participating in housing supply. And this wasn’t just hindsight. At the time, the Advisory Committee on Reconstruction recommended a national, comprehensive housing program emphasizing low-rental housing.  

Here’s how WHL president Joe Pigott put it in 1945: “If the Federal Government has to go on building houses for soldiers’ families; if they have to enter the field of low cost housing which it is my opinion they will undoubtedly have to do, then there is a great deal to be said in favour of using the well-established and smoothly operating facilities of Wartime Housing to continue to plan and construct these projects and afterwards to manage and maintain them.” 

He was no layman or outsider. Prior to his work at WHL, Pigott was a successful Hamilton contractor and the president of Pigott Construction, Canada’s largest privately owned construction company at the time, amassing more than $113,000,000 in business in a single year.

Instead of taking Pigott’s and others’ advice, the federal government initiated a post-war program promoting home ownership and private enterprise. Wade wrote that in doing so, officials “neglected long-range planning and low income housing”.

Eventually WHL was absorbed by Central Mortgage and Housing Corporation (CHMC) and dismantled. In addition, during the late 1940s, WHL’s stock of affordable housing was privatized. 

“This market-oriented perspective hindered advances in postwar housing policy in the same way that, for decades, the poor law tradition blocked government acceptance of unemployment relief,” said Wade.

A clash of politics

While there were many factors that Wade believes contributed to the fall of the WHL, her analysis boiled it down to a fundamental view of how much involvement the government should or should not have in construction, development and housing. 

Humphrey Carver, a senior executive at CMHC and a thought-leader during Canada’s post-war reconstruction efforts, stated that the “all too successful” wartime housing program “should have been redirected to the needs of low-income families,” but “the prospect of the federal government becoming landlord to even more than 40,000 families horrified a Liberal government that was dedicated to private enterprise and would do almost anything to avoid getting into a policy of public housing.”

Wade also cited Lawrence B. Smith, a housing specialist associated with the Fraser Institute, who explained that federal housing policy “sought to encourage the private sector rather than to replace it with direct government involvement.”

Wade’s research and writing highlights a fundamental question of the extent of government involvement in construction, development, and housing, a debate that continues to shape housing policies today.

Key Takeaways:

• Prompt payment has been implemented in Alberta, except if you are working on Dow Chemical’s multi-billion-dollar project in Fort Saskatchewan.
• Records show the company lobbied the province to be exempt from prompt payment legislation and the exemption was granted.
• The Calgary Construction Association says that all stakeholders, regardless of size or stature, should be held to the same standards and urged the province to reconsider exemptions.
• Alberta officials say they have been transparent about possible exemptions which are intended to attract large projects that drive investment.

The Whole Story:

The Calgary Construction Association (CCA) is raising concerns about recent exemptions granted by the Government of Alberta under the Prompt Payment for Construction Work Act (PPCLA). 

The association released a statement saying it believes the exemptions undermine the fundamental principles of fairness and transparency embedded in the legislation and urged officials to reconsider the approach.

According to government documents, the exemption applies to Dow Chemical Canada in relation to its $11.5-billion petrochemical complex planned for Fort Saskatchewan, the Path2Zero Expansion Project. Dow announced last month it would be moving ahead with the project and construction is expected to start in 2024.

Records show Dow Chemical is a registered lobbyist in the province and its activities included discussion around the 28 day payment requirements and their applicability towards multi-billion dollar, multi-year projects and how “payment terms need to be extended past 28 days”.

Enacted in 2022, the PPCLA was introduced to foster fairness and transparency in payment practices within the construction industry – notably, requiring owners to pay contractors within 28 days of receiving proper invoices.

The association says the granting of exemptions threatens the core objectives of the legislation. The CCA stated that all stakeholders, regardless of size or stature, should be held to the same standards to maintain the integrity of the construction sector.

“The PPCLA was put into place in 2022 to provide fairness and accountability in the industry. We are deeply concerned that the ink hasn’t even dried on the legislation, and exemptions have already been granted,” said Bill Black, president, and COO of the CCA. “Granting exemptions to large corporations creates an imbalanced landscape, favouring giants over smaller players,” said Black. “These exemptions undermine the fundamental principles of fairness and equity that the PPCLA aims to promote, creating an uneven playing field for all involved parties.”

The CCA stated that the “erosion of trust and relationships within the construction industry” is a significant concern, adding that granting exemptions based on investment dollars to the province sends a damaging message that fairness can be compromised, eroding trust between contractors, subcontractors and suppliers. 

The CCA also expressed concern that the exemptions may also discourage compliance with industry regulations. They argued that granting exemptions sets a dangerous precedent, suggesting that compliance is optional. They believe this not only undermines the purpose of the legislation but also poses a risk to the industry’s overall integrity.

SiteNews reached out to the province and a spokesperson for Service Alberta and Red Tape Reduction explained that Alberta, like many other jurisdictions, has prompt payment rules in place to ensure contractors get paid on time. They argued that they have always been transparent about the possibility of exemptions.

“After testing ideas with industry, we built some flexibility into the Prompt Payment and Construction Lien Act in limited circumstances, while maintaining the underlying policy intent of prompt payment,” said the spokesperson. “Once proper invoices are given, all legislated payment timelines and protections still apply. We have met several times with key organizations representing the construction industry and have been transparent about the intent to create flexibility.”

The spokesperson added that Alberta’s government has been supportive of the Path2Zero project from the start, but noted this is not a Dow-specific regulation.

“The criteria for an exemption, including a minimum $5 billion project cost, are set out in regulation,” they said. “If other projects come forward, and we hope they do, they may be considered. We want to attract large projects that drive investment, create jobs and generate economic spin-offs for our province. We are committed to taking a balanced approach to ensure we have the right legislation and regulations in place to support economic growth while also ensuring the appropriate protections are in place.”

The CCA believes the exemption could hurt the industry’s reputation.

“The construction industry’s reputation is built on fair and prompt payment practices. Exemptions under the PPCLA risk tarnishing this reputation, leading to disputes, legal battles, and damaged professional relationships,” said Black. “Timely payments are vital for maintaining healthy business relationships, and exemptions can jeopardize the industry’s image.”

The CCA said prompt payment isn’t just a legal requirement; it is a “moral imperative” promoting ethical business practices. Their view is that granting exemptions to companies sends the wrong message about the importance of integrity and ethical conduct in the construction industry.

The CCA urged a reevaluation of the exemptions granted under the PPCLA to ensure that the construction industry remains a fair, transparent, and trustworthy environment for all stakeholders. Moreover, the CCA called on the Government of Alberta to lead by example and have the PPCLA apply to all Alberta projects which are publicly funded.

Key Takeaways:

• Enbridge has entered into a definitive agreement to sell its 50% interest in Alliance Pipeline and its 42.7% interest in Aux Sable.
• The interest will be sold to Pembina Pipeline Corporation for $3.1 billion.
• The sales proceeds will fund a portion of the strategic U.S. gas utilities acquisitions and be used for debt reduction.

The Whole Story:

Enbridge, a Calgary-based multinational pipeline and energy company, has entered into a definitive agreement to sell its 50% interest in Alliance Pipeline and its 42.7% interest in Aux Sable to Pembina Pipeline Corporation for a purchase price of $3.1 billion, including non-recourse debt at Alliance of approximately $0.3 billion, and subject to customary closing adjustments.

Alliance delivers liquids rich natural gas sourced in Northeast B.C., Northwest Alberta, and the Bakken region to Chicago. Aux Sable operates NGL extraction and fractionation facilities in both Canada and the U.S., with extraction rights on Alliance, offering connectivity to key U.S. NGL hubs.

Enbridge explained that the sale price represents a valuation of approximately 11 times projected 2024 EBITDA for Alliance and approximately 7 times for Aux Sable, which is in line with other commodity exposed businesses.

“We are pleased to continue our strong track record of surfacing value for shareholders through an ongoing capital recycling program. With this divestiture, we will have raised ~$14 billion since 2018 at attractive valuations,” said Pat Murray, EVP and chief financial officer. “Today’s transaction reinforces our disciplined approach to capital allocation. We remain committed to optimizing our portfolio, enhancing our industry leading cash flow profile by reducing commodity price exposure, bolstering our financial flexibility, and maintaining a strong balance sheet.”

As part of the transaction, Pembina, a long-standing partner on Alliance and the current operator of Aux Sable, will also assume operatorship of Alliance.

“The Alliance and Aux Sable system has been a reliable and profitable asset for Enbridge for many years. We would like to thank our high-quality team for their commitment to safety and reliability,” said Cynthia Hansen, EVP and president, gas transmission and midstream. 

Enbridge explained the divestiture represents an important element of its financing plan. The sales proceeds will fund a portion of the strategic U.S. gas utilities acquisitions and be used for debt reduction. Any remaining Acquisitions funding will be satisfied through utilizing any, or all, of the following financing programs available to Enbridge including its ongoing capital recycling program, issuance of further hybrid securities and bonds, reinstatement of its DRIP Program, or at-the-market equity issuances.   

The effective date of the transaction is January 1, 2024, with closing expected to occur in the first half of 2024, subject to the receipt of regulatory approvals and customary closing conditions. Enbridge’s 2024 financial guidance and near-term growth outlook through 2025 remain unchanged as a result of this announcement.

“Pembina is well positioned to benefit from growing volumes in the Western Canadian Sedimentary Basin driven by near term catalysts, including new West Coast LNG export capacity, expanded crude oil export capacity, as well as developments in the Alberta petrochemical industry,” said Scott Burrows, Pembina CEO. “The funding plan for the acquisition ensures Pembina’s continued financial flexibility and ability to fund future projects that respond to growing demand, while maintaining leverage within targeted ranges.”

Key Takeaways:

• Under the terms of the legislation, the federal government will have 28 calendar days to pay after the contractor submits a proper invoice.
• The legislation came about due to industry stakeholders raising the issue with government officials back in 2016.
• The contractor will then have seven days to pay its subcontractors, subcontractors will have another seven days to pay their sub-subcontractors, and so on down the contracting payment chain. 
• All existing construction contracts will have one year, as of Dec. 9, 2023, to comply.

The Whole Story:

The federal government is now legally required to pay its construction bills on time. 

Under the terms of the legislation, the federal government will have 28 calendar days to pay after the contractor submits a proper invoice. The contractor will then have seven days to pay its subcontractors, subcontractors will have another seven days to pay their sub-subcontractors, and so on down the contracting payment chain. 

The genesis of the change goes all the way back to 2016 when industry stakeholders raised the long-standing issue of payment delays along the contracting chain.

The construction industry is a critical part of the Canadian economy. We reached a major milestone in ensuring that subcontractors who work on federal government contracts get paid on time. The coming into force of this legislation will alleviate payment delays and enhance financial stability for small and medium-sized construction companies, helping to support the more than 1.5 million workers of the industry during these difficult times for all Canadians.

Jean-Yves Duclos, Minister of Public Services and Procurement

Public Services and Procurement Canada collaborated with key construction industry stakeholders, as well as other government departments, to develop federal prompt payment legislation, which led to the Federal Prompt Payment for Construction Work Act. 

Officials stated that the federal prompt payment legislation aims to ensure that each party in the construction chain receives timely payment for the construction work provided for a project. They added that it is the predictable and timely payment of contractors and subcontractors (and sub-subcontractors) that allows important federal infrastructure projects, such as work on buildings and bridges, to be completed.

All existing construction contracts will have one year, as of Dec. 9, 2023, to comply with the Federal Prompt Payment for Construction Work Act.

Key Takeaways:

• Details and technical resources to support the implementation of Bill 35 – Short-Term Rental Accommodations Act, Bill 44 – Housing Statutes (Residential Development) Amendment Act and Bill 47 – Housing Statutes (Transit-Oriented Areas) Amendment Act have been provided to local governments.
• In January 2024, $51 million distributed to local governments to help meet new requirements that promote the Province’s housing-density initiatives.  
• By June 2024, local governments must have designated Transit Oriented Development Areas bylaw and removed minimum residential-parking requirements. They also must update their zoning bylaw to accommodate small-scale, multi-unit housing requirements (except in areas where they have applied for an extension).
• Provincial modeling predicts small-scale, multi-unit and transit-oriented development legislation could lead to between 216,000 and 293,000 additional net-new housing units over the next 10 years.

The Whole Story:

Regulations and policy manuals have been issued to support B.C.’s latest home construction reforms. 

In the fall legislative session, the government introduced a suite of housing legislation aimed at speeding up home construction. This week, details and technical resources to support the implementation of Bill 35 – Short-Term Rental Accommodations Act, Bill 44 – Housing Statutes (Residential Development) Amendment Act and Bill 47 – Housing Statutes (Transit-Oriented Areas) Amendment Act have been provided to local governments.

“Over the fall session, our government passed comprehensive laws to deliver more homes for people faster in every part of B.C. We are in a housing crisis and we will continue to take strong action to deliver thousands more middle-class homes families can afford.”

Premier David Eby

“We leveraged ideas from some of the most successful action taken on housing from around the world and we made B.C. a leader. said Ravi Kahlon, minister of housing. These regulations will help local governments work with homebuilders to deliver viable housing projects that help more people find homes in existing neighbourhoods and next to transit hubs.”

Bill 35 – Short-Term Rental Accommodations Act:

B.C. is regulating short-term rentals to turn more units into long-term homes. The new rules give local governments stronger enforcement tools, restrict short-term rentals to principal residences and either a secondary suite or an accessory dwelling unit (ADU) in many B.C. communities, and establish a new provincial role in regulating short-term rentals.

Regulations define what constitutes a principal residence, list the communities where the principal-residency requirement applies and detail accommodation-service providers that will be exempt from the principal-residence requirement, such as some strata-titled hotels and motels, fishing/hunting lodges and time shares.

The guidelines also provide additional details, including how local governments can annually request by resolution to the Province to “opt out” of the principal-residence requirement if the community has a rental-vacancy rate of 3% or more for two consecutive years, and assist local governments applying the new provincial legislation alongside existing local government short-term rental bylaws.

Bill 44 – Housing Statutes (Residential Development) Amendment Act:

According to the province, historical zoning rules in many B.C. communities have resulted in new housing being mostly in the form of condos or single-family homes that are out of reach for many people, leaving a shortage of options for the types of housing in between. 

Officials noted that zoning barriers and layers of regulations have also slowed down the delivery of housing, making people go through long, complicated processes to build much-needed housing in communities.

The regulations detail requirements for local governments to update zoning bylaws to allow either a minimum of one secondary suite or detached accessory dwelling unit, a minimum of three to four dwelling units, or a minimum of six dwelling units in selected areas near bus stops with frequent transit service.  

The Small-Scale Multi-Unit Housing Provincial Policy Manual with site standards has also been released to help local governments work with homebuilders to move forward with viable housing projects. Municipalities are required by legislation to consider this manual when developing local zoning bylaws and policies.  

 Bill 47 – Housing Statutes (Transit-Oriented Areas) Amendment Act:

Officials explained that in some cases, higher-density neighbourhoods have been established around transit hubs, but in other cases, restrictive zoning bylaws and parking requirements, along with delayed development approvals, continue to slow down the delivery of homes and services near transit hubs.

Through regulations, transit-oriented development (TOD) areas have now been defined. The regulations will prescribe 104 TOD Areas in 31 municipalities throughout B.C. within the first year of the legislation coming into effect.

The Provincial Policy Guidance Manual: Transit-Oriented Areas is a resource created to support local governments with the implementation of provincial Transit Oriented Area (TOA) requirements. The manual defines transit-oriented areas, prescribes minimum allowable densities and restricts local governments’ ability to mandate residential parking. Municipalities are required by legislation to consider this manual when developing bylaws for TOAs. 

Further details of regulations for all three pieces of legislation, including links to policy manuals and regulations, are included in the backgrounder at the end of this release.

Modelling scenarios:

In addition, the province has released detailed modelling scenarios for the implementation of Bill 44 and 47. The Ministry of Housing retained a group of economic and planning experts to analyze what impacts the new frameworks for more small-scale, multi-unit homes (SSMUH) and designated transit-oriented development areas could have in B.C.

The analysis used relevant international examples of recent zoning changes, particularly in New Zealand and Washington state, and examples from B.C., such as Kelowna. Officials noted modelling of future scenarios cannot account for unforeseen circumstances, the changing nature of housing, real estate markets and other factors.

The findings from the analysis anticipates small-scale, multi-unit and transit-oriented development legislation could lead to between 216,000 and 293,000 additional net-new housing units over the next 10 years.

Timelines:

January 2024:

• $51 million distributed to local governments to help meet new requirements that promote the Province’s housing-density initiatives.  

Early 2024:

• Housing Needs Report guidance provided to local governments.

Feb. 29, 2024:

• local governments’ request must be submitted to opt out of the principal-residence requirement.

May 1, 2024:

• principal-residence requirement (including definition of exempt areas or accommodations), changes to legal non-conforming use protections; and

• short-term rental hosts will be required to display a valid business licence number on their listing, where a business licence is required by a local government.

June/July 2024:

• guidance provided to municipalities to update Official Community Plans and zoning bylaws.

June 30, 2024:

• local governments must have designated TOD Areas bylaw and removed minimum residential-parking requirements; and

• local governments must have updated their zoning bylaw to accommodate small-scale, multi-unit housing requirements (except in areas where they have applied for an extension).

Jan. 1, 2025:

• local governments must have completed their interim Housing Needs Report.

Dec. 31, 2025:

• municipalities update of their Official Community Plans and zoning bylaws (based on the interim Housing Needs Report).

Home construction was front and centre for this year’s Fall Economic Statement.

Chrystia Freeland, deputy prime minister and the minister of finance, explained that the Economic Statement is focused on two key challenges, the rising cost of living and building affordable housing. 

For the latter, the federal government is introducing billions of dollars in new financing to speed home building, crack down on short-term rentals and increase the number of construction workers.

“Our economic plan is about building a strong economy that works for everyone, and this Fall Economic Statement is the next phase of our plan,” said Freeland. “With a focus on supporting the middle class and building more homes, faster, we are taking action on the priorities that matter most to Canadians today—and we will continue doing everything we can to deliver for Canadians from coast to coast to coast.”

The document contains detailed information on Canada’s Housing Action Plan, which is divided into several key areas:

Building More Homes Faster

This section discusses various strategies to accelerate housing construction. Key initiatives include:

• Accelerating how communities build housing.
• Leveraging federal funding to build more homes.
• Removing the Goods and Services Tax (GST) from new co-operative rental housing to reduce costs and encourage more development.
• Providing more financing for apartment construction to address the demand for multi-family housing.
• Building more affordable housing, addressing the critical need for housing that is financially accessible to a broader range of people.
• Unlocking $20 billion in low-cost rental financing, which would make it easier to finance rental housing projects.
• Speeding up financing approvals to expedite the process of building more homes.
• Repurposing more federal lands for housing, which involves using government-owned land for residential development.
• Strengthening the Co-operative Housing Development Program to support more collaborative, community-driven housing solutions.
• Leveraging the Canada Infrastructure Bank to support more housing, using this entity to finance large-scale infrastructure projects, including housing.
• Providing an update on Indigenous housing and the Urban, Rural, and Northern Indigenous Housing Strategy.
• Establishing the Department of Housing Infrastructure and Communities to oversee and streamline housing-related initiatives.

More Construction Workers to Build More Homes

This part focuses on workforce development in the construction sector. It includes:

• Breaking down barriers to internal labor mobility, making it easier for construction workers to move and work across different regions.
• Prioritizing construction workers for permanent residency, recognizing the critical role they play in addressing Canada’s housing needs.

Supporting Renters, Buyers, and Homeowners

This section addresses various measures to support different stakeholders in the housing market. Key points include:

• Cracking down on non-compliant short-term rentals, which can impact the availability of long-term rental housing.
• Introducing the New Canadian Mortgage Charter, aimed at protecting and supporting homebuyers.
• Housing international students and protecting them from fraud, ensuring they have access to safe and reliable housing options

The Residential Construction Council of Ontario (RESCON) stated that while the measures are a step in the right direction towards tackling the housing crisis, the federal government can and must do more.

“Billion-dollar fixes are being proposed, but the housing supply crisis and affordability issue is a trillion-dollar problem, as noted by the CMHC,” said RESCON president Richard Lyall. “We are encouraged that housing is a main focus of the feds but there are still many impediments that were not addressed such as the enormous infrastructure funding gap faced by municipalities that impedes new home construction.

We need a Marshall plan-styled strategy with respect to the chronic housing supply shortfall.

RESCON President Richard Lyall

RESCON was pleased the government announced $15 billion in new loan funding for builders of rental properties and $1 billion to support the building of affordable housing, as well as a mortgage charter that will clarify rules for homeowners who are facing renewals and ensure that lenders have appropriate mortgage relief policies in place for consumers facing hardship.

But Lyall argued that many impediments to housing construction were not addressed, such as reducing taxes associated with purchasing a home and the long approvals process that builders must endure when starting a project.

“Without tackling these issues, and the huge infrastructure funding gap being faced by municipalities, the housing problem will not be solved,” he said. “Municipalities are in a challenging position and the feds must pick up the slack by funding the necessary public infrastructure to support housing.”

Key Takeaways:

• The majority of Teck’s steelmaking coal business, Elk Valley Resources, will be sold to Glencore PLC for US$6.9 billion in cash.
• The rest will go to Nippon Steel Corporation and South Korean steelmaker POSCO.
• Glencore says it plans continue to operate in Canada through both a Vancouver head office and regional offices in Calgary and Sparwood, B.C.
• The company noted that they will maintain significant employment levels in Canada with no net reduction in the number of employees.  

The Whole Story:

Teck Resources has agreed to sell its entire interest in its steelmaking coal business, Elk Valley Resources (EVR), through a sale of a majority stake to Glencore PLC and two other overseas steelmakers for US$9 billion.

Founded more than 100 years ago in Ontario, Teck is one Canada’s largest mining companies. Glencore is a Swiss multinational commodity trading and mining company.

Teck says Glencore plans to establish Canadian head office for the steelmaking coal business in Vancouver, maintain jobs and increase investment in the business and local communities.

“This transaction will be a catalyst to re-focus Teck as a Canadian-based critical minerals champion with an extensive portfolio of copper growth projects, unlocking the full value potential of the company,” said Jonathan Price, president and CEO of Teck. “This sale will ensure Teck is well-capitalized and able to realize value from our base metals business and deliver strong returns to our shareholders while maintaining a robust balance sheet. Glencore has made strong commitments that will create new benefits for Canada and the Elk Valley and ensure responsible stewardship of the steelmaking coal operations for the long term.”

The deal includes a minority sale to two other companes. Glencore has agreed to acquire 77% of EVR for US$6.9 billion in cash. Nippon Steel Corporation (NSC) has agreed to acquire a 20% interest in EVR in exchange for its current 2.5% interest in Elkview Operations plus US$1.3 billion in cash payable to Teck at closing of the NSC transaction and US$0.4 billion paid out of cash flows from EVR. South Korean steelmaker POSCO will trade its interest in a pair of Teck’s coal operations for a three per cent stake in the overall steelmaking coal operations.

“This sale sets the stage for Teck for continued growth as a major Canadian-based producer of copper and other future-oriented metals, while preserving the jobs and operations of the coal mines in the Elk Valley,” said Dr. Norman B. Keevil, chairman emeritus, Teck. “This company was built on a foundation of sound geoscience and engineering excellence, with a record of successful mine-building second to none. That is the same foundation we see for Teck’s future. It’s time to get on with it.”

The sale comes at a time of increased government scrutiny of major foreign transactions with the Investment Canada Act. 

“All regulatory processes will be followed regarding review of the proposal,” said Finance Minister Chrystia Freeland said during a conference. “The government concern remains to protect Canadian jobs, environmental issues, rights of indigenous people; Teck is important for Canada and they are a champion for Canada.”

Construction is dominating Canada’s business scene.

The latest Top Growing Companies list from the Globe and Mail reveals a trend: for the second year in a row, the top spot went to a construction-related company. This sector’s prominence extends throughout the list, with numerous other builders standing out among the 425 top firms.

Our examination centers on the fastest-growing builders, distinct from the engineering, tech, and manufacturing sectors that are also making major strides in Canada’s economy.

Subterra Renewables

Subterra Renewables is an underground underdog that snagged the number one spot as Canada’s fastest growing company. The full-service geothermal drilling provider has over 500 projects completed in multi-res, single family and commercial sectors across Canada and the U.S. Lucie Andlauer, the CEO behind Subterra, has embraced an energy as a service business model that allows developers to install the complete geothermal exchange system at no upfront capital cost. Subterra believes this is the best way to unlock the value of geothermal exchange while mitigating risk. 

HKC Construction 

After more than 10 years in the Greater Toronto Area, HKC is taking off. The contractor tackles commercial, industrial, retail, institutional and other project services. The HKC team attributed their success to three things: putting innovation at the forefront, their culture of excellence and having a customer-centric approach. 

The recognition as the 28th top growing company is a moment of immense pride for the entire HKC Construction team. It validates our efforts, fuels our passion, and motivates us to reach for the stars. We are grateful to our clients, partners, and employees for being a part of this incredible journey.

HKC

Astro Excavating

Sometimes it pays to be a specialist rather than a generalist. Ontario-based Astro chose to go all-in on digging. A quick glance at their project list shows condo after condo, highlighting their role in creating more housing for the Greater Toronto Area. 

Orion Construction 

Orion is no stranger to growth. Last year they took the top spot on the list and are still on an upward trajectory. Helmed by Josh Gaglardi, Orion says that a major part of its success has been mastering the design-build model and assembling a high-quality team.

UTILE

The Quebec-based builder boasts that it is the only social economy organization that specializes in student housing in the province. And UTILE’s approach is paying off, ranking them in the top 100. 

“This recognition is particularly dear to us because it illustrates that with the social economy, it is entirely possible to combine the agility and dynamism generally attributed to the private sector with the achievement of social objectives.”

UTILE

Avana

Based in Saskatchewan, Avana is unapologetically female-led and family-focused. President & CEO of Avana, Jenn Denouden, has been outspoken about her company’s mission to provide affordable housing to women and children, particularly those who are fleeing violence. Since its founding in 2014, Avana has proven that you can prioritize social responsibility and turn a profit. The company says it has more than $400 million in assets under management. It also started the Avana Foundation, which supports a plethora of charities. 

Ace of Decks

Started by 14-year-olds riding bikes with bags of tools, Ace has grown into a premier deck builder in the Montreal area. The team says they can handle anything, from roof top terrasses to small balconies. Their portfolios even showcases bespoke work wrapping decks around trees.

Catanzaro Mechanical

The company was founded in 2017 by Guy Catanzaro to serve the industrial, commercial, and institutional construction sector. It has gone on to become one of the most sought-after mechanical contractors in the Greater Toronto Area.

The Catanzaro name had been well-established within the MEP trades for over 50 years. There isn’t a prominent building in Toronto, that we, as a family, have not serviced”

Guy Catanzaro, President and CEO, Catanzaro Mechanical

Luxton Construction

Luxton Construction is a full-service General Contractor based in Vancouver that offers a diverse range of services including general contracting, design-build, and project management services under a variety of contracting methods. The company says it has rooted its growth in seven core values: safety, environment, quality, honesty/integrity, community, people and clients.

Marlin Spring

Marlin Spring is a fully integrated real estate company that strategically acquires, develops, constructs and repositions assets throughout North America. One of its current Canadian projects is a multi-tower development proposed for Etobicoke that would add more than 1,000 units of housing to the city.

miEnergy

miEnergy is on a mission to turn Canada’s prairies green. The geothermal and solar company specializes in turnkey energy projects for residential and agricultural clients in Alberta, Saskatchewan and Manitoba. They also are a Certified B Corp, an impressive accomplishment for any company. They are currently the largest renewable energy company in Saskatchewan with over 1,500 systems installed.

Vinland Homes

Custom builds to stock plans, infills, and teardowns — Vinland does it all for those looking for a home in Saskatchewan. Vinland says its professionals work with leading, upscale materials to deliver a finished product that outshines the competition and exceeds industry standards.

Black-hart Construction

Led by Jordan Hart, director of operations, and John Black, director of construction, Black-hart says its steady growth is due to reinvesting in its development by attracting new team members. Based in Oakville, Ont. the company says it also focuses on being at the forefront of technology and project management. The team says it offers meticulous process of design, budget and schedule, and subcontracting.

RITESTART

Established in Ontario in 2015, RITESTART is a general contractor, design-builder and construction manager that specializes in institutional, industrial, and commercial construction projects. The company says one its major values and priorities is strong relationships. So far, they have completed more than $65 million worth of work and it’s their fourth time on the Top Growing Companies list.

Vesta Properties

Vesta is no stranger to accolades. It has been awarded the UDI Awards for Excellence- Best of the Fraser Valley, and Canadian Homebuilder Association of BC – Multi-Family and Single-Family Home Builder of the Year. Many have benefitted from their work. The company has been building since 1989 and has created more than 6,000 homes in Alberta and B.C.

Ehrenburg Homes

While their methods are modern, Ehrenburg has a medieval connection. Ehrenburg Homes was named in homage to Ehrenburg Castle in Germany. The castle, which was built around 1100, still stands today as a testament to the longevity of true craftsmanship. When Joe Ehr founded Ehrenburg Homes in 1983, he wanted to create a company dedicated to providing quality in every aspect of home construction.

In-Depth Contracting

In-Depth Contracting is an Ottawa based heavy civil construction company with more than 20 years of experience in large-scale excavations, watermain and sewer installations, culvert replacements, shoring system installations, demolition, bridge rehabilitation, and paving. Its core values include accountability, engagement, innovation, adaptability, communication and integrity.

Jablonski Electric, Plumbing & Heating

Jablonski has been keeping the lights on and the water flowing for Manitobans since 2012. They specialize in electrical, plumbing, heating and cooling for residential, commercial and industrial clients.

VersaPile

When it comes to helical piles, deep foundation solution suitable for supporting light and heavy structures, VersaPile is crushing it in central Canada. Their team specializes in deep foundations for hydro transmission lines, substations, wireless and telecommunication towers, oil and gas facilities, and pipelines, industrial structures, municipal and government projects, and more. VersaPile is also a Certified Aboriginal Business.

Our whole team is proud to receive recognition for the dedication we bring to work every day. I firmly believe it’s our commitment to shockingly-good service and willingness to disrupt the status quo to achieve better results that has led to our rapid growth. We are honoured to be one of Canada’s Top Growing Companies and look forward to serving more customers as we expand to Southern Ontario.

Stan Higgins, VersaPile Founder

VPAC Construction Group

VPAC has spent the past 20 years honing their design and build skills to deliver a full spectrum of pre-construction and construction management, and general contracting services for commercial, multi-family, and seniors’ housing projects. They also are experts in integrated project delivery. Their team is currently nearing completion on a major redevelopment of the Chain and Forge building on Granville Island in Vancouver.

This accomplishment comes as a testament to VPAC’s 22 years of delivering successful construction projects around British Columbia. We’re proud of our continued growth and would like to thank our incredible team, clients, and partners who have supported us throughout this journey. Together, we’re building a better future, one project at a time.

VPAC

Coffrages Synergy Formwork

Coffrages is not messing around when it comes to formwork. Their team has completed 6,800 projects in eastern Canada. They boast a fleet of 16 natural gas-powered trucks that can make daily deliveries from its prefabrication plants. They manufacture roughly 40,000 square feet of formwork material each week. This gives them the capacity to deliver large-scale projects.

QuadReal Property Group, a global real estate investment, operating and development company headquartered B.C. announced it has acquired the U.S. student housing business of CA Ventures. Under QuadReal’s ownership CA Student Living (CASL) will operate as a new brand, Article Student Living.  

QuadReal first became a real estate partner of CASL in 2017 and has held an indirect passive stake in the business since September 2020.  

“We are thrilled to launch Article Student Living, which represents a key part of QuadReal’s long-term investment strategy in the U.S. Article’s 500 employees are passionate about elevating student living and delivering operational excellence, and we will continue to build on their existing momentum and commitment to bring a best-in-class experience to our residents and partners,” said Dennis Lopez, CEO, QuadReal Property Group. 

QuadReal explained that the full acquisition will enable it to combine capabilities, resources, and best practices and create the leading real estate investment manager dedicated to U.S. student housing.

“We have witnessed firsthand QuadReal’s unwavering commitment to the success of our team since we first partnered,” said Thierry Keable, president, Article Student Living. “Today marks an important milestone in our journey together. Our new brand represents our commitment to deliver quality and strong performance. At Article Student Living, we strive to offer students more than a place to stay. We build and provide vibrant hubs of learning and connection.” 

Key Takeaways:

• Ontario plans to remove the 8% provincial portion of HST for purpose-built rental home construction.
• Combined with federal cuts, this removes the full 13% HST on qualifying new purpose-built rental housing in Ontario. 
• Ontario is also investigating how to leverage modular construction to meet its goal of building 1.5 million homes by 2031.

The Whole Story:

Ontario plans to cut taxes for construction to get more rental homes built.

The province announced it is taking steps to remove the full 8% provincial portion of the Harmonized Sales Tax (HST) on qualifying new purpose-built rental housing to encourage rental home construction. 

“There has never been a greater need to get rental housing built across the province. This is why our government is taking steps to tackle the housing crisis so that all Ontarians can have an affordable place to live,” said Peter Bethlenfalvy, minister of finance. “Tomorrow, I will provide an update on our plan that will continue with our government’s targeted, responsible approach so we have the flexibility needed to build Ontario and address the uncertainty of today while laying a strong fiscal foundation for future generations.”

Cutting taxes

The removal of the provincial portion of the HST would apply to new purpose-built rental housing such as apartment buildings, student housing and senior residences built specifically for long-term rental accommodation that meet the criteria. The enhanced rebate would apply to qualifying projects that begin construction between September 14, 2023 and December 31, 2030, and complete construction by December 31, 2035.

To qualify for the enhanced HST New Residential Rental Property Rebate, new residential units must be in buildings with at least four private apartment units or 10 private rooms or suites, and have at least 90% of residential units designated for long-term rental.

Currently, the Ontario HST New Residential Rental Property Rebate is equal to 75% of the provincial portion of the HST paid, up to a maximum rebate of $24,000. The enhanced rebate would be equal to 100% of the provincial portion of the HST, with no maximum rebate amount.

In the example of a two-bedroom rental unit valued at $500,000, the enhanced Ontario HST New Residential Rental Property Rebate would deliver $40,000 in provincial tax relief. When combined with the enhanced federal GST New Residential Rental Property Rebate, this would amount to $65,000 in tax relief.

Since fall 2022, Ontario has called on the federal government to remove the HST for certain purpose-built rental housing. In September, Ottawa announced it would totally remove GST for purpose-built rental housing projects. Trudeau then encouraged provinces to do the same.

Together, the provincial and federal actions would remove the full 13% HST on qualifying new purpose-built rental housing in Ontario. 

Developing a modular strategy

The province is also working on the development of a comprehensive modular home strategy. This strategy includes exploring the use of a Request for Qualification process that will identify and pre-qualify companies that contribute to modular housing construction on the scale that can help meet housing goals.

The government is also working to leverage surplus provincial lands and partnering with municipalities to leverage surplus municipal lands in order to help reduce the cost of building attainable homes, including modular homes.

Key Takeaways:

• Metro Vancouver has voted to implement significant development cost charge increases to fund infrastructure projects in a ‘growth pays for growth’ strategy.
• The move has drawn stern criticism from Federal Housing Minister Sean Fraser.
• The fees are set to increase starting in 2025.

The Whole Story:

Construction fees are about to jump in the Lower Mainland and the federal government is not pleased. 

Officials with Metro Vancouver, a federation of 21 municipalities in the region, have voted in favor of significant development cost charge (DCCs).

Rising fees

The fees associated with building new residential and non-residential buildings across the region will go up significantly over a three-year period between 2025 and 2027. The fees vary between municipalities and by project type, but will triple in some cases. 

Metro Vancouver plans to use the revenue generated by the fees to fund billions of dollars worth of growth-related park, water and sewer infrastructure over the next 30 years.

While consulting with industry leaders, Metro Vancouver found opposition to the raises, but determined that the impacts were comparable or less impactful than other factors. 

“Many in the development industry expressed the rate increase would have a negative effect on residential and industrial development,” reads Metro Vancouver documents. “Given the challenges industry is already facing, such increased financing and construction inflation and other DCC increases and building code changes, the development industry expressed the proposed DCC is another charge adding a burden to development.”

Metro Vancouver commissioned a study to examine the financial impact of the proposed DCCs. The findings in the study concluded that the proposed DCCs will have a “commensurate impact” to the financing rate changes over the past 12 months, but “significantly less of an impact” than the construction inflation and changes in unit prices over the past 12 months.

Criticism from Ottawa

Even before they were approved, the increases drew the attention of Federal Housing Minister Sean Fraser, who wrote to the board asking them to rethink the plan as it goes against Ottawa’s strategy.

“Significant increases to development charges have the potential deter development by offsetting the impact of other measures that reduce the cost of building,” wrote Fraser in a letter to Metro Vancouver. “When projects do advance, increased charges on development can lead to higher housing costs for renters and homeowners, making it more difficult to find somewhere affordable to live.”

Fraser argued that as part of their Housing Accelerator Fund applications, cities in the region have proposed various initiatives to help get more homes built, more quickly, including waiving their own development charges. 

“While I also appreciate that some hold the perspective that ‘growth pays for growth,’ we will all pay for stagnation as a result of a lower pace of construction,” wrote Fraser. “A ‘growth pays for growth’ approach ignores the value that new development, new property tax bases, new businesses, and new neighbours bring to our communities.”

Increasing scrutiny

It hasn’t just been talk. In September, Fraser announced he would postpone the announcement of Housing Accelerator Fund deals in Surrey and Burnaby due to the DCC increase plans. 

Following Fraser’s comments, the Vancouver Regional Construction Association asked its members for their thoughts. 

“We sent a survey to our members in September in response to the Federal Government postponing the Housing Accelerator Fund announcement in Surrey and Burnaby,” said Jeannine Martin, VRCA president. “The general response was that we need to find ways to fund aging infrastructure. However, increasing developer fees to fund aging sewer systems and parks is not going to help alleviate the housing crisis.” 

Fraser said he will be re-examining the proposed initiatives in each city’s application, and will make “necessary adjustments” where the initiatives conflict with Metro Vancouver’s DCC plans.

Key Takeaways:

• In January, the project team estimated the project would cost $30.9 billion, nearly $10 billion more than their estimate just a month earlier.
• Following the revised cost estimate, the Government of Canada announced it would spend no additional public money on the pipeline.
•  In March, the project team announced that construction was close to 80% complete, with mechanical completion expected to occur at the end of 2023. They expect the pipeline will be in-service in the first quarter of 2024.

The Whole Story:

The Trans Mountain Pipeline Expansion Project is in serious financial trouble, government reports show. 

According to documents released by Canada’s Auditor General, for the second year, the Trans Mountain Corporation’s year-end financial statements disclosed a “significant uncertainty” about the Crown corporation’s ability to continue operating. 

The uncertainty was related to the corporation’s ability to fund the remaining construction costs and to make the necessary payments on its existing debt. 

“While this disclosure did not cause us to modify our audit opinion on the Trans Mountain Corporation’s 31 December 2022 financial statements, we assessed the uncertainty to be important enough to mention it in our report,” read the report. “During our audit work, we also assessed that the corporation appropriately described the matter in a note in its financial statements.”

Earlier this year, the corporation revised its cost estimate for the pipeline expansion project to $30.9 billion. The corporation had previously reported costs of the project in December 2022 to be $21.1 billion. In early 2023, the corporation proposed a borrowing plan to finance the remaining construction costs.

The Treasury Board approved both the revised cost estimate and the borrowing plan in April 2023 through the 2023–27 corporate plan of the Canada Development Investment Corporation (the Trans Mountain Corporation’s parent Crown corporation). This corporate plan also anticipates that the revenue from the transport of crude oil in the expanded pipeline will begin in the first quarter of 2024.

In February 2022, the Government of Canada announced it would spend no additional public money on the pipeline. Since then, Trans Mountain Corporation has had to obtain external financing to fund the remaining costs of the project. 

“If the corporation cannot finance the full remaining construction of the pipeline expansion, it will be unable to put the expanded pipeline into service to generate revenue,” concluded the report.  

In July 2023, the corporation reported that the borrowing limit on its existing credit facility with a group of Canadian financial institutions, which is guaranteed by the Government of Canada, was increased to $16 billion. Notably, as of 31 December 2022, the corporation had already borrowed $7.2 billion from this credit facility. 

“Given that it will need additional funding to meet the remaining construction costs, the corporation, in its unaudited financial statements for the second quarter of 2023, continued to report a significant uncertainty over continuing operations,” stated the report. “Our mandate includes bringing important matters like this to Parliament’s attention.”

The original Trans Mountain Pipeline was built in 1953. The expansion is essentially a twinning of this existing 1,150-km pipeline between Strathcona County (near Edmonton), Alberta and Burnaby, B.C. It will create a pipeline system with the nominal capacity of the system going from approximately 300,000 barrels per day to 890,000 barrels per day. The project involves laying 980 km of new pipeline.

 In March, the project team announced that construction was close to 80% complete, with mechanical completion expected to occur at the end of 2023. They expect the pipeline will be in-service in the first quarter of 2024.