Category: Economy

You wouldn’t step onto a job site with someone you can’t trust. 

First West Capital believes the same reasoning applies to financing your construction business. They explained that their team has in-depth knowledge of how the industry operates and are committed to the long-term success of their clients.  

Steve Chen, vice president and head of First West Capital, explained that trust is a requirement  for the job site and it’s no different for finance. 

“You can’t document or put in the legal contracts every nook and cranny, every possibility that comes up, so you have to trust the people that you’re working with will do the right thing right at the end of the day,” said Chen. 

A partner that will be there

First West Capital understands the intricacies of construction work and has the risk appetite to finance it. Rather than just being a lender, they want to seek out firms that are looking for someone to help them grow. 

“Those that have gone through different financings, or needed financing to finance a larger project or a bigger order, understand that they need a financial partner who will be there throughout all their cycles and changes and that’s what I mean,” said Chen, “Risk appetite means that the money will be there when you need it.”

He explained that this means the First West Capital team will help their partners figure out cash flows and forecasts so they are on solid financial footing. They want to remove uncertainty. 

“For the right companies, we are the partner that will make sure that you have that piece figured out so that you don’t need to worry or second guess whether or not that lender will be there,” said Chen. “I think that’s a big thing because, for folks in the sector, they’re good at running their business, they’re good at whatever their expertise is. They know they’re going to make money. It’s just they need that financing help to make money because the dollars are big and the projects get larger and they need somebody there with them.”

Geoff Devereux, a director at First West Capital, recalled that this was the exact reason one of their former clients sought them out. A project had gone sideways, leaving them short of working capital. 

“We were able to understand that it was really a one-off kind of Black Swan type of event,” he said. “They have really strong management and we were able to come in to provide some additional financing to right-size their working capital on the back of that and fast forward and they are back in great shape. That’s an example of us putting our money where our mouth is.”

Devereux noted that traditionally in lending there is less appetite for this due to cautionary tales or the niche understanding required for the ebbs and flows of a project-based business.  But First West Capital can demonstrate the patience required of a lender or for managers who are doing all the right things.

Finding the right fit

Whether you are looking to buy your first building, finance a project or need extra equipment, First West Capital’s team wants to dig deep into how major financial decisions can help you thrive. The boutique firm of only seven people are specialists that are zeroing in those looking for growth.  

“We are here for your ongoing success,” said Chen. “We are looking beyond just the credit metrics to what will benefit the business most in the long term.”

If, in their opinion, the project doesn’t build value, if the margins are too thin, if project risk is high, if overruns seem likely, if the bids are too tight, they will express those views which could help a company think more deeply about a project. 

“But sometimes it really makes sense,” said Chen. “It’s a fantastic project, you’re expanding in the right areas. You’ve done all your homework and we want to be there for you to support you financially with that.”

He stressed that above all, they are looking for partners with a growth mindset and who are looking for a financial partner. 

“We want people who are looking for advice and are willing to spend the time and money investing in systems and processes that will elevate your business,” said Chen.

Green flags 

It also comes down to the right people. 

“A key thing for us is character,” said Devereux. “The character of the people we’re working with is paramount, the grit, resilience and hard-working nature of our clients.”

Other “green flags” that First West Capital looks for are a diversity of projects (size, type, location, customer), owners who delegate effectively, companies with strong systems, processes, and procedures, and long-term business planning.

Carmel Tang, operations advisor at First West Capital, noted that once the firm finds a company that’s a good fit, the partnership that’s formed is unique. 

 “What makes us really special and really unique is how much we work with our clients,” she said. “Working with First West Capital means you have a partner who will be responsive and understanding. I am Just so proud of the level of service and communication that we give to our clients. It really is a working relationship to try to make them as successful and I think that’s what really truly sets us apart.”

Connect with the team to see if First West Capital might be a good fit to achieve your growth goals. Here’s how to get in touch:

Steve Chen, CFA,VP and Head of First West Capital

c: 604 862 7564 e: schen@firstwestcapital.ca 

610 – 1040 West Georgia Street, Vancouver, BC V6E 4H1

Geoff Devereux, Director, First West Capital

t: 604-335-1239  c 604-996-4581 e: gdevereux@firstwestcapital.ca

610 – 1040 West Georgia Street, Vancouver, BC V6E 4H1

Key Takeaways:

• Environment Minister Steven Guilbeault said earlier this week he was against government support for new road infrastructure.
• He said this was because more roads encourages more car use, something Ottawa is looking to move away from.
• This week he sought to clarify those comments, saying he was against federal support for “large” road projects.
• The comments drew strong criticism from provincial leaders as well as the construction sector.

The Whole Story:

Environment Minister Steven Guilbeault has clarified controversial comments about road infrastructure investment after drawing heavy criticism from political leaders and the construction sector. 

On Monday, Guilbeault said the federal government will stop investing in new road infrastructure. However he has since clarified his comments, stressing that he meant to say Ottawa will not be funding “large” road projects. 

“Of course we’re funding roads. We have programs to fund roads,” he told reporters, adding that the federal government can be counted on to support provinces paying for maintenance. 

However, he noted that Ottawa has decided that existing road infrastructure “is perfectly adequate to respond to the needs we have.”

Guilbeault explained that the federal government’s goal is to get people out of their cars and into public transportation.

He told reporters that Quebec City’s long-proposed third link is an example of a project that will not receive funding from Ottawa.

“What we have said, and maybe I should have been more specific, is that we don’t have funds for large projects like the ‘3eme lien’ that the CAQ has been trying to do for many years,” he said of Quebec’s provincial government.

Criticism from industry

The Canadian Construction Association noted that a report by the Federation of Canadian Municipalities (FCM) estimates that it will require $107,000 in public investments per new housing unit. This amounts to a total of $620 billion in public funding needed – an additional $375 billion beyond the current planned budget.

“These new communities need new roads. People need to be connected to their jobs, their schools, and their hospitals,” said Mary Van Buren, CCA president. “A growing population has growing demands. We not only need the road networks to support their movement; we also need to shore up our trade infrastructure, which includes roads, bridges and highways.”

The CCA added that Canada has been under-investing in its trade-enabling infrastructure for 15 years and builders need the federal government to partner with industry and work with municipal and provincial governments to build a strong foundation for a stronger Canada.

In response to the minister’s initial comments, the Ontario Road Builders Association (ORBA) stated that he did not understand the importance of Canadian infrastructure. 

“While the Minister’s previous actions – including an attempt to encroach on provincial jurisdiction over infrastructure development recently deemed unconstitutional – demonstrate a bias against development, it is shocking to see the Minister make these comments on behalf of the government, suggesting a naive understanding of Canada’s infrastructure needs at a time of record immigration and a push towards removing barriers to trade and economic growth,” said the group, adding that his comments were “elitist” and “out of touch” with the reality of everyday life in suburban and rural communities. 

They noted that the road building industry employs more than 56,000 workers in Ontario alone and earlier this month, Prime Minister Justin Trudeau’s spoke at ORBA’s 97th Annual Convention, emphasizing the importance of road and highway infrastructure for Canadian prosperity.

“We call on Minister Guilbeault to stop playing politics and join us and provincial governments across Canada to get shovels in the ground on much needed projects in Ontario and across the country,” said the group. 

LiUNA International Vice President and Canadian Director Joseph Mancinelli called the minister’s comments “beyond disappointing”. 

“Growing regions require resilient infrastructure, including our roads,” he said in a statement on social media. “This has a direct impact on our economy, jobs, connectivity and the strength and function of our communities. Enough delays and political games. It’s time to get shovels in the ground.” 

Provincial leaders weigh in

Various political leaders took to social media to give their response to the comments.

Federal Conservative Leader Pierre Poilievre said in a post on X that Mr. Guilbeault “won’t be happy until we’re living back in mud huts.”

Saskatchewan Premier Scott Moe also posted on social media, saying this: “Guilbeault wants us all to walk everywhere. The Trudeau government gets more out of touch with reality every day.”

Alberta Premier Danielle Smith suggested the minister is out of touch with the transportation needs of Canadians.

“Does this minister understand that most Canadians don’t live in downtown Montreal? Most of us can’t just head out the door in the snow and rain and just walk 10km to work each day,” said Smith.

Key Takeaways:

• Canada is seeing rapid reductions (potentially up to 5%) in both high and low-rise residential construction costs, with much larger reductions anticipated in Toronto, followed by Montreal and Vancouver.
• Interest rates are expected to begin their decline in 2024, at which point condominium sales will likely recover. By this time, we should also see increased momentum in purpose-built rental development, with credit to government-led incentives and an increase in infrastructure spending.
• Mid-term (2025-2026) success will hinge on timing the market and beating the rush, taking a deal, and hitting the ground running.
• In the long term, we are likely to find ourselves losing the demand versus supply fight, and costs may continue to escalate while the housing crisis intensifies. 

The Whole Story:

Builders could be seeing some relief from high construction costs, however in the long term, the industry will continue to face significant challenges . 

The latest construction costs forecast from Altus group shows that Canada is seeing rapid reductions (potentially up to 5%) in both high and low-rise residential construction costs, with much larger reductions anticipated in Toronto, followed by Montreal and Vancouver.

Marlon Bray, Altus Group’s senior director of cost consulting & project management, wrote that as the industry heads into 2024, development demand is ripe (particularly in the case of residential development), but investors, builders, and developers are wary in this high-interest rate environment. 

“While escalation projections are, in essence, a well-educated guess – especially in the current, more volatile landscape – it remains important to highlight the anticipated impact of cost escalation over the short term, midterm, and longer term,” said Bray.

Across Canada, Altus is seeing rapid reductions (potentially up to 5%) in both high and low-rise residential construction costs, with much larger reductions expected for Toronto, followed by Montreal and Vancouver. However, in the Atlantic (Halifax, in particular) and the Prairies (Calgary, in particular), cost reductions are not expected. Bray noted that instead, these regions could see a continued upward trajectory.

“This cost correction can largely be attributed to interest rate hikes, which have impacted the condominium and low-rise markets in the most expensive cities, by the largest degree,” said Bray. “In the current environment, sales have plummeted, and construction starts are slowing (if not coming to a near halt). The ongoing housing crisis is expected to worsen as a result, with regions like the Greater Toronto Area (GTA) expected to be hit the hardest.”

According to Build Force Canada, employment in the residential sector is forecasted to decline by more than 11,000 workers – or approximately 5% of the 2021 workforce – as demand for new home construction recedes. The non-residential sector helps to offset this; however, the skills need to be transferable, and location plays a key role. Quebec and B.C. will also see large drops in workforce, with a significant decline in Quebec non-residential expected as well.

Even in the best-case scenario, housing needs, infrastructure challenges, and the lack of skilled labour in the market are on a collision course to create a massive construction cost headache – or hangover.

Marlon Bray, senior director of cost consulting & project management, Altus Group

Labour costs are not expected to decrease; union agreements in addition to the increased cost of living mean there is little wiggle room. Material costs have stabilized (albeit higher than pre-pandemic) with some reductions, but nothing significant on an overall project scale.

Bray said the industry will likely see a reduction of overhead and profit as companies adopt lean operational models. To insulate profit margins, some construction trades will reduce their labour force and focus on recreating productivity for the inevitable resurgence in residential construction.

Housing development is expected to slow outside of Calgary and Halifax in 2024. However, the infrastructure/institutional market (including transit and social investments) will remain robust for the foreseeable future in Ontario, Atlantic, and Alberta regions – and to a lesser degree in B.C.

Mid-term: 2025-2026

Interest rates are expected to begin their decline in 2024, at which point condominium sales will likely recover. By this time, we should also see increased momentum in purpose-built rental development, with credit to government-led incentives and an increase in infrastructure spending.

As sales increase, the construction market could become flooded with development projects, especially in regions like Toronto. There are potentially 90,000 condominiums on deck, ready to go out for sale over the next few years in the GTA, along with 30,000 rentals that should be approved and ready to go (with even more moving through the system). 

“In simpler terms, we may see the construction industry shift from 2nd gear to 8th gear in the span of 6 to 9 months,” said Bray.

He explained that success in this mid-term period will hinge on timing the market and beating the rush, taking a deal, and hitting the ground running. This kind of environment is all about relationships, rather than competitive tendering. 

“The lowest bid is not always the best choice; rather, it’s about selecting the right person who can get the project finished,” said Bray. “This sentiment applies to trades as well – pick the right owner, because getting paid should be the priority in a high-interest environment.”

He added that when considering private sector construction costs, it’s also important to recognize that time is an exceedingly important factor in the overall cost of any project. Slow construction timelines (and delays) translate to higher trade, interest, and overhead costs, as well as the loss of opportunity. Within a construction site, “too many white hats” is often a bad sign for coordination and efficiency. 

Bray says the most efficient construction sites are typically those that have leaders and decision-makers in more limited quantities. The presence of too many “cooks in the kitchen”, so to speak, can become more of a productivity bottleneck than an asset. 

“In the world of development, the speed at which decisions are made is a key determinator of profit potential, and if you have the right people, they know how to get things done,” said Bray.

Altus expects the mid-term to endure some serious turbulence. Labour demand is likely going to exceed available supply in 2026; most acutely in Ontario, B.C., and Nova Scotia.

The long-term outlook

In the worst-case scenario, the “wheels may come off the hypothetical development freight train” and we could see double-digit escalation over the long-term, predicted Bray. 

“Even in the best-case scenario, housing needs, infrastructure challenges, and the lack of skilled labour in the market are on a collision course to create a massive construction cost headache – or hangover,” he said. 

When it comes to the housing crisis, Bray said the biggest challenge won’t be policy, it’s the shortage of skilled labour. 

He explained that in the long term, we are likely to find ourselves losing the demand versus supply fight, and costs may continue to escalate while the housing crisis intensifies. 

“The fix? It’s a complicated issue, but the development of a national housing plan that is focused on tangible outcomes and the continued removal of red tape and bureaucracy would be a step in the right direction,” he said. 

Bray believes that if we don’t make major changes to the market now, it’s going to become expensive to build anything, anywhere. He noted that innovation is required; modulization, building information modelling (BIM), and artificial intelligence (AI) need to be applied across the industry. Moreover, we need to find a way to better attract and retain skilled labour. 

“Trade workers build homes that house families and foster communities – this is critical and honourable work that should not be minimized, but celebrated and propped up, now more than ever,” said Bray.

Transferring ownership of a construction business is no simple task. 

It’s a unique industry based on relationships, projects pipelines and processes. Financial services firm First West Capital has in-depth knowledge of the construction sector. When navigating a business sale, their goal is to ensure a fair deal that rewards the owner and sets up the new one for success. 

One of the most complex tasks is answering a deceptively simple question: What is a construction business worth? 

Construction is project-based

Geoff Devereux, a director at First West Capital, explained that while equipment, real estate and other assets are part of this equation, unlike other industries, construction is mostly a project-based business. The common refrain is that you are only as good as your next project. Most construction businesses can produce a forecast of the next six to nine months based on what projects are in the queue.

“But after that it just falls off a cliff and it’s really tough to estimate how things are going to be,” he said. “Even businesses that have been in the industry for 20 years, they’re still very much averse to thinking about multi-year forecasts not based on an actual pipeline. And so figuring all of that out when you’re buying a business is going to be pretty critical to its value.” 

This is often why valuation multiples tend to be a bit lower than other sectors that aren’t subject to the project dynamic. Having a diverse portfolio of projects, sticking with work that your team is experienced with and cultivating relationships with multiple clients are ways to mitigate some of these risks and maintain a business’s value. 

Finding the hidden value

While important, project value isn’t everything. 

Steve Chen, vice president and head of First West Capital, explained that often construction businesses overlook some of their biggest assets for buyers. 

“When we are talking to construction companies — could be trades or subtrades or whoever — they are always talking about their pipeline, saying ‘these are our customers, this is our pipeline’ and we find a lot of value in that for sure, but I think that they undersell the processes, systems and controls that they have built internally,” said Chen. 

How bidding is organized, project management, software systems and many other factors can be a huge in determining the value of a company. First West Capital added that this is especially true of companies with strong estimating offices that are pragmatic and realistic in their work. 

“A lot of companies do these things well. My two cents is that you should be talking about all these processes and systems that you have put in place and how they have contributed to the ongoing profitability and success of the business,” said Chen.     

Thinking beyond price

Chen added that coordinating ownership changes is about more than money. He believes the early conversations should also include planning how the transition will create success for both parties going forward. 

“At the end of the day there is going to be a valuation that includes something paid now and something that gets paid over time,” he said. “If  you just focus on what’s paid today, no matter how well you structure it, you’re probably not going to get the amounts that are paid later. The business is not going to be successful or the projects will fall off when customers aren’t happy.”

Chen encouraged companies thinking of selling to make sure that good systems and processes are in place that will set the business up for ongoing success after ownership changes hands and key people might not be in place. 

He also stressed the importance of understanding who an ideal buyer might be. It could be a competitor down the street, members of your own management team or a large company on the other side of the country who wants to expand into your market. 

“Identify who your ideal buyer is, why they want your business and what it would take to make them successful,” he said. “If you can do that, you’re maximizing your dollars.”

Common pitfalls 

While it may be tempting to try and simplify the process with a handshake deal, Devereux cautioned owners and buyers from avoiding the details. 

“What we sometimes see is an existing owner and several key employees show up at our door with an agreed upon price but not enough work has been done to support the valuation,” he said. “Then things get bogged down because as soon as you dig in, everyone’s expectations get blown apart and things become contentious.” 

While he noted that there can be some hesitation to include consultants, high quality ones exist and can create a deal that is a win for everyone. 

“Typically there is some contingent compensation or transition period so the deal is going to close and then you’re going to have to still work together,” he said. “And if you’re feeling like you just got sort of whatever short end of the stick, suddenly all that cooperation gets a lot tougher.”

Mary Liu, an associate director at First West Capital, believes that structuring a buyout can be complex and many owners tend to avoid advisors, instead opting to keep things in the company. 

“A lot of that work ends up getting done in-house by having these conversations with their more senior employees and thinking about what kind of home equity can be borrowed to buy out a business,” she said. “So they’ve done it in a very grassroots kind of way and instead of seeking professional help on that and I think  because of that, they’ll tend to leave some money on the table.”

If you are thinking about transferring ownership of your construction business, connect with First West Capital’s team to see if they can help your journey. 

Listen to the episode:

It’s not breaking news in the construction sector that construction costs have gone up.

Canada’s residential construction price index has soared 51% since the start of the pandemic, putting new pressure on home prices amid a severe housing affordability crisis. 

Compared to 2017, residential building costs are now 79% higher in Calgary, 65% higher in Edmonton, and 57% higher in Metro Vancouver. For the 11-city Canadian composite, the comparable increase is 73%.

The deeper question is why these costs have skyrocketed in recent years. SiteNews Editor Russell Hixson stopped by the Free Lunch by The Peak podcast to share how much construction costs have gone up and what the major forces behind these increases are.

“Without question, the number one thing that keeps builders up at night … we are going off a demographic cliff,” said Hixson, highlighting the impact worker shortages are having on rising costs. “You have a lot of people who have been in the trades , they are highly skilled workers, they are electricians, project managers, carpenters, and they are getting to retirement age. And there are not as many people going into the industry.”

According to BuildForce Canada, overall hiring requirements in the industry are expected to exceed 299,000 by 2032 due to the retirement of approximately 245,000 workers (20% of the 2022 labour force) and growth in worker demand of more than 54,000. They are predicting a possible retirement-recruitment gap of more than 61,000 workers.

To compete for this smaller pool of workers, the industry has had to offer better wages and more benefits. And many builders are having to turn down work. According to the Independent Contractors and Business Association’s most recent survey in B.C., 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.

Hixson also spoke about the challenge builders have acquiring materials and how those costs have also gone up due to supply chain disruptions and high demand. Some of these disruptions include COVID-19 causing reduced mill capacity, storms cutting off highways in B.C., port strikes, the war in Ukraine and more.

When asked by the hosts what can be done to address these challenges, Hixson spoke about the movement to enact prompt payment, contracts that encourage more project collaboration, technology that can reduce labour demands and more.

“More and more what we are seeing is that builders on a project need to work together to share risk,” said Hixson. “There is always going to be volatility. Stuff is going to happen. If you just try and gouge each other and beat each other, everyone is going to lose. Builders will go bankrupt and you won’t have that partner to work with in the future.”

Key Takeaways:

• The US$3.5 billion deal includes Tricon’s multi-family development platform in Toronto.
• The company plans to complete its US$2.5 billion development pipeline of 5,500 new apartments in Canada.
• The company’s single-family business in the U.S. has approximately 2,500 homes under development. 

The Whole Story:

Blackstone, the world’s largest alternative asset manager, plans to purchase Tricon Residential in a US$3.5 billion deal.

Blackstone and Tricon Residential announced that they have entered into an arrangement agreement under which Blackstone Real Estate Partners X together with Blackstone Real Estate Income Trust, Inc. (BREIT) will acquire all outstanding common shares of Tricon. The transaction price represents a premium of 30% to Tricon’s closing share price on the NYSE on January 18, 2024, the last trading day prior to the announcement of the Transaction, and a 42% premium to the volume weighted average share price on the NYSE over the previous 90 days, and equates to a $3.5 billion equity transaction value based on fully-diluted shares outstanding. BREIT will maintain its approximately 11% ownership stake post-closing.

Tricon provides rental homes and apartments, along with resident services through its tech-enabled operating platform and dedicated on-the-ground operating teams. Tricon serves communities in high-growth markets such as Atlanta, Charlotte, Dallas, Tampa and Phoenix as well as Toronto, Canada. In addition to managing a single-family rental housing portfolio, Tricon has a single-family rental development platform in the U.S. with approximately 2,500 houses under development, as well as numerous land development projects that can support the future development of nearly 21,000 single-family homes.

The company also has a Canadian multifamily development platform that is building approximately 5,500 market-rate and affordable multifamily rental apartments.

“We are proud of the significant and immediate value that this transaction will deliver to our shareholders, while allowing us to continue providing an exceptional rental experience for our residents. Blackstone shares our values and our unwavering commitment to resident satisfaction, and we look forward to benefitting from their expertise and capital as we partner in building thriving communities,” said Gary Berman, president & CEO of Tricon.

Under Blackstone’s ownership, the company plans to complete its US$1 billion development pipeline of new single-family rental homes in the U.S. and US$2.5 billion of new apartments in Canada (together with its existing joint venture partners). The company will also continue to enhance the quality of existing single-family homes in the U.S. through an additional US$1 billion of planned capital projects over the next several years.

“Tricon provides access to high-quality housing, and we are fully committed to delivering an exceptional resident experience together,” said Nadeem Meghji, global co-head of Blackstone Real Estate. “We are excited that our capital will propel Tricon’s efforts to add much needed housing supply across the U.S. and in Toronto.”

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.”