Category: Economy

Construction is dominating Canada’s business scene.

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

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

Subterra Renewables

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

HKC Construction 

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

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

HKC

Astro Excavating

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

Orion Construction 

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

UTILE

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

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

UTILE

Avana

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

Ace of Decks

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

Catanzaro Mechanical

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

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

Guy Catanzaro, President and CEO, Catanzaro Mechanical

Luxton Construction

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

Marlin Spring

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

miEnergy

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

Vinland Homes

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

Black-hart Construction

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

RITESTART

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

Vesta Properties

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

Ehrenburg Homes

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

In-Depth Contracting

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

Jablonski Electric, Plumbing & Heating

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

VersaPile

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

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

Stan Higgins, VersaPile Founder

VPAC Construction Group

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

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

VPAC

Coffrages Synergy Formwork

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

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

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

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

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

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

Key Takeaways:

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

The Whole Story:

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

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

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

Cutting taxes

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

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

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

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

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

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

Developing a modular strategy

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

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

Key Takeaways:

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

The Whole Story:

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

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

Rising fees

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

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

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

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

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

Criticism from Ottawa

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

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

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

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

Increasing scrutiny

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

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

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

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

Key Takeaways:

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

The Whole Story:

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

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

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

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

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

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

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

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

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

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

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

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

Key Takeaways:

• B.C.’s construction industry accounts for 10.3% ($27B) of the province’s GDP.
• More than 218,000 people rely directly on B.C.’s Construction industry for a paycheque.
• Number of credentialed tradespeople: 163,900.
• Number of credentialed tradeswomen: 7,376 (4.5%).
• Value of proposed construction projects in B.C.: $174 billion.
• Number of construction jobs in B.C. that will be unfilled due to labour shortages by 2032: 6,000.

The Whole Story:

The BC Construction Association Construction (BCCA) says the industry is in dire need of legislative reform in its latest compilation of data and analysis. 

The group’s conclusions come from its recently published Fall 2023 BC Construction Association (BCCA) Industry Stat Pack, combined with findings from an economic and policy report published today by the organization.

Construction demand is strong

The numbers show demand for construction remains high in B.C., with major projects currently underway at an estimated value of $157 billion. 

This represents an increase of 16% over 2022, and 109% over the past five years. However, the estimated value of proposed major projects has dipped to $174 billion in comparison to $220 billion last year, which the BCCA says is signaling possible future decrease in robustness and growing insecurity with regard to economic prospects.

Real investment in B.C.’s industrial, commercial, and institutional (ICI) construction sectors has been essentially flat (-1.6%) through the first half of 2023. It remains over 10% below its pre-pandemic level (February of 2020) in real terms, with institutional and government construction being the singular growth segment in the interim.

Recent improvements in the availability of construction inputs have resulted in a slowing of price increases to non-residential building in the past year, registering at 7% compared to 13% between 2021 and 2022. Labour costs and the non-residential building price index sit, respectively, at 18.4% and 28.6% above pre-pandemic levels.

Challenges put pressure on builders

The group stated that the ongoing struggle of dealing with decreased commercial demand and rising costs of material and labour, coupled with waning procurement standards on public sector projects, lack of prompt-payment legislation, and a declining workforce, paints a “dim picture” for contractors over the next few years.

“Construction has never been busier, yet the pressures to meet this demand are equally high. Interest rates, rising wages and the high cost of materials all factor into the equation. It is clear that these pressures are causing layoffs,” said Chris Atchison, BCCA president. “We’ve seen indications that construction workers, both skilled and unskilled, are moving out of the province as a direct result of B.C.’s high cost of living, housing shortage, and the perception of better opportunities elsewhere. Our workforce is invaluable, and we cannot afford to lose a single tradesperson or journeyperson. B.C. needs an effective affordable multi-unit housing strategy aimed at keeping workers like those in the construction sector within the province.”

The group argued that prompt payment legislation, something they have long advocated for, would provide immediate relief to contractors. 

The BCCA explained that when contractors wait months for payment, they experience significant financial risk and take on the increased cost of debt, which can put them in danger of bankruptcy. 

“Government seems to be under the illusion that contractors all have the deep pockets needed to essentially fund large scale projects. Not so. About 90% of B.C. contractors are small companies, and they are often paid three or six months after the last nail has been pounded, or the last coat of paint has dried. No other industry has to endure that,” said Atchison. “Last Spring, we were encouraged to hear that the Attorney General would be convening a large table working group on this issue. We’re still waiting. The time to talk has passed. The time to act is now. The situation is dire. Unlocking cash flow is an economic necessity and in the best interests of every community in British Columbia.”

According to the province, the Ministry of Attorney General staff have been monitoring prompt payment efforts in other provinces and participated as part of a table established under the Canada Free Trade Agreement to establish best practices with respect to prompt payment legislation.

“One point that has been clear from this review is that there is no single model legislation that has been adopted by all or even a few provinces,” said provincial officials. “Each province has customized legislation that responds to the unique needs of their construction and skilled trades communities.”

Officials say that starting in late 2023, Ministry of Attorney General staff will begin a large table consultation with all interested associations and interest groups in the construction industry to review the different legislation that has been adopted in other provinces to determine how prompt payment legislation could work best in B.C.

Labour shortages

Despite 8% growth in the number of ICI construction companies in B.C. over the last 5 years (26,262), the number of tradespeople in the industry dropped 8% over three years, and 9% since 2019. The average company size has contracted by 10% over the previous three years to an average of 6.24 workers.

From the first quarter of 2023 to the second, B.C.’s construction employment base diminished by 14,500 workers, a decline approaching 6%.  According to the association, this represents the worst performance of any Canadian province in both absolute and percentage terms.

“We need to get enough people skilled up to replace the tens of thousands who are retiring in the next few years in British Columbia.  One way to do that is to be more diverse about who we hire and train,” said Atchison. “Everyone, including members of traditionally underrepresented groups, should feel welcome within the construction industry. There is absolutely no lack of employment opportunities for anyone interested in exploring a career in construction.”

The complete Stat Pack, economic report from Sage Policy Group, and more information regarding the B.C. construction industry can be found at www.bccassn.com/stats.

Key Takeaways

• The $750-million project includes building facilities to boost transloading service capacity. 
• Construction has begun and is expected to wrap in 2026. 
• Officials say the project will significantly decarbonize operations.  

The Whole Story:

The Prince Rupert Port Authority (PRPA) is starting work construction on a $750-million large scale logistics project to expand capacity. 

The Ridley Island Export Logistics Project (RIELP) will boost the capabilities for rail-to-container transloading of multiple export products at the B.C. port. 

Port officials say the investment promises to deliver critical trade infrastructure that will improve supply chain resiliency, strategic market access and enhanced competitiveness for Canadian exports. 

“The development of this innovative project and its introduction of large-scale export logistics capabilities at the Port will fundamentally improve competitiveness for Canadian exporters, and marks the opening of a new chapter of Prince Rupert intermodal growth,” said Shaun Stevenson, president & CEO, Prince Rupert Port Authority. “It also demonstrates the strong alignment of our corporate, government and community partners with PRPA’s strategic vision for growing Canadian trade,”

Project plans include a 108-acre greenfield development on Ridley Island that will begin operation in Q3 2026. Ray-Mont Logistics will develop and operate facilities that provide transloading service capacity for 400,000 TEUs (twenty-foot equivalent units) for agricultural, forestry, and plastic resin products. Ray-Mont currently operates a multi-product transload facility on a temporary Ridley Island location.

The project will also include an expansion of the existing Ridley Island Road Rail Utility Corridor that will facilitate unit trains 10,000 feet in length with direct access to the site from the CN network. The transload facilities will be connected to Fairview Container Terminal by direct private road access, the 5-kilometer Fairview-Ridley Connector Corridor, ensuring all product movements will be within PRPA jurisdiction and fully avoid public infrastructure. 

The port noted that the full electrification of transload facilities, optimization of rail, and the minimal truck drayage cumulatively represent a significant step forward in decarbonizing Canada’s export supply chains.

Port officials added that In addition to its commercial advantages, RIELP will result in stronger volumes for loaded export containers moving through the Port of Prince Rupert and a more sustainable balance in its intermodal import and export trade. 

The development of increased logistics capacity is seen by PRPA as a strategic prerequisite to supporting the stability of existing and future container volumes through Prince Rupert, and the trade, employment and economic opportunities they support.

Local Indigenous partners will be active participants in the development and operation of RIELP. The primary contract for Ridley Island site development has been awarded to an Indigenous joint venture arrangement that includes Metlakatla First Nation, Lax Kw’alaams Band, Gitxaała Nation and IDL Projects Inc. Metlakatla and Lax Kw’alaams are also majority owners of Gat Leedm Logistics, which will be a primary service provider of truck drayage services.

Total capital investment in RIELP will be approximately $750 million, and is being provided by PRPA, Ray-Mont Logistics, CN, the Government of Canada, and the B.C. goverment. Canada’s National Transportation Corridor Fund is providing $64.8 million and B.C.’s Stronger BC program is providing $25 million toward the project.

Key Takeaways:

• The court found that the law grants the federal government powers that allow it to go beyond the bounds of its jurisdiction as laid out in the Constitution.
• Alberta and industry groups celebrated it as a win for Canadian workers and the economy. 
• Government officials said they accept the ruling and will work quickly to improve the legislation through Parliament.

The Whole Story:

The Supreme Court has ruled that the Impact Assessment Act, which grants Ottawa powers to approve or block major energy or infrastructure projects, is unconstitutional. 

The act, which went into effect in 2019, granted federal officials the ability to determine if projects were in the best interest of the country by taking into account their positive or negative impacts on the environment, economics, health, Indigenous groups and society. 

“Environmental protection remains one of today’s most pressing challenges, and Parliament has the power to enact a scheme of environmental assessment to meet this challenge,” the court said in the ruling. “But Parliament also has the duty to act within the enduring division of powers framework laid out in the Constitution.”

The 5-2 ruling determined that the law granted the federal government power to permanently halt projects for reasons that go outside the bounds of federal jurisdiction, calling it “an unconstitutional arrogation of power by Parliament.”

The two dissenting justices wrote that the environment is complex and shared responsibility in Canada, involving various levels of government. They argued that this approach recognizes overlapping powers and emphasizes cooperation. They argued that legislation should be interpreted with respect for constitutional limits, and courts should favor statutes enacted by both federal and provincial governments. 

“This shared responsibility is neither unusual nor unworkable in a federal state such as Canada,” they wrote. “Rather, it reflects the Court’s flexible approach to federalism.”

After it was passed, the law was soon challenged by the Alberta government, with former Alberta Premier called it the “No More Pipelines Act”. The province’s top court determined it was unconstitutional and requested that the Supreme Court take a look. The morning of the ruling, Premier Danielle Smith and Minister of Justice Mickey Amery issued a joint statement applauding the deicision and lamenting the opportunities the act halted. 

“This legislation is already responsible for the loss of tens of billions in investment as well as thousands of jobs across many provinces and economic sectors,” they said. “The ruling today represents an opportunity for all provinces to stop that bleeding and begin the process of reattracting those investments and jobs into our economies.”

Smith and Amery added that the decision is also a massive win for the protection of sovereign provincial rights under the Constitution.

“The federal government, through passage of Bill C-69, and continuing now with their proposed electricity regulations and oil and gas emissions cap, is blatantly attempting to erode and emasculate the rights and authorities of provinces as an equal order of government under the Canadian Constitution,” they said. 

Some construction groups also celebrated the ruling. The Independent Contractors and Businesses Association (ICBA), which supported Alberta as an intervenor in the case, called it an unequivocal victory for Canada’s economy and workers.

“We are thrilled with this decision and what it means for Canadian workers, their families, and everyone who stands to benefit from Canada’s responsibly-produced natural resources during a global energy crisis,” said Mike Martens, president of ICBA Alberta. “The ill-advised and heavy-handed Impact Assessment Act damaged Canada’s economy, prosperity, and the families that depended on it, driving away investment and creating uncertainty. It has been tossed in the trash can, where it belongs.”

Martens added that the group felt it was important to add the voice of Alberta’s construction and resource workers to the province’s case.

“It would have been irresponsible to simply sit on the sidelines and hope for the best in something as damaging to the economic prosperity of Canada as this Act was,” he said. 

According to an analysis from the Canada West Foundation, 25 proponents have submitted projects for review under the new regime since it came into force less than four years ago. All of these projects remain in the first two phases of a four-step process, noted Martens. 

At a press conference, Environment and Climate Change Minister Steven Guilbeault said the federal government accepts the ruling and acknowledged the bill needs to be “tightened.”

“We will now take this back and work quickly to improve the legislation through Parliament,” Guilbeault said. “We will continue to build on 50 years of federal leadership in impact assessment.”

After announcing federal GST will be dropped for new rental apartment projects, Ottawa is urging provinces across Canada to do their part and cut taxes for affordable housing projects.  

The response from provinces has been mixed. Some moved quickly to announce plans to eliminate similar provincial taxes, others said they would consider it and some rejected the idea altogether.

Here is a round up of provincial responses to Ottawa’s efforts:

Ontario

Ontario has committed to eliminate provincial sales tax from new rental construction as soon as possible. They also plan to update the definition of “affordable” housing when it comes to reductions and exemptions to fees developers pay when building those units. Last year the province unveiled legislation, the More Homes Built Faster Act, to cut fees for affordable, non-profit housing projects. The legislation also allows for the development of three units on any residential lot across the province. Cities are acting as well. Earlier this year Toronto adopted the Official Plan Amendment and Zoning By-law Amendment to permit multiplexes citywide.

B.C.

Ravi Kahlon, minister of housing, noted after the federal announcement that B.C. already doesn’t charge PST on purpose-built rentals, putting it in a good position to see more projects get built. Major cities like Victoria and Vancouver have implemented major zoning reforms to encourage density in single-family home neighbourhoods. Vancouver is opening up neighbourhoods across the city to allow for the development of multiplexes and Victoria will allow more houseplexes, corner townhouses and heritage conserving infill housing in residential areas. B.C. premier David Eby recently announced new initiatives to consolidate parts of the application process so permits get sped up. They will also pilot a new program that offers forgivable $40,000 loans for homeowners that want to create rental suites.

Newfoundland and Labrador

Soon after the federal announcement, Newfoundland and Labrador officials vowed to waive the provincial portion of HST on new apartment complexes. Newfoundland and Labrador have a blended, 15% HST. 10% goes to the province and 5% goes to Ottawa. Calls for action in the region have been growing after a report from earlier this year showed that more than one-third of N.L.’s population is spending more than 30% of their income on housing.

Alberta 

Jason Nixon, Alberta’s housing minister, called Ottawa’s tax cuts a “step in the right direction” but urged officials to focus on removing the carbon tax and new building energy efficiency regulations that he says drive up the cost of homes. Meanwhile, in Calgary, officials approved sweeping housing strategy changes that include allowing the construction of row houses and duplexes on land zoned for single-family homes. The move comes on the heels of a devastating report that shows one in five Calgarians live in housing they can’t afford.

Saskatchewan

The Saskatchewan government said it is not considering a similar tax cut, despite pressure from home builders’ associations and other groups. Finance Minister Donna Harpauer has told reporters that the province believes the broad application of PST ensures that a fairly applied, reliable, and sustainable source of revenue is available to finance vital public services. Instead, the province is drawing attention to its Rental Development Program, a one-time funding allowance for housing organizations to develop affordable units for low-income households. The province drew significant criticism from the construction sector in 2017 when construction labour became subject to PST.

Manitoba 

For some provinces, construction taxes have become a major election issue. Manitoba NDP Leader Wab Kinew announced he plans to eliminate the provincial sales tax from the construction of new rental units if his party wins the Oct. 3 provincial election. The province is also currently in the midst of a $126M homelessness strategy dubbed A Place for Everyone. The strategy’s goal is to create hundreds of new social housing units and new wrap-around services.

Quebec

Quebec has not been swayed by the federal announcement. Premier François Legault stated that he will won’t eliminate its sales tax on construction materials in order to stimulate the building of rental properties to address the housing crisis, arguing that any benefit would be outweighed by the cost. The province is also facing criticism for Bill 31, which would allow owners to stop tenants from transferring their leases. Legault stated he is considering walking back the provision. A recent study showed the number of unhoused people in Quebec has risen to around 10,000, a 44% increase since 2018.

Nova Scotia

Federal officials have written to Nova Scotia, urging them to remove the provincial portion of the harmonized sales tax. So far, only the province’s Liberal leader Zach Churchill has expressed support for the cuts. Premier Tim Houston’s strategy has been to steps to expedite private sector builds and provide land and funding to help non-profit organizations raise developments. Houston has also accused municipalities of dragging their feet on on approvals and raising fees for developers.

Prince Edward Island

Soon after the federal announcement, P.E.I officals stated that they would this initiative a step further by looking at a complementary program to remove the provincial portion of HST on new rental builds. Earlier this year, officials said they are working with community partners and stakeholders to come up with a comprehensive housing strategy.

Key Takeaways:

• Qualifying projects must be new buildings with at least four private apartment units, or at least 10 private rooms or suites, and 90% of residential units designated for long-term rental.
• The enhanced GST Rental Rebate will not apply to individually-owned condominium units, single-unit housing, duplexes, triplexes, housing co-ops, and owned houses situated on leased land and sites in residential trailer parks.
• For a two-bedroom rental unit valued at $500,000, the enhanced GST Rental Rebate would deliver $25,000 in tax relief.
• To protect Canadian renters from renovictions, the enhanced GST Rental Rebate will not apply to substantial renovations of existing residential complexes.

The Whole Story:

Federal GST will be dropped for new rental apartment projects. 

The news came from Prime Minister Justin Trudeau and Deputy Prime Minister and Finance Minister Chrystia Freeland after a Liberal caucus retreat in Ontario. 

“The most expensive cost for people these days is housing. And the best way to tackle this is to make sure that more homes of all types are being built,” said Trudeau. “More and more Canadians are renting and the cost of rent keeps going up. Canadians need more buildings for renters, not just condos to turn into Airbnbs or sold to foreign buyers as financial assets.” 

The enhancement increases the GST Rental Rebate from 36% to 100% and removes the existing GST Rental Rebate phase-out thresholds for purpose-built rental housing projects. Trudeau encouraged provinces to do the same. 

The move comes after Trudeau and the Liberals have been facing intense pressure from voters. A new Abacus Data survey found that Millennials are now twice as likely to vote Conservative instead of Liberal. The rising cost of living was cited as the number one issue for Canadians under 40, a key demographic for Trudeau. The latest Angus Reid Institute shows that Trudeau now has an approval rating of just 33 per cent, against a disapproval rating of 63 per cent.

Other efforts to spur housing construction

It isn’t the only move Trudeau has made to address affordability. Earlier this week he traveled to London, Ont. to announce that the city would be the first in Canada to strike a deal with the government’s Housing Accelerator Fund. The fund allocates $4 billion until 2026-27 to encourage more homebuilding in cities. 

As per the deal, London will receive $74 million if it implements a series of reforms, including a change to local zoning rules that should make it easier to build more rental units.

Officials say the agreement will produce 2,000 housing units over the next three years and will help build thousands more beyond that. 

“Every community across Canada needs to build homes faster so we can lower the cost of housing,” said Trudeau.

The announcement was quickly praised by by the Residential Construction Council of Ontario (RESCON) which noted that the Ontario government has indicated that it plans to follow suit with the HST.

“We haven’t built enough purpose-built rentals to accommodate our growing population, yet projects were still being saddled with whopping sales taxes on the fair market value of a building upon completion,” said RESCON president Richard Lyall. “When encumbered with such formidable financial hurdles, developers often find it difficult to proceed with apartment building projects. These adjustments are clearly a step in the right direction as it will shave costs from constructing apartments and lead to more building.”

RESCON is also advocating for tax incentive programs that eliminate the collection of taxes on profits emanating from residential construction projects where the funds are re-invested into advancing similar projects. They noted that programs like this resulted in tens of thousands of housing units in the 1960s and 1970s.

What qualifies for the rebate

Qualifying projects must be new buildings with at least four private apartment units, or at least 10 private rooms or suites, and 90% of residential units designated for long-term rental.

Projects that convert existing non-residential real estate, such as an office building, into a residential complex would be eligible for the enhanced GST Rental Rebate if all other above conditions are met. Public service bodies would also be eligible to access the enhanced GST Rental Rebate.

The enhanced GST Rental Rebate will not apply to individually-owned condominium units, single-unit housing, duplexes, triplexes, housing co-ops, and owned houses situated on leased land and sites in residential trailer parks, but this housing would continue to qualify for the existing GST Rental Rebate where the conditions for the existing rebate are met.

To protect Canadian renters from renovictions, the enhanced GST Rental Rebate will not apply to substantial renovations of existing residential complexes.

Editor’s Note: This story has been updated as of Sept. 14, 4:30 p.m. with new information.

Key Takeaways:

• The report, published every five years, shows roughly 84,600 households earning less than 65% of Calgary’s median income spend more than 30% on housing costs.
• The data is based on conditions in 2021 and the city suspects the issue has gotten worse.
• An annual income of $84,000 is needed to adequately afford average market rent in 2023. That number has increased from $67,000 in 2022.

The Whole Story:

The city of Calgary’s latest Housing Needs Assessment report shows nearly one in five Calgary households can’t afford their housing and the issue is likely getting worse. 

The Housing Needs Assessment report uses quantitative data from the Federal Census, the city of Calgary Corporate Economics and Canada Housing and Mortgage Corporation.

Published every five years, the information in the assessment informs the city’s affordable housing policies. It also helps the city plan its work with housing providers who build new developments and with other orders of government who fund them.

The latest report shows at least 84,600 or almost one in five Calgary households didn’t have enough money to pay for housing in 2021. The city noted that based on current housing conditions, it is expected that the numbers in 2023 are almost certainly even higher.

“Calgary is experiencing a housing crisis. The latest data published in the Housing Needs Assessment shows us that an increasing number of Calgarians are struggling with housing affordability,” said Tim Ward, manager of housing solutions. “The findings in the assessment also highlight that the housing crisis is affecting a wide range of Calgarians including those looking to buy or rent a home, and those that are in greatest need of affordable housing supports.”

Based on recent market housing data, the median cost to buy a detached home has increased in price by 37% in the last three years. For Calgarians looking to buy their first detached home in 2023, an annual household income of $156,000 is required to adequately afford it, meaning they would not be spending more than 30% of their income before tax on housing.

To adequately afford the median purchase cost of an apartment in 2023, an annual household income of $70,800 is needed for that new home-buyer. For those looking to rent, an annual income of $84,000 is needed to adequately afford average market rent in 2023. That number has increased from $67,000 in 2022.

Based on Calgary’s forecasted population growth and historical rate of housing need, the number of households in need of affordable housing is expected to reach close to 100,000 by 2026.

Calgary presents the findings of their report:

The city is currently developing a housing strategy that names specific actions to address the issue.

The strategy includes five sought outcomes:

• Increase housing supply
• Support affordable housing providers
• Support The city’s housing subsidiaries
• Ensure housing choices meet the needs of equity-deserving populations
• Meet the affordable housing needs of Indigenous people living in Calgary

It incorporates the 33 actions from the Housing and Affordability Task Force, a handful of additional new actions and 38 previously council-approved actions for work that’s underway. The strategy will be reviewed by members of council at the Community Development Committee meeting on Sept. 14.

Key Takeaways:

• Enbridge has entered into three agreements with Dominion Energy, Inc. to acquire EOG, Questar and PSNC for an aggregate purchase price of $19 billion.
• The acquisitions will add gas utility operations in Ohio, North Carolina, Utah, Idaho and Wyoming.
• Upon closing, Enbridge’s gas utility business will be the largest, by volume, in North America with a combined rate base of over $27 billion and about 7,000 employees delivering over 9 billion cubic feet per day of gas to approximately 7 million customers.

The Whole Story:

Enbridge Inc. has inked a series of deals totaling $19 billion that would make it the largest natural gas utility franchise in North America upon closing.  

The deal involves three separate definitive agreements with Dominion Energy, Inc. to acquire EOG, Questar and PSNC for an aggregate purchase price of $19 billion.

Upon the closings of the three transactions, Enbridge will add gas utility operations in Ohio, North Carolina, Utah, Idaho and Wyoming, representing a significant presence in the U.S. utility sector. 

The company stated that the gas utilities fit Enbridge’s long held investor proposition of low-risk businesses with predictable cash flow growth and strong overall returns. Following the closings, the acquisitions are expected to double the scale of the company’s gas utility business to approximately 22% of Enbridge’s total adjusted EBITDA and balance the company’s asset mix evenly between natural gas and renewables, and liquids.

Following the closings, Enbridge’s gas utility business will be the largest, by volume, in North America with a combined rate base of over $27 billion and about 7,000 employees delivering over 9 billion cubic feet per day of gas to approximately 7 million customers.

“Adding natural gas utilities of this scale and quality, at a historically attractive multiple, is a once in a generation opportunity. The transaction is expected to be accretive to DCFPS and adjusted EPS in the first full year of ownership, increasing over time due to the strong growth profile,” said Greg Ebel, Enbridge president and CEO. “Following the closings of the acquisitions, our Gas Distribution and Storage (GDS) business will be North America’s largest gas utility franchise. These acquisitions further diversify our business, enhance the stable cash flow profile of our assets, and strengthen our long-term dividend growth profile.  The transaction also reinforces our position as the first-choice energy delivery company in North America.”

Ebel noted that the assets have long useful lives and natural gas utilities are “must-have” infrastructure for providing safe, reliable and affordable energy. Ebel noted that the gas utilities have each committed to achieving net-zero greenhouse gas emissions by 2050. 

“We are very excited by today’s announcement as these businesses align with Enbridge’s business risk model and long-term growth targets,” he said. “The entire Enbridge team is committed to working with the EOG, Questar and PSNC teams and to investing in the communities they serve.  We look forward to serving our customers with dedication and to providing them with safe, reliable, and affordable energy service for years to come.”

Following the closings of the acquisitions, EOG, PSNC and Questar each will continue to be regulated by the Public Utility Commission of Ohio, the North Carolina Utilities Commission, and the Public Service Commissions of Utah, Wyoming and Idaho, respectively.

“Acquiring these natural gas utilities makes strong strategic and financial sense. Enbridge is currently the only major pipeline and midstream company that owns a regulated gas utility and we’ve further strengthened that position today by doubling the size of our GDS business. After closings, the acquisitions will extend and diversify our natural gas footprint and importantly add low-risk, ratable investments to our growth portfolio” said Patrick Murray, executive vice president and chief financial officer for Enbridge. “The financing plan for the transaction includes significant equity pre-funding and a suite of financing options that will be optimized to maximize accretion and protect our strong investment grade ratings.”

The acquisitions are expected to close in 2024, subject to the satisfaction of customary closing conditions, including the receipt of certain required U.S. federal and state regulatory approvals. 

Key Takeaways:

• A portion will go to single and lower tier municipalities that have not been assigned a housing target, including small, rural and northern communities. 
• The fund will provide $400 million in new annual funding for three years to municipalities that are on target to meet provincial housing targets by 2031.
• The province is also expanding strong mayor powers to municipalities projected to have populations of 50,000 or larger by 2031 that commit to meeting their provincial targets.

The Whole Story:

Municipalities that are hitting homebuilding targets are set to receive millions in Ontario. 

To encourage home construction, the Ontario government is launching the Building Faster Fund, a new three-year, $1.2 billion program that provides new funding to municipalities based on performance against provincial housing targets. 

To ensure more municipalities have the tools needed to build homes and to expand eligibility for the Building Faster Fund, the province is also expanding strong mayor powers to municipalities projected to have populations of 50,000 or larger by 2031 that commit to meeting their provincial targets.

“With these new measures, we’re supporting municipalities and giving them the tools they need to build more homes faster to tackle the affordability crisis that’s pricing too many people, especially young families and newcomers, out of the dream of home ownership,” said Premier Doug Ford. “We have two choices: We can sit back and ignore the crisis, or we can build more homes. Our government is choosing to build homes.”

The fund will provide $400 million in new annual funding for three years to municipalities that are on target to meet provincial housing targets by 2031. Municipalities that reach 80% of their annual target each year will become eligible for funding based on their share of the overall goal of 1.5 million homes. Municipalities that exceed their target will receive a bonus on top of their allocation.

Funding from the Building Faster Fund can be directed toward housing-enabling infrastructure and other related costs that support community growth. Eligible expenses will be determined following consultations between the province, the Association of Municipalities of Ontario, the City of Toronto and the Housing Supply Action Plan Implementation Team. 

A portion of the overall funding will also be allocated to single and lower tier municipalities that have not been assigned a housing target, including small, rural and northern communities, in order to address their unique needs, following municipal consultations.

Ontario is also expanding strong mayor powers to 21 more municipalities that are projected to have populations of 50,000 by 2031 and whose heads of council are committed to a provincially assigned housing target. The expansion of strong mayor powers will take effect on October 31, 2023. The expansion is in addition to the 28 municipalities that already have strong mayor powers, having committed to targets through municipal housing pledges. Once a housing pledge is received from the head of council, these municipalities will also become eligible for and will have access to the Building Faster Fund.

“There is an urgent need to get more homes built quickly across Ontario,” said Minister of Municipal Affairs and Housing Steve Clark. “By providing additional financial resources to our municipal partners as well as strong mayor powers to help speed up the approvals process, our government is acting decisively to tackle Ontario’s housing supply crisis and build the homes our residents need and deserve.”

Key Takeaways:

• July saw a healthy number of actual housings starts from a historical perspective, said experts.
• The housing starts trendline increased for the second consecutive month.
• Toronto and Vancouver have been performing well this year compared to last.

The Whole Story:

Canada’s home builders may not yet be feeling the effect of the most recent interest rate hikes.

Bob Dugan, the Canadian Mortgage and Housing Corporation’s (CMHC) chief economist explained that the latest data on housing starts show historically positive activity, but these projects were not financed under current conditions. 

“Despite a decrease in the seasonally adjusted annual rate (SAAR) of housing starts relative to last month, July saw a healthy number of actual housings starts from a historical perspective,” said Dugan. “This pushed the trend of housing starts upward for the second consecutive month. Market intelligence suggests multi-unit projects started in June and July were likely financed a few months prior, so, the effect of the most recent interest rate hikes on housing starts remains to be seen,”

According to CMHC, the housing starts trendline increased for the second consecutive month due to a healthy number of actual housing starts in July. The trend was 242,525 units, up 2.8% from 235,819 units in June, according to Canada Mortgage and Housing Corporation (CMHC). The trend measure is a six-month moving average of the monthly SAAR of total housing starts for all areas in Canada.

The standalone monthly SAAR of total housing starts for all areas in Canada decreased 10% in July (254,966 units) compared to June (283,498 units), which was the strongest month so far this year. Despite the monthly drop, total SAAR housing starts for all areas in Canada was 7.4% above the 5-year average.

The monthly SAAR of total urban starts (centres 10,000 population and over) decreased by 11%, with 234,857 units recorded in July. Multi-unit urban starts decreased 12% to 193,446 units, while single-detached urban starts decreased 4% to 41,411 units.

The Vancouver and Toronto CMAs saw decreases in total SAAR housing starts in July, with Vancouver down 23%, and Toronto down 29%. In contrast, the Montreal, Calgary, and Edmonton CMAs recorded respective increases of 12%, 33%, and 67% in total SAAR housing starts.

CMHC noted that Toronto and Vancouver have been performing well this year compared to last. Actual 2023 year-to-date housing starts were 35% and 49% higher than the same period in 2022 in Toronto and Vancouver respectively.

When you’re hunting for a mortgage to buy a house, finding the best rates is as easy as checking out bank ads online. But for growing construction businesses seeking financing, understanding the ins and outs of rates and terms can feel like cracking a code.

“Most business owners aren’t finance experts,” explained former banker Brad Kiendl. “They’ve got a team for that, maybe a controller or CFO. However, dealing with financing often ends up on the back burner as they focus on more pressing needs within the company. Bank agreements are lengthy, confusing and don’t seemingly have a lot of wiggle room and thus clients simply end up taking the first deal presented to them.”

Inside Knowledge

Kiendl knows this better than most. He spent years at big banks, fighting to get the best deals for commercial clients. But he felt he could do more to guide them through the maze of commercial financing.

“Every business had a different deal,” he said. “Rates, fees, structures – they all varied. I saw how much a bank’s account manager could influence the final financing deal.”

Wanting to bridge this gap, Kiendl started Ashdown Capital. They help businesses get more working capital, buy equipment, start new projects, or invest in real estate.

“I wanted experts who truly get financing, who understand how different banks and lenders think,” said Kiendl. “With our inside knowledge, we uncover better pricing, more appropriate structures, and help navigate the unique risk factors that construction companies present. I wanted to show what’s possible.”

Six years later, Ashdown has a team of 27 people who mostly work with clients in British Columbia and are moving into Alberta. Why B.C.? It’s a hotspot for construction and development.

“Construction companies, developers, contractors – they all need financing and lots of working capital,” Kiendl noted.

But the construction world has its own challenges. Payments can drag, and even when they arrive, there are holdbacks. Banks get cautious when it comes to construction financing. “Construction is a roller coaster,” Kiendl said. “There are long gaps between spending and getting paid. Plus, builders’ liens take priority over bank financing, so banks can be wary. It’s tough.”

Navigating the Money Maze

Despite the hurdles, BC’s construction scene is booming.

“We see fantastic businesses growing like crazy, struggling to match their growth with enough working capital. It’s a real challenge,” said Kiendl.

Most construction companies fund their day-to-day with credit lines. Banks typically do something called “margining,” using their receivables and inventory to secure financing. But it looks back, not forward and often the banks just offer their standard formula.

“We see companies in a bind. They’re booming, tackling big projects, winning great business, but they’re not getting the financing they need,” said Kiendl. “The banks give them the financing they needed last month or quarter, not what they need to accomplish future work”

“Getting financing in construction is no cakewalk, no matter the size. Unless you’re swimming in cash, it can be tough to get and even tougher to know if you’re actually getting a good deal.”

Brad Kiendl – Principal, Ashdown Capital

The real pinch is felt by small-to-medium-sized businesses aiming to expand, looking for loans from $50,000 to a million.

“Getting financing for this space is tough. Most banks treat it like a personal loan,” Kiendl explained. “Walk into a bank with a growing business, doing millions in sales, with new projects in the pipeline. If you ask for a credit line, they’ll often want your house as security.”

Lately, Ashdown has been turning this around, getting true financing packages. Kiendl tells of a recent construction client doing $3 million in sales, offered a $42,000 credit line by a bank. Ashdown was able to secure them $500,000 by taking them to the right bank and then showing the bank the full picture and how the deal could be structured in a way that works for everyone.

Larger clients aren’t exempt from banking challenges, and Ashdown also works with companies with revenues over $100 Million and everything in between.

“Getting financing in construction is no cakewalk, no matter the size. Unless you’re swimming in cash, it can be tough to get and even tougher to know if you’re actually getting a good deal. Often larger businesses are overlooked by the banks and sometimes taken for granted.” Kiendl acknowledged. “For the big players, we help by negotiating better structures and ensuring they have forward looking capital that is priced and structured to their benefit.”

Trends and Challenges in Financing

Beyond the complexities, financing in construction is wrestling with other big issues, from rising inflation to labor shortages. But the standout challenge is interest rates.

“Banks are pickier now due to higher rates,” Kiendl noted. “We’re seeing more projects, from land loans to full-on construction, going the alternative financing route. That drives up costs, and those get passed on to developers and ultimately the end consumer.”

This has led to projects stalling as teams wait for better conditions.

Consolidation is another theme. As construction companies grow, they’re snapping up rivals or similar businesses. But this presents a puzzle, as these deals often lack sufficient assets to back the loans.

“Imagine a client buying a $10 million business, but their assets – equipment, receivables, inventory – are only worth a few million. The bulk of the loan is unsecured,” clarified Kiendl. “It’s a head-scratcher for banks. But it’s a road we’re travelling a lot lately, helping to get the banks comfortable with cash flow lending for acquisitions.

He added that nobody wants financing to become the deal-breaker – but, it’s always been the trickiest part in the acquisition space. It’s the area where Ashdown can help companies the most.

While acquisitions come with their own set of challenges, Kiendl and his team find satisfaction in aiding in acquisitions and management buyouts, where senior leaders and employees buy out owners.

“They’re some of the best stories,” Kiendl enthused. “These businesses often thrive after and it’s a win-win for all parties. Financing them can be tough, but we relish the challenge.”

In the complex world of construction financing, Kiendl’s advice boils down to this: Don’t wait for trouble to start seeking financing.

“If times are good and you don’t need money, that’s when you should secure financing. That’s when you’ll secure a credit line and the most favourable terms,” he advised. “There might be a small setup or monitoring fee, but think of it as insurance. When things get tough, and your results aren’t trending in the right direction, it’s much harder, or even impossible, to secure financing at that point.”

If your construction company is on the growth path, explore the financing options Ashdown Capital offers today. They’re your partner in navigating the financial landscape of construction.

From essential infrastructure like bridges to the pipes that serve the energy sector, steel is a critical component of the economy. Many of the steel companies in Canada come from humble roots, often just a handful of people, a welding machine and a truck. Some have grown into international giants that are tackling some of the most complex projects in the world. Here are just a handful of those companies with compelling backstories.

Algoma Steel

Algoma Steel was forged in 1901 with two small blast furnaces, a 60-ton Bessemer furnace, a 23- inch bloom rolling mill and rail mill. It has since grown into a fully integrated steel producer based in Sault Ste. Marie, Ont. The company manufactures and sells hot and cold rolled steel products including sheet and plate. The company is currently constructing two new state-of-the-art electric-arc-furnaces to replace its existing blast furnace and basic oxygen steelmaking operations. It’s the biggest construction project in Sault Ste. Marie history. The change is expected to reduce Algoma’s carbon emissions by 70%.

Canam

Canam Steel Works Inc. was founded in St. Gédéon de Beauce, Que. in 1960. Despite a series of devastating fires, the company persisted. The company says it has been involved in more than 300,000 Construction projects in North America. They are also embracing technology. The group recently won an award for its Building Engineering Platform (BEP) which aims to modernize, update or replace some in-house engineering and detailing applications for Canam’s steel products. 

Solid Rock Steel Fabricating Co. Ltd.

Solid Rock is a classic immigrant success story. Berend Steunenberg learned the metal fabricating trade while growing up in Holland and and took his skills to Vancouver in the 1950s. He worked day and night shifts at two jobs to buy an old flat deck truck, a second-hand welding machine and a torch set-up to start Solid Rock Steel. Now the company is helping tackle large, complex projects like The Butterfly, the Surrey Central Library and Microsoft’s Vancouver headquarters.

Stelco

Originally called the Steel Company of Canada, Stelco was created in 1910 via the merger of Montreal Rolling Mills, the Hamilton Steel and Iron Company, and a handful of secondary companies located from Gananoque to Brantford. The company shifted its production during WW1 and WW2 to help with the war effort. Today it serves the construction, automotive, energy, appliance, and pipe and tube industries.

LMS Reinforcing Steel Group

Started in the 1980s with one pickup truck and a crew of 14 ironworkers, LMS Reinforcing Steel Group is one of the biggest independent fabricators and installers of reinforcing steel B.C. The company specializes in residential towers, complex commercial developments, sports facilities and infrastructure in the transportation, energy, oil and gas sectors. Their project resume is iconic: the Golden Ears Bridge, the Sea-to-Sky Highway project, the Vancouver Convention Centre, Ruskin Dam, BC Place and more.

Walters Group

Founded in 1956, Walters Group is a family-owned steel construction company that designs, fabricates, and constructs commercial and industrial projects throughout North America. An iconic Hamilton Ont. business, one of Walters’ first big jobs was with Dutch marine contractor Boskalis as they dredged Hamilton Harbor. Since then it has grown in size and now performs work for major projects like the Canadian Museum for Human Rights, Brookfield Place and the Burgoyne Bridge.

Sperling Industries

Three Nicolajsen brothers joined forces in 1978 to start Sperling. The private family-owned business began as a small welding repair shop and has since turned into a full-service provider that offers design, engineering, fabrication and installation. The company started with smaller projects in Manitoba, moving into Western Canada, and eventually engaging in work overseas.

Supreme Steel

Now a somewhat familiar tale on this list, Supreme began in 1972 as a modest steel erector business with prairie couple John and Sally Leder’s single welding truck. Through acquisitions and investing in technology, the company has grown beyond Western Canada and expanded across North America. Some of its major projects include the Rainier Tower in Seattle, the Port Mann Bridge in Vancouver and the Diavik diamond mine in the Northwest Territories.

Capitol Steel

Capitol began as a one man, welding operation and has grown into a highly specialized, structural steel fabricator and erector for some of the largest and most demanding projects in the public infrastructure, commercial construction and heavy industrial sectors. Some of Capitol’s projects include the Walterdale Bridge, the Remai Art Gallery, the Grand Valley Bridge Cofferdam and Manitoba Hydro Place.

George Third & Son

Burnaby, B.C.-based George Third & Son was founded in 1910 as a blacksmith shop. Over the past 110 years the blacksmith shop has been upgraded to 55,000 square-foot steel fabrication shop. GTS has a gained a reputation for combining various materials – most notably timber – with structural steel. Its services include design, engineering, welding, cutting, steel forming, machining, custom fabrication, and managing the installation process.

Contractors, engineers, heavy equipment and more – we dove into the Toronto Stock Exchange to explore some of the largest publicly traded companies related to construction.

*Editor’s note: Market cap is accurate as of 10:00 a.m. PST, Aug. 3, 2023.

Enterprise Group (E)

Enterprise is a specialized equipment rental and services organization, providing critical site infrastructure and services in Western Canada and beyond. The company’s first quarter report for 2023 touted higher capital spending in the energy industry combined with increased customer activity levels for improved results. Revenue for the three months was $10,008,332 compared to $7,629,418 in the prior period.

Market cap: $22.52 million

DIRTT Environmental Solutions Ltd. (DRT)

Calgary-based DIRTT specializes in industrialized construction which utilizes a system of physical products and digital tools to build high-performing, adaptable, interior environments. It’s latest financial results show revenue of $44.8 million, up 22% from the first quarter and flat compared to prior year period. Earlier this year, DIRTT entered into assignment and co-ownership agreements with Armstrong World Industries Inc. resulting in cash inflow of $10 million

Market cap: $59.33 million

Bird Construction (BDT)

In its latest report to investors, Bird stated that it achieved a significant increase in construction revenue for the first quarter of 2023, with healthy seasonal margins reflecting strong execution across work programs. At the same time, Bird grew its backlog and pending backlog to record combined levels, including recurring revenue awards now exceeding $1.1 billion. During the quarter, Bird also acquired Trinity Communications Ltd. It’s next report is scheduled for Aug. 9

Market cap: $485.18 million

Aecon Group (ARE)

Aecon Group Inc. is a national Canadian construction and infrastructure development company. One of the company’s biggest moves this year came when it announced a definitive purchase agreement with Green Infrastructure Partners Inc. to sell its Aecon Transportation East roadbuilding, aggregates and materials businesses in Ontario for $235 million in cash.  In its last quarterly results announcement, officials reported an 8% year-to-date increase in revenue and backlog of $6.9 billion at June 30, 2023.

Market cap: $682.76 million

North American Construction Group Ltd. (NOA)

The company was founded in B.C. in the 1950s with just one secondhand bulldozer. It has grown into Canada’s largest independent heavy equipment and mining contractor. North American recently announced plans to acquire MacKellar Group for an estimated $395 million. The Australian company boasts a heavy construction equipment fleet and serves the mining and civil sectors. officials said the deal came together after two years of discussions.

Market cap: $900.7 million

Badger Infrastructure Solutions (BDGI)

Badger Infrastructure Solutions Ltd. is North America’s largest provider of non-destructive excavating services. Badger’s customers typically operate near high concentrations of underground power, communication, water, gas and sewer lines, where safety and economic risks are high and where non-destructive excavation provides a safe alternative. Badger recently announced a quarterly cash dividend of $0.1725 per share.

Market cap: $1.11 billion

SNC-Lavalin Group Inc. (SNC)

Founded in 1911, SNC is a fully integrated professional services and project management company with offices in more than 40 countries and 30,000 employees. It’s recent news is a binding agreement to sell its Scandinavian Engineering Services business – comprising Denmark, Sweden and Norway – to SYSTRA Group, a France-based engineering and consulting group specialized in public transport and mobility solutions. In June it launched Decarbonomic, its decarbonization service for the industrial sector.

Market cap: $7.27 billion

Stantec (STN)

Stantec Inc. is an international professional services company in the design and consulting industry. The company was founded in 1954, as D. R. Stanley Associates in Edmonton. Just last month, it announced the closing of its private placement offering of $250 million aggregate principal amount of senior unsecured notes. The Notes bear an interest rate of 5.393% per annum and were priced at par. Stantec was also recently selected to serve as owner’s engineer for the SunZia Transmission project, the largest clean energy infrastructure project in U.S. history.

Market cap: $9.86 billion

WSP Global (WSP)

WSP is one of the world’s largest professional services firms in the world with 67,000 employees. It provides strategic advisory, engineering and design services to clients seeking sustainable solutions in the transportation, infrastructure, environment, building, energy, water, and mining sectors. In 2022, WSP reported $11.9 billion in revenue. Last month, WSP completed its acquisition of Australian mining expert Calibre Professional Services One Pty Ltd.

Market cap: $22.23 billion

Key Takeaways:

• The plan calls for creating a separate, spinoff business that focuses on pipelines.
• TC Energy will focus on natural gas infrastructure and expand its power and energy solutions business.
• The deal expected to be finalized on a tax-free basis during the latter half of 2024, after shareholder and court approvals.

The Whole Story:

TC Energy plans to separate into two distinct, publicly listed companies, both investment-grade entities, through the spinoff of TC Energy’s liquids pipelines business. This decision follows a two-year strategic review and is expected to be finalized on a tax-free basis during the latter half of 2024.

The company explained that the primary objective of the strategic spinoff is to unlock shareholder value and enable each newly-formed company to focus on its growth objectives while maintaining disciplined capital allocation, efficiency enhancement and operational excellence. TC Energy stated that by becoming independent entities, these new firms will be better equipped to pursue specific opportunities, ultimately benefiting their shareholders, customers, and the communities they serve.

Following the completion of the spinoff, TC Energy will emerge as a diversified, natural gas and energy solutions company. The new entity will be uniquely positioned to address the increasing demand for reliable, lower-carbon energy by leveraging its complementary business sets.

On the other hand, the liquids pipelines company will be established as a critical infrastructure entity with strategically positioned assets that connect supply routes to high-demand markets. The company aims to drive incremental growth and value creation opportunities in this space.

“This transformative announcement sets us up to deliver superior shareholder value for the next decade and beyond,” said François Poirier, president and CEO of TC Energy. “Fundamentals have always driven our strategic direction, and as a result, we have grown into a premier energy company with incumbency across a wide range of energy infrastructure platforms. As we have become the partner of choice for a magnitude of accretive, high-quality opportunities, we have determined that as two separate companies we can better execute on these distinct opportunity sets to unlock shareholder value.”

He emphasized that the decision was grounded in fundamental considerations and that the separation into two companies would enable them to execute distinct opportunity sets more effectively, thereby maximizing shareholder value.

Upon the completion of the spinoff, TC Energy will focus on natural gas infrastructure, backed by strong, long-term fundamentals. The company will also expand its power and energy solutions business, including nuclear, pumped hydro energy storage, and other emerging energy opportunities. TC Energy, with its extensive energy infrastructure network spanning over 93,700 km (58,200 miles), is expected to deliver about 30% of total natural gas supply for LNG export from the U.S. Additionally, it will play a pivotal role in providing Canada’s first direct connection to LNG markets through the Coastal GasLink project.

Poirier further emphasized TC Energy’s commitment to a strong balance sheet and the continuation of its efforts to achieve deleveraging goals, reinforcing the company’s focus on delivering sustainable value to shareholders.

The liquids pipelines company, as an independent entity, will be led by Bevin Wirzba, who will serve as president and CEO. This entity will operate a crude oil pipeline infrastructure covering 4,900 km (3,045 miles) and will supply crude to over 14 Mbbl/d of refining and export capacity, transporting 16% of crude exported from the Western Canadian Sedimentary Basin (WCSB).

TC Energy intends to capitalize the liquids pipelines company in a manner that aligns with its business model and growth plans, ensuring the new entity maintains its investment-grade credit ratings.

The proposed Transaction is expected to be tax-free for TC Energy’s Canadian and U.S. shareholders. The company plans to seek shareholder approval for the spinoff in mid-2024. In addition to shareholder and court approvals, the transaction is subject to receiving favourable tax rulings from Canadian and U.S. tax authorities and meeting other customary closing conditions. The completion of the transaction is anticipated in the second half of 2024.

There is no green energy transition without doing some digging. 

As the backbone of the green and digital economy, minerals are essential for technologies like batteries, electric cars, wind turbines and solar panels. Building resilient critical minerals value chains with high ESG standards is vital for global sustainability, and Canada aims to lead the way.

According to the federal government, Canada is home to almost half of the world’s publicly listed mining companies and has a market capitalization of $520 billion.

To seize these opportunities, Ottawa recently released the Critical Minerals Strategy backed by a $4-billion budget. The comprehensive strategy not only promises economic growth and job creation but also seeks to strengthen Indigenous reconciliation efforts and foster collaboration with allies. 

Of Canada’s 31 critical minerals, six are initially prioritized in the strategy for their distinct potential to spur Canadian economic growth and their necessity as inputs for priority supply chains. These six minerals are lithium, graphite, nickel, cobalt, copper, and rare earth elements.

Here’s a list of mining companies that are searching for these minerals and others.

Teck Resources

If you are driving around in an electric car, it’s likely thanks to Teck Resources. The century-old, diversified natural resources company headquartered in Vancouver is engaged in mining and mineral development, including coal for the steelmaking, copper, zinc, and energy. Their products are critical for making solar panels and electric vehicles. They are also on a mission be carbon-neutral by 2050 and in the last decade, they have reduced GHG emissions by more than 411,000 tonnes. Their name comes from Teck Township in Kirkland Lake, Ont. where the company developed a gold mine. The mine produced gold until 1968. In addition to Canada and the U.S., Teck has major operations in Chile and Peru.

Nutrien

Nutrien is all about putting food on the table. Formed in 2018 from merger between PotashCorp and Agrium, they are the world’s largest provider of crop inputs and services, playing a critical role in helping growers sustainably increase food production. They produce and distribute over 27 million tonnes of potash, nitrogen and phosphate products for agricultural, industrial and feed customers world-wide. A major focus of theirs in recent years has been shifting to automated and tele-remote mining and other digital technologies to safety performance, lower production costs, increase production and reduce emissions.

Barrick Gold

Toronto-based Barrick Gold owns six tier one gold assets, the most in the world. They also have been building a strategic copper portfolio to support the transition to clean technology. Their CEO, Mark Bristow, recently said that he believes that mining is the “flywheel of development” and mining companies will be critical for reaching the world’s sustainability goals. The group’s current key focus areas are: using its purchasing power to drive down emissions from suppliers; developing a tool to measure its contribution to the conservation and regeneration of biodiversity; continuing to provide ESG raters with the latest sustainability-related information; and progressing the environmental and social studies at the giant Reko Diq project in Balochistan, Pakistan.

First Quantum Minerals

With likely the coolest name on this list, First Quantum Minerals is a Canadian-based mining and metals company whose main activities include mineral exploration, development and mining. Its primary product is copper, which accounts for 80% of revenues. Their team produces copper in the form of concentrate, cathode and anode, and has inventories of nickel, gold and cobalt. They operate long life mines in several countries and employ approximately 20,000 people around the globe. Just this month, Quantum announced it has started production at the Enterprise mine in Zambia, which is set to become Africa’s biggest nickel mine. Nickel is a key component for electric vehicle batteries.

Agnico Eagle Mines

Toronto-based Agnico Eagle Mines has a legacy that traces back to 1957. It has operations in Canada, Finland, Australia and Mexico and exploration and development activities extending to the United States. The company’s flagship LaRonde mine, located in the Abitibi-Témiscamingue region 62 kilometres west of Val-d’Or in Quebec, has produced 6.6 million ounces of gold since 1988 and remains a consistent engine of earnings and cash flow for the company.

Pan American Silver Corp.

2023 has been a big year for Pan American. The Vancouver-based mining company has operations in Ontario, Mexico, Peru, Bolivia, and Argentina. Earlier this year, they completed a massive deal added four Yamana Gold mines to its assets: the Jacobina mining complex in Brazil, the El Peñón and Minera Florida mines in Chile, and the Cerro Moro mine in Argentina. The multi-billion-dollar deal also required Yamana to sell its share of the Canadian Malartic mine to Agnico Eagle Mines.

Lundin Mining

Toronto-based Lundin Mining Corporation has a global presence. It owns and operates mines in Sweden, the United States, Chile, Portugal, and Brazil. These mines are focused on the extraction of essential base metals like copper, zinc, and nickel. The company’s headquarters are based in Toronto, and it was initially established by Adolf Lundin, later operated by Lukas Lundin. Originally, the company’s primary interest was in a diamond mine located in Brazil. However, it later underwent a restructuring phase and successfully raised funds to develop the Storliden mine in Sweden. Over time, Lundin Mining Corporation expanded its portfolio by acquiring significant assets.

Avalon Advanced Materials

Avalon Advanced Materials, formerly known as Avalon Rare Metals Inc., is a Canadian mineral development company based in Toronto. They have a unique focus on rare metals and minerals that play a crucial role in emerging technologies. Among their key assets are the Nechalacho Project located in Yellowknife, Northwest Territories, the Separation Rapids near Minaki, Ont., the East Kemptville in Nova Scotia, Lilypad Cesium near Ignace, Ont., and the Warren Township in Ontario. Avalon recently Announced $63M strategic investment by Sibelco to create a vertically integrated lithium strategic partnership.

Hudbay Minerals

Hudbay Minerals has a rich Canadian history spanning over 90 years. It has been a key player in mining copper concentrate, which includes valuable deposits of copper, gold, and silver. Flin Flon, Manitoba, has been a focal point of its operations for decades. Presently, Hudbay operates in both Manitoba and Peru. Additionally, the company is actively engaged in establishing a copper mine in the southern region of Arizona.