Federal Labour Minister Seamus O’Regan announced that he received notice Thursday morning, July 13, that the British Columbia Maritime Employers Association (BCMEA) and the International Longshore and Warehouse Union (ILWU) have accepted the Terms of Settlement from federal mediators.
The parties have reached a tentative agreement and they are finalizing details for the resumption of work at the ports.
“We thank the union and the employer for their commitment to the collective bargaining process and federal mediators for their instrumental role in supporting the parties in their negotiations and proposing the successful settlement,” said O’Regan.
He noted that the scale of the disruption has been significant.
Greater Vancouver Board of Trade President and CEO, Bridgitte Anderson explained that it will still take time to get operations back to normal, noting that it is the longest strike the region has had in nearly 40 years. It also follows years of already disrupted supply chains.
“The 13-day strike has had a significant impact on Canada’s west coast ports and Canadian economy, disrupting an estimated $9.7 billion in trade,” said Anderson. “The consequences of the strike have been felt across various industries nationwide and will continue for some time.”
She urged the federal government to explore adding additional tools in their toolkit that can better address labour disputes on the waterfront to avoid further damage to Canada’s supply chains.
O’Regan stressed that the disruption is not something Ottawa wants to see repeated.
“The extent of it has shown just how important the relationship between industry and labour is to our national interest,” he said. “Our supply chains and economy depend on it. We do not want to be back here again. Deals like this, made between parties at the collective bargaining table, are the best way to prevent that. They are the best way to preserve the long-term stability of Canada’s economy. But we do not want to be back here again.”
Canada’s business community is calling for an end to a labour dispute that has shut down Western Canadian ports.
On July 1, more than 7,000 International Longshore and Warehouse Union Canada (ILWU Canada) workers walked off the job after negotiations with the BC Maritime Employers Association (BCMEA) failed to produce a new collective agreement. Days later, the two parties seem no closer to a solution.
“The BC Construction Association is deeply concerned about the labour dispute at Canada’s West Coast ports,” said Chris Atchison, BC Construction Association (BCCA) president, in a statement to SiteNews.
Approximately 25 percent of Canada’s total traded goods flow through these ports and this shutdown will fuel inflation, increase costs for business and consumers, and damage the Canadian economy.
Chris Atchison / BC Construction Association President
Atchison noted that with BC Contractors already feeling operational pressures tied to high demand for construction services, coupled with a continuing shortage in labour supply and rising costs due to post pandemic supply chain issues, the added strain will push BC’s builders into an even tougher spot while also negatively impacting the 230,000+ British Columbians employed in the sector.
Atchison added that the BCCA, along with its partner associations across Canada, have implored the Government of Canada to take immediate action to resolve the dispute.
Fiona Famulak, president and CEO of the BC Chamber of Commerce, noted that the shutdown is not sustainable.
“The continued shutdown of Canada’s busiest and third busiest ports, where as much as $800 million worth of cargo is moved daily, is untenable,” she said in a statement to SiteNews. “Every day the job action remains unresolved increases impacts on Canadians, businesses and our economy. Without swift resolution, this strike will become dire for every organization that relies on international supply chains to produce, supply and sell goods or services.”
Striking workers walk the picket line with Canada’s largest port, the Port of Vancouver, in the background. – ILWU Canada
Famulak urged the union and the employers association to reach a deal as quickly as possible.
“On behalf of the 100 chambers of commerce and boards of trade and the 36,000 businesses that we represent, we are calling on the parties to resume negotiations immediately and commit to finding a mutually acceptable resolution to the impasse,” she said. “If negotiations do not bring resolution to the labour action, the federal government must act with urgency to facilitate an end to the strike.”
The BCCA and BC Chamber of Commerce are just the tip of the iceberg. Over 120 associations, chambers of commerce, and boards of trade representing the Canadian business community have united in a joint letter to Prime Minister Justin Trudeau to express their deep concern over the labour disruption at Canada’s West Coast ports.
In addition to the BCCA and BC Chamber, industry signatories include the Canadian Construction Association, the Heating, Refrigeration and Air Conditioning Institute of Canada, Independent Contractors and Businesses Association, BC Council of Forest Industries, Northern Regional Construction Association, Canadian Home Builders’ Association, Southern Interior Construction Association, Western Retail Lumber Association, Vancouver Regional Construction Association and the Vancouver Island Construction Association.
Here is the letter in its entirety:
“Dear Prime Minister:
On behalf of the Canadian business community, we are writing to express our deep concern regarding the labour dispute at Canada’s West Coast ports.
As associations, local chambers of commerce and boards of trade, whose members employ millions of Canadians, we are calling on the Government to reconvene Parliament and pass back-to-work legislation, immediately.
The shutdown of our ports will fuel inflation, increase costs for businesses and consumers, and damage the Canadian economy. It will severely reduce the ability of our exporting industries to move their products to market, making it much more difficult to secure the global contracts that drive investment and employ Canadians.
Approximately 25 percent of our total traded goods flow through the ports in Western Canada. They are Canada’s largest gateway, handling over $800 million worth of cargo, from agri-foods and potash to critical minerals, forestry, construction materials and household necessities, every single day. As a result of Canada’s heavy reliance on trade, the smooth delivery of goods is in the national public interest making the impact of this dispute far more profound than that of most other more isolated labour disruptions.
To position Canada as a reliable trading partner that is competitive in the global economy, businesses must be able to reliably and efficiently get goods to and from market. Canadians expect our elected officials to ensure that this labour dispute is resolved quickly.
Sincerely,
Abbotsford Chamber of Commerce Heating, Refrigeration and Air Conditioning Institute of Canada Ajax-Pickering Board of Trade Independent Contractors and Businesses Association Alberta Chambers of Commerce Innovative Medicines Canada Assiniboia Chamber of Commerce (Manitoba) Jasper Park Chamber of Commerce Association of Home Appliance Manufacturers Kamloops & District Chamber of Commerce Barriere & Area Chamber of Commerce Kelowna Chamber of Commerce BC Chamber of Commerce King Chamber of Commerce BC Chamber of Shipping Leamington District Chamber of Commerce BC Council of Forest Industries Lethbridge Chamber of Commerce Beaumont Chamber of Commerce Life Sciences BC Brampton Board of Trade London Chamber of Commerce British Columbia Construction Association Madoc & District Chamber of Commerce British Columbia Trucking Association Manitoba Chambers of Commerce Burlington Chamber of Commerce Melfort Trade Alliance Chamber of Commerce Burnaby Board of Trade Mining Association of Canada Business Council of Canada Mission Regional Chamber of Commerce Calgary Chamber of Commerce Mississauga Board of Trade Campbell River & District Chamber of Commerce Moose Jaw & District Chamber of Commerce Canadian Association of Importers and Exporters New Car Dealers Association of BC Canadian Automobile Dealers Association North Bay & District Chamber of Commerce Canadian Canola Growers Association Northern Regional Construction Association Canadian Chamber of Commerce Oakville Chamber of Commerce Canadian Construction Association Ottawa Board of Trade Canadian Federation of Independent Business Owen Sound & District Chamber of Commerce Canadian Food Exporters Association Parkland Chamber of Commerce Canadian Home Builders’ Association Parry Sound Area Chamber of Commerce Canadian International Freight Forwarders Association Penticton & Wine Country Chamber of Commerce Canadian Manufacturers & Exporters Perth & District Chamber of Commerce Canadian Meat Council Port Hope and District Chamber of Commerce Canadian Produce Marketing Association Prince Albert & District Chamber of Commerce Canadian Society of Customs Brokers Prince George Chamber of Commerce Canadian Sugar Institute Qualicum Beach Chamber of Commerce Canadian Toy Association Railway Association of Canada Canadian Trucking Alliance Recreation Vehicle Dealers Association of Canada Canola Council of Canada Red Deer & District Chamber of Commerce Cap-Acadie Chamber of Commerce Responsible Distribution Canada CCSPA Restaurants Canada Chamber of Commerce Brantford-Brant Retail Council of Canada Chetwynd Chamber of Commerce Richmond Chamber of Commerce Clarenville Area Chamber of Commerce Ridge Meadows Chamber of Commerce Cloverdale District Chamber of Commerce Rocky Mountain House & District Chamber Of Commerce Cochrane Board of Trade Saskatchewan Chamber of Commerce Cold Lake Regional Chamber of Commerce Saskatchewan Mining Association Crowsnest Pass Chamber of Commerce Sault Ste. Marie Chamber of Commerce Delta Chamber of Commerce Sherwood Park & District Chamber of Commerce Edmonton Chamber of Commerce Shipping Federation of Canada Electro-Federation Canada Smithers District Chamber of Commerce Fédération des chambres de commerce du Québec (FCCQ) South Surrey & White Rock Chamber of Commerce Fertilizer Canada Southern Interior Construction Association FETCO St. Albert and District Chamber Of Commerce Food Producers of Canada St. Andrews Chamber of Commerce Food, Health & Consumer Products of Canada Surrey Board of Trade Freight Management Association of Canada Sylvan Lake Chamber of Commerce Global Automakers of Canada The Chamber of Commerce for Greater Moncton Grande Prairie & District Chamber of Commerce Tillsonburg District Chamber of Commerce Greater Kitchener Waterloo Chamber of Commerce Toronto Region Board of Trade Greater Langley Chamber of Commerce Tri-Cities Chamber of Commerce Greater Saskatoon Chamber of Commerce Vancouver Island Construction Association Greater Sudbury Chamber of Commerce Vancouver Regional Construction Association Greater Vancouver Board of Trade Vermilion & District Chamber of Commerce Greater Vernon Chamber of Commerce Western Canadian Shippers’ Coalition Greater Victoria Chamber of Commerce Western Retail Lumber Association Halifax Chamber of Commerce Winnipeg Chamber of Commerce Halton Hills Chamber of Commerce Woodstock Chamber of Commerce Yarmouth & Area Chamber of Commerce Yorkton Chamber of Commerce.”
Work will resume on a $5-billion electric vehicle (EV) battery plant after work halted seven weeks ago over government funding.
Union officials announced that Stellantis and the federal and Ontario governments have reached an agreement that will see construction of the Windsor EV battery plant resume.
“We knew the high stakes. We knew these commitments had to be kept because the alternative would have been unthinkable for so many workers. I know what resonated with all parties was the persistent message from our union that thousands upon thousands of workers’ livelihoods were hanging in the balance throughout this dispute,” said Lana Payne, Unifor national president. “We would like to thank Prime Minister Trudeau, Premier Doug Ford and the company for reaching this important conclusion and taking the necessary action to secure the Stellantis production footprint in Canada.”
The lithium-ion battery plant is a joint venture of Stellantis and LG Energy Solution. It was first announced in March 2022. Construction at the future plant was halted on May 15, 2023, after Stellantis claimed the federal government had not met its financial commitment and that the company was implementing contingency plans for battery production. Windsor officials called the delays unacceptable and are circulated a petition to push Ottawa to finalize a deal.
Key Takeaways:
This year’s wildfire season is already well on its way to beating the 1989 record of 7.5 million hectares burned.
Sawmills, oil and gas sites, and construction sites have all been impacted and could be impacted more if severe wildfires continue as predicted.
The nation’s GDP lost could be as high as 0.6 ppts.
The Whole Story:
Canadian wildfires aren’t just destroying trees. They are burning Canada’s GDP.
According to advisory firm Oxford Economics, Canada’s early-season wildfires have already reduced GDP in Q2 by 0.1ppt.
And if predictions of record-breaking wildfires this summer are realized, Oxford’s preliminary analysis suggests cuts to Q3 GDP could be between 0.3 ppts and 0.6 ppts. This would make the impact worse than the catastrophic 2016 Fort McMurray fires.
So far, Canada has passed the halfway mark to the previous record-holding year of 1989, when about 7.5 million hectares burned. According to Natural Resources Canada, over 100,000 people have been affected by evacuation orders so far this year, with an estimated 27,643 people still evacuated across the country due to fires as of June 8.
The firm noted that the bulk of the hit to the economy will be in mining, quarrying, and oil and gas extraction in Alberta, Quebec, and B.C. where fires have forced operations to shut down for various periods since mid-May.
“In our low-impact scenario, we assume 10 more poor air quality days than normal this wildfire season, while our high-impact scenario assumes 20 more poor air quality days than normal,” they wrote. “However, once the wildfire season is over, rebuilding efforts should provide a meaningful but gradual boost to the construction sector.”
The forestry industry has also been directly impacted by the closure of sawmills in hard-hit areas, particularly in Quebec.
One of the most visible impacts is in the sky. Wildfire smoke is causing periods of poor air quality across much of Canada and parts of the U.S.
“So far, we don’t think this has had a measurable macroeconomic impact,” said researchers. “But, if the wildfires lead to a large number of poor air quality days this summer, outdoor economic activities like recreation travel, tourism and construction could be disrupted.”
The firm noted that a larger number of poor air quality days could disrupt Canada’s construction sector if labourers aren’t able to work safely outdoors. They noted that a growing body of economic research on the effects of poor air quality and air pollution show the impact on hours worked and productivity, though most focus only on specific sectors and regions and the research techniques used vary considerably.
In a worse case, should wildfires shut major traffic corridors, cutting off supply lines or disrupting power supply to large population and business centres, the economic consequences could be even more severe, said Oxford.
Key Takeaways:
Several days into the strike, both parties have accused the other of being unreasonable and negotiations appear to have stalled.
Automation of ports, the rising cost of living and the use of outside contractors are major issues that have been raised by workers.
The employers association argued the union is trying to expand their scope and redefine their work.
The strike includes more than 7,000 workers and impacts West Coast ports, including Canada’s largest port, the Port of Vancouver.
The Whole Story:
A supply chain crisis is brewing in Western Canada as workers at some of Canada’s largest ports are striking.
On July 1, more than 7,000 International Longshore and Warehouse Union Canada (ILWU Canada) workers walked off the job after negotiations with the BC Maritime Employers Association (BCMEA) failed to produce a new collective agreement. Days later, the two parties seem no closer to a solution.
What the employers say
On Monday BCMEA announced that a continuation of bargaining at this time is not going to produce a collective agreement.
“The BCMEA has continued to advance reasonable proposals and positions in good faith with the urgent objective of making progress, reaching a fair deal, and ensuring ports are open and supply chains are stable and reliable,” officials said. “Rather than work towards an equitable deal, ILWU Canada seems to have entrenched their positions. The BCMEA has gone as far as possible on core issues.”
The group stated that the ILWU Canada is attempting to “aggressively expand” their scope and re-define regular maintenance work far beyond what is set out in the industry-wide agreement. The BCMEA’s view is that changing this definition would result in immediate and significant impacts to terminal operations. They explained that under the current collective agreement, the ILWU exclusively supplies the labour force, however, the employers noted that the union has been consistently unable to fulfill the trades work they have jurisdiction over.
“Further, ILWU Canada’s proposals for compensation are unreasonable, and well outside the established norm of union settlements in Canada,” they said.
In 2022, the median salary of an ILWU Union longshore worker in B.C. was $136,000 per year, plus benefits and pension. Over the course of the past 13 years, longshore wages have risen by 40%. ILWU Canada member wages have increased by approximately 10% in the past three years since the COVID-19 pandemic began.
“ILWU Canada went on strike over demands that were and continue to be outside any reasonable framework for settlement,” said the BCMEA. “ILWU Canada needs to decide if they are going to continue this strike with no hope of settlement, or significantly modify their position so a fair and balanced deal can be reached.”
Workers float on the picket line as part of the ILWU strike in B.C. – ILWU Canada
What the union says
When the union issued its strike noticed, it cited three main objectives:
Stop the erosion of their work through contracting out.
Protect current and future generations from the impacts of port automation.
Protect longshore workers from record high Inflation and sky-rocketing cost of living.
According to the union, the association was not willing to engage in any meaningful way on substantive issues based on their experience with how the the BCMEA approaches collective bargaining. In response, the union issued notice of dispute in an effort to move the process along and parties have been involved with the Federal Mediation and Conciliation Services (FMCS) since April.
The union replied to the association’s argument of them trying to expand its scope of work beyond regular maintenance.
“The fact is that the union has been raising the issue of rampant contracting out of our maintenance work for years,” said ILWU officials. “Our focus in this round of bargaining has been to stop the erosion of jurisdiction and the extensive use of contractors.”
According to the union, they moved substantially from their original position on regular maintenance issues and the parties had produced a document that was largely agreed upon. They accused the employers of changing their position at this late stage to “muddy the water” and mischaracterize the union’s concerns.
“The BCMEA drew a line in the sand and ended the progress that had been made so that the new maintenance document would have no ability to achieve the aims set out in it,” stated union officials. “The association deliberately sabotaged the progress that had been made therefore we must question their motives and the appropriateness of the BCMEA bargaining committee to actually negotiate a collective bargaining agreement.”
The unions also argued against the employers’ position on compensation, noting that the BCMEA’s members have enjoyed record profits before and during the COVID-19 pandemic and other industries, like the transportation sector, have shared those profits with workers.
“We implore the BCMEA to get back to the table to achieve a fair and reasonable agreement that the parties negotiate together,” stated the union. “It is unrealistic to think that a collective agreement that is imposed will result in long term labour stability in the industry. The parties need to put their best effort forward for the entire country and not just their individual aims.”
Automating port facilities
The automation effort the union is referring to is the the $3.5-billion Roberts Bank Terminal 2 Project which received federal approval earlier this year. The work, to be funded by the port authority and private investment, involves the construction of a new three-berth marine container terminal in Delta, B.C. The terminal will serve container ships bringing a wide variety of goods such as clothing, electronics, food, auto parts, manufacturing parts, furniture, and household goods.
The terminal will also serve overseas markets, shipping export containers loaded with a range of Canadian goods including pulp, lumber, crops such as lentils and legumes, grain, fruits, and specialty items like wine and craft beer. As part of the project, the existing causeway will be widened to accommodate additional road and rail infrastructure, and the existing tug basin will be expanded to accommodate a second tug operations
When it comes to automation, port officials stated that the future terminal operator will determine the final configuration and operating concept for the terminal, taking into account the conditions and commitments set out in the environmental process.
“However, it is important to note that all the work we have completed to date has planned for a semi-automated terminal and we assume the Roberts Bank Terminal 2 Project will be partially automated, similar to newer container terminals around the world,” they said.
The Canadian Chamber of Commerce urged the Government of Canada to immediately intervene in order to prevent further disruption to Canada’s supply chains and limit the impact of the strike.
“The government should immediately recall Parliament to pass back-to-work legislation to protect the livelihoods of Canadian workers and the health of Canadian businesses affected by disruption to the more than $800 million worth of cargo flowing through West Coast ports every single day,” said Robin Guy, vice president and deputy leader of government relations for the chamber.
Key Takeaways:
Transit passes issued by a developer to residents in transit-oriented buildings increased their transit use by 10%
Approximately 50 percent of the participants did not own private vehicles, indicating a reduced reliance on personal cars.
TransLink is actively seeking partners to support a larger-scale study conducted over an extended period.
The Whole Story:
Early research conducted by TransLink and PCI Developments (PCI) suggests that incentives provided by developers can significantly increase the use of public transit among residents and employees of transit-oriented developments.
Moreover, the study found that these incentives also create a new source of revenue for transit services. Officials say the findings shed light on the potential of encouraging developers to offer transit passes as part of their projects to promote sustainable transportation options and enhance the financial sustainability of transit systems.
“This study gives us a clearer picture of how people travel when they work or live near SkyTrain,” said TransLink CEO Kevin Quinn. “These results show that developer-granted incentives would lead to more transit use, less car-dependency, and a new revenue stream independent from taxes.”
The study involved PCI providing Compass Cards with $150 stored value to 300 residents or employees of King George Hub, a transit-oriented development located near the King George SkyTrain Station. TransLink closely monitored the travel patterns of the participants before and after the subsidy was implemented, while also conducting surveys to gather valuable insights. The results of the three-month study revealed an increase of approximately 10 percent in transit use among the participants.
Prior to receiving the subsidy, 82 percent of participants reported using transit twice a week or more. However, after the subsidy was introduced, this number surged to an impressive 92 percent. Officials said that the growth suggests that individuals who choose to live or work near rapid transit options like the SkyTrain are more inclined to use public transportation when provided with subsidized transit passes.
A chart compares transit use with and without the subsidy. – TransLink
TransLink stated that it intends to share these results with regional municipalities, highlighting the potential benefits of developer-sponsored incentives. In addition to promoting increased transit use, the study revealed several other findings. Approximately 50 percent of the participants did not own private vehicles, indicating a reduced reliance on personal cars. Furthermore, about 40 percent of the participants reported owning only one vehicle per household. Over the course of the three-month pilot, the 300 participants collectively took more than 12,000 transit trips.
While these initial findings are certainly promising, officials noted that they are based on a relatively small sample size and a short timeframe. Recognizing the need for further research, TransLink is actively seeking partners to support a larger-scale study conducted over an extended period. They believe that by replicating these results on a broader scale, transit authorities can gain a more comprehensive understanding of the potential impact of developer-sponsored incentives on transit usage and revenue generation.
Key Takeaways:
Saint-Gobain also recently acquired Kaycan and CertainTeed as part of its Canadian business strategy.
Saint-Gobain plans to add $435 million to its leadership in Canada, where it already has around $1.4 billion of sales, primarily gypsum, insulation, ceilings and siding.
Saint-Gobain stated that the acquisition completes its offering of solutions for light and sustainable construction in Canada.
The Whole Story:
International building materials giant Saint-Gobain announced that it has entered into a definitive agreement for the acquisition of Building Products of Canada Corp. (BP Canada) for $994 million in cash.
The company is a privately owned manufacturer of residential roofing shingles and wood fiber insulation panels in Canada. Saint-Gobain said the acquisition will reinforce its leadership in light and sustainable construction in the Canadian market.
“Today marks the beginning of an exciting new chapter in the history of Building Products of Canada,” said Yves Gosselin, BP Canada president and CEO. “Our focus on delivering the best solutions and satisfaction to our customers has enabled us to become a leading player in roofing in Canada. The opportunity to join Saint-Gobain, the worldwide leader in light and sustainable construction, and which is investing significantly in Canada, is the perfect next step to further enrich our offer by leveraging Saint-Gobain’s innovation and technology.”
BP Canada is a leading roofing and exterior building products player in Canada with three manufacturing plants – Montreal, Edmonton, Pont-Rouge – and 460 employees. It has a leading position in asphalt shingle roofing in Canada and offers a comprehensive range of exterior building products including wood fiber insulation panels and acoustic panels. It sells through more than 1,200 points-of-sale across home center retailers and specialty distribution channels.
Saint-Gobain plans to add $435 million to its leadership in Canada, where it already has around $1.4 billion of sales, primarily gypsum, insulation, ceilings and siding.
“This is an important and logical step for Saint-Gobain, allowing us to establish a leading position in roofing in Canada, completing our offering for the building envelope which we have reinforced with the recent Kaycan and GCP acquisitions,” said Benoit Bazin, Saint-Gobain CEO. “It completes our offering of solutions for light and sustainable construction in Canada as we have done successfully in the United States.”
Canadian investment and advisory firm Hillcore has completed the acquisition of Alberta-based Thompson Construction Group.
Thompson was established in Barrhead, Alta. in 1964 with a handful of employees and a couple pieces of heavy equipment. It has been headquartered in Spruce Grove, Alta. since 1984 and has grown to include 1,500 employees and 2,000 pieces of equipment.
The heavy civil contractor focuses on heavy civil earth moving, infrastructure construction, oil sands reclamation and plant construction.
Hillcore, which has partnered with Thompson’s existing senior management team on the acquisition, stated that Thompson’s long-standing history of operational excellence, safety, and quality will continue. Hillcore will work with the management team as it builds its service capacity to support its growing customer base through capital expenditure, acquisition, and geographic expansion plans.
“We are excited to partner with such a great leadership team and an industry leader and see tremendous opportunities to grow this platform,” said Russell Negus, Hillcore chairman. “We welcome Thompson’s 1,500 employees to our existing family of over 3,500 employees across our affiliated businesses.”
Negus gave a special thanks to Larry Thompson for building the business and said that Hillcore is committed to being first rate stewards and custodians of the business as it continues to grow.
“I am thrilled that the Hillcore Group is dedicated to continuing the vision of Thompson, supporting all the great staff and clients in the excellent work we do,” said Larry. “I also want to thank all Thompson employees past and present who have been instrumental in delivering so many successful projects to our long list of great clients over the years.”
Structurlam Mass Timber Corporation is filing for bankruptcy.
The company announced it has entered into a stalking horse asset purchase agreement (APA) with Mercer International Inc. to sell its assets in B.C. and Arkansas for US$60 million. Mercer is one of the world’s largest producers of market pulp.
In conjunction with the APA, the Company has voluntarily filed petition for relief under Chapter 11 of the U.S. code. Recognition of the Chapter 11 proceedings will be sought in the Supreme Court of British Columbia shortly thereafter.
The company explained that APA is subject to higher and better offers as part of a court monitored auction process. In addition, the company secured a C$7.5 million debtor-in-possession (DIP) facility from the Bank of Montreal to fund its operations throughout the court process.
“I am delighted and grateful for Mercer’s vote of confidence in Structurlam and in its leadership in the mass timber industry. It is especially rewarding given the difficult period the company has had since suspending its operations in Arkansas mid-January, and it will help in normalizing the plant operations going forward” said Matthew Karmel, CEO of Structurlam.
Operations were suspended at the Arkansas plant due to a customer contract cancellation. Local news outlets reported Walmart cancelled its contract due to production delays. Walmart’s headquarters is also in Arkansas.
Structurlam products have been used on many Canadian projects, including:
Art Gallery of Ontario
Prince George’s Wood Innovation and Design Centre
Brock Commons
The Richmond Olympic Oval
Key Takeaways:
Industry groups in Alberta are calling on NDP leader Rachel Notley to be specific about the party’s stance on community benefits agreements and “double breasting”.
The next Provincial General Election is scheduled to be held on May 29 unless an election is called earlier.
The groups include the Progressive Contractors Association, the Alberta Construction Association and the Independent Contractors and Businesses Association of Alberta.
The Whole Story:
Alberta construction groups are calling on NDP leader Rachel Notley to clarify the party’s position on labour issues as a general election for the province looms on the horizon.
“We are reaching out to you on behalf of several Alberta construction associations, who would like clarification on two policy changes that you promise, should you be elected in the upcoming Alberta general election,” wrote the groups. “We are concerned that if implemented, these changes could increase taxpayer costs and limit the access of thousands of Alberta companies and construction workers to public and private projects, during a critical time when demand for their skills is at an all-time high.”
The letter focused on two main issues: Community benefits agreements and “double breasting”.
Community benefits agreements
The groups noted that on multiple occasions the NDP has signaled its intention to implement a community benefits agreement” regime in Alberta to maximize the participation of underemployed worker groups.
“We believe CBAs, when designed to be fair, open and transparent, can achieve meaningful social procurement objectives,” wrote the groups. “However, these reports note that a new NDP government may look to B.C. as a template for a broader CBA program. We sincerely hope this is a misprint.”
The groups explained that they believe the B.C. program, designed by former Premier John Horgan’s NDP government, is in reality a “grossly coercive program aimed at giving select B.C. Building Trades Unions a monopoly over large parts of the province’s multi-billion-dollar infrastructure projects.”
They explained that companies wishing to do work on these projects must do so using exclusively Building Trades Union (BTU) labour and terms, regardless of which labour model they are affiliated with.
“Given that B.C.’s BTU workers constitute no more than 15% of the province’s skilled construction workforce, this means that the other 85% are excluded from public work that is paid for by their own tax dollars,” they wrote. “We trust you will agree that this arrangement is grossly unfair, anti-competitive and punishes companies and their workers for choices they have freely made.”
The groups called on Notley to clarify the NDP’s stance on CBAs and if it will differ from B.C.’s approach.
“Our industry associations are ready and willing to constructively work with parties across the political spectrum, to pursue social procurement objectives that are fair, meaningful, and productive,” they said.
Double Breasting
The groups stated that the NDP has also pledged to do away with “double breasting” in the construction and maintenance sectors.
They explained that the term arises out of Labour Relations Board decisions across Canada.
“It is not – and lawfully cannot be – a creation of employers. It arises only when employees, within a group of businesses, decide to be represented by a union that is different from another union representing the employees of another company within that corporate group,” they wrote. “When there are different unions representing separate employees within separate companies – or there is a non-union business in the group – the ‘label’ that is applied from the labour relations perspective, is that the overall business is “double” or ‘triple breasted.’”
The groups explained that no single source of workers has been sufficient to meet the workforce required to construct all of Alberta’s capital and infrastructure projects, whether those workers are craft or progressive, union, non- union, from employee associations, or from outside the province.
“Healthy competition has resulted in union and non-union employers offering high pay, comprehensive benefit packages, training and learning and development including outstanding workplace health and safety, family counselling services, and other employee supports,” they argued. “Indeed, construction is among the highest paying professions in Alberta, well above the average for all industries and occupations.”
The groups called tinkering with the corporate structure of construction and maintenance firms a misguided attempt to address perceived issues with double breasting .
“At minimum, we would want to see industry-wide consultations before such drastic policy changes are enacted,” they said.
The groups concluded by highlighting the province’s “Alberta is Calling” campaign aimed at attracting workers from other provinces, including skilled trades workers from under-utilized groups such as youth, women, immigrants, and Indigenous Peoples.
“The policy changes under consideration could send a very different message: that Alberta is really only calling upon a select few, at a time when the province’s construction industry faces a dire and growing shortage of skilled labour,” they wrote.
Key Takeaways:
Alberta, Saskatchewan and Manitoba have signed an agreement to work together on projects that can boost trade and economic growth.
The agreement will focus on enhancing critical infrastructure, improving the efficiency of interprovincial transportation networks and reducing regulatory hurdles.
The trio highlighted the transcontinental railway as an example of the kinds of nation-building projects they are looking to achieve.
The Whole Story:
Alberta, Saskatchewan and Manitoba have signed an agreement to collaborate on joint economic corridor projects to boost trade and economic growth.
Officials say the signing of a memorandum of understanding between the governments will foster the development of new economic corridors across the three provinces.
This partnership aims to bolster economic growth and collaboration while strengthening the region’s position as a key player in the global market.
“In its earliest days, Canada was united by nation-building economic projects such as the transcontinental railway, which tied the country together through improved travel and trade,” said officials in a joint statement.
The agreement will focus on enhancing critical infrastructure, improving the efficiency of interprovincial transportation networks and reducing regulatory hurdles. It will also identify opportunities to attract private sector investment and partner with Indigenous communities on economic corridor development.
Officials from the province stated that they believe the last decade has brought regulatory uncertainty, anti-development policies and a lack of national leadership that have cost provinces opportunities to pursue projects that would have created thousands of jobs and billions of dollars in growth and investment.
The three provincial governments plan to work together to eliminate regulatory inefficiency and uncertainty to attract and develop nation-building projects. The provinces will coordinate to identify and prioritize strategic infrastructure that will enhance trade and transportation between the provinces and around the world. Officials believe that this could create new economic corridors to support the movement of critical resources, energy and utility projects, and secure national supply chains.
Don’t have time to read through hundreds of pages of federal budget documents? No problem. SiteNews went through it and picked out some of the most interesting bits that you should know.
15. Tax credits
We all love paying less taxes, right? To encourage the transition to clean energy and emissions reductions, the budget is looking to leverage tax credits. The budget included several major ones: Clean Hydrogen Investment tax credit, Clean Electricity tax credit, and atax credit for carbon capture, utilization, and storage. All said, the credits at up to $55 billion.
14. Labour requirements
To be eligible for some of the highest tax credit rates, businesses must pay a total compensation package that equates to the prevailing wage. The definition of prevailing wage would be based on union compensation, including benefits and pension contributions from the most recent, widely applicable multi-employer collective bargaining agreement, or corresponding project labour agreements. Additionally, at least 10 per cent of the tradesperson hours worked must be performed by registered apprentices in the Red Seal trades.
A Red Seal student practices their drilling. – Province of B.C.
13. Protecting procurement
Proposed procurement measures will include placing conditions on foreign suppliers’ participation in federally-funded infrastructure projects, applying strict reciprocity to federal procurement, and creating a preference program for Canadian small businesses.
12. Employee ownership
The budget is proposing making Employee Ownership Trusts easier to create. Officials say that this would make selling the business to employees a more attractive proposition for owners looking to exit. An Employee Ownership Trust (EOT) is a form of employee ownership where a trust holds shares of a corporation for the benefit of the corporation’s employees.
11. Building a lunar vehicle
This project is going straight to the moon. Canada is planning to provide $1.2 billion over 13 years to the Canadian Space Agency to develop and contribute a lunar utility vehicle to assist astronauts on the moon.
The Canadian Space Agency tests one of its lunar rovers. – Government of Canada
10. Strikes strengthened
Officials are looking to table amendments to the Canada Labour Code this year that would prohibit the use of replacement workers during a strike or lockout, and improve the process to review activities that must be maintained to ensure the health and safety of the public during a work stoppage.
9. Pregnancy loss leave
Officials are looking to expand support for grieving parents. Budget 2023 would amend the Canada Labour Code to create a new stand-alone leave for workers in federally regulated sectors who experience a pregnancy loss.
8. Program review
How we train youth for careers is going under the microscope. The budget introduced cross-government program effectiveness reviews, to be led by the President of the Treasury Board. The first review will examine skills training and youth programming, to determine, by the next budget, whether improvements can be made to help more Canadians develop the skills and receive the work experience they need to have successful careers.
7. Indigenous loans for equity
Budget 2023 announces that the Canada Infrastructure Bank will provide loans to Indigenous communities to support them in purchasing equity stakes in infrastructure projects in which the Bank is also investing. These loans will be sourced from the Canada Infrastructure Bank’s existing funding envelope.
The Meadow Lake Tribal Council Bioenergy Centre in northwestern Saskatchewan is Canada’s first Indigenous-owned bioenergy facility. – The Meadow Lake Tribal Council (MLTC)
6. Reinforcing supply chains
Ottawa plans to spend $27.2 million to establish a Transportation Supply Chain Office, and $25 million to develop useful transportation supply chain data. Officials also want to compel data sharing by shippers accessing federally regulated transportation services, and increase rail and shipping competition.
5. National Supply Chain Strategy
The budget noted that the country’s strategy is just months away from being completed. Plans for the strategy were announced last October. The strategy will be shaped by by the National Supply Chain Task Force. The Government of Canada has established an online portal for suggestions on how it can improve its supply chain performance.
4. Improving approvals
Officials have committed to outline a concrete plan to improve the efficiency of the impact assessment and permitting processes for major projects by the end of the year. This will include clarifying and reducing timelines, mitigating inefficiencies, and improving engagement and partnerships.
3. Money for tools
Have your eye on a new drill or saw? To help tradespeople invest in the equipment they need, Ottawa wants to double the maximum employment deduction for tradespeople’s tool expenses from $500 to $1,000. This change would take effect for the 2023 taxation year.
2. Work-Sharing Program
The budget is asking for $5.4 million to give the Work-Sharing Program a boost. The program helps avoid layoffs during temporary decreases in business activity by providing income support through the Employment Insurance program to eligible employees who work a reduced week while their employer recovers. This means that employees can keep their jobs and continue earning income, while their employer retains skilled workers without having to hire someone new when business picks up.
1. Redeveloping the Bonaventure Expressway
This was one of the few projects specifically highlighted in the budget. Officials plan to spend $47.8 million over nine years, with $225.5 million in remaining amortization, with Jacques Cartier and Champlain Bridges Incorporated for the redevelopment of the federal portion of Montreal’s Bonaventure Expressway into an urban boulevard. The budget also proposes to provide $576.1 million to help operate, maintain, and repair infrastructure in the Greater Montreal Area.
The federal budget is looking to create a cleaner economy as Canada looks to meet aggressive climate targets.
On Tuesday, Finance Minister Chrystia Freeland tabled the 255-page budget which forecasts a $40.1 billion deficit for 2023-24. The SiteNews team read through the documents and picked out everything that is relevant for the construction industry.
Going green
The Canada Infrastructure Bank plans to invest at least $10 billion through its Clean Power priority area, and at least $10 billion through its Green Infrastructure priority area. This will allow the Canada Infrastructure Bank to invest at least $20 billion to support the building of major clean electricity and clean growth infrastructure projects.
Ottawa is looking to expand tax credits for investments in carbon capture, utilization and storage (CCUS). It would include dual use heat and/or power equipment and water use equipment, with tax support prorated in proportion to the use of energy or material in the carbon capture, utilization, and storage process. In addition to Saskatchewan and Alberta, credits would be available to projects that store CO2 using dedicated geological storage in B.C. Officials would require projects storing CO2 in concrete to have their concrete storage process validated by a third-party based on an ISO standard prior to claiming the investment tax credit.
The budget proposes to provide $500 million over ten years to the Strategic Innovation Fund to support the development and application of clean technologies in Canada. The Strategic Innovation Fund will also direct up to $1.5 billion of its existing resources towards projects in sectors including clean technologies, critical minerals, and industrial transformation.
The federal government announced the details of the Clean Hydrogen Investment Tax Credit. Levels of support will vary between 15 and 40 per cent of eligible project costs, with the projects that produce the cleanest hydrogen receiving the highest levels of support. The program will extend a 15 per cent tax credit to equipment needed to convert hydrogen into ammonia, in order to transport the hydrogen. The tax credit will only be available to the extent the ammonia production is associated with the production of clean hydrogen.
Workers create hydrogen fuel cells at a facility in B.C. – Province of B.C.
Supply chains
Supply issues have been one of the top concerns for the construction sector since the beginning of the pandemic. While Ottawa has yet to release its National Supply Chain Strategy, officials are proposing millions to bolster the system.
Budget 2023 would allocate $27.2 million over five years to Transport Canada to establish a Transportation Supply Chain Office to work with industry and other orders of government to respond to disruptions and better coordinate action to increase the capacity, efficiency, and reliability of supply chain infrastructure.
$25 million over five years would go to Transport Canada to work with Statistics Canada to develop transportation supply chain data that will help reduce congestion, make our supply chains more efficient, and inform future infrastructure planning. This measure will be advanced using existing Transport Canada resources.
Officials plan to introduce amendments to the Canada Transportation Act to provide the minister of transport with the authority to compel data sharing by shippers accessing federally regulated transportation services.
They also want to introduce amendments to the Canada Transportation Act for a temporary extension, on a pilot basis, of the interswitching limit in the prairie provinces to strengthen rail competition and launch a review of the Shipping Conferences Exemption Act to improve marine shipping competition.
The budget called these measures are a “down payment on Canada’s National Supply Chain Strategy” which is expected to be released in the coming months.
Elsewhere in the budget, officials focused specifically on rail, proposing to provide $210.0 million over five years, with $117.4 million in remaining amortization, to VIA Rail to conduct maintenance on its trains on routes outside the Québec City– Windsor Corridor and to maintain levels of service across its network.
The MV Algoma Discovery docks at the Port of Toronto. – PortsToronto)
Indigenous participation
The budget states that more effort must be made to include Indigenous people in consultation on major projects and they should have more opportunities to benefit from such projects.
The budget would allocate $19.4 million over five years to Crown-Indigenous Relations and Northern Affairs Canada for the Northern Participant Funding Program. The funds would be used to increase the participation of Indigenous Peoples and other Northerners in environmental and regulatory assessments of major projects. $1.6 million would go to the Canadian Northern Economic Development Agency for the Northern Projects Management Office to increase capacity for federal participation in environmental assessments and consultation with Indigenous communities on major projects in the territories.
The budget also calls for the Canada Infrastructure Bank to provide loans to Indigenous communities to support them in purchasing equity stakes in infrastructure projects in which the bank is also investing. These loans will be sourced from the Canada Infrastructure Bank’s existing funding envelope.
Labour
Need tools? Ottawa wants to double the employment deduction for tradespeople’s tool expenses from $500 to $1,000.
Officials also intend to introduce tax changes to facilitate the creation of Employee Ownership Trusts. They believe this would make selling the business to employees a more attractive proposition for owners looking for an exit.
The budget would provide additional $625 million in the Labour Market Transfer Agreements to ensure Canadians continue to have access to the supports they need to get their next job.
To ensure the success of the Work Sharing program, the budget would provide Employment and Social Development Canada with $5.4 million over three years. The Work-Sharing Program helps avoid layoffs during temporary decreases in business activity by providing income support through the Employment Insurance program to eligible employees who work a reduced week while their employer recovers.
Officials are proposinglabour requirements for the Clean Technology and Clean Hydrogen Investment Tax Credits. To be eligible for the highest tax credit rates, businesses must pay a total compensation package that equates to the prevailing wage. Additionally, at least ten per cent of the tradesperson hours worked must be performed by registered apprentices in the Red Seal trades.
The government also intends to apply labour requirements related to the prevailing wage and hours worked by registered apprentices to the Investment Tax Credit for Carbon Capture, Utilization, and Storage, and the Investment Tax Credit for Clean Electricity. Further details will be provided at a later date. In all cases, the requirements would begin on Oct. 1
The budget would change the way strikes work. Officials plan to table amendments to the Canada Labour Code this year that would prohibit the use of replacement workers during a strike or lockout, and improve the process to review activities that must be maintained to ensure the health and safety of the public during a work stoppage.
Quebec transit
One of the few projects specifically highlighted by the budget was renewing the Bonaventure Expressway. Officials are looking to spend $47.8 million over nine years with $225.5 million in remaining amortization, with Jacques Cartier and Champlain Bridges Incorporated to redevelop the federal portion of the Bonaventure Expressway into an urban boulevard. Budget 2023 also proposes to providing $576.1 million over five years, with $192.3 million in remaining amortization, to operate, maintain, and repair infrastructure in the Greater Montreal Area.
Lights brighten the sky over Montreal.
Procurement measures
The government plans to undertake targeted engagement with provinces and territories, industry stakeholders, and workers and unions on “concrete reciprocal procurement measures”. The proposed measures will include placing conditions on foreign suppliers’ participation in federally-funded infrastructure projects, applying strict reciprocity to federal procurement, and creating a preference program for Canadian small businesses.
Vancouver is emerging as one of Canada’s most innovative cities. In 2021, the B.C. government invested more than $700 million in its technology and innovation sectors, helping to acquire top talent, allowing start-ups to grow and providing the necessary infrastructure for communities to participate in technology and innovation; it’s this type of investment that has allowed the life sciences community in B.C. to prosper.
In 2020, B.C.’s life sciences industry raised more than $2 billion in market capital, and now, the province is home to the fastest-growing life sciences sector in Canada. Educational centers, like the British Columbia Institute of Technology, the University of Victoria, and the University of British Columbia, are contributing to this growing industry by developing innovative thinkers to further the industry.
At Low Tide Properties (Low Tide), one of the city’s largest landlords of technically complex life science buildings, we recognize that this growth is continuing, especially in Vancouver’s False Creek Flats, as this area has become the perfect ecosystem for the life sciences industry. With the new St. Paul’s Hospital, research centers, purpose-built labs, education and learning opportunities, this region has all the ingredients to become the country’s top health science hub.
The development of the False Creek Flats
The False Creek Flats will play a vital role in the region’s economy, providing an exciting opportunity for the life sciences industry and the City of Vancouver. Home to what will be the new St. Paul’s Hospital, set to be completed by 2026, the area will be anchored by this world class facility, attracting a robust portfolio of health science talent. This region is also becoming more accessible with the introduction of rapid transit made possible through the extended Broadway Subway Project. In more recent years, the False Creek Flats has already started to draw in innovative thinkers through the Emily Carr Campus, the Center for Digital Media, the Vancouver Community College expansion, and the new Electronic Arts office. As this area continues to grow in creativity, innovation, and life science development, it’s critical to provide enough infrastructure to house all these opportunities.
Adding to the momentum and keeping top talent
As Vancouver’s life sciences hub continues to expand, it’s important that developers and landlords build and manage projects that will successfully support and facilitate growth within this community. Converting available office space to life science space will not be enough to move the ecosystem forward in a meaningful way. These companies need space that is purpose-designed with functionality to their technical needs as the first consideration.
Expected to be completed by mid-2026, Lab 29 will provide a new opportunity for life science tenants within the False Creek Flats. Purposefully built with critical infrastructure to make the building as functional as possible, Lab 29 will incorporate key life science design considerations, including increased floor-loads, 15-foot ceiling heights, high load/capacity freight elevators, double-wide corridors and access doors for easy materials movement, and full backup power integrated into the building systems. These considerations will allow tenants to continue developing new innovations with minimal interruptions or roadblocks. While functionality for life science use is at the forefront of the design, Lab 29 will also include sought-after amenities that will appeal to tenants and their employees. A 10,000-square-foot rooftop sky garden, 6,000 square feet of ground-floor food service and retail space,1,300 square feet of rooftop conference space and a 2,500-square-foot gym will entice and support the growth of innovative companies within the life sciences industry.
A unique hub, and an essential part of our growing economy
Compared to other key life science hubs in Canada, the False Creek Flats has the unique advantage of not only becoming a workplace hub, but also a well-rounded community with diverse amenities, modern, rapid transit, residential areas, and beautiful views. As the third largest life sciences community in Canada, the False Creek Flats also provides the opportunity for this industry to continue to grow through the False Creek Flats Plan, which will create 8,000 to 30,000 new jobs, support existing programs, help develop key infrastructure, and ultimately contribute positively to the city’s economy.
With the development of the False Creek Flats through key initiatives like St.Paul’s Hospital, the Broadway Subway Project, and Lab 29, the region is cementing itself as an emerging leader in the growth of health science innovations. It’s time we celebrate this, and put Vancouver and its booming life sciences industry on the map.
Key Takeaways:
B.C. Real Estate Association say 25% more homes need to built above historical averages to impact prices.
The association argued that population increases, rather than foreign buyers, will have the most impact on affordability in the coming years.
The federal government recently relaxed restrictions on foreign buyers.
The Whole Story
Realtors in B.C. are warning that home completions need to increase massively for affordability to be achieved.
A new report from the B.C. Real Estate Association (BCREA) found that new home completions in B.C. need to increase 25 per cent above their historical average level for the next five years to fully offset the deterioration of housing affordability. This would require a record level of about 43,000 completions per year.
According to the latest Market Intelligence report from the association, two significant federal government policies – the Foreign Buyers Ban and record-high immigration targets – will shape housing demand in BC over the next three years.
The association said it found weak evidence that Canada’s Foreign Buyers Ban will achieve its objective of lowering home prices, with an estimated reduction in home sales of 2,400 units in BC over the two-year ban.
The report noted that B.C. will welcome an estimated 217,500 new permanent residents from 2023 to 2025 or 100,500 more new permanent residents than would be expected based on historical average immigration levels. This translates to a 20,500-unit increase in housing demand from new permanent residents.
Impact of immigration
The association added that the demand impact of the increase in immigration is approximately five times as large as the Foreign Buyers Ban and is estimated to place significant upward pressure on home prices.
“Lowering price growth so that income growth can catch up to prices is integral to improving housing affordability in BC,” says Brendon Ogmundson, BCREA chief economist. “In our simulations, an appropriate supply response can offset the negative impact on affordability from an immigration-driven demand shock and if sustained, can achieve a permanent improvement in affordability in BC.”
Ogmundson explained that it is essential to create policies and programs that support and welcome immigrants while addressing the consequent pressures on an already stressed housing market.
“To ease the pressure on the housing market that arises from sudden changes in housing demand, governments can take steps to increase housing supply,” he said. “This can include zoning changes to allow for more housing construction, increasing funding for affordable housing programs, and providing incentives for developers to build more housing units.”
Only recently has the government started tracking foreign home buying. The Canadian Housing Statistics Program shows that non-residents only own about two to six per cent of Canadian residential properties in 2020.
Foreign buyer changes
The federal government recently announced revisions to foreign buyer restrictions including:
Enabling more work permit holders to purchase a home to live in while working in Canada.
Repealing existing provision so the prohibition doesn’t apply to vacant land.
Adding exceptions for foreign home developers.
Increasing the corporation foreign control threshold from 3% to 10%.
“To provide greater flexibility to newcomers and businesses seeking to contribute to Canada, the Government of Canada is making important amendments to the Act’s Regulations,” said Ahmed Hussen, minister of housing and diversity and inclusion. “These amendments will allow newcomers to put down roots in Canada through home ownership and businesses to create jobs and build homes by adding to the housing supply in Canadian cities. These amendments strike the right balance in ensuring that housing is used to house those living in Canada, rather than a speculative investment by foreign investors.”
Canada’s economy and its future prosperity are in jeopardy, no thanks to the federal Impact Assessment Act or Bill C-69. Even with a global energy crisis and the world pleading for Canada’s responsibly and sustainably produced natural resources, Canada, according to the Organization for Economic Co-operation and Development (OECD), is on track to have the worst performing economy of the G20 over the next ten years. Perhaps this dismal forecast reflects the regulatory uncertainty, increased red tape, and resource opposition codified in Bill C-69. Most disturbingly, as a country, we can no longer make the promise that the next generation will be better off than we are—unless things change significantly.
That is why our organizations – the Alberta Enterprise Group and ICBA Alberta – are in the Supreme Court of Canada, supporting the Government of Alberta and almost all other provinces and territories in their fight against the federal government’s Impact Assessment Act. Canada was already struggling to approve resource development projects before 2019 when the Act came into force; now it is even worse.
This is most apparent in the case of Liquid Natural Gas (LNG). The USA and Canada stood together on the starting line in 2013, both considering how to launch an LNG industry in their respective countries. A decade later, the USA now stands as the largest exporter of LNG in the world, while Canada remains at least two years away from exporting any measurable volume of LNG. In the time Canada took to approve and build one LNG export facility – LNG Canada in Kitimat, B.C. – the United States approved and built seven LNG export facilities and has five more under construction with an additional fifteen approved.
Canada has done such a thorough job of saying “no” and turning away capital and talent through regulatory uncertainty, red tape, and resource opposition—$150 billion in cancelled energy projects alone since 2017—that two years ago, the World Bank ranked Canada 64th in the world in the time it takes to approve a major construction project. Furthermore, in Canada, in every year since 2014, outbound investment has exceeded inbound investment. This has had a very negative impact on small and medium sized businesses—including our members—who provide goods and services required by major projects.
What precisely is it about the federal Impact Assessment Act that discourages capital investment and resource development?
The federal Impact Assessment Act or Bill C-69 replaced a streamlined National Energy Board with the bureaucratic multi-layered Canada Energy Regulator (CER), and the narrow-scoped Canadian Environmental Assessment Agency with the broad-scoped Impact Assessment Agency. In addition, the Act essentiallyinstitutionalizes jurisdictional duplication and red tape. For example, a project may have to go through both a provincial review as well as a federal assessment; time limits for review may be suspended at the discretion of the CER, while stakeholder participation is expanded – meaning one no longer needs to be directly affected by a project or even be in the affected provinces to participate in the process. These changes, along with expanded discretionary practices, makes the major project approval process both vague and uncertain, in terms of the criteria to be applied and the time it will take to get a decision.
Investors can be forgiven for thinking that Canada is focused on entrenching regulatory gridlock with the never-ending demands it places on project proponents. Thus, for investors, the risks are too high and the uncertainty too great; meaning, Canada is a bad prospect for investment.
Canada’s long-term prosperity is at risk if investments are not made today for developing our incredible resources and improving our infrastructure. Of course, investment should not come at the cost of a healthy environment. We believe we can do both. But robust regulations do not have to mean lengthy and uncertain timelines for assessments and project reviews, or unreasonable environmental and social requirements bound by sticky layers of red tape. Indeed, the current Impact Assessment Act puts everything—environment, social, and governance issues—ahead of economic or employment benefits rather than weighing the trade-offs carefully.
If we wish to establish a framework to strengthen Canada’s economy and future prosperity, then we need a better development regulatory process. This would be a process that appropriately balances the care for the environment we all want with the economic and resource development we need within appropriate constitutional boundaries to ensure prosperity now and for the future. That is why this week, we are standing in front of the Supreme Court of Canada, supporting the Government of Alberta and almost all of the other provinces and territories in opposing this legislation.
Key Takeaways:
$224 million will go towards building and upgrading training centres.
The province also plans to invest $75 million over three years to support the operations and programing at new and existing centres.
Applications for the new Skills Development Fund (SDF) capital stream are expected to open in late spring.
The Whole Story:
To help tackle the province’s labour shortage and get more people into careers in the skilled trades, the Ontario government is investing $224 million more to build and upgrade training centres.
The province also plans to invest $75 million more over the next three years to support the operations and programing at new and existing centres to prepare workers for in-demand careers like electricians, welders and mechanics.
“As we build Ontario, we’re providing more women and men with opportunities to begin or advance their careers in the skilled trades,” said Premier Doug Ford. “As our population grows, we’re working hand-in-hand with labour unions, business groups and our colleges and universities to train the skilled workforce that will build the roads, highways, houses, public transit, hospitals and schools our economy needs. It’s all hands on deck.”
Applications for the new Skills Development Fund (SDF) capital stream are expected to open in late spring and will provide eligible applicants, including unions, Indigenous centres, businesses and industry associations, with funding to build new training centres or to upgrade or convert their existing facilities into training centres with state-of-the-art design and technology. This includes facility renovations, retrofits, expansions, repairs and building construction.
“Ontario is facing the largest labour shortage in a generation, which means when you have a career in the skilled trades, you have a career for life,” said Monte McNaughton, minister of labour, immigration, training and skills development. “Today, we’re supporting employers, unions and other training providers so that they can build and improve the facilities we need to attract and prepare our next generation of skilled trades workers for better jobs and bigger paycheques for themselves and their families.”
According to the province, nearly 300,000 jobs are going unfilled across Ontario, costing billions in lost productivity. To address this, the Skills Development Fund capital stream aims to create opportunities for unions and training providers to improve and expand their facilities.
“LiUNA! 183 fully supports the Ontario Government’s investment in upskilling and re-training our workforce through the Skills Development Fund (SDF),” said Jack Oliveira, business manager of Local 183. “The first three rounds of the SDF were tremendously successful and saw thousands of people receive skills for rewarding careers in industries such as the skilled trades. The newly announced ‘Capital’ stream will ensure that training providers in Ontario have the necessary tools and resources to continue their great work. We are proud to partner with Premier Ford and Minister McNaughton in this initiative.”
Officials added that Ontario’s 2023 Budget will be released on March 23 and will more details of the government’s approach,
B.C. is providing $65 million to the City of Prince Rupert to replace crucial sections of its aging water-distribution system.
“The importance of reliable drinking-water delivery cannot be overstated. We saw first-hand the critical need for this funding last December when the city issued a state of emergency due to water-distribution concerns,” said Premier David Eby. “Crews worked tirelessly to keep potable water flowing to homes during the holiday season, and I want to thank them for their efforts. Together we are working to support the people of Prince Rupert, replacing aging infrastructure and ensuring that this valuable resource is available now and in the future.”
Officials explained that Prince Rupert’s water-distribution system is undergoing an increasing number of water-main and service-line failures, including the major line break on Dec. 15, 2022, which threatened the water supply for the community, which is home to Canada’s third-largest port.
“We know that old infrastructure can cause both public-safety and economic issues within communities,” said Anne Kang, Minister of Municipal Affairs. “Working together, this funding will help support the health and safety of the community, and ensure people have access to the services they rely on.”
Prince Rupert’s water-distribution system delivers drinkable water to approximately 14,000 people and the city’s port. According to the province, the port and B.C.’s northern trade corridor provides vital trade capacity and resiliency for provincial and national supply chains. The Port of Prince Rupert ships more than $50 billion worth of exports and imports every year, and provides economic and employment benefits in Prince Rupert and throughout B.C.
The funding, through the provincial Critical Community Infrastructure fund, is in addition to the $1-billion Growing Communities Fund, which was provided to all 188 B.C. municipalities and regional districts to support their local infrastructure and amenities needs.
Key Takeaways:
The province is projecting a $4.2-billion deficit in 2023-24, declining to $3 billion in 2025-26.
The budget has a refreshed housing plan with $4.2 billion in operating and capital funding over the next three years to build thousands of new homes as well as funding for new transit-oriented development.
$480 million will be spent over three years to support Future Ready’s work to break down barriers to post-secondary training. The plan’s details are expected this spring.
$77 million will go towards up natural-resource permitting.
Starting April 1, 2023, the carbon tax will increase by $15 per tonne each year until it reaches $170 in 2030.
$1.1 billion will be spent over the next three years to fight climate change by building more climate-resilient communities.
The province said that it targets improving health and mental health care, creating more affordable housing, growing a clean economy and delivering more help with costs – especially for those most affected by global inflation.
“B.C. is a great place to live, but people are facing real challenges – not only from global inflation and the pandemic, but from ongoing and systemic challenges,” said Katrine Conroy, minister of finance. “This year’s budget helps protect people who can’t afford today’s high prices and takes action on the issues people care about, like finding affordable housing and accessing health care.”
Response from the province’s construction sector was mixed as many questioned if it will address the most critical issues facing builders.
BC Construction Association (BCCA)
Big spending on infrastructure did not impress the BCCA which said the construction industry is now left wondering what it means to have BC’s government in its corner.
“While we welcome the investment in infrastructure and relish the opportunity to build world-class structures that serve our communities, we know that getting it done is not as simple as adding a multi-billion-dollar budget line-item,” the group said in a release. “Funding infrastructure is important, but it isn’t a golden ticket with a guaranteed outcome. We are not building a brighter future for all British Columbians if we continue to ignore the jeopardy of BC’s more than 25,000 contractors and the 171,000 tradespeople who work for them.”
They also pointed out the province’s lack of movement on prompt payment legislation, noting that builders are working longer and harder than ever before without any guarantee that they will be paid.
“Non-payment and late payment is out of control, right alongside skyrocketing interest rates, cost of materials, and cost of labour,” wrote the group. “The result is that investment in infrastructure is becoming a catch-22 for all but BC’s largest contractors, whether open shop or union. Without complementary measures to mitigate the extreme financial risks of late or non-payment, a typical company could go broke building their share of the $4.2BN budgeted for housing. Brutal disregard of contract and payment terms plus skyrocketing costs of borrowing are bringing BC’s construction industry to the breaking point. The result is that contractors government needs might not be there to deliver.”
They called prompt payment legislation the single biggest thing government could do for construction businesses.
The group added that the industry also needs express-qualification for internationally educated and trained tradespeople, as well as faster permitting processes.
Independent Contractors and Businesses Association (ICBA)
Jordan Bateman, vice president of communications for ICBA, wrote that while government spending reached an all-time high, the provincial debt jumped to more than $100 billion for the first time in B.C. history, and $11 billion in deficits are expected over the next three years.
Bateman noted that despite higher than expected previous budget surpluses from recalculating corporate income taxes, the budget offered no tax cuts for entrepreneurs, employers and job creators dealing with escalating financial pressures.
“On the infrastructure side, the NDP touted record levels of capital spending,” said Bateman. “Unfortunately, that is in part due to the monopoly they have given their building trades union allies on several high-profile projects, which have inflated construction costs and frozen out of these projects 85% of construction workers in BC.”
Bateman wrote that the 65-year-old Taylor Bridge over Peace River was again left out of the budget, the Massey Tunnel replacement was scheduled for 2030, and there were funds targeted toward improving operations or infrastructure serving B.C. ports, a key supply chain chokepoint and as we experienced following the record floods in the fall of 2021, a major risk to our ability to trade goods.
He also argued that the province’s housing approach isn’t enough to address the housing crisis as housing starts are forecast to drop into 2024.
“Even with an infusion of government cash, housing supply is not keeping up,” he said.
While he did note that efforts to reduce natural resources permit backlogs could help potential, the ICBA would prefer they cut red tape rather than hire more bureaucrats.
“Canada generally, and B.C., has lost ground when it comes to attracting investment into our economy, which is no small reason why the national economy, according to the Organisation for Economic Co-operation and Development, is expected to be the worst performer among the 38 most advanced economies over the next decade,” he wrote. “This budget does nothing to change that, and in fact ignores the issue altogether.”
BC Building Trades
The province’s building trades unions were supportive of the budget.
“The BC Building Trades applauds Premier David Eby and Finance Minister Katrine Conroy for historic infrastructure investments in Budget 2023. The new budget commits a record $37.5 billion to capital spending over three years. That’s a $10.1 billion increase from Budget ’22,” they said on social media. “We look forward to seeing our members at work on the many crucial capital projects to come!”
Electrical Contractors Association of BC (ECABC)
ECABC President Matt MacInnis gave the budget a cautiously optimistic response.
“For Electrical Contractors Association of British Columbia’s membership, the budget is OK, and there are program-level details that will roll out over the year which are very important for electrical contractors,” wrote MacInnis in a social media post.
He praised the $37.5 billion in capital spending over the next three years across a range of project types: housing, hospitals, schools, transit – all of which will have electrical needs.
However, on the Future Ready plan, MacInnis is waiting for the details.
“Government has prioritized addressing climate change and green jobs,” he wrote. “We’re looking for a clear recognition – and allocation of resources – that electricians, line technicians and other electrical workers are foundational to British Columbia’s low carbon future. A climate change strategy will only be as strong as the expertise and workforce available to build it.
Progressive Contractors Association (PCA)
Paul de Jong, PCA president, said the province could have made better choices to protect residents and make infrastructure investments go further.
He noted that while the budget boosts capital spending to a record $37.5 billion over three years, projects are getting over budget.
“If the B.C. government is truly concerned about affordability, its labour policies should encourage competition to help reduce infrastructure costs,” said de Jong. “Scrapping the flawed CBA would go a long way in keeping project costs down, and making life more affordable for each and every taxpayer in this province.”
De Jong stated that the budget provides $480 over three years for a new skills training program that builds on the Future Ready plan. PCA supports additional funds for skills training and is hopeful there will be broad consultation before program details are announced in the months ahead.
“We look forward to providing our input on how to address B.C.’s skills shortage,” added de Jong. “Any new programs should support employers and workers through parity of esteem initiatives that help put the skilled trades on equal footing with all other academic pursuits.”
Key Takeaways:
The next 12 months could bring stable commodity pricing as supply disruptions have eased.
Owner-furnished, contractor-installed (OFCI) arrangements, avoiding volatile materials during design and acquiring hard to find items like HVAC units early on have been some of the ways the industry has been dealing with high prices and long lead times.
Economists predict some slowdown in the residential sector but this could be offset by high immigration targets set by the federal government.
The Whole Story:
The Canadian construction industry could have a year to catch its breath when it comes to material pricing.
Global construction consultancy firm Linesight released new data indicating the likely leveling out of prices in key commodities markets as supply chain disruptions ease and logistics return to a more normalized level. Linesight provides cost, schedule, program, and project management services to a multitude of sectors including life sciences, commercial, data centers, high-tech industrial, residential, hospitality, healthcare, and retail.
“Barring any major world events, it should be steady as she goes,” said Padraig Leahy, a director at Linesight. “Hyper inflation on commodity pricing is moderating. We see stability for the next 12 months.”
Leahy is a chartered quantity surveyor with over 30 years of industry experience in cost management. Essentially, he is an expert in construction economics.
“There was a tsunami that hit us in relation to COVID,” said Leahy. “All the shipping got out of position, cost to ship a container quadrupled. It was out of this world but that’s settled down. It’s slightly offset by the cost of fuel and labour went up but supply chains are back in kilter.”
Canadian lumber prices have continued along a slight downward trend over the past quarter as demand has remained subdued. Due to a high dependence on U.S. exports (85% of the US softwood imports are sourced from Canada), prices are linked to the US housing market, which is facing a prolonged downturn.
Hauler strikes and a shutdown of major plants due to fires reduced cement supply in mid- to late-2022. Supply has gradually recovered, and stocks have been replenished while intensive demand from the housing sector has subsided.
Although demand from the residential sector has subsided, energy prices have contributed to the high price of concrete blocks and bricks, which may continue to rise thanks to elevated oil and gas prices over the next quarter.
Canada produces roughly 50% of the North American steel supply, but with supply-side issues easing and inventories stable, demand-side uncertainty has weakened prices.
Anticipation of a global recession has hurt copper demand, though prices have picked up partly owing to political and social unrest in significant sources like Chile and Peru.
Adjusting to high costs and wait times
Leahy noted that clients have been working with Linesight during the past few years to choose the best products with the least amount of volatility for a project’s design. They are also budgeting in advance for significant commodities like electrical equipment and large HVAC equipment that they know they will eventually need so they can lock in price and availability.
He added that some have done master service agreements with mills or steel manufacturers to guarantee materials. But he noted that this is typically only done by large companies on large projects.
Another strategy has been for owner-furnished, contractor-installed (OFCI) arrangements.
“You have owners purchasing equipment in anticipation of a project so their contractor can install it later so projects don’t get delayed due to one piece of equipment,” said Leahy.
Hyperinflation events in the 70s and 80s
Just how unprecedented are these economic conditions? Leahy the last major hyperinflation event for Canada in recent memory was in the late 1970s and early 80s.
According to economists at TD Bank, in the 70s and 80s, there were two distinct inflation episodes that led to double-digit price increases in Canada. One from 1971 to 1976 and another from 1977 to 1983. In both cases, food and energy price shocks were the trigger. In the first episode, adverse weather in 1973 caused food prices to jump 18.4%. And following the Yom Kippur war in that same year, a quadrupling in the world price of oil caused a massive rise in gasoline prices. By December 1974, with Canadian inflation hitting a peak of 12.7%, the economy entered recession.
The second inflationary spike was an echo of the first. In 1978, meat prices skyrocketed by 70%, causing the overall food index to rise by 20.2%. Then the Iranian Revolution caused the 1979 Oil Crisis, which was followed by the Iran-Iraq war of 1980. This resulted in another doubling in the price of oil. Canadian gasoline prices ended up rising by 45.5% in 1981, which pushed Canadian CPI to an all-time high of 12.9%.
Residential slowdown likely
Leahy noted that while commodity pricing looks to be normalizing, residential construction will likely slow in 2023 due to overall economic sentiment and an increase in interest rates. But the Canadian government has announced a number of major infrastructure projects including road and light rail work in major metropolitan areas, which should help offset some of the slowdown in other areas of the construction industry.
“Canada has some oddities,” he said. “You have half a million people coming to the country from government immigration policy which will create demand so there could be a balance there as well. It might not hit as hard and be slightly offset.
A chart from Linesight’s Canada Commodity Report – Q4 2022 shows prices beginning to stabilize. – Linesight
