There’s optimism amid instability in the Canadian construction landscape

David Johnson There’s optimism amid instability in the Canadian construction landscape in Canadian Business Quarterly

The last year has been among the most expensive on record for many Canadians. Families and those on fixed incomes faced significant increases in the cost of food, utilities, transportation, and services. Students, workers, and business owners have adjusted to increased costs for tuition, training and workforce development and retention. Inflation is projected to slow across Canada this year, according to Statistics Canada, Deloitte, and most international economic advisory groups. As a result, the country may tip toward recession over the next two fiscal quarters. This is an outcome of the federal and provincial monetary policies as governments begin unwinding pandemic-era stimulus spending.

This economic contraction presents a significant challenge to Canadians. It is of particular concern to the construction industry, which I represent, as President of the Edmonton Construction Association. Our sector has a tremendous responsibility. Construction is Canada’s fourth-largest industry in terms of GDP, closely behind the financial sector, mining and oil and gas, manufacturing, and real estate. As one of Canada’s most important economic sectors, it is incumbent on construction industry leaders to ensure we are prepared for what comes next.

And so, the Edmonton Construction Association works closely with the Alberta Construction Association, the Canadian Construction Association, and associations in other major Canadian cities to illustrate how our industry can help address affordability in the Canadian economy, and support Canadians through the uncertain times ahead. The pressures we face have been widely addressed in the pages of this publication. They range from the immediate and short term need for more sustainable and predictable public investment, mid-term pressures faced from inflation and cost escalation to significant long-term issues with respect to labour supply and mobility. These are valid concerns. They must not overlook, however, the opportunity that lies ahead.

Signs of recovery abound. According to Deloitte’s recent economic outlook for Canada, interest rate cuts through 2023 will allow for a “modest recovery in activity, with a more robust rebound in store for 2025.” In February of this year, employment in construction remained steady, following consecutive months of growth. Year-over-year, the industry grew by 4.6% and created more than 70,000 new jobs, making construction one of the fastest-growing industries in Canada.

In Alberta, the outlook is similar, if not accelerated, by a recent spate of investment announced in the recent provincial budget. Over the next three years, Alberta plans to spend $23 billion on capital construction projects, including roads, hospitals, universities, schools, affordable and Indigenous housing, broadband infrastructure, and carbon capture and storage. Alberta is one of the few Canadian jurisdictions posting a surplus budget. Indeed, this has much to do with royalty revenues from record-high energy prices – but provincial forecasts suggest Alberta has weathered the worst of the downturns from COVID-19 and the energy price collapse and is poised to lead Canada’s pursuit of prosperity.

Alberta’s seasonally adjusted employment rate in February led the nation at 65.9%, well above the national average of 62.4%. Optimism also abounds in Alberta’s private sector, where most businesses report plans to increase sales, employment, and investments in machinery and equipment, according to surveys conducted by the Business Council of Alberta. Statistics like these are promising for Canadian businesses and well as domestic and foreign investors. For construction industry contractors, employers, and workers, they offer a reason for hope and a call to participate in Canada’s economic recovery.

The Edmonton Construction Association is determined to help lead this initiative. Together with our colleagues at the Calgary Construction Association, our provincial advocate at the Alberta Construction Association, and nationally through the Canadian Construction Association, we are aligning advocacy initiatives to maintain and grow our industry’s impact on Canada’s economy.

Our efforts fall under four areas of interest: sustainable and predictable funding for public infrastructure and capital projects, improvements to the procurement process, more equitable allocation of risk between the public and private sectors, and doing everything we can to improve labour supply, retention training and education, and increase diversity in our workforce. By leaning into these areas, our industry is participating more actively in policy discussions about strengthening growth in the economy, reducing trade barriers that limit the movement of materials and labour, reducing emissions and driving cost efficiencies across the construction supply chain, and creating more sustainable, responsible, and equitable systems of public procurement.

It’s a tall order to participate in such a broad range of discussions and to have a positive influence on the policies they inform, and change will come slowly. There are no simple solutions that address these issues immediately while respecting the fiscal constraints of public asset owners at all levels of government. These are complex challenges that require well-informed and measured consideration.

The ECA was incorporated in 1931 and is the largest non-profit construction association in Western Canada, serving the commercial, institutional, and industrial construction industry. Our members are among the most experienced and well-educated in this segment of the national economy. As we help develop our industry’s role and raise its voice in support of Canada’s economic recovery, we invite stakeholders from across the nation to join us by becoming more engaged with their local and provincial construction associations and with our national body. As importantly, we are asking our colleagues from across Canada to extend this value to construction-adjacent stakeholders in sectors like labour associations, school boards and educators from elementary through high school, post-secondary institutions, economic developers, investment attraction agencies and many others.

This will require collaboration from our sector’s entire value chain, from asset owners, general contractors, and skilled trade employers to design professionals, engineers, workers, material suppliers and other professionals. Improving policy in our four areas of interest has knock-on effects that add value across these sectors.

Encouraging governments to reduce the unpredictable peaks and valleys of capital budgets can improve transparency and industry responsiveness across the economy and drive efficiency in the provision of public services. Rebalancing untenable risk profiles in public infrastructure procurement equitably distributed responsibility and benefit between government and industry, which delivers more projects on time and budget, reducing waste and protecting worthwhile investment commitments in other sectors.

Working with government and regulators to maximize innovation, collaboration, and opportunity in managing public projects creates scalable test cases that can transform outdated procurement and investment evaluation models across the spectrum of capital, operational and social services Canadians depend on in our big cities. It also helps our industry demonstrate to others how commitments to sustainable development goals, climate resiliency and social investment metrics can deliver more impactful benefits and returns. Further, the development of new tactics to engage young people, women, BIPOC, and new Canadians will allow the industry to explore a greater diversity of skills and career options.

The construction industry’s commitment to pursuits like this is growing increasingly sophisticated, not just in Edmonton but across the country. And we are not alone; we are just one of many industries that have begun to more actively embrace our responsibility to help Canadians come out the other side of the pandemic and build an economy that is more resilient than ever. It’s true that Canadians face challenging days ahead. In Alberta, affordability issues are often conflated by the tension between provincial and federal economic policy. In May, the outcome of a closely contested provincial election could introduce new regulatory changes to our industry. And yet, despite all of it, our industry remains excited at the prospect of growth in the future.

Call me an optimist. I’m confident the Edmonton Construction Association will be joined by colleagues and stakeholders from across the country in our efforts to advance positive change for funding, procurement, risk allocation and job creation. Together, we can shepherd all Canadians on the path back to prosperity and build a better nation for the future.

David Johnson is President of the Edmonton Construction Association,


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