Ontario Construction News staff writer
As the provincial government steps up social distancing measures to slow the COVID-19 virus, it issued emergency regulations to shut down much of Ontario’s private sector industrial and commercial construction industry.
However, the impact of the new rules has been blunted by a carve-out for already-started residential and mixed-use projects, which would include many high-rise condos, rental apartments and mixed-use projects, especially in the GTA.
Which construction can continue?
As well, the Ontario General Contractors Association (OGCA) says there is widespread confusion within the industry about which non-residential projects should be shut down. OGCA president Clive Thurston says members have received conflicting instructions from public sector owners and government officials.
The confusion is serious enough that, “if action isn’t taken quickly and effectively, we will lose somewhere around 20 per cent of our general contracting community,” he said.
The OGCA represents businesses doing about $20 billion a year of work in Ontario. “And it’s all being put at risk.”
The confusion started on April 3 when the provincial government issued a news release setting out essential construction projects. “We’ll be directing additional workplaces to close. All industrial construction, except critical industrial projects will stop,” Premier Doug Ford said at a news conference announcing the changes.
“Only necessary infrastructure projects like hospitals and transportation will continue,” he said.
Ford made an exception for residential construction projects already underway, indicating that curtailing projects might cause hardship to upwards of 45,000 families seeking accommodation. Ford said that stopping new home and condo projects would cause families waiting for their homes to need to stay in dense accommodation, which would defeat the social distancing goals.
The “45,000 families are months away and some are even weeks away from being able to get their homes,” Ford said. “Nothing would be more dangerous than a whole bunch of families on top of each other, living in the same house because their house isn’t ready.
“Any new builds, they’re closed down.” So “we’re trying to minimize the construction to the best of our capabilities.
“Those few sites that will remain open will be placed under the highest level of scrutiny possible, and we will keep coming down hard on the inspections.”
The provincial government says the closures will last at least two weeks, with possible further extensions.
Ford said the province has added 60 new inspectors. “We have hundreds of inspectors out every day. Over the last week, we’ve shut down five construction sites and we will not hesitate to shut down more, because the health and safety of all Ontarians is our number one priority.”
Exceptions in the non-residential sector will include sewers and water projects and hospitals. The National Capital Heavy Construction Association (NCHCA) in Ottawa says it understands other civil work including roadwork can continue. However the NCHCA cited a legal opinion of grave penalties for proceeding with work not allowed under the essential services restrictions, potentially causing serious problems for contractors where there is a dispute about the “essential services” interpretation.
“Hospitals are critical. If ever there’s a time to speed up the construction of hospitals, it’s right now,” the premier said at his news conference.
In detail, projects related to ensuring the production of critical equipment and medical devices, along with those required to maintain the operations of petrochemical plants and refineries, will be exempted from the shutdown.
The problem, says the OGCA’s Thurston, is there isn’t clarity about much public sector work that isn’t specifically outlined in the government’s “essential work” announcements.
“If you want to know what the level of confusion is, it is off the charts,” he said in an interview just after the narrower definitions of essential services went into effect. “This is affecting virtually every project because there’s no clarity. We don’t know what’s going on.”
Thurston said members and OGCA staff have been calling for clarity and receiving conflicting instructions. “Not a single ministry is willing to take ownership of this and clearly state what is and isn’t shut down,” he said.
“We’ve been tossed back from ministry to ministry.”
For example, OGCA members were told that the Ministry of Education would decide if schools are essential. “And then when we finally got hold of the Ministry of Education, they tell us, oh well, ‘the guidelines are there. Just follow the guidelines.’ That doesn’t help you very much.”
Some owners, such as the City of Toronto, have issued directives that all municipal construction work will be essential, even if it isn’t specified on the government’s list.
“Our projects are still active,” wrote Joseph Savaglio, project manager, project management office, corporate real estate management, at the City of Toronto. “Please advise your trades to keep going until we send out formal communication to confirm.” Savaglio sent the email late Friday afternoon, after the premier’s announcement.
Thurston said OGCA members in some cases are caught between a rock and hard place; if they don’t proceed, they will be defying their owners’ instructions to continue and could be subject to liquidated damages for non-compliance with their contracts; if they proceed against the order, they could have legal liability for failing to follow the government’s directive. Matters are compounded with competing businesses receiving differing interpretations, throwing subtrades and suppliers into confusion.
The premier made the decision to restrict much construction work after reviewing modelling data that indicates upwards of 15,000 people could die from COVID-19 over the next two years even as intensive public health social distance strategies are enforced. At the low end, if everything works well, the death rate could be as low as 3,000. However, if the province allowed the pandemic to run its natural course without aggressive measures, the death toll could have reached as high as 100,000.
“There is widespread confusion in the industry and little clarification on the true meaning of the updated list,” OGCA president Thurston said in a memo to members on April 5. “While the ICI sector was targeted, it was not clear precisely which projects are to shut down.
“OGCA members have been contacting us regularly due to the confusion. We know you are facing challenges with the number of calls coming from your subtrades. We have been inundated with calls from the industry and from the public about their home projects.
“Unfortunately, we cannot provide you with any real clarity, nor can we provide a definitive definition of what sites are closed. Information that we’ve been able to gather from government and industry partners has only increased the confusion. We are aware the lack of transparency is causing undue stress on your business, your employees, and your subtrades,” Thurston wrote.
“OGCA staff is tirelessly working to obtain clarity from the government on which projects are to remain open and which projects are to close, including schools, dormitories, addiction centres, and many others.
“It is our understanding that some contractors will continue to work until provided information to the contrary,” Thurston said in the memo.
In its statement, the provincial government says business owners with questions concerning their essential business status can call the Stop the Spread hotline at (888) 444-3659. However, several contractors said they were having trouble getting through to the help line, and others said they received conflicting instructions.
Gerard McCabe, managing director with Turner & Townsend, told Reuters that his construction consultancy has about 100 projects under way in Ontario and estimates between 10 to 20 of them may be stopped, including the historic Massey Hall concert venue.
“You can’t just walk away from the project,” McCabe said. “All of those sites have to (be) made safe.”
There are more than 2,000 construction sites across the province. Most of these are in the GTA. The largest segment includes many new condo and apartment units that have already broken ground, and therefore would be allowed to continue work under the new guidelines.
The government says it is implementing additional measures to protect frontline workers in essential businesses by adding more than 60 special consultants and officers and doubling the number of phone agents at its Health and Safety Call Centre to 50 to make it easier for workers to report safety concerns. Workers worried their workplaces are unsafe can phone 1-877-202-0008 to speak with an agent.
“If you’re a worker on the frontlines of this outbreak, you should know we’re doing everything in our power to keep you safe at work,” said Monte McNaughton, Minister of Labour, Training and Skills Development. “We’re beefing up our inspectors and making it easier for you to report your concerns. We’re working around the clock.”
However the NCHCA says it expects work on roads, sewers and other municipal infrastructure to continue.
“The provincial government recognizes that the work done by the heavy construction industry is essential,” the Ottawa-based group said in a memo to its members..
“We were advised by the City of Ottawa on April 3, 2020, that it considers all of its capital projects to be essential and work will continue. The city is also continuing to put projects out to tender,” the NCHCA says.
The story is very different however for private sector industrial, commercial and institutional projects (unless they are otherwise allowed under the essential services provisions) and some public works.
Citing a legal opinion obtained by the Greater Toronto Sewer and Watermain Contractors Association, the NCHCA advises members to “please proceed with caution.”
“A director or officer of the corporation that violates the Essential Services List Regulation may be fined up to $500,000 and imprisoned for up to a year, and a corporation can be fined up to $10,000,000 each per day of the contravention,” the NCHCA said in memo.