Looking forward to 2015

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                More competition for middle-size contractors as industry associations tackle legislative and regulatory issues

    By Mark Buckshon

    Canadian Design and Construction Report staff writer

    If you could set a crystal ball prediction for 2015 for Canada’s construction industry, what would you see?

    Anyone trying to forecast the future discovers, in time, that the best predictions often turn out to be inaccurate in part because events overtake the predictions. However, the architectural, engineering and construction industry has one advantage overs – the longer-range lead and sales cycle, from project conception to completion, can provide us with an opportunity to see ahead, at least for the first part of the following year.

    The picture so far: Not so bad, but with increasing pressure on mid-size contractors, as the tendency towards larger-scale projects and P3 initiatives take away the traditional middle-ground in the public sector, even as the private sector has been slow to introduce new work.

    “We have seen a small contraction in the ICI industry over the past couple of years,” said David Frame, director of government relations and corporate strategy for the Ontario General Contractors Association (OGCA).  “The private sector growth that went into the 2009 cutbacks significantly, but hasn’t come back. The government did a lot of stimulus work and that stimulus work has come to an end.”

    “This means less work,  and less value for work.”

    Frame said the government infrastructure spending appears to be shifting from buildings to roads and transit systems, and this is causing some contractors to reorganize their services, sometimes through acquisition, to attract the new markets.”
    Meanwhile, Ian Cunningham, president of the Council of Ontario Construction Associations (COCA) said: “I recently conducted a quick survey of local mixed trade construction associations across Ontario about the level of construction activities in their markets. The prevailing view was the level of construction activity next year will remain about the same level as this year.”

    Cunningham said there will be many issues on the legislative/regulatory front in 2015.  These include:

    • Continuing the fight for prompt payment legislation for construction projects in ontario;
    • Active engagement with the Ministry of Labour’s Prevention Office with regard to improvements of the occupational health and safety system to save lives, reduce injuries and save costs;
    • The ongoing pursuit of a viable and sustainable workers compensation system that serves the needs of employers and workers and serves as a competitive advantage for Ontario;
    • To make sure the government of Ontario follows its 10 year, $130 billion infrastructure investment program; and
    • Active engagement in the government’s review of the Construction Lien Act.

    These observations appear to be shared by others, such as Andrew Sefton, executive director of the Ontario Painting Contractors Association, and Ottawa Construction Association president John DeVries.

    Sefton says there seems to be a healthy volume of work in the institutional and industrial protective coatings market, as maintenance (and infrastructure) work continues to attract more resources and attention than new construction.

    DeVries, meanwhile, says he sees “2015 as a continuation of 2014 – stats showing a strong permit volume but decidedly influenced by large projects dominated by big firms (such as) PCL, EllisDon, Pomerleau.

    “Competition is very strong among small-to-medium builders for (the) remaining market.”

    DeVries says he anticipates that public sector work will remain tight due to cutbacks, but some condo projects will proceed in the Ottawa area despite an overall depressed market.

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