– The Ontario Construction Report
The Ontario government says in its budget that it will invest more than $137 billion over the next decade to build roads, public transit, bridges, schools and hospitals. The total will be $160 billion through 12 years, starting in 2014-15, including previously allocated funds.
Several industry organizations applauded the planned infrastructure spending, indicating that the provincial plans – coupled with already announced federal infrastructure commitments – should provide good news for builders in both the heavy construction and building sectors.
“The province remains on track to generate $5.7 billion over time from maximizing the value of government-owned assets – $2.6 billion higher than originally projected in the 2014 budget,” a government news release says. “Net revenue gains from the sale of qualifying assets will be dedicated to the Trillium Trust to help fund public transit, transportation and other priority infrastructure.”
Budget highlights related to infrastructure spending include:
• $12 billion over 10 years for hospital capital grants. There are about 35 major hospital projects under construction or in various planning stages;
• The province will invest $13.5 billion to implement GO Regional Express Rail (REW), quadrupling the number of weekly trips from about 1,500 to nearly 6,000;
• $11 billion in capital grants will be provided to school boards to construct schools where there is rapid growth, in addition to improving the condition of existing facilities; and
• Additional funds will be made available for clean technologies. “The province is putting its new Climate Change Strategy into action by investing $100 million from the Ontario Green Investment Fund to take advantage of the economic and job opportunities in clean technologies and to help homeowners reduce their energy bills and cut greenhouse gas emissions.”
“The 2016 Ontario budget makes a number of strategic investments in infrastructure which are critical to our economy’s longterm prosperity,” says Anthony Fernando, director of public affairs of the Residential and Civil Construction Alliance of Ontario (RCCAO). “Key investments in transit, housing and public infrastructure are going to create jobs and ensure that Ontario remains a global destination for talent and investment.”
Meanwhile, the Building and Construction Trades Council of Ontario, representing organized labour, says the capital investment planned “for roads, utilities, transit, schools and hospitals will help the skilled workforce grow and prosper over the next 10 years.” “As these infrastructure pledges support 110,000 jobs each year, we want to make sure that those investments benefit the workers who construct and maintain our infrastructure,” said Patric Dillon, the trade council’s business manager.
“With major capital expenditures planned in areas such as public transit, highways, hospitals, and schools, the government is building the critical infrastructure necessary to create jobs and keep Ontario growing today and into the future,” said Mark Romoff, president and CEO at the Canadian Council for Public-Private Partnerships (CCPPP).
Budget 2016 highlights the success of Alternative Financing and Procurement (AFP), which is Ontario’s model for public-private partnerships (P3s). The AFP approach has led to 44 of 45 projects being completed on budget, a remarkable achievement for Infrastructure Ontario (IO), the agency responsible for executing AFPs in Ontario.
“Infrastructure Ontario’s track record of success at delivering public-private partnerships effectively will no doubt help the government deliver on its ambitious, long-term infrastructure plan,” said Romoff.
The 2016 budget commits to assessing the AFP model for all major infrastructure projects greater than $100 million. P3s will continue to be an important tool for the government. Projects already underway using this approach include the Eglinton Crosstown, Waterloo’s ION LRT, Ottawa’s Confederation Line LRT and the Mackenzie Vaughn Hospital.
Groups representing both organized labour and employers and non-unionized employees expressed support for the budget speech’s references to the Ontario College of Trades (OCOT), though clearly they approach the OCOT from differing perspectives.
The Ontario Skilled Trades’ Alliance (OSTA) said in a news release that it welcomes the 2016 Ontario budget commitments, which set the stage for improvements in Ontario’s skilled trades and apprenticeship system. The government has again committed to follow through on the recommendations made by Tony Dean to reform the Ontario College of Trades and will continue to make important investments in training and skills development.
“OSTA welcomes the 2016 budget announcements by the government. We are pleased the government has committed to modernizing the skilled trades by implementing the Tony Dean recommendations and pledging to bring forward legislative changes to the Ontario College of Trades,” OSTA chair Joe Vaccaro said in a statement. “This is a significant positive step and employers look forward to working with the government and stakeholders to ensure the future regulatory framework is designed to close the skills gap in all areas of the province.”
“Employers play a key role in providing apprenticeship opportunities by providing hands on experience in the trades so the apprentice or tradesperson can thrive in their career. We will look to clarify how the funding announcements will be prioritized so that these investments can provide the most impact to build the next generation of tradespeople. The government’s efforts should emphasize positive training outcomes by ensuring a better link between employers and workers.”
Meanwhile, Dillon, representing the unionized Ontario building trades, said the Ontario Building Trades “are supportive of changes that in the premier’s own words will strengthen OCOT’s mandate.”
“We are hopeful that the college will continue to be an arms-length institution governed by and for tradespeople,” he said. “Our council will work with the college, with government and with construction employers to make sure that infrastructure investments achieve their desired effect of building Ontario up,” he said.
“This budget focuses much more on the social elements driving the Ontario economy,” said Barry Steinberg, chief executive officer of Consulting Engineers of Ontario. “We have grown accustomed to the hard dollars and cents issues impacting Ontario since the recession. This budget is much more about people,” Steinberg said. “Consulting Engineers of Ontario has been working closely with the government to implement its infrastructure plan. Queen’s Park is showing a commitment to sound, evidence based decision making, and to dedicated revenue streams to fund these important investments. These are crucial to elements for delivering successful improvements for Ontarians.”
The budget details a total government spend for the coming year of $133.9 billion, leaving a deficit of $4.3 billion. The government is maintaining its pledge to bring its finances back to balance by 2017-18. Ontario’s total accumulated debt will reach $313.4 billion by March 31, 2016, representing 39.6 per cent of GDP.