Construction in Vancouver

VRCA news feature

J a n u ar y 1 3 – 1 9 , 2 0 1 5 v R ca . b c . ca

forecast: Industry buoyed by outlook for LNG in 2015 Boot camp scheduled to get contractors up to speed on qualifications

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FINDit

ptimism is riding high that a final investment decision (FID) will be made by one of the LNG proponents i n 2015 at one of the nor thern coastal ports vying for the development.

“We are optimistic that one or two will move ahead,” said Renata King, director of business development for Northern Development Initiative Trust, as three proposals (two LNG pipelines and one export facility) received environmental approval in late 2014 from the B.C. government. Approximately 18 proposals have been put forward.

Early construction work such as site preparation for camps and roads has already started at major sites located at Prince Rupert, the District of Port Edward and Kitimat. “That is only millions of dollars compared to the billions that will be invested when projects go ahead,” she said.

FortisBC in the B.C. Lower Mainland is already out of the gate at its Tilbury LNG plant.

Construction has started on the $400 million expansion, adding 1.1 million gigajoules of LNG to storage and 34,000 gigajoules of liquefying capacity.

In November, the Petronas export terminal with the Prince Rupert Gas Transmission pipeline (TransCanada Corp.), which will supply Petronas’ facility, and the Westcoast Connector

PCL.com

G a s T ra n sm i ssion pip el i ne (Spectra Energy Corp.) received environmental approval from the B.C. government. The Westcoast Connector will feed BG Group’s proposed Prince Rupert LNG facility, although BG Group has announced it won’t make its FID until 2017. In December, the City of Prince Rupert rezoned an area on Tuck Island for inclusion in the official city plan as an area for LNG terminal development.

Kitimat, another proposed LNG hub, is looking for a final decision on proposed developments slated to happen there. Newly elected Mayor Phil Germuth said, “We are hoping an FID will come in 2015.” He sees Shell’s joint venture as the leader to reach a FID in 2015. Shell, Korea Gas Corp., Mitsubishi and PetroChina are working together to design, build and operate the proposed LNG Canada project, located in the traditional territory of the Haisla First Nation.

T he K iti mat LNG proposa l

by Chevron Canada Ltd. is also ca rry i ng out g rou nd works.

“They have done a whole whack of land clearing and almost completed the road to their property - which is a huge project,” Germuth said.

Recently, a joint venture between Fluor Corp. and JGC has been awa rded a contract by Chevron Canada for pre-construction work on the proposed

Provincial view C7 Data to shape how the industry moves forward this year

constructive comment C11 VRCA getting down to business in 2015

FortisBC has started construction of its expanded Tilbury LNG facility. From left to right: Michael Mulcahy, president and CEO, FortisBC; Barry V. Perry, president, Fortis Inc.; B.C. Premier Christy Clark; and John Walker, executive vice-president, western Canadian operations, Fortis Inc.

Kitimat LNG project. Fluor is also undertaking the engineering, procurement and construction contract for the Kitimat project.

It involves the completion of the existing front-end engineering design (FEED) for the construction of an LNG facility near the port of Kitimat.

In Port Edward, Petronas – a Malaysian company – leads the Pacific NorthWest LNG joint venture, which is getting closer to an FID on its $11.4 billion proposed project at Lelu Island.

In addition, ground works for some of the major camps needed for project have begun, with smaller construction camps established. In Kitimat, Horizon

North Logistics, a camp provider, has acquired ground for a proposed 1,000-man camp and a new hotel. PTI Group Inc. (Civeo) is planning to build a 2,100-man camp and already has a construction camp started to house those building the camp. Shell’s LNG Canada camp will house an estimated 7,000. Camps are also being proposed in the Prince Rupert area.

The degree of activity has King working hard to ensure that contractors, subcontractors and suppliers are ready for the economic boom that will come with the building of these multibillion-dollar projects.

“We want to make sure they are ready for these projects,” she

Labour emerges as top issue C2 Vancouver Pile Driving brings in $30 million Mexico project C3 Road builders poised for increased activity in 2015 C4 Women playing bigger role in industry C4 Getting the right insurance C5 Specialization seen as key to growth C6

Sharing your viSion.

BUILDIng SUCCESS.

said. “These are multinational companies and they have requirements for pre-qualification [to bid on contracts]. We are showing local companies what they need to have in place to have an opportunity,” she said.

King has been hosting workshops throughout B.C. providing information to contractors on where to register for potential contracts and also what needs should be met before registering.

On January 14, King will host a “boot camp” in Nanaimo for interested construction companies and suppliers. (An earlier boot camp was held in Squamish). continued on page C2

U40 Network helps young execs C6 New rule protects road crews C6 Careful testing crucial in training C8 Schneider lab makes company a solar leader C8 Legal Specs column C9 Documents ease conflicts C10 VCRA award winners C12 Permits hit $1 billion mark C12

january 13–19, 2015

special news feature | Vancouver regional construction Association

c2 news outlook: Labour emerging as critical issue in 2015 $206 billion in future projects proposed for B.C. expected to intensify province’s skills shortage

T

he construction industry is looking at 2015 as a springboard year in which decisions about multibillion-dollar projects will occur that could fuel the economy for the next decade. But the real issue looming is whether B.C. will have the skilled workers in place in time to complete the projects.

BC Construction Association (BCCA) numbers shed light on the problems facing the B.C. construction industry today. Statistics to fall 2014 tallied $84 billion in projects underway and another $206 billion proposed in 2015 and beyond. The BCCA estimates there will be 49,800 openings for skilled trades and 26,000 unfilled labour jobs by 2023.

Currently, two out of every three skilled labour workers in B.C. are over the age of 45.

Concern is mou nt i ng over labour shortages on Vancouver Island and in B.C.’s Southern Interior, although there is also concern in northern B.C., where the energy sector is poised for dramatic growth.

“Going into 2015 is going to get more intense and, with the labour shortage, a perfect storm for the improving economy,” said Greg Baynton, president of the

Vancouver Island Construction Association. “The problem with the labour numbers is there is a disconnect [between] where people live and where they work.

Where they are working is in northern B.C. and northern Alberta, and they are commuting off the Island.”

He said the attractive wages in the oil and gas sector drawing skills to other areas combined with older workers retiring is creating an industry labour gap. “It is really creating a problem right now,” he said. Members found it difficult to find skilled tradespeople even when the economy was not charged.

The concern is echoed by Bill Everett, COO of the Southern Interior Construction Association.

Everett said his region is looking at 2015 as an improved year over 2014. But labour and skills shortages remain a question on the horizon as the construction industry picks up.

“We are seeing some challenges here,” Everett said. “There are more and more construction crews working outside the region.

There is no guarantee that these contractors and crews will return to their own region. The contractors are working in northern

Projects such as the Site C dam will intensify the labour shortage faced by the B.C. construction industry

B.C. or on industrial projects in areas such as Kitimat.”

Renata King, business development director for the Northern Development Initiative Trust, said while the 18 LNG proposals are grabbing headlines – and a final investment decision is expected on one or two in 2015 – they are only part of the northern region’s development potential. “There is $50 billion to $100 billion in proposed projects in northern B.C.,” she said, adding those projects include new mines, transmission lines, major projects such as the Site C dam and new hospital construction.

“The big issue will be labour,” King said. “These projects will

require hundreds if not thousands of people.”

In the Lower Mainland, construction is expected to continue strong into 2015, with a record $1 billion in building permits issued in October 2014 and attributed largely to government spending on medical facilities such as the Children’s and Women’s Health Centre in Vancouver.

Urban Development Institute (UDI) chairman David Porte said new housing starts (represented by mainly multiple-unit buildings) will continue into 2015 at the 2014 level of 19,000.

UDI members will be carefully watching the upcoming transit referendum in 2015 as it has the

potential to open new development opportunities along Broadway and in Surrey.

Economist Roslyn Kunin, a fellow with the Canada West Foundation and former Canada Manpower analyst, said that labour looms as the greatest stumbling block as B.C.’s economy heads towards a continued economic growth of approximately 2% in 2015.

“We don’t have sufficient appropriately trained skilled labour to meet demand,” Kunin said.

As B.C. goes deeper into 2015, the traditional construction industry will face competition from a newly revitalized sector, shipbuilding. Seaspan has won an $8 billion contract to build the non-combat portion of the federal government’s new shipbuilding program. Seaspan’s $170 million Vancouver Shipyards modernization project, started in late 2012, is now complete, and the shipyard is ramping up its workforce, doubling it to 300 in 2016 and tripling it in 2017.

“Once we start constructing the really big ships, starting in 2017, the number will be approximately 1,000 tradesmen and -women,” said Jonathan Whitworth, Seaspan CEO. •

continued from page C1

While King’s organization is focused on northern development (Lytton north), the province has asked her to expand her focus for the LNG development. She is urging companies throughout B.C. to register on the website LNGBuyBC.ca. She is also encouraging companies in southern B.C. to form partnerships with northern companies, which can be smaller but have local knowledge, to expand their services and share expertise.

“I encourage people to go to the supply chain [online registries] and find these partners,” she

said. King said those companies that wait until projects have been announced may be too late as the process for finding suitable partners or pre-qualifying can take time. When the FIDs are made, there will be rapid movement to put contracts in place.

She doesn’t doubt that an FID will be made by one of the companies moving forward in the LNG race. The province is expecting to have its LNG export plan in place by 2020. “The clock is now ticking, and with the tax structure in place it is now up to the industry,” King said. •

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special news feature | Vancouver regional construction Association

january 13–19, 2015

c3

news

Beyond b.c.: Vancouver Pile Driving brings in $30 million Mexico project Federal government integrity guidelines make foreign work trickier

P

ublic Works and Government Services Canada’s ( P WG SC) re c ent ly enhanced Integrity Framework, introduced in the summer of 2014, is making it trickier to work outside Canada, especially in countries where integrity may be lacking.

But award-winning Vancouver Regional Construction Association (VCRA) company Vancouver Pile Driving (Vanpile) has shown that a Canadian company can complete a 30-month and $30 million project in Mexico and navigate every obstacle placed in its path. The project involved the construction of a marine terminal and a salt water intake for the El Boleo mine, a copper producer located near Santa Rosalia on the east side of the Baja California peninsula, and earned Vancouver Pile Driving a VRCA Silver Award of Excellence in 2014.

Project manager Robert Windecker, P.Eng., said there are concerns about working in Mexico such as payoffs to authorities or worker safety during drug-cartel strife. Those concerns never materialized. “I want to emphasize that throughout the entire project for us, there was no inappropriate exchange of money.

Everything was above board,” he said, adding that there was also nothing to ever indicate that Canadians working in the area were at risk.

While the enhanced guidelines rolled in after Vanpile rolled out in December 2013, Windecker came away with nothing but respect and admiration for the Mexican team in place. “The people there were really a joy to work with,” Windecker said. He also acquired an understanding that getting approvals through Mexico’s regulatory bodies can be time-consuming. “My observation is that everything they do has a purpose.”

“The real challenge was logistics and planning and working in a foreign country,” said Windecker.

During the two-and-a-halfyear project, the company incorporated a Mexican construction company, shipped large amounts of marine equipment across Canada and two borders and rallied a construction effort aimed at helping a Canadian-owned client rekindle copper production in an area with a historic legacy dating back to the 1880s.

The last government-owned mining venture closed in the 1980s. The project would also encounter the unexpected: upheavals such as stubborn subsea conditions, a change of the project’s ownership, and lack of subcontractors willing to venture into the Mexico market.

New federal government integrity rules make working offshore for Canadian companies more challenging. But a Canadian company has shown working abroad can be done smoothly. Vancouver Pile Driving’s crew worked for 2.5 years completing a $30 million marine terminal and salt water intake for the El Boleo mine, a copper producer located near Santa Rosalia on the Baja peninsula in Mexico | Vancouver Pile Driving

Windecker said the language barrier “was a huge chal­lenge.”

Fortunately, Vanpile had some employees with Spanish skills.

On site, the company hired Mexican nationals who had a command of English as senior staff (foremen and engineers).

Vanpile’s Mexican company employed its own legal and accounting firm in Mexico but worked through the mining company for all permitting issues.

“They handled the liaison with the reg u latory authorities,” Windecker said. That also included running interception when large or heavy equipment travelled along federal highways under the watchful eye of camouflage-clothed, rifle-toting federal police. Minera y Metalurgical del Boleo, the Mexican mine company, would be called to sort out such tasks.

A major technical challenge did appear when Vanpile attempted to do the densification for the 300-metre wharf. Densification involves constructing stone columns in the zones of softer marine sediment to give it greater subsea stability in the event of an earthquake. “You don’t want the ground [below the water] to liquefy and shift, putting extra stress on the pilings,” Windecker said. The densification process provided a grid of stone pilings into which a second grid for seating the 180 wharf pilings was overlaid.

“Usually we work with a densification subcontractor,” said Windecker. But companies in Canada and the U.S. were reluctant to move men and equipment into Mexico.

Vanpile turned to Europe for a solution. Through a leasing

agreement, it sourced the needed equipment from a German company, had it shipped to a Canadian East Coast port, railed cross-country and then loaded

on trucks and transported to the Baja peninsula.

“We did the densification work ourselves,” Windecker said, as more than 1,000 such columns were placed.

Shipping equipment had its own challenges. Tons of equipment arriving from outside Mexico had to be carefully itemized with customs officials, whether it was drill rig equipment or Vanpile’s marine derrick barge, which was prepped and loaded in North Vancouver and towed down to Santa Rosalia.

The North American Free Trade Agreement was in place, making the U.S. and Canada transport back and forth easy – but Mexico was more difficult.

“Everything had to be documented,” he said. Vanpile used customs agents who translated the equipment onto the import document that accompanied a shipment. However, when the same item was being sent home or out of the country, the document had to contain the same description as on entry. Otherwise, Windecker said, customs agents would question whether it was the same piece of equipment.

But the greatest glitch came

when the original Canadian company Baja Mining, then the dominant shareholder holding 70% of shares, had production cost overruns at the mine in 2012, resulting in the minority shareholder becoming the dominant owner and gaining project control. “While the funding was being sorted out, we didn’t know if the project would continue,” Windecker said. The new majority shareholder was Korean stateowned resource company Kores (Korea Resources Corp.)

“It was a whole different culture again as to how business was done,” he said, adding that the Korean company management team moved quickly onto the site.

The new team had to be brought up to speed.

“Luckily we were far enough along in the project,” he said. The Koreans were able to see what the project entailed and how it was being carried out.

By December 2013, the terminal for off-loading sulphur, needed for copper production, was complete, and Vanpile returned to Canada. “We were pleased to have had the international experience,” Windecker said.•

january 13–19, 2015

special news feature | Vancouver regional construction Association

c4 news infrastructure: B.C. road builders poised for increased activity starting late 2015 BC

’s road builders are looking to the forestry and mining sectors as economic drivers in the first three quarters of 2015 until larger infrastructure projects, expected to be launched in the year’s final quarter, kick in and keep members busy for almost a decade, said Jack Davidson, president of the BC Road Builders & Heavy Construction Association.

“2014 was a bit of a down year for us with not a lot happening,” said Davidson, as the provincial government attempted to balance its budget. “And the first three quarters of 2015 will be the same, but the last quarter of 2015 through to 2024, it is going to pick up dramatically.”

The uptick will be fuelled by major projects including bridge works such as replaci ng the George Massey Tunnel, with construction on the bridge slated for 2017 but pre-works starting in 2015.

T h e Mayors’ Cou nci l on Regional Transportation’s 10year look at transportation calls for replacing the Pattullo Bridge with a new four-lane structure (expandable in the future to six lanes). The decision to replace the structure will hinge upon voters’ support in a planned spring 2015

Metro Vancouver referendum.

T he Site C hydro project in northern B.C. could also affect road builders as the construction of the reservoir will require new roadways as well as the construction camp and construction site. “There will be a lot of dirt to move,” Davidson said.

Davidson said that by March 2015, the Ministry of Transportation and Infrastructure will have committed to approximately 70% of its planned 2015 projects. One project already posted is repaving 28 kilometres of highways and roads in the Ashcroft and Cache Creek area in 2015. The paving project will take place on Highway 97C and Evans Road in Ashcroft, as well as on Highway 1 from south of Cache Creek to the Highway 97 Bonaparte River Bridge, including the arterial highway through Cache Creek.

In the short term, a rebounding U.S. economy is again spurring demand for B.C. lumber, and providing access roads to new stands of timber will generate business in 2015 for members. As well, Davidson points out, 20 mines have received environmental approval in B.C. and can provide work both in both the short and long term when they launch.

The proposed replacement of the Pattullo Bridge is one of the major projects that could add to an increasingly busy year for B.C. road builders

“We support the LNG plant pipelines,” said Davidson, as the LNG industry proposals will provide work for members and have a spinoff effect in adding tax dollars to the B.C. economy, which will translate into more dollars available for infrastructure construction, such as roads, throughout the province.

Davidson is urging construction companies to provide input into the province’s 10-year transportation plan that is now being compiled throughout B.C., looking at infrastructure renewal

and upgrades throughout the province. “It is important to get your two cents in,” he said. “It is important that the government understands the need to fix the roads and what it means to the economy.”

The plan, entitled BC on the Move, will outline needed projects and serve as a guide for the B.C. government. Davidson said the B.C. government completed almost all the projects outlined in the previous plan over a decade ago.

Ministry of Transportation and

Infrastructure representatives have met with key stakeholders, including First Nations, local governments, port and airport authorities and other community leaders, around the province to gauge their needs. The discussion results, plus survey results, will be incorporated into the plan. The new 10-year plan will be posted in the first quarter of 2015 on the BC on the Move website and will set out a series of short-, mediumand longer-term priorities for government. •

HUMAN RESOURCES: New opportunities await women in construction in 2015 Construction business development manager Katy Fairley works to recruit more women to the industry

By Jean Sorensen

K

inetic Construction Ltd.’s Katy Fairley breaks the stereotype of women in construction.

She admits that the common image of a woman wearing a hard hat with a hammer in hand just isn’t her – nor is that image really representative of the whole spectrum of jobs and opportunities that await women in construction as the industry enters a skills shortage.

“From the moment I started the job at Kinetic Construction, I knew this is where I was supposed to be,” said Fairley, who is the construction firm’s business development manager.

She is also one of a growing number of women finding a niche in construction, although the numbers are still sparse. Status

of Women 2011 figures show that numbers of women in construction trade apprentices are low (2% in carpentry, 1.9% in plumbing, 1.5% in heavy equipment mechanics), but women did hold 11% of construction jobs in 2012 across Canada.

As the business development manager of the company, which is headquartered in Victoria and has offices in Vancouver and Courtenay, Fairley is charged with seeking out new business, preparing proposals, meeting with clients and consulting on projects. Her main focus is in the pre-award phase of a contract, but she stays engaged throughout the project as it goes from plan to reality.

It’s a career path she stumbled upon rather than set out to pursue. She had been employed as a senior legislative assistant to

Katy Fairley | business development manager, Kinetic Construction Ltd.

Kinetic was very supportive

the BC Liberal caucus when, four years ago, she answered a newspaper advertisement seeking an administrative assistant to the president of Kinetic Construction.

She became intrigued by the whole construction process, ranging from proposal to plan and finished product. She took on more duties and eventually moved into her current role.

“Kinetic was very supportive,” she said, adding she was amazed at how much knowledge she took from her work in government and was able to apply to her new job, which is now based in Victoria but which involves travel to Vancouver on a regular basis.

T he job i nspi red her to set about organizing Women in Construction, an effort that in 2014 earned her Vancouver Regional Construction Association award honours. The organization, a subcommittee of the Vancouver Island Construction Association, has provided a networking, social and educational platform through which women working in

Katy Fairley sees a range of new opportunities awa iti n g wo m e n in co n s t r u c ti o n b eyo n d the hardhat-and-ham­ mer image | Kinetic Con­ struction

construction firms can network.

“When you work in construction, you often feel isolated because you work mainly with men,” she said. But she knew there were other women involved in construction and decided to start an organization to bring them together. “I wanted to meet others who were as passionate about the industry as I was.”

“We don’t define who a woman in construction is,” she said, adding the organization is an umbrella for all women who “self-identify” as working in the construction industry. Aware of the changing dynamics of job roles for women in construction today, Fairley now speaks to young people at schools and encourages women to consider a career in construction, whether it is as a tradesperson or as a manager.

“When we are talking about careers in construction today, we are not just talking to 50% of the population,” she said.

“We are talking to both men and women.” •

special news feature | Vancouver regional construction Association

january 13–19, 2015

c5

Q&A

B.C. contractors often forget to insure their tools for job site

It can be easy to neglect to advise your insurance adviser of the equipment changes.

This can result in an uninsured loss

Darryl Wind Westland Insurance Group Ltd.

T

he insurance industry outlook for 2015 is expected to remain stable with minor adjustments in rates for earthquake and flood insurance, which can affect construction contractors. But one area that contractors often ignore is coverage of their tools, said Westland Insurance Group Ltd.’s Darryl Wind, who specializes in contractor insurance. Here is Wind’s overview of some of the aspects of insurance that contractors should address when searching for businessrelated insurance in the coming year.

Q What kinds of insurance should a construction company, whether it is a new industry startup, a company coming into B.C. or an established firm, consider?

A Each company is unique and it is important for a company to identify and analyze its various risk exposures. Working with an experienced insurance professional can assist with this process to help put in place appropriate

insurance coverage and to review other risk management strategies to help control and reduce risk.

Insurance coverage typically addresses two main exposures.

First-party insurance coverage insures against direct and indirect loss as a result of physical loss or damage to the property of the policyholder, such as fixed assets and mobile equipment.

Third-party insurance coverage is designed to protect you against situations in which others (third parties) are seeking compensation for injury or damage to persons or property or other economic loss. For example, a plumber overtightens a fitting, which breaks, causing water damage to thirdparty property.

Third-party insurance typically includes general liability to protect against third party claims arising out of your contracting operations. Automobile liability is of course designed to protect against claims arising from the use and operation of automobiles.

Liability coverage will cover costs that you could become legally obligated to pay to third parties due to your negligence, as well as provide legal defence protection.

Q What insurance coverage should an out-of-province company entering B.C. have in place?

A An out-of-province company that is entering B.C. should ensure it has adequate general liability insurance, automobile liability insurance (compulsory ICBC coverage and/or private insurance options) and WorkSafeBC (workers compensation) coverage.

Q What types of insurance do contractors or subcontractors often tend to ignore but should be in place to protect the contractor/subcontractor and his or her company?

A Contractors of ten ig nore coverage for tools. Often it can be assumed that your tools are covered by your ICBC auto insurance when in your vehicle or by your

A one-size-fits-all approach to insurance doesn’t work in the construction industry, because every company has unique coverage needs | j. wootthisak/Shutterstock

home insurance. Unfortunately if you use tools for work they are not covered by your home insurance, and ICBC does not cover contents in your vehicle.

Installation floaters that cover work that is in progress are also available to insure materials that form part of the contractor’s work and that might sustain loss or damage prior to final acceptance by the customer. Sometimes this type of coverage is overlooked, or limits of coverage are not fully adequate.

Q Where do you see the most claims by contractors or subcontractors denied, and why? Is it because they have not taken the time to read the policy or they are not properly insured?

A Contractors often rent, purchase or sell equipment that is needed for their work. It can be easy to neglect to advise your insurance advisor of the equipment changes. This can result in an uninsured loss as the insurance company will not pay out on equipment they were not advised of. In order to accommodate this exposure, many policies include newly acquired equipment coverage. This coverage allows a

certain amount of time for policy holders to notify the insurer of new equipment purchased but is subject to a specified limit and location.

Another claim that is commonly denied is due to faulty workmanship. The insurance company will provide coverage for the resultant damage but will deny coverage to restore or repair the work that was done incorrectly.

Q What can a company do to ensure that in the event of an incident, the claim is considered? Is ensuring that you have good records in both the office and on the work site helpful?

A Understanding your insurance policy and your responsibilities as an insured will help to make you aware of what needs to be done in the event of a loss and what is and isn’t covered. Keeping good records will ensure that the claim is processed more efficiently.

Q What is the best way to ensure that a contractor or subcontractor’s coverage is reflective of the scope of work undertaken? If a contractor takes on new work, or a different type of work should

he or she check with his or her insurance representative?

A The best way to make sure the contractor or subcontractor’s insurance is sufficient is to fully disclose all operations to the insurance company. Full disclosure to the insurance company prevents the insurance company from declining a claim based on misrepresentation. If a contractor takes on a new operation, he or she needs to make sure to advise the insurance company prior to doing so. This enables the insurance company to amend the policy accordingly to account for the new operation.

Q As we move into 2015, are changes happening in construction insurance that companies should be aware of? Higher premiums? More exclusions?

A In the upcoming year it is anticipated that the insurance marketplace will remain stable.

Currently the areas that are seeing minor increases in both premiums and deductibles are earthquake and flood coverage. This may modestly affect the premiums for course-of-construction insurance and other property-related insurance. •

Group Ltd.

We specialize in Construction Services for all types of contractors and projects including Contract Surety.

For more information, please contact: Darryl Wind, CIP, CRM Account Executive Phone: 604-543-7788 1-800-899-3093 dwind@westland-insurance.com www.westland-insurance.com You r b es t co v er a g e i s o ur o n l y p o l i cy

ENVIRONMENTAL CONSULTANTS

january 13–19, 2015

special news feature | Vancouver regional construction Association

c6 news contractors: Specialization seen as the route to growth for small or medium-sized companies Demand for specialized knowledge and skills underscores the need for educating and investing in employees

S

pecialization will continue to lead the way for growth of small and medium-sized business in the future, predicts a construction industry veteran recently honoured by the Vancouver Regional Construction Association (VRCA) for his lifetime achievements in the industry.

Specialization is about finding market niches and building expertise in an area that other, larger firms can’t fill. “If you are a larger company and you don’t have that expertise, you can’t just move any crew into that area,” said Hank Paquin, founder of Sasco Contractors Ltd., an electrical contractor that specializes in commercial and industrial tenant improvements and refurbishing the interiors of older buildings.

“I knew from Day 1 I had to specialize,” said Paquin, now retired, reflecting back to 1985 when he founded his company, which is now run by his son and a former business partner. He started by specializing in building maintenance work, and then as his customer base broadened he was able to move into interior building works. Today, Sasco Contractors employs 100 individuals.

T he compa ny conti nues to build expertise and is watchful for new technologies and market opportunities, and as a trend becomes evident, Paquin said, the company broadens its scope of expertise.

Working relationships between subcontractors such as Sasco and general contractors have changed over the years, he said.

At one time, subcontractors and contractors worked almost as a team – the same crews worked on projects and had long-term relationships. Today, that’s not the case. But what remains the same is underlying principle that the contractor is looking for the best expertise possible in a given area.

It’s the underlying reason why smaller and mid-sized companies can fuel their corporate growth if they are willing to develop specialized knowledge.

“If you are an employee, you know you have to go to work and make money for your employer,” he said. “I had that bred into me.”

When Paquin moved from being an employee to a subcontractor, that same concept was true. The subcontractor had to ensure that he had brought forward the skills and ability to deliver on time and

Small and medium-sized contractors can grow stronger by occupying specialized niches and staying on top of industry trends | Antonio Diaz/Shutterstock

within the agreed price.

Paquin said traditional loyalties have changed as the focus shifts toward companies that have the best expertise. “I think there is still a certain amount of the old loyalty today,” he said, but general contractors and owners are concerned about costs as new technology emerges or is demanded. “There is loyalty to the bottom line,” he said, and subcontractors today have to be able

to deliver.

“T here is respect between subcontractors and contractors, especially if they know you can do the job. But times change and subcontractors have to be willing

Hank Paquin | founder, Sasco Contractors Ltd.

It is one thing to get the job done and another to get it done the best way

education: U40 Network helping young executives gain industry knowledge Members facing huge window of opportunity as baby boomers retire

Y

oung executives in the B.C. construction industry who want to move ahead, at a time when the industry is facing a huge window of opportunity as baby boomers retire, need to be connected. That’s why Justin Mattioli, project manager for Graham Construction & Engineering Inc., values the Vancouver Regional Construction Association’s (VRCA) U40 Network, an organization of which he is a founding member.

“I have a desk drawer full of business cards,” he said. “When I have a problem or need to know someth i ng, there is usua l ly someone I can call.”

Seven ye a rs a go, M at t iol i joined the VRCA to participate in events, but he found there was no vehicle within the association that was specifically for younger

construction industry professionals eager to advance.

“I had been involved in the Toronto Construction Association and their group was called the Young Construction Executives Club. It was great. When I went into construction in Toronto, I was quite young, and it allowed me to quickly meet a lot of people in the industry. I formed a lot of good, solid friendships. I also started to get different views of what people do,” he said, adding he gained a more rounded view of the construction industry and a better understanding of the role that he played in it. “I also got to hang out with some of the contractors and competitors and clients.”

One hot, sticky summer day in Toronto, Mattioli – who had briefly worked in B.C. – decided

Justin Mattioli | project manager, Graham Construction & Engineering Inc.

There is usually someone I can call

to pack his suitcase and head west to work in Vancouver. But he had lost his industry contacts – and the VRCA was a place to start rebuilding.

“I gathered together five or six of the younger members at a meeting and we went to Keith Sashaw [former VRCA president] and told him we wanted to form a group,” he said, adding Sashaw endorsed the idea and the group took off. “It took a lot of work to get it going, but now it has snowballed.”

T he network hosts mentor breakfast sessions where successful entrepreneurs or executives within the industry provide insight into how they were able to achieve their objectives. Networking activities, usually once a month, range from a casino night to a summer cruise event, which is usually sold out.

The U40 Network is also involved in community activities and donates a day’s labour and materials to the Zajac Ranch for Children, a summer facility for children with disabilities. “We believe we should be giving back

to change with them,” he said.

It’s the rationale behind why Paquin continued to invested in his people and participate in the VRCA. “We have to adapt and further the education of our tradespeople, take more courses, find better ways of doing projects, improve our communications skills and improve our effectiveness on the job,” he said.

It is only through such efforts of building greater expertise that specialized companies can continue to be in demand with the general contractors.

“The general contractor and trades are definitely a partnership, and sometimes we fail to think about that,” he said. “It is a partnership; we are both working for the developer and want to get the job done the best way.

“It is one thing to get the job done and another to get it done the best way and on time and on budget.” •

to the community,” he said.

The U40 Network has a seat on the VRCA’s board of directors but has its own executive committee, which provides for an opportunity to have input in VRCA activities. “The education committee may ask us about the kinds of courses we would like to see offered,” he said, adding that the question can be referred to the U40 Network’s own executive meetings for input.

The U40 Network provides new entrants into the industry with the ability to learn quickly and from their peer group. “If you just stay on the job and do nothing else, you are slowly meeting people,” he said, but the VRCA and U40 Network will provide a wider circle of industry contacts to expedite the process.

Mattioli has served as president and past president of the U40 Network and believes it is pivotal to young executives wanting to move forward in the construction industry. In 2014, the VRCA honoured Mattioli with the U40 Excellence in Construction Award. •

Law: New rules protect B.C. road crews

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oad maintenance and c o n s t r u c t io n c re w s working on highways will now be included in B.C.’s ‘Slow Down Move Over’ rule after an amendment to Motor Vehicle Act regulations. The amendment went into effect on January 1.

Previously, drivers had to reduce speed and, if on a multilane road, move over to another lane when passing a stopped official vehicle such as a police car, fire truck or ambulance.

The new regulatory amendment will change the Slow Down Move Over requirement so that it includes all vehicles displaying a flashing red, blue or yellow light. The change will improve safety for all roadside workers, including highway maintenance personnel, utility workers, land surveyors, animal control workers and garbage collectors. •

special news feature | Vancouver regional construction Association

january 13–19, 2015

c7

Provincial view

Data to shape how the industry moves forward in 2015 Careful collection and use of information is crucial for companies of all sizes as they strive to boost productivity Manley McLachlan

D Data shows that skilled trades will be in demand regardless of what happens with LNG projects in B.C.

Manley McLachlan President, BC Construction Association

ata is the defining word and a common thread for the construction industry this year and into the far future.

Current and factual information is integral to effective planning. Data is a major economic resource, a currency in today’s world and a competitive asset. As B.C.’s construction sector heats up and we look toward our future needs, data will drive much decision-making and strategic planning. New technologies allow data capture in ways never before possible, but how our industry captures, interprets and acts upon that data is going to be critical for success.

The government of B.C.’s Skills for Jobs Blueprint makes data a top priority as the ministries of Education, Advanced Education, and Jobs, Tourism and Skills Training reallocate efforts to support skilled-trades training.

It is imperative that the construction industry actively contribute information to make sure government’s increased emphasis on labour market reporting is fully reflective of our business needs.

Government will use this data as it seeks to “develop responsive

and meaningful targets,” focus tracking and reporting on performance and outcomes, and expand web-based tools.

Data connects us to each other and to the future. Smaller businesses have a bigger voice when they aggregate data to show activities, opportunities and challenges. Quantifiable proof of an issue can bring about muchneeded change. Our own B.C. Construction Industry Survey combines hundreds of responses, illuminates real-world issues, and gives B.C.’s construction employers a stronger and collective voice.

With productivity levels in Canada at an all-time low, it’s time to make use of available data to ensure we’re getting the best out of what we’re putting in. Productivity is cited by the Conference Board of Canada as “the single most important determinant of a country’s per capita income over the longer term.”

It really is about working smarter, not harder – investing our time and effort toward the things that truly make us better.

Provincial and federal governments are making visible moves to work more closely with industry associations like the BC Construction Association (BCCA),

enhancing data collection to drive decision-making, to make sure government and industry programs respond directly to real needs quickly and effectively. The private sector is also interested in accessing our data for profit.

We’re a busy province and the construction sector is at the center of activity; remember, nothing happens until something gets built. Estimated capital costs of major infrastructure projects in B.C. hit a record high of $312 billion in early 2014. Our sector conti nues to outpace others as we remain on an upswing, a leading contributor to B.C.’s provincial GDP (currently at 7.9% and expected to increase 31% by 2018).

Data shows that skilled trades will be in demand regardless of what happens with LNG projects in B.C.: this is a key message and one that construction employers must continue to hit home.

Procurement tools like BidCentral have gone fully online – including a paperless, nearly instant e-bonding system – and have been reported to save 60% or more on time and resources during the tendering process.

Ou r d iscussions w ith B.C.’s capital ministries in the Deputy

Ministers’ Industry Infrastructure Forum are contributing to the public-sector procurement policy process to ensure B.C. businesses are enabled and empowered to make the best of the opportunities offered in this province.

We’re here to connect, represent and support you. B.C.’s construction associations continue to offer more and more tools to make the best of your time and money and to give you a voice.

Become part of our network in any way that you can: join your regional construction association and become an integrated member of BCCA and the Canadian Construction Association, use BidCentral for procuring your private- and public-sector projects, take advantage of the STEP program to source your skilled workers, or simply participate in our annual construction industry surveys, social media or other means we provide to support your business and give you a voice in our province.

As the world moves forward with a new emphasis on the numbers, make sure those numbers include you.

We look forward to serving you in 2015. •

january 13–19, 2015

special news feature | Vancouver regional construction Association

c8 news workplace: rigorous testing crucial in training Emphasis on credentials and proof of knowledge help reduce workplace accidents while boosting productivity

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ompanies that carry out worker training need to ensure that the individuals attending such courses can effectively apply the skills they have learned and take them back to the workplace, says Tanya Steele, an educator who has been training people in construction for the past 17 years.

Too often companies send their employees to courses simply because they are required to do so

by WorkSafeBC, but there is no evaluation of whether the person has absorbed the information and can apply the skills, or even of whether the trainer is qualified to teach the course and certify individuals.

“Some companies do not research who their trainer is. They find the cheapest and quickest option,” she said. The individual may leave with a certificate in hand, but it has little value.

“Fully trained” means that the trainer has the credentials to teach the course and knows the content,

and that the individual has absorbed the knowledge and can apply it, said Steele, who is a partner in ER Plus Risk Management Group Inc., a training company that works with the construction industry.

“You really want proof of knowledge,” she said. Participants in her courses have to pass a written or oral exam or provide a demonstration of the skills learned, or a combination of these test methods.

Steele said she is recognized in the industry for stressing this aspect of training, especially today when companies are focusing on reducing accidents on site and increasing productivity.

The construction industry is facing a shortfall of skilled labour as baby boomers retire, and there is a concerted effort to educate new entrants into the construction industry to bridge that gap.

Companies with poor safety records will find they are locked out of bidding on contracts and face

higher insurance premiums or penalties that dramatically slim their return on investment.

A change that Steele has seen in those attending industry training classes is that more senior company employees are attending classes. “There are more supervisors being trained than ever before,” she said, adding trained supervisors on a job site can help entrench the safety culture and also train other workers to adopt safe work practices.

Steele, who trained as a paramedic, began teaching courses in occupational first aid and then branched into WorkSafeBC. “I loved that I was impacting other people’s lives and giving them the skills to save people’s lives,” she said, adding there was job satisfaction in empowering others in this important skill.

Three years ago, she began teaching a construction safety officer course. Today, her career has gone further as she has become a speaker in demand at national

Tanya Steele, a partner in ER Plus Risk Management Group Inc., said more supervisors are taking safety training, which helps cement a culture of accident prevention in the workplace

conferences talking about the importance of effective training.

The three topics she discusses are how to change behaviour through effective on-site training, teaching others to teach and selling safety to others on the job site.

ER Plus Risk Management has three focal divisions: training of construction safety officers; writing manuals and training in a variety of programs ranging from enhancing supervisory skills to fall prevention; and consulting and providing Certificate of Recognition (COR) audits.

Steele was the recipient of the Vancouver Regional Construction Association’s Educator of the Year Award in 2014 and has also received the Applied Science Technologists and Technicians of BC Professional Leadership Award for Women. She is also an executive board member with the Canadian Society of Safety Engineering and is the chair of the National NAOSH Week Steering Committee. •

Innovation: Schneider lab makes company a North American solar leader Power Pros provided out-of-the-box solutions to construction challenges

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olar energy installations are growing internationally with the U.S. Energy Information Administration reporting that solar power was the secondlargest source of new generating capacity in 2013. Clean Energy Canada’s December 2014 report Tracking the Energy Revolution found that in the past five years, investors have put $27 billion into clean energy, with wind, biomass and solar doubling during the same time period, although hydro generation still accounts for the bulk of energy generation.

But for world energy markets to expand to meet solar production, solar power has to be integrated into the existing power grids of utility companies, all of which have differing standards and requirements. A B.C. electrical contractor belonging to the Vancouver Regional Construction Association (VRCA) has helped another B.C. company solve that problem as it worked to set up a one-of-a-kind test site to make Schneider Electric’s new Solar MicroGrid plant a leader in the field.

“We a re a n electrica l contractor that specializes in these intensive, unique projects and we tend to go after them,” said Kody Saunders, projects director for Power Pros Electrical, which completed the innovative lab

contract in just four months.

T he lab, a n add it ion to Schneider’s existing building, is considered unique in North America as it signals Schneider Electric’s lead into manufacturing and testing more complex utility-grade solar inverters that can be used internationally in a variety of climates. The inverters integrate solar-derived power into conventional electrical power grids.

In order to do the extensive testing, the lab needed to be able to simulate a wide range of international grid test conditions. The lab also has a specialized chamber able to simulate climatic ranges varying from -65 C to 85 C and 10% to 95% humidity. “They can even make it snow in there,” said Saunders.

The MicroGrid Lab occupies 15,000 sqare feet of Schneider Electric’s Bu rnaby office; it contains 70,000 lb. of wiring, 300,000 lb. of test equipment a nd a n 1,800-poi nt cont rol structure. The new MicroGrid Lab was built to support the design and testing of Schneider Electric’s revolutiona ry SE1 1500V platform.

The main challenge that faced t he l ab’s cre at ion wa s t h at Schneider was venturing into a whole new area of product development and testing. By the

Power Pros Electrical project team (left to right) Kody Saunders, John Vail, Luc Vail and Dana MacLean at Schneider Electric’s new Solar MicroGrid plant opening. The contract was a once-in-a-lifetime project as it involved construction of a unique solar inverter test facility | Power Pros Electrical

end of 2012, Schneider had started to search for equipment and manufacturers, but the reality of the situation was that much of what was required simply did not exist. It had to be designed specifically for the structure, and contractors pulled in to work on the project had to be innovative.

“This was not your typical job where you could follow a set of drawings,” said Saunders, adding that Power Pros had to build much of the in-house cabinetry

as the lab build-out progressed.

“Our biggest challenge was materials and the time frame,” said Saunders. The project did not start until September 2013 and the portion that involved B.C. government funding had to be finished by year-end with some additional work carried out in the first two months of 2014.

Saunders credits the engineers at Schneider plus consultant BLC Engineering’s Barry Corsiatto, P.Eng., for a collaborative team

approach that solved many of the problems that arose as the construction team moved forward to build a unique test site.

“Working with Power Pros was a great experience,” said Paul Sikora, engineering director for Schneider Electric utility-scale inverters.

He credits the company’s direct design feedback, anticipation of client needs, adaptability to changing circumstances and “out-of-t he-box” problemsolving as factors in achieving the new lab.

A s wel l, Power P ros was a “catalyst for creating the sense of team between client consultants, contractor and trades, and craftsmanship under significant time pressure,” he said.

Corsiatto agrees. “It was a non-sta nd a rd project a nd a thing you would probably never do again,” he said.

“There was a huge learning curve to make sure that it was done properly,” he said, adding the team spirit drove everyone to take on the challenge of building something unique and to do it within the tight deadline.

“This was really a once-in-alifetime type of contract,” said Saunders, with the achievement earning the company a VRCA Silver Award of Excellence in 2014. •

special news feature | Vancouver regional construction Association

january 13–19, 2015

c9

legal specs

SCC decision on contract law a major game-changer for companies Norm Streu and Christopher Hirst

T

The SCC recognized that there is a duty on the part of contracting parties to engage in honest contractual performance

he Supreme Court of Canada (SCC) recently issued what may be the most important decision in contract law in more than a generation.

The decision in Bhasin vs. Hyrnew is a potential game-changer because it establishes a doctrine of good faith between contracting parties and a duty of honesty in the performance of contract obligations.

The decision involved a dispute between a retailer, the plaintiff Harish Bhasin, and a wholesaler, Canadian American Financial Corp. (Ca n-A m). T he ot her named defendant, Larry Hyrnew, was a competitor of Bhasin, who was working closely with Can-Am. Bhasin acted as an “enrolment” director with Can-Am, which was in the business of marketing education savings plans to investors. Bhasin and Can-Am had entered into an agreement governing their relationship which required Bhasin to sell only CanAm products. The agreement also stated that it would automatically renew at the end of its three-year term unless one of the parties gave six months’ notice to terminate the agreement.

Hyrnew was a competitor of

injuries: Recover at Work program keeps employees on job

K

eith Plumbing and Heating Co. Ltd.’s Recover at Work program for injured employees has earned the company the Construction Workplace Health and Safety Innovation Award presented by the Vancouver Regional Construction Association.

“It’s our own program. We have tried to adapt it and make it more streamlined to work with WorkSafeBC,” said Kevin Collier, Keith’s construction manager.

“We have also tried to make it a more user-friendly system for our employees.”

The Keith program was developed with the help of WorkSafeBC physicians who listed the tasks that could be undertaken by an individual with a specific injury. When an injured employee goes to his or her physician, that employee can take the Keith job list. In discussion with the physician, the employee can determine which duties he or she is able to perform safely while rehabilitating the injury.

While WorkSafeBC works with

companies to develop returnto-work programs, Collier said Keith’s program is more advanced.

“We have taken a couple of steps ahead and determined what work is available according to where the injury is. If it is a shoulder injury, then there is a predetermined list of duties,” he said.

By having the program and a list of job duties in place, there is a concerted focus on staying on the job. “Otherwise, a worker may not think there is any work available,” said Collier.

This program ensures that the individual remains gainfully employed during his or her injury and also provides the employer with the continued skilled labour.

“Obviously, if it is a serious injury, we are not expecting that person to come to work and we would rather that person stay at home and recover. But if it is a lighter injury, then this program provides them the opportunity to be productive and enjoy the social interaction of the workplace,” he said. •

Bhasin and wanted to take advantage of the market created

by Bhasin’s efforts. At first, he did so by attempting to persuade Can-Am not to renew its contract with Bhasin. When that failed, Hyrnew repeatedly proposed a merger to Bhasin which Bhasin repeatedly refused.

Subsequently, the Alberta Securities Commission raised compliance concerns with respect to an aspect of Can-Am’s business. As part of its investigation it required the appointment of a “provincial trading office” to review Can-Am’s enrolment directors, including Bhasin. Can-Am somewhat bizarrely appointed Hyrnew to be the provincial trading office. Not surprisingly, Bhasin objected to this appointment as it would involve a review of his confidential business records by his competitor Hyrnew.

Despite those reasonable objections, Can-Am forced Hyrnew on Bhasin while falsely reassuring him that Hyrnew would be bound by confidentiality obligations and lying to him that the securities commission had rejected Bhasin’s proposal that an independent party be appointed to this position.

The end result was that Can-Am did not renew its agreement with Bhasin, and Hyrnew ended up with Bhasin’s business. Bhasin

sued both Can-Am and Hyrnew.

A unanimous SCC decision held that Can-Am had breached its agreement with Bhasin through its failure to act honestly with Bhasin and its termination of the agreement. In reaching that conclusion, the SCC recognized that there is a duty on the part of contracting parties to engage in honest contractual performance. The SCC found that “there is a common law duty which applies to all contracts to act honestly in the performance of contractual obligations. The organizing principle of good faith includes the notion that in carrying out performance of a contract, a contracting party should have appropriate regard to the legitimate contractual interests of the contracting partner.”

An overriding contractual duty to act honestly and in good faith in carrying out contractual duties is something new. It will no longer be sufficient to look only to the narrow language of the contract to determine whether contractual obligations have been breached.

From now on, in addition to the narrow language of the contract, one needs to take a larger view and consider whether behaviour under a contract is consistent with an overriding duty of honesty and good faith. • Norm Streu is president and chief operating officer of LMS Reinforcing Steel Group. Christopher Hirst is a partner and leader of the construction and engineering group Alexander Holburn Beaudin + Lang LLP.

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january 13–19, 2015

special news feature | Vancouver regional construction Association

c10 NEWS Standardized construction documents ease contract conflicts Documents developed by industry organizations are one of the chief ways to avoid unnecessary risks at the bidding stage standard document for the contractor-subcontractor, and the Canadian Design Build Institute (CDBI) also publishes guidelines for documents.

Too little consideration is given to the risks at the bidding stage (prior to signing the contract), which may have cost implications during construction

Warren Perks Vice-president, BC Construction Association

A

s B.C.’s construction indu st r y b ecomes more complex with different kinds of partnerships and new entrants such as startups and foreign companies, the documents setting out the scope of a job are becoming increasingly important. Lack of a comprehensive understanding of what parties are asking or agreeing to in a contract can lead to misunderstandings and disputes on the job site and, in the worst case scenario, legal suits. BC Construction Association (BCCA) vice-president Warren Perks, also director of industry practices, outlines some of the issues and how the industry has moved to standardize documents.

Q What documents are considered the standard today in the construction industry?

A There are a number of reliable sources for standard documents, from national and provincial organizations. Documents from t he Ca nad ia n Constr uction Documents Committee (CCDC) are considered the standard.

They are primarily developed for u se i n rega rd to ow nercontractor contracts, with the exception being the contractorconsultant contract for designbuild projects.

In B.C., the BC Documents Committee created a standard document (BCDC 2 and 2E) for the solicitation of stipulated sum bids in the public sector (commonly referred to as “front-end documents”) and a companion document for use with CCDC 2, known as stipulated price contract.

The Canadian Construction Association (CCA) provides a

Q How were they created and where do individuals in the construction industry get these documents?

A The CCDC documents are created by a consensus process of the committee, which is made up of representatives from owners (both private and public), contractors (CCA), consultants (the Association of Consulting Engineering Companies-Canada, the Royal Architectural Institute of Canada and Construction Specifications Canada) and integrating surety and legal advisers.

The CCA documents are developed by the CCA Standards and Practices Committee, with member representatives from the various contractor stakeholders. These documents reflect the considerations of the CCDC to include conditions that preserve and protect the rights of the parties under the head contract.

T he BCDC 2 a nd 2 E documents have been created by sta keholder representatives from public owners, consultants and contractors (BC Documents Committee).

In B.C., all CCDC, CCA and CDBI documents are available from the BC Construction Association’s four regional offices with some documents also available through the Architectural Institute of BC. For a list of these current locations, refer to the CCDC website’s Where to Buy section: www.ccdc.org/WhereToBuy/WhereToBuy.html The BCDC documents are free to download and can be found on the website of the Public Construction Council of BC (www. pccbc.com/bcdc2docs/bcdc-2 and www.pccbc.com/bcdc2docs/ bcdc-2e).

Q What types of standard documents are available and where is a list of these?

A Standard construction contracts as well as forms and guides are available for all the generally acknowledged standard forms of construction; stipulated sum, construction management (both for service and services and construction), design-build, cost plus, unit price and civil works.

The most current list of standard documents is on the Canadian Construction Association website at www.cca-acc.com/en/ industry-practices/cca-documents, where links to all the current CCDC, CCA and CDBI documents are available. The BCDC 2 and 2E documents are available online as noted above.

Q Can problems result when

Before signing, contractors should carefully consider the quality of the bid documents, the level of success of the owner’s or architect’s past projects, and potentially onerous contract conditions | Zurijeta/shutterstock

industry members create their own documents or alter those commonly used in the industry?

A The most common consideration for documents that are unknown to the industry or altered standard documents is that they usually bring added risk. This will likely imply higher costs as bidders will want to add contingencies for the added risk, and may even limit the competition as some contractors will not want to assume that added risk.

The busier the industry, the more risk-averse the bidders become.

Q Are the terms “pay when paid” and “pay if paid” found in the standard contract offered? What are the caveats or risks of these terms for a contractor or subcontractor and accepting a contract that bears these terms?

A These types of clauses often appear as add-on conditions in contracts. The terms are not endorsed by industry associations because they are not in the interest of the industry as a whole.

Trade contractors must very ca ref u l ly exa m i ne pay ment terms in the subcontract agreement before execution. These terms may contain clauses that attempt to make any payment obligation on the part of the prime contractor conditional upon the prime contractor first receiv i ng pay ment from the owner for the work performed by the trade contractor.

Such clauses are used to shift the risk incurred through nonpayment by the owner from the prime contractor to the trade contractor (who has to pay his workers). In fact, where receipt of

payment by the prime contractor is a condition of any obligation to pay the trade contractor under the subcontract, it is quite possible that the trade contractor will never be entitled to payment even when the owner’s refusal or failure to pay the prime contractor is not attributed to any fault of the trade contractor.

Q What are the common mistakes that contractors make before signing a contract?

A Too little consideration is given to the risks at the bidding stage (prior to signing the contract), which may have cost implications during construction. Above all else, contractors should thoroughly review the bid documents.

A few items they should consider are: the quality of the documents, the level of success on past projects with the owner or the architect, and onerous contract conditions that add costly risk (such as extended warranties and liquidated damages clauses).

Standard documents are beneficial because you know what your risks are and you don’t have to get legal counsel. If you have to get counsel, that is another costly overhead; however, if there is something you don’t understand, then it is best to seek legal advice or the cost could be far greater.

Q What is the BC Construction Association doing to make the whole documentation process easier for the construction industry?

A Educating bidding authorities and contractors is an ongoing pursuit for us, especially with the demographic changes

resulting from the retirement of senior staff in most construction industry organizations. Many new employees have yet to build that same level of expertise, requiring time and a training period. But BCCA and its four regional associations are leading Canada in the development of online procurement technologies to increase fair and transparent procurement processes.

Our BidCentral platform features the most advanced technology available, including e-bonding, and is recognized as the industry standard.

Q Are there various aspects of the contract process, such as prompt payment legislation, under review?

A The BCCA believes this is a key issue for the growth and success of the industrial-commercial-institutional (ICI) construction sector, and we continue to advocate with government and industry groups on behalf of contractors across the province.

This ICI sector has some significant requirements for success. One of those requirements is reliable, timely cash f low, which strengthens businesses, families and communities; assists in building a stronger employment base; allows employers to increase investment in training, staff and machinery, which i mproves productiv ity; a nd lowers overall construction costs due to reduced risk. Commitment to prompt payment is fundamental to ensuring this cycle is as positive as possible. When contractors are paid in a prompt manner, it benefits everyone, from industry employees to the final users. •

special news feature | Vancouver regional construction Association

january 13–19, 2015

c11

Constructive comment

VRCA getting down to business in 2015 Direct feedback from association members spurs new commitment to improve communication and standardization within the industry

I am becoming increasingly aware of the need for change, and that there’s a real appetite in the marketplace for it

Fiona Famulak President, Vancouver Regional Construction Association

Fiona Famulak

I

n the last 12 months, our board of directors and staff have focused sharply on our organization’s purpose, its relevance and the value it generates for its members and the industry as a whole.

We’ve engaged current, past and future members, industry partners, U40s and volunteers to provide feedback on what we do well and where we need to improve. We’ve injected fresh perspective into our events, education, affinity program and our communications, as well as formed new partnerships with respected organizations that allow us to deliver on our mandate.

We’re getting traction. We’ve

Special rates offered to VRCA members To book space or for answers to your questions, please call 604.688.2398 or email ads@biv.com

grown our membership by 11% in the last 12 months and we’ve increased participation at networking events and attendance at education courses. The most interesting result, in my opinion, is the outcome of the weekly site visits we conducted in 2014, where we gathered input from our members on the industry issues affecting them today and in future.

Our members are telling us we need to: •Improve communication across the construction supply chain to help increase productivity, resolve issues promptly and reduce project time and cost.

•Improve standardization of procurement processes and do cu ments, a nd lobby for prompt payment legislation that will ease current risk and cash flow problems faced by contractors.

•Engage the design community to secure more complete design drawings to better manage project risk and reduce time and cost.

•Secure a reliable pipeline of skilled workers to enable our members to pursue work and prosper over the long term.

These themes are mirrored in the list of issues, identified at a Canadian Construction Association Industry Summit earlier this year, that the construction industry across the cou ntry must face in the next three to five years. To learn more about those issues, I encourage you to check out the document at http:// cca-acc.com/pdfs/en/information/CCAIndustrySummitOutcomes2014.pdf.

Many of the issues identified have been around for years, even decades. However, as a result of many member conversations in the last year, I am becoming increasingly aware of the need for change, and that there’s a real appetite in the marketplace for it.

As a result, in 2015, while the

The need for better communication across the supply chain was one of the issues identified as important during the past year by members of the Vancouver Regional Construction Association

Vancouver Regional Construction Association (VRCA) will conti nue to del iver broader networking opportunities and a more focused education offering, our board of directors, its councils and committees will focus sharply on industry issues, with a view to finding solutions that help its members succeed in business.

That focus starts in this issue of Construction in Vancouver, where Warren Perks, director

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of i ndustr y practices at the from our members directly. Let’s BC Construction Association, be clear – we won’t solve every stresses the importance of stan- issue. However, our strength is dard contract documents, and at the grassroots and I’m conwhy using them would help the fident that, working with our entire construction industry members and partners, we’ll develop practical solutions to supply chain save money.

That conversation, along with some long-standing challenges.

The extent of global change many others, will continue at our general, trade and manu- around us is unprecedented and facturers and suppliers councils we’d better keep up or we’ll be throughout the year. We’re also left behind. The VRCA is in solucommitted to continuing with tions mode. Let’s get down to business. •10:37 PM our weekly site visits to hear (fixing) RCABC_BIV_3.8x3_Dairy_PRINT.pdf 1 2014-10-06

january 13–19, 2015

special news feature | Vancouver regional construction Association

c12 NEWS Awards: VRCA honours excellence in construction Excellence in construction was honoured by the Vancouver Regional Construction Association at its October 2014 gala evening event at the Vancouver Convention Centre. Gold Award winners were announced from three Silver Award finalists in each of 12 project categories.

Honours were also given to individuals and companies that had achieved distinction over the year.

The 2014 gold project winners were: General Contractors – Over $55 million EllisDon Corp. for Surrey Memorial Hospital Critical Care Tower General Contractors – $15 million to $55 million EllisDon Corp. for TRIUMF ARIEL General Contractors – Up to $15 million Ledcor Construction Ltd. for UBC Bioenergy Research & Demonstration Facility Founder’s Trade Award – Over $3 million CentiMark Ltd. for its contribution to City Square Property Holdings

President’s Trade Award – $1 million to $3 million StructureCraft Builders for work on Chilliwack Secondary School

General Contractor 200,000 or more person hours PCL Constructors Westcoast Inc. for achieving a zero frequency injury rate in the category of General Contractor 200,000 or more person hours McLeod Masonry International Corp. for achieving a zero frequency injury rate in the category of Trade Contractor 10 to 49,000 person hours Lockerbie & Hole Contracting Ltd. for achieving a zero frequency injury rate in the category of Trade Contractor 200,000 or more person hours

Chairman’s Trade Award – Up to $1 million Solid Rock Steel Fabricating Co. Ltd. for work on Sixth + Willow Mechanical Contractors – Over $3 million Lockerbie & Hole Contracting Ltd. for its contribution to Coquitlam UV Disinfection Project Mechanical Contractors – Up to $3 million Jeda Mechanical Ltd. for work on the UBC Bioenergy Research & Demonstration Facility Electrical Contractors – Over $2 million Houle Electric Ltd. for work on Surrey Memorial Hospital Critical Care Tower Electrical Contractors – Up to $2 million Anton Electrical Services Inc. for its contribution to Dilawri Audi Vancouver Dealership Manufacturer and Supplier Western Archrib for its contribution to Hillside Centre Redevelopment Phase II

EllisDon Corp. won in the over-$55 million category for its work on the Surrey Memorial Hospital Critical Care Tower | EllisDon Corp.

Heritage Award 564 Beatty, ITC Construction Group, Dominion Masonry Ltd., Sentrax Mechanical Contracting Ltd., Chambers Electric Lifetime Achievement Award Hank Paquin, founder, Sasco Conractors Ltd. Construction Workplace Health & Safety Innovation Award Keith Plumbing and Heating Co. Ltd. for Recover at Work Program

Safety Awards Gisborne Industrial Construction Ltd. for its superior safety record in the category of Trade Contractor 50,000 to 99,999 person hours Graham Construction & Engineering for achieving a zero frequency injury rate in the category of General Contractor 50,000 to 99,999 person hours Omicron Canada Inc. for achieving a zero frequency injury rate in the category of

Education Leadership Award Tanya Steele, ER Plus Risk Management Outstanding Woman in Construction Award Katy Fairley, Kinetic Construction Ltd. U40 Excellence in Construction Award Justin Mattioli, Graham Construction & Engineering Inc. Innovation & Productivity Graham Construction & Engineering Inc. for Graham Personnel Monitoring Program Member of the Year Award Houle Electric Ltd.

Growth: permits hit record $1 billion mark Institutional-government building permits soared nearly 2,000%

T

otal building permit values in the Lower MainlandSouthwest region shot up 109% in October 2014 to set a new record for the region, according to Vancouver Regional Construction Association’s (VRCA) regional analysis of the Statistics Canada Building Permits report.

“This month’s permit numbers were significant due to large gains in public and commercial permit values,” said Fiona Famulak, VRCA president. “This is the first time that we have seen total permit values break the $1 billion mark, surpassing the previous record set in November 2006 of $956.1 million. We attribute the bulk of this jump in values to medical facilities in the institutional-government sector, which is likely the permit for the Children’s and Women’s Hospital in Vancouver, and hotel and restaurant permits in the commercial sector to a lesser extent.”

Total permit values in October 2014 rose to $1.22 billion compared to $585.8 million in September 2014. Non-residential permits rose 522% to $691 million in October from $111.1 million in September, with institutional-government permits

soaring 1,999% to $325.1 million from $15.5 million and commercial permits jumping 331% to $357.2 million from $82.9 million, while industrial permits declined 32% to $8.6 million from $12.7 million. Residential permit values rose 12% to $531.9 million from $474.7 million during the same period.

“While this is good news, it should be noted that the set of events that led to this new record does not necessarily indicate a boom in the regional economy or in non-residential real estate, as public permits are not subject to the same market forces as private permits, and the large gain in commercial permits is likely project-specific rather than reflective of a market-wide investment upswing,” Famulak said.

“October’s surge will likely not be repeated in November, and a large decline would be typical.”

Total building permits were valued at 12% higher at $6.57 billion in the first 10 months of this year compared to $5.9 billion for the same period last year. After October’s surge, VRCA’s 2014 forecast for building permits sees values coming in ahead of the 2013 level, with a moderate

gain likely.

Regional building permit highlights •Total permit values in October 2014 rose 109% to $1.22 billion compared to $585.8 million in September 2014.

•Total non-residential permit values were up 522% in October 2014 to $691 million compared to $111.1 million in September 2014.

•Commercial permits rose 331% to $357.2 million from $82.9 million.

•I ndustria l perm its d ipped 32% to $8.6 million from $12.7 million.

•Institutional-government permits jumped 1,999% to $325.1 million from $15.5 million.

•Residential permit values were up 12% to $531.9 million in October 2014 from $474.7 million in September 2014.

•Total building permit values were 12% higher at $6.57 billion in the first ten months of 2014 compared to $5.89 billion in the first 10 months of 2013.

•Non-residential permits were up 33% at $2.181 billion from $1.64 billion last year.

•Residential permit values were

3% higher at $4.38 billion from $4.24 billion last year.

In Abbotsford, building permit values fell 28% in October 2014 from September (seasonally adjusted).

“While Abbotsford permits were down this month, we do not see this as a sign of deteriorating market conditions or investor sentiment,” Famulak said. “Year-to-date permits are currently tracking 16% ahead of 2013, and we expect Abbotsford’s e c onomy a nd b u i ldi ng activ ity to show fu rther improvement in 2015.”

Seasonally adjusted non-residential permit values fell 9% to $2.4 million in October 2014 from $2.6 million in September.

Industrial permits rose 4% to $2.2 million while commercial permits came in at $200,000 million. No institutional-government permits were issued in October. The seasonally adjusted value of residential permits fell 35% to $4.1 million in October 2014 from September’s $6.4 million.

VRCA’s outlook for Abbotsford in 2014 remains positive with an upside bias, with double-digit

gains in total building permits likely over 2013, with further gains in 2015.

Abbotsford regional building permit highlights •Seasonally adjusted total building permit values in the Abbotsford census metropolitan area fell 28% to $6.5 million in October 2014 compared to $9 million in September 2014.

•N o n-r e s i d e n t i a l p e r m i t s dropped 9% to $2.4 million from $2.6 million.

•Residential building permits fell 35% to $4.1 million from $6.4 million.

•Total building permit values in Abbotsford were 16% higher to $160 million in the first 10 months of 2014 compared to $137.1 million in the same period last year.

•Non-residential permits were up 41% at $73.9 million.

•Residential permits were up 3% to $75.5 million.

•Total building permit values jumped 109% in the Lower Mainland-Southwest region to $1.22 billion in October 2014 compared to $585.8 million in September 2014, setting a new record high for the region. •