Construction Economist Journal - Winter 2016

CONSTRUCTION ECONOMIST WINTER 2016

The Journal of the Canadian Institute of Quantity Surveyors Le Journal de l’Institut canadien des économistes en construction

FEATURE:

Are you a

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lifeguard or swimmer?

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4 | CONSTRUCTION ECONOMIST | www.ciqs.org | Winter 2016

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CONSTRUCTION ECONOMIST WINTER 2016

The mission of CIQS is to promote and advance professional quantity surveying and construction estimating; to establish and maintain national standards; to recruit, educate and support our members.

Canadian Institute of Quantity Surveyors

90 Nolan Court, Unit 19, Markham, ON L3R 4L9 t. 905/477.0008 f. 905/477.6774 toll free. +1 866/345.1168 e. info@ciqs.org www.ciqs.org

Executive Director Sheila Lennon, CAE.................... . . . . . . execdir@ciqs.org Editor Arif Ghaffur, PQS. . ...................... . . . . . . editor@ciqs.org Send Change of Address to: Canadian Institute of Quantity Surveyors 90 Nolan Court, Unit 19, Markham, Ontario L3R 4L9

The Journal of the Canadian Institute of Quantity Surveyors Le Journal de l’Institut canadien des économistes en construction

Features Dave Burns inducted into CEEC Board . . . . . . . . . . . . . 15 PQS Future leader – Melissa Trautmann. . . . . . . . . . . . 17 PAQS 2017 Conference . . . . . . . . . . . . . . . . . . . . . . 18 Member interview – Angela Lai. . . . . . . . . . . . . . . . . 20 2017 construction forecast for Prairies . . . . . . . . . . . 22

CIQS Board Chair: Matthew K. Weber, PQS(F)

18

Vice Chair and Secretary/Treasurer: David Dooks, PQS Past Chair: Craig Bye, PQS(F) Registrar and CIQS – Prairies and NWT Rep: Wendy Hobbs, PQS CIQS – British Columbia Rep: Angela Lai, PQS CIQS – Maritimes Rep: Erin Brownlow, PQS CIQS – Newfoundland and Labrador Rep: Royston Lewis, PQS(F) CIQS – Ontario Rep: Sheri Thompson, PQS CIQS – Quebec Rep: Guillaume Robitaille, PQS Education Administrator: David Lai, PQS(F)

Statements of fact and opinion contained within this journal are those of the authors, including subject matter experts. CIQS assumes no responsibility or liability for the content of such fact and opinion, nor do they represent the official policy of CIQS. Published four times a year on behalf of the Canadian Institute of Quantity Surveyors by

Corners 10

Chair’s Message. . . . . . . . . . . . . . . . .

6

. . . . . . . . . . . . . . . . . . . 14

Executive Director’s Message. . . . . . .

8

25

Editor’s Message . . . . . . . . . . . . . . . .

9

Professional Sustainability Corner. . .

CPD Corner

Messages

Legal Corner. . . . . . . . . . . . . . . . . . .

Third Floor - 2020 Portage Avenue Winnipeg, Manitoba R3J 0K4 Tel: 866-985-9780 Fax: 866-985-9799 info@kelman.ca www.kelman.ca Managing Editor. ....................... . . . . Chris Kelman Art Design/Production.............. . . . . . Kristy Unrau Advertising Coordinator...... Stefanie Hagidiakow Marketing Manager. ................... . . . . . . . . Jeff Kutny jeff@kelman.ca 866-985-9789 Publication Mails Agreement #40065075 Send undeliverable addresses to: lauren@kelman.ca

OUR CONCERN FOR THE ENVIRONMENT IS MORE THAN JUST TALK This document is printed on paper certified to the standards of the Forest Stewardship Council® (FSC®).

Chair’s Message

Merry Christmas and Happy Holidays!

I

would like to begin by wishing everyone a happy holiday season!

2016 has been a whirlwind from the perspective of the CIQS, as I imagine it has been for many of you.

Most notably, we bade adieu to our matriarch Lois Metcalfe, and welcomed our new executive director Sheila Lennon. Our new ‘Explore CIQS’ video series was released in September, drawing more attention to the work we do. Many productive board meetings have helped us chart a path for the next five years, a path that will ensure growth and prosperity for the Institute and our profession. Planning and organizing for the 2017 PAQS Congress is in full swing as we promote our profession across Canada and around the globe.

At the same time, the Construction Economist magazine has gone through a major transformation through the leadership and hard work of Arif Ghaffur.

For the benefit of our designation holders, I am happy to report that our financials are in order and that ongoing costs of marketing and upcoming initiatives will be balanced by current membership fees. Membership continues to grow, especially internationally where we have seen significant increases in our membership at large. This is a clear indication of our international reach and recognition. We are excited to see that our profession is growing as rapidly as the industry we advise.

In light of this, I want to dedicate the rest of my message to something I believe we cannot ignore. It is simultaneously a grave concern and an extraordinary opportunity.

Globally, the total output of the construction market in 2015 was $8 trillion. By 2025, this will grow to $15 trillion, fueled mainly by

Matt Weber, PQS(F)

We are excited to see that our profession is growing as rapidly as the industry we advise. development in Asia and North America. Canada is one of seven countries accounting for 72% of this growth. By 2050, 6.3 billion people will live in cities, an increase of more than 60% from the current urban population of 3.9 billion.

Furthermore, this massive shift comes at an unprecedented time in human history with respect to our environment. Whatever the causes, the consequences of global climate change are real, observable, and increasing in severity and scope.

Now, more than ever, sustainability must be at the heart of every stage in a project’s life cycle. We know this will take time and effort, and we are ready to help. Noting recent major political developments, I believe there is an opportunity for the CIQS to make a measurable difference. As construction economists, we advise on the majority of the world’s wealth. But the quantity surveyor’s role in the construction process affects much more than the budget – our recommendations have a direct impact on the quality of people’s lives for years to come.

We are all connected.

This will be the focus of the next PAQS congress. It will dovetail into a special, three-day conference titled, “Green Developments: The New Era”, where all aspects of sustainable development will be explored. David Suzuki and Sarika Cullis-Suzuki will speak to the urgency with which this must be undertaken,

6 | CONSTRUCTION ECONOMIST | www.ciqs.org | Winter 2016

while industry experts will present solutions and demonstrate emerging technologies, many of which are already in practice around the world.

Drawing heavily from the City of Vancouver’s Greenest City Action Plan, the conference will show that not only is a renewable city good for the planet, it makes economic sense as well.

The conference will be attended by representatives from various sectors of the construction industry, from lenders and developers to consultants and builders. It is a fantastic opportunity for us to promote our profession directly to our most relevant audience.

Under our marketing slogan, “Quantity Surveyors: Canada’s Construction Economists”, the PAQS2017 congress will usher in a new era of development for a rapidly changing world, in which our profession is universally recognized as a vital part of every project.

The PAQS2017 Congress and Green Developments: The New Era conference will be held in Vancouver at the Westin Bayshore Hotel, from July 21–26, 2017. We promise it will be an exciting, information-packed, star-studded and fun event – not your typical industry conference! I strongly urge you all to attend and sponsor.

Thank you for reading this, and I wish you the best of times during the holiday season. We look forward to an amazing 2017.

Merry Christmas and Happy Holidays!

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Message du Président du Conseil

Joyeuses fêtes et bonne année!

J

’aimerais commencer par vous souhaiter un joyeux temps des fêtes!

2016 fut une année mouvementée pour l’ICÉC, comme pour plusieurs d’entre vous. En premier lieu, nous avons dit adieu à notre matriarche, Lois Matcalfe et nous avons accueilli notre nouvelle directrice générale, Sheila Lennon.

Le lancement de notre nouvelle série vidéo intitulée « Explorer l’ICÉC » en septembre, attirant davantage l’attention sur le travail que nous faisons. Le Conseil a tenu plusieurs réunions productives qui ont permis de définir une feuille de route pour les cinq prochaines années; Une route qui assurera la croissance et la prospérité de l’Institut et de notre profession.

La planification et l’organisation du Congrès PAQS 2017 bat son plein alors que nous faisons la promotion de notre profession partout au Canada et à travers le monde.

En même temps, la revue Construction Economist a subi une transformation majeure grâce grâce au leadership et au travail acharné d’Arif Ghaffur.

Je suis heureux de vous annoncer que nos finances sont en ordre et que les coûts récurrents du marketing et les initiatives à venir seront équilibrés par les cotisations des membres, et ce, au profit des détenteurs de désignations. Le nombre d’adhésions est continuellement en croissance, surtout à l’international où nous avons perçu une augmentation importante dans l’adhésion de nouveaux membres résidants à l’extérieur du Canada. Cela démontre clairement l’impact de notre portée internationale et notre reconnaissance.

Nous sommes excités de voir que notre profession grandit aussi rapidement que l’industrie qui bénéficie de nos conseils.

Dans cette optique, je souhaite dédier le reste de mon message à un sujet dont, je crois, nous ne pouvons pas ignorer.

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C’est une inquiétude importante autant qu’une opportunité extraordinaire.

Mondialement, la production totale du marché de la construction en 2015 était de huit billions de dollars. D’ici 2025, ce chiffre augmentera à quinze billions, principalement alimenté par les marchés de l’Asie et l’Amérique du Nord.

Le Canada fait parti des sept pays qui sont responsables de soixante-douze pour cent de cette croissance. D’ici 2050, 6.3 milliards de personnes vivront en milieu urbain, ce qui représente une augmentation de plus de soixante pour cent de la population urbaine actuelle qui s’élève à 3.9 milliards de personnes.

Par ailleurs, cette transition majeure survient à un moment sans précédent dans l’histoire de l’humanité en ce qui concerne l’environnement. Quelles que soient les causes, les conséquences des changements climatiques à l’échelle mondiale sont réelles, observables et augmentent autant en gravité qu’en ampleur. Maintenant plus que jamais, la durabilité doit être au cœur de chaque étape du cycle de vie d’un projet. Nous savons que ceci demandera du temps et de l’effort, mais nous sommes prêts à aider. Suite à des développements politiques majeurs, je crois qu’une opportunité se présente à l’ICÉC afin de réaliser une différence mesurable.

En tant qu’économistes de la construction, nous conseillons la majorité de la richesse du monde. Par contre, notre rôle dans le processus de la construction n’affecte pas seulement le budget – nos recommandations ont un impact direct et significatif sur la qualité de vie des gens et ce, pour des années à venir. Nous sommes tous liés les uns aux autres.

Ce sujet sera le thème du prochain Congrès PAQS. Il sera traité lors d’une conférence spéciale de trois jours qui s’intitule « Green Developments:

The New Era », où tous les aspects du développement durable seront explorés.

David Suzuki et Sarika Cullis-Suzuki prendront la parole sur l’urgence de cette situation tandis que des experts de l’industrie présenteront des solutions et feront la démonstration de nouvelles technologies qui sont déjà utilisées à travers le monde. S’inspirant fortement de Greenest City Action Plan de la ville de Vancouver, la conférence va démontrer qu’une ville renouvelable n’est pas seulement bénéfique pour la planète, mais que cela a également un sens économique.

Des représentants de divers secteurs de l’industrie de la construction seront présents à la conférence, incluant des bailleurs, des promoteurs, des consultants et des entrepreneurs.

C’est une merveilleuse opportunité pour nous de promouvoir notre profession directement aux acteurs les plus pertinents. Sous le slogan de « Quantity Surveyors: Canada’s Construction Economists », le Congrès PAQS 2017 marquera le début d’une nouvelle ère de développement dans un monde en rapide mutation, dans lequel notre profession est reconnue comme un élément essentiel pour chaque projet.

Le Congrès PAQS 2017 et la conférence Green Developments: The New Era auront lieu à Vancouver à l’hôtel Westin Bayshore du 21 au 26 juillet 2017. Nous vous promettons un événement excitant, amusant, prestigieux et regorgeant d’information; Certainement pas une conférence typique comme les autres! Je vous exhorte vivement d’y assister et d’en faire la promotion.

Je vous remercie d’avoir lu ce mot et vous souhaite un merveilleux temps des fêtes. Nous anticipons une année 2017 extraordinaire.

Joyeuses fêtes et bonne année!

Winter 2016 | www.ciqs.org | CONSTRUCTION ECONOMIST | 7

Executive Director’s Message

2016 year in review

I

t has been an eventful year for the CIQS staff, Board and Affiliates, with leadership changes, a new promotional series, growth in number of Designations Holders and international representation on several committees. Eighty-one individuals received their PQS designation and 94 received their CEC designation (including reinstatements). Congratulations again on your accomplishment.

The CIQS is well represented on several international committees, including ICEC (International Cost Engineering Council), CEEC (European Committee of Construction Economists) and ICMS (International Cost Measurements Standard). There has been a lot of activity this year for the ICMS, a non‑profit committee that aims to bring about consistency of construction cost reporting standards, internationally.

The CIQS is represented at the ICMS table by: Craig Bye, PQS(F) as Trustee and Secretary; Ian Duncan, PQS (F), Trustee for PAQS; Roy Howes, PQS(F), ICMS SSC (Standards Setting Committee) Member; and Mark Gardin, PQS(F), SSC Member. ICMS has just launched the

public consultation on the draft standard.

All stakeholders in the construction and infrastructure sectors can comment on the draft standard by visiting www.icms‑coalition.org/consultation.

Congress 2016, hosted by the CIQS – Ontario, was a very successful and well-attended event. At Congress, the leadership of CIQS changed with Matthew Weber, PQS(F) introduced as the new Chair of the CIQS and me as the new Executive Director. Lois Metcalfe was honoured in her retirement and her long service was celebrated at this event.

The Affiliates have been busy again this year, planning events for their members; they look forward to providing you with new CPD opportunities in 2017. Stay tuned for messages from your Affiliate on upcoming learning and networking events.

As part of the CIQS marketing plan, a promotional video series was introduced in the fall. With these videos and the platforms used to promote them, the CIQS hopes to attract brand awareness, youth to the profession and to provide a better understanding of what a quantity surveyor is. There are more videos to come in 2017!

8 | CONSTRUCTION ECONOMIST | www.ciqs.org | Winter 2016

Sheila Lennon, CAE

2016 also said goodbye to some of our long standing Designation Holders.

We pause for a moment to remember those that we lost this year, including: W. John Porter, PQS; Arthur W. Hooker, PQS(F); and Allan Joyce, PQS. Finally, I would like to say thank you to all of our volunteers who participated at the National, Affiliate and Chapter levels. Our volunteers are a valuable resource of the Institute and we appreciate your time and hard work. I would also like to say thank you to our Designation Holders for your continued support and commitment to the CIQS. Housekeeping notes: • The CIQS National Office will be closed for the holidays from December 23, 2016 to January 2, 2017 inclusive.

• PAQS2017 Congress registration and Call for Papers will launch in January 2017.

Happy Holidays from the CIQS National team: Sophie, Aliya, Patrice and myself. We wish you and your families all the best at this special time of year.

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Editor’s Message

Arif Ghaffur, PQS

A

Construction spending update

s we headed into 2016, the federal election in 2015 had brought much debate and even more emotion about upcoming spending, surpluses and deficits. The economic thematic was how the income classes would be affected, jobs created and how Canada’s economy would grow as a result of increased investments.

Today, the Canadian construction industry is still wondering what it all means from a future workload perspective, after the incoming government rejected austerity and committed to spend billions, including substantial multi-year infrastructure projects required to be delivered right across Canada.

However, the reality of the time required to get such projects off the ground has sunk in, as the overall start has been slow for infrastructure projects such as public transit, social infrastructure and green infrastructure. Therefore, the ferocity of the predicted growth of construction well into 2017 and beyond has been somewhat delayed.

This delay has not been for lack of effort on the part of provincial/territorial agencies, which have championed the public/private partnership procurement model for infrastructure, rather the ability to diligently process the volume of concurrent projects through the pipeline of procurement, in order to meet the government’s commitment to nearly double federal infrastructure investment to almost $125 billion, over the next decade.

This increased spending was expected to directly influence the amount of work being carried out by the construction industry, with the potential to create opportunities for construction trades and professionals across various sectors in Canada, and having a positive impact CLICK HERE to return to Table of Contents

upon resources from the slower sectors such as mining and energy.

Many professionals, such as Estimators and Quantity Surveyors, including those in affected regions such as western Canada, optimistically await the full benefits of further economic stimulus, so that they can use their expertise in expediting the delivery of these new initiatives.

It is significant to note that two important pipeline projects for exporting crude from Alberta’s oil sands have been approved by the government. This includes the addition of an extra pipeline along the route of the existing Trans Mountain system from Alberta to the port of Vancouver. Also approved is the proposed upgrade of Line 3, a pipeline running from Alberta into the United States.

The CAD6.8B Trans Mountain expansion is expected to create 15,000 new jobs during construction, while the CAD4.8B Canadian section of the Line 3 replacement is expected to create a further 7,000 jobs. As a fellow professional recently said to me, “…it is taking time – but there is more coming in the way of major projects; be patient.” This is good news for companies operating in the oil sands, as a shortage of pipeline export capacity out of Alberta had been starting to emerge as a constraint on output

growth, and the new routes will make more production viable.

Augmenting the above is the ongoing government support of the public/private partnership procurement model for infrastructure, which is yielding much optimism in terms of emerging projects in the infrastructure sector. This model is now being used in most provinces with increasing frequency and continues to be further successfully expounded.

I could not possibly close my update without a reminder about the PAQS2017 Congress, the thematic of which Green Developments: The New Era is being championed by the visionary Chair of the CIQS, Matthew K. Weber, PQS(F).

In my view, this is going to be a huge success―please do not forget to register and sponsor. The Congress will be held in Vancouver at the Westin Bayshore Hotel from July 21–26, 2017.

Finally, I thank you for your support and contribution to the Construction Economist. I also extend sincere greetings to you and your families for the forthcoming holiday period and a very happy New Year. If you have feedback, suggestions and of course any articles that you would like to be considered for publication, please email: editor@ciqs.org.

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Winter 2016 | www.ciqs.org | CONSTRUCTION ECONOMIST | 9

Professional Sustainability Corner

Lifeguard or Swimmer?

Craig Woodall

As leaders we have many responsibilities, this series of articles (which started in the Winter 2015 edition) has delved into some of the challenges that we face as leaders including communication and dealing with change.

There is however one ultimate responsibility of being a leader, more important than any other, and that is to create a leadership legacy, a generation of leaders to continue the journey that we have been a part of.

The task of a leader is to get people from where they are to where they have not been.

- Henry Kissinger

So to the question in the title: are you a swimmer or a lifeguard? Throughout my career I have had the pleasure of partnering with many organizations and you can usually tell within minutes of being in their company whether they are creating Leadership Legacy or just struggling through another day. I use the analogy of a swimming pool as I

believe it is a perfect representation of the dynamics in most professional workplaces. Sometimes I walk into the pool area and I see the most mature and competent swimmers in the deep end, confidently swimming back and forth and occasionally exiting the water to climb the high board to demonstrate their diving prowess. Sitting on the pool

10 | CONSTRUCTION ECONOMIST | www.ciqs.org | Winter 2016

deck you will see more junior, less experienced swimmers, all dressed for swimming with bathing suits and goggles but they are bone dry.

There may even be a few paddling in the shallow end but the rope across the center of the pool clearly defines their limits and restricts their movements.

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Performance Management is an ongoing process. It involves coaching, mentoring and continuous conversations. Engaged employees are the key to a successful business.

I have also visited a different kind of pool, one where the most senior and competent swimmers are not actually in the water, they are patrolling the edge of the pool while the new swimmers experience deep water.

These lifeguards are there to offer words of encouragement, to coach and teach skills so that when they leave they are confident that those left in the pool are capable swimmers, maybe more capable than they ever were. Every so often a new swimmer will get into trouble; the lifeguards are there to jump in when necessary but they rarely have to as their mere presence is often enough to help the swimmers get comfortable with being uncomfortable.

So, in which kind of swimming pool do you work? When your swimming days are behind you, will the pool be empty or will you have created a legacy of which you can be proud? This article is therefore dedicated to lifeguard training, what are the things that we can work on that will help create the Leadership Legacy to which we aspire.

Lifeguard Tip #1 - Recruitment Hiring well is a skill, one to which we rarely dedicate enough time. We typically hire in times of urgent need, which clouds our vision – and then our focus is typically on who can do this particular job, today. While most businesses go through cycles, the construction industry is one of the worst for sudden hiring needs. It is tough to change this. We will always have times when we are under-resourced and project needs dictate immediate hiring; however, the best leaders maintain a focus on finding CLICK HERE to return to Table of Contents

good people all the time. They never turn down an opportunity to meet an interesting candidate, and they always look past the obvious checklist items of education, experience etc. Some of the best hires that I have ever made would not have passed traditional screening processes. When meeting potential candidates, instead of asking myself, “Could they do Job A?”, I question what it is that they could do for the organization, what opportunities could open up if their unique combination of skills and attributes were to exist in our organization. Sometimes this can lead to uncomfortable decisions, as it may well be that we have to create room within the organization for them – as leaders, that is our responsibility. The lesson here is that we should stop hiring just to fill vacant seats. Instead, we should be constantly evaluating whether we have the right seats, and always be open to introducing a new one.

Lifeguard Tip #2 - Delegation One thing that most of us struggle with is delegating. The struggle gets worse when we get promoted into a new position, maybe stepping up to a leadership role for the first time. Our ego and fears convince us that, if we stop doing what we are good at, (the very thing that got us recognized in the first place), then we will no longer be adding value and we will become obsolete. Our role as leaders is not to do everything and be everything, it is to lead others to achieve great things. Until we can control our fears and become comfortable with the

fact that standing in the wings and watching others succeed can be far more rewarding than actually completing everything ourselves, then delegation will continue to be a challenge. Some tips to help you as you improve your delegation skills: • Before starting any task, take 20 seconds to challenge yourself: Why are you doing it? Who else could do it?

Whom else could I teach to do it?

• Meet with your direct-reports, peers and supervisors. Ask them what they are capable of taking off your plate. You may well be surprised at their response.

• Delegate in all directions.

Traditionally we view delegation as the art of passing work to those who report to us. Start to view it as the act of ensuring that tasks are completed by the most appropriate person for the benefit of the enterprise.

When you have decided that the only person who can complete a task is you, just double check that you did not just make an excuse or rationalization to justify your fears. We all do it – and more often than we would like to admit.

Lifeguard Tip #3 Performance Management Regardless of your views on the ‘Annual Performance Review’ the one thing that I am confident about is that it gives us the perfect excuse to convince ourselves that we are managing performance and developing our people. Real performance management is about so much more than performance reviews. Relying on one, 60-minute conversation that occurs on an annual basis just before year end, is the equivalent of sending your kids to school for half a day per year, and then being surprised when they did not learn too much. Performance Management is an ongoing process. It involves coaching, mentoring and continuous conversations.

Engaged employees are the key to a successful business. We should all strive to be leaders who inspire and engage with our people. I often hear the excuse,

Winter 2016 | www.ciqs.org | CONSTRUCTION ECONOMIST | 11

Professional Sustainability Corner

Hiring well is a skill, one to which we rarely dedicate enough time.

“I don’t have time to do my job, now you want me to chat with all my staff.”

Next time you hear yourself saying, “I don’t have time,” just remember that we all have exactly the same amount of time, 86,400 seconds per day.

The actual excuse that you should use is, “I am choosing to spend my time doing something else instead.” Rephrasing in this more accurate way may make you stop and challenge yourself. Taking five minutes to check in on a peer or employee is not wasted time; it is part of being a leader. We can all find five minutes to go and make a coffee – are you prepared to take five minutes today to have a positive impact on someone around you?

a commitment, one that many are not ready or willing to make. The great leaders of our time all understand that Self-Awareness is a journey not a destination; you never actually ‘get there’. It is about having a clear perception of yourself, which includes your strengths, weaknesses, values, beliefs, motivators and fears. The more self-aware you become, the more likely you are to be able to relate to others and see how they relate to each other.

There are many books written on the subject; I highly recommend reading some and opening your mind to the fact that your view of yourself may not be accurate and your fears may not be valid.

Lifeguard Tip #4 - Self Awareness A truly self-aware leader is comfortable standing on the pool deck and watching others swim, hoping that they become better swimmers than he or she ever was. Unfortunately, it is not possible to buy Self Awareness. It does not come in a box and you cannot learn it at university. To become self-aware takes

Lifeguard Tip #5 - Embrace ‘Different’ For our organizations to grow and develop, we must accept that the future will be different from the past. In the past few years there has been a lot of talk about Millennials entering the work force. I hear about how they have a different work ethic, expect to have a life balance, use social media all the time, form relationships differently, etc. Basically, this says far more about our own personal fears than it does about the next generation. If you go back 30 years, the Baby Boomers had exactly the same fears about Gen X; it is a pattern that will keep repeating itself. We convince ourselves that, after thousands of years of evolution, our generation finally got it right and it does not need tinkering with anymore.

That is of course a path to decline, but we have to get ourselves out of the trap. To do that, I suggest that we all, myself included, start referring to the next generation as the ‘evolving generation’ and get on board with them. Those of us who expect them to change and become us, will, I fear, be sadly disappointed.

We convince ourselves that, after thousands of years of evolution, our generation finally got it right and it does not need tinkering with anymore.

12 | CONSTRUCTION ECONOMIST | www.ciqs.org | Winter 2016

Lifeguard Tip #6 - Gratitude We can all identify those individuals in our lives who have made a difference.

It could be your first boss, a great teacher or family friend. When did you last thank them for the impact that they had in shaping your path? I highly recommend that you find them and do just that; it is very rewarding for both parties. On that same note, in 30 years’ time, when you have retired and you receive a note from someone whom you mentored in their early career, what do you want it to say?

How do you want them to remember you, and what lasting impact do you want to have had? There are many more steps to becoming a great leader.

I am sure you have your own Lifeguard Tips that you could add to this list. It is also important to remember that we all have a responsibility to help develop those around us. It is not just up to the CEO and senior leaders, regardless of our positions in the organization, there is always someone whom we can coach, mentor and support. Next time you feel that you are just treading water and are in over your head ask yourself a simple question – should I even be in the pool?

About the author Craig Woodall is the President and Owner of Byng Leadership Inc. He has over 25 years of experience leading teams, projects, organizations and individuals. His passion is Leadership Development, helping people and organizations grow by maximizing their leadership potential.

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Are you an aspiring Estimating Professional/Professional Quantity Surveyor?

Education Policy Guidance Notes Recent Graduate, Associate, Mature Candidate or Direct Finalists are encouraged to review their current membership status to establish if it is time to progress towards Construction Estimator Certified (CEC) and Professional Quantity Surveyor (PQS) status.

The CIQS is pleased to confirm the implementation of the Education Policy Guidance Notes which confirm that the requirements for becoming a CEC and PQS have been streamlined since Fall 2015 in an attempt to assist aspiring professionals to achieve these much sought after professional designations.

For more information, please visit the CIQS website www.ciqs.org. The new Education Policy Guidance Notes are located in the ‘Members Only’ section (members must log-in to gain access) under the ‘Education’ tab (drop down menu will have ‘Policy Guidance Notes’).

Using the correct designation?

Acceptable designations:

Ⅴ Professional Quantity Surveyor or PQS Ⅴ Construction Estimator Certified or CEC Ⅴ Économistes en Construction Agréé or ECA Ⅴ Estimateur en Construction Certifié or ECC Ⅴ Professional Quantity Surveyor (Fellow) or PQS(F) Ⅴ Économistes en Construction Agréé(F) or ECA(F)

Unacceptable designations:

X PQS (In training) X PQS (R) X PQS (Intern)

X MCIQS X AQS X ACIQS

Use your correct designation with pride.

You have earned it!

Below is a list of acceptable (provided that you are a member of CIQS and in good standing) and unacceptable designations.

QSM

MECHANICAL AND ELECTRICAL COST CONSULTING

Opportunties in Real Estate Development Management Loan Monitoring - on behalf of lender Construction Cost Estimating Cost Consulting

Dennis M. Smith PQS

Mechanical & Electrical Services

dennis@qsmcon.ca www.qsmcon.ca

416-949-8540 OFFICE 905-649-8540 CELL

Let QSM bring its experience to your next project!

CLICK HERE to return to Table of Contents Finnegn Marshall Press Advert.indd 2

22/11/2016 00:42

Winter 2016 | www.ciqs.org | CONSTRUCTION ECONOMIST | 13

CPD Corner

Start change at your regional level How wonderful it is that nobody need wait a single moment before starting to improve the world. ~Anne Frank

I

t may seem like a daunting task to take on large scale global changes. Heck, even nationally it can present a challenge. But if we look to volunteer or to donate locally while keeping in mind how it affects the province, the country or, yes, the world, it becomes a much more manageable task.

Do you want to see changes to the national board of CIQS? Start with your regional board. Attend the meetings, volunteer to organize events, write letters, etc. Usually, the people living within a region can better speak to the needs of that region. Do you have ideas for a conference, tour or speaker that would resonate in your region? Volunteer! Do you see a need for operational changes? Become a local chapter member!

The people living within a region can better speak to the needs of that region.

AN UNDERSTANDING OF DEVELOPMENT IN BC LIKE NO OTHER We help our clients get the most from their investments — because we know investment can pay off. We use the same principle in our own philosophy, investing heavily in the right people, equipment, and software to deliver the best service possible. But what really sets us apart is our in-depth knowledge of real estate development in British Columbia. Our focus has allowed us to gain unparalleled knowledge of our region — and our clients know it.

HAVE YOU GOT WHAT IT TAKES? We are currently accepting applications from qualified individuals at senior and intermediate level with experience in cost planning and loan monitoring. Send your resume and cover letter to: info@conecon.ca

ConEcon Consultants Inc. Suite 201, 7857 - 6th Street, Burnaby, BC V3N 3N4 Tel: 604.522.8970 www.conecon.ca COST MANAGEMENT • LOAN MONITORING • PROJECT MANAGEMENT SUPPORT

14 | CONSTRUCTION ECONOMIST | www.ciqs.org | Winter 2016

Wendy Hobbs, PQS

Change is a constant in this very fastmoving world. It takes everyone working at all levels to ensure that we are not left behind. Volunteering at a local level ensures that we are looking at change at micro and macro levels. It also ensures that our solutions to any problems that arise come from all levels of our Designation Holders.

‘Think globally; act locally’ may seem like a platitude, but it is often the best way to not just effect change, but to feel like you have done your best for yourself and those around you. We need invested members at all levels. Now could be the time for you to change our organization for the best. So get involved with your local chapter and earn CPD points while you change the world!

About the author Wendy is a professional quantity surveyor with experience across all sectors of construction in construction loan monitoring, cost consulting, and risk management.

During her office duties she was involved in a wide range of complex projects of values exceeding $100 million. Wendy has been a guest lecturer in construction financing and quantity surveying at SAIT Polytechnic and the University of Calgary. This experience reawakened the joy of teaching and led her to join the instructional team at SAIT’s School of Construction.

She sits on the Board of Directors for the Canadian Institute of Quantity Surveyors – Prairies and Northwest Territories, as President. She also sits on the national board as the Prairies and Northwest Territories representative, CPD Director and as Registrar.

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DAVE BURNS inducted into CEEC Earlier this fall, the CEEC (European Committee of Construction Economists) held its 74th General Assembly meeting from October 27–29, in Copenhagen, Denmark. This recurring bi-annual meeting assembles the leading QS delegates from each of the participating European continental nations, and the CEEC has traditionally invited the CIQS to participate as an observing delegate.

During the October 29 session, a motion was raised by the General Secretary, seconded by Executive Counsel and unanimously approved by the members, to formally induct CIQS member and Past CIQS National Chair (2015-16) Dave Burns, PQS(F) onto the CEEC Board as an Honorary Member.

In the past, Dave has actively worked with a number of international

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BOARD

professional bodies including the ICEC, PAQS and the CEEC, while representing Canada as the CIQS National Delegate/ Representative. In his acceptance speech, Dave said: “…I am truly honoured and overwhelmed by this unexpected appointment. I thank you for your consideration and accept your nomination. I will endeavour to continue sharing my viewpoints from a Canadian perspective and acting in the interests of all Quantity Surveyors practising worldwide for the betterment of our professional role.”

Through this direct and special motion, Dave has become the first non-European national to have received this prestigious appointment. The CEEC’s endorsed motion serves to honour the integrity

and respect that International QS bodies hold for CIQS professionals, in addition to recognising the history of Dave’s personal contributions.

Dave Burns, PQS(F) accepting his CEEC nomination from Tarmo Savolainen, President of CEEC, in Copenhagen, Denmark on October 29, 2016.

Winter 2016 | www.ciqs.org | CONSTRUCTION ECONOMIST | 15

:

PROFESSIONAL QUANTIT Y SURVE YORS

FUTURE LEADER I

was not always so sure of my career path and goals. In fact, when I graduated from high school, like many students I had no idea where life was going to take me, so I enrolled in a General Arts and Science Program at Mohawk College hoping that a program would stand out to me. One day, my path became clear and I decided that I wanted pursue Architecture and I enrolled in the Architectural Technology program.

This led me to completion and graduation from my program, and it was time to start my career and use the new skills I had learned. I saw a posting for a junior cost consultant at a local company and thought, “Why not?” So I applied and was hired by Hanscomb.

At the start, I had no idea that quantity surveying was a potential career path nor did I know the difference it was about to make to my ambitions and career goals.

“AS AN ASPIRING FEMALE IN THE INDUSTRY, I FOUND IT TO BE TREMENDOUSLY EMPOWERING TO WORK ALONGSIDE SUCH A COMMANDING FORCE.” My four years at College equipped me with the structural and architectural knowledge to excel in this industry but my technical skills would only carry me so far so, in my second year at college, I became involved with the Mohawk Students Association as the Technology Director. These roles allowed me to work with all of the technology students at Mohawk, hear their needs and requests and implement them accordingly by becoming a leader, mentor and further developing my communications skills. After my year on the board as a Director, I returned for a second term as Speaker and Chair. My new roles were to lead board meetings, keep order and allow all members a chance to speak. My time with the Mohawk Students Association prepared me for aspects of business and the industry that I would not have gained through my technical studies alone.

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I will never forget my first day at Hanscomb. I was asked to measure partitions/walls and count doors for a hospital renovation. The following weeks were more of the same: measuring, counting and calculating, until one day I started to really grasp the reason and process of the cost consultant.

Estimating is not only counting the walls and doors but anticipating construction when it is not shown on the drawings or plans. It is also expanding your knowledge across various disciplines.

Since my early days of counting and measuring, I have been a part of various projects, spanning various sectors – master planning, loan monitoring and cost control.

Now that I had found my career path and a direction, a new exciting moment was witnessing a woman commanding

MELISSA TRAUTMANN, PQS Cost Consultant, Hanscomb Limited a high-power position in my company.

As an aspiring female in the industry, I found it to be tremendously empowering to work alongside such a commanding force. Susan Neil became my mentor, just as I had been a mentor to the technology students of Mohawk College.

For the first time, I thought to myself, “I can, and want, do that too.” I had found my next goal and path.

I have continued to learn and grow as a young professional in this industry and hope one day to be sitting in an executive position. When I look back to my early days at Mohawk, I would have never thought that I would be a cost consultant with a professional quantity surveyors designation and working with such an amazing company.

Winter 2016 | www.ciqs.org | CONSTRUCTION ECONOMIST | 17

INTERNATIONAL SUSTAINABLE

DEVELOPMENT CONFERENCE

JULY 24–26, 2017 KEYNOTE SPEAKERS INCLUDE:

David Suzuki & Sarika Cullis-Suzuki

NOT YOUR AVERAGE INDUSTRY CONFERENCE… The annual PAQS Congress will dovetail into a special three-day event which will feature some of the world’s leading champions and innovators of green building technology. With many presenters from different areas of the industry, keynote speakers from top experts in the field, breakout sessions and an exciting competition where innovators of emerging green technology will present their products to industry executives, this is a jam-packed three days that will showcase the best of the best in green technology for the construction industry. Numerous breakout sessions and many social outings including a cocktail reception, elegant gala dinner, live music and entertainment and motivational speakers make this an event not to be missed. Definitely not your average industry conference. Registration and Call for Abstracts will be launching in January 2017.

VANCOUVER: WORLD’S GREENEST CITY Vancouver aims to become the greenest city in the world by 2020. That’s just three years away, and things are heating up. As a global hub of clean technology, Vancouver is home to some of the best and brightest green initiatives shaping the future of industry. The City of Vancouver’s Greenest City Action Plan comprises ten achievable goals in a variety of disciplines with the common objective of pushing Vancouver to the forefront of clean cities.

This will have a huge impact on the construction industry. When it comes to green buildings, the goals of the GCAP are clear: to reduce greenhouse gas emissions from existing buildings by 20% over 2007 levels by 2020, and up to 90% of these levels by 2025. All buildings constructed from 2020 onward will be carbon neutral in operations; by 2030, all new buildings will be zero emissions. Change is coming, and fast. If you’re involved in construction in any capacity, the Green Developments: The New Era conference will arm you with the right resources and connections to help guide your company through the turbulent times ahead.

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PRESENTED BY

MEMBER INTERVIEW

Angela Denice Lai FRICS, PQS, LEED AP O+M How did you start your career in Quantity Surveying?

I actually started off studying architecture before I realised that I enjoyed the mathematical, contracts and business electives of the course far more than the design courses. Also, you had to think, sleep and eat design to get the creative juices flowing and my fellow students used to live in the studio (literally) to complete designs. Hence, for my sanity, I changed to a more conservative course that more suited my natural abilities – Quantity Surveying.

Once I completed my degree, I decided to go down an academic route and was appointed as a lecturer within the School of Construction Economics and Management at the University of Witwatersrand in Johannesburg, South Africa lecturing both Quantity Surveying and Construction Management courses. Concurrent with my lecturing role, I completed a Masters in Property Development and Management.

My first stint in industry was with Davis Langdon in London, UK (now AECOM), where I worked as a cost manager specializing in tall office buildings before diversifying and changing to Management Consulting in the areas of Sustainability and Asset Strategy (Life Cycle and Facilities Management Costing). However, I never lost touch with my academic roots and continued teaching on a part-time basis at London South Bank University, UK and now teaching at BCIT. What is your current career role and responsibilities?

I am currently with Turner & Townsend, leading the loan monitoring service line for the Vancouver office. My role includes business development and day-to-day delivery of projects, and client interface. I am also involved in specialist services commissions such as life-cycle models and P3 benchmarking reports.

Who has been the biggest influence on your career?

I cannot pinpoint one particular person who has been the biggest influence; however, I can say that throughout my career I have worked with some of the best quantity surveyors in the world from whose experience and knowledge I have been able to draw and emulate.

Has there been a particular project or mandate that you would like to tell us about?

In my ten years working in London, I was fortunate to work on the Shard of Glass at London Bridge station which is a 310m high, mixed use building involved in both the pre- and 20 | CONSTRUCTION ECONOMIST | www.ciqs.org | Winter 2016

Angela Denice Lai

I actually started off studying architecture before I realised that I enjoyed the mathematical, contracts and business electives of the course far more than the design courses. post-contract stages. It was a project that had a full range of construction challenges which included logistical issues with a site in a congested city centre, deconstruction of an existing building adjacent to a train station and a general hospital, (both of which needed to remain operational), and building a high rise tower that at the time was to be the tallest in Europe, which needed specialist contractor and consultant expertise.

There were also cost and procurement challenges, two of which were the change in contract format from Construction Management to a fixed price, lump sum, partway through the project during the enabling/early works – this was due to a change in funder and funding requirements – and management of change orders and early warnings so that the client was given an accurate forecast of costs in monthly cost reporting.

How have you seen Quantity Surveying in Canada evolve over the years?

Having been in Canada five and half years, I have seen Quantity Surveying become more recognized, due to the hard work of the CIQS to promote the profession. Notwithstanding that, and having worked in the UK for a large part of my career, I still feel that the profession has a long way to becoming established where the Quantity Surveyor can sit alongside the client as a prime consultant for costing advisory. CIQS and the Board of volunteers work hard to promote the profession, which in turn benefits all of our members, but it also needs our members to re-iterate the message.

What are your thoughts on the future for Quantity Surveying in Canada?

Although Quantity Surveying in Canada is a long way to being well established as in the UK, we are ‘big fish in a small pond’ with the relatively small number of available Professional Quantity Surveyors in Canada. Hence, when the leap in the To return to Table of Contents CLICK HERE

mindset of clients is made and having a Quantity Surveyor on board in the early stages through construction and operational phases becomes essential and the norm on every project, there will be huge opportunity and a vast market to tap into.

What is your role with the CIQS and how and when did you get involved with the CIQS? I am currently the President of CIQS-BC and sit on the National Board supporting with the National Education Portfolio. I got involved with the CIQS around four years ago, when I offered my help to the BC Education Director at the time to support with assessments. I am also an APC assessor for the RICS and wanted to help the CIQS with assessments. After a year of supporting in an unofficial basis, a call for Directors for the BC Board was made; hence, I applied and was elected for the position of Education Director with the BC Board, before being appointed as Vice President and then eventually elected as President.

What do you see as future challenges and priorities for the CIQS? The continued challenges are marketing of the profession, accreditation, and educating clients in the value of appointing a Quantity Surveyor at the start of every construction project.

CONSTRUCTION ECONOMIST To reach construction and quantity surveying professionals through Construction Economist and its targeted readership, contact Jeff at your earliest convenience to discuss your company’s promotional plans.

What advice would you give to those embarking on a career in Quantity Surveying?

A career in Quantity Surveying gives you a broad range of experiences, more so than any other career of which I am aware. You will acquire knowledge of construction, contracts, costing, negotiation, etc., which makes the work interesting and varied. Furthermore, becoming a Quantity Surveyor does not limit you to just one area – you can always move into areas such as Project Management, Commercial Management, Development Management, Capital Allowances (Tax), Management Consulting and Academia/Research. My varied career path has shown that the training of a Quantity Surveyor allows one to adapt and diversify quite easily.

What do you do in your spare time?

Due to sitting on the CIQS National Board, being President of CIQS-BC and Vice Chair of RICS BC, and lecturing three courses for BCIT, much of my spare time is taken up. However, at the sacrifice of having much spare time, I find it rewarding to give back and support the profession. For my little remaining spare time, I try to spend it with my family and am also an avid poker player (which also requires math skills and an understanding of probability).

With more than 200 mandates completed in just one year, We’re at the top of our field. trust us for your governance and project management needs. macogep.com

Jeff Kutny, Marketing Manager E-mail: jeff@kelman.ca Phone: 866-985-9789 Published for CIQS by:

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The Espace culturel Georges-Émile-Lapalme - Place des Arts.

Winter 2016 | www.ciqs.org | CONSTRUCTION ECONOMIST | 21

2017 construction forecast for Prairies Heavy cloud cover lifts, sun breaks through

C

anada’s prairie provinces, except in Manitoba, have not been able to catch a break for three years.

The Prairies have seen a catastrophic flood and disastrous fire, plummeting oil and gas prices, and prolonged softness in commodity markets. But things are looking up for 2017. And that is good news for the construction industry.

ALBERTA PRIMED TO RETURN TO GROWTH Many analysts expect Alberta – buoyed by an anticipated rise in oil prices – to shake off negative GDP numbers and return to positive territory with growth of more than 2% in 2017. That infusion will help blow away the cloud cover that has hung over the province.

We can expect investment to start flowing back into the oil patch, reviving shelved or delayed projects.

The re-building of Fort McMurray, now underway with no fixed completion date, will also add substantially to the construction workload.

The wildfires damaged or destroyed an estimated 2,400 buildings, including 1,600 private dwellings that were completely destroyed.

Housing will hold steady, thanks in part to continued strong population growth. While immigration has slowed, several years of high net migration have given the province a younger population than most – yielding years with bumper crops of babies to complement still high, if slightly diminished immigration.

22 | CONSTRUCTION ECONOMIST | www.ciqs.org | Winter 2016

Single-detached starts are projected to decline from 2015 to range between 10,000 and 11,000 units in 2016.

They are expected to rise to between 10,300 and 11,300 units in 2017, and between 11,300 to 12,300 units in 2018. After years of high levels of activity, multi-family starts are projected to decline in 2016 to 11,200 to 13,800, and to continue the downward trend in 2017 with between 10,700 to 13,300 units. By 2018, lower inventories and an improved economy and market are expected to boost production to between 11,600 and 14,400 units.

The provincial government’s continued commitment to infrastructure spending to help offset the decline in private sector activity will also help support To return to Table of Contents CLICK HERE

construction levels. Some $8.5B has been allocated in 2016–2017 to help build and modernize key public infrastructure, including $1.2B for the Calgary Cancer Centre. Among the major infrastructure allocations are $953M for roads and bridges, $271M for flood recovery and nearly $1.7B in municipal infrastructure supports.

Other high profile infrastructure projects include Calgary’s $1.4B Southwest Calgary Ring Road and proposed $4B Green Line LRT, and Edmonton’s $1.8B Valley Line LRT, which started construction in late summer 2016. Calgary will also invest $600M in the Bonnybrook Wastewater Treatment Plant D Expansion and $200M in the new CNG Bus Storage and Transit Facility.

The Alberta and federal governments are making available more than $1.08B in funding, under two new federal programs: the Public Transit Infrastructure Fund, and the Clean Water and Wastewater Fund. The federal government is providing up to 50% of funding, (more than $543M), for projects supported through these programs.

Downtown Edmonton remains a strong performer despite the province’s economic troubles. A number of projects, including the now operational $480M arena, are completing in fall 2016, but others will help keep activity high through 2018. They include the $500M, 66-storey Stantec Tower, MacEwan University’s $180M Centre for Arts and Culture, and the 54-storey JW Marriott Hotel.

Calgary also has multiple office and commercial projects under construction that will add close to 2.5 million sf of space to the market by 2018. At the same time, a high vacancy rate due to the oil and gas slump is seeing some projects delayed or suspended.

PUBLIC SECTOR INVESTMENT PUMPS UP SASKATCHEWAN The provincial government’s investment of more than $3.5B in infrastructure projects – a single-year record – will help CLICK HERE to return to Table of Contents

support construction workloads battered by tough years in 2015 and 2016.

The province can also expect to see a return to positive growth in 2017, with GDP growth of between 1.5% and 2%.

The optimism is rooted in an anticipated rise in the price of oil, a strong performance in the agriculture sector, and ramped up production at new mines. Overall, the prospects are favourable for the energy and mining sectors in Saskatchewan for the next two years. Saskatchewan could outpace Alberta in oil and gas well drilling in 2017 – even if slightly – for the first time in decades.

“The Prairies have seen a catastrophic flood and disastrous fire, plummeting oil and gas prices, and prolonged softness in commodity markets. But things are looking up for 2017.”

The forecast is for a total of 4,175 wells to be drilled in Canada next year, a 5.7% increase from an estimated total of 3,950 wells in 2016. An estimated 1,900 wells are to be drilled in Alberta, and 1,940 wells for Saskatchewan, year-over-year increases of 53 and 240 wells, respectively.

Increased demand for uranium is also expected to boost production, and newly completed potash mines and expansions will increase output. The mining sector has more than a dozen projects valued at nearly $30B underway, and there are another 20 projects valued at $5B in oil and gas development and pipeline expansion.

Even with the rebound, the provincial economy will feel the drag from the last two years with higher unemployment,

lower population growth due to people having emigrated to seek work elsewhere, and still-low prices for one of its primary exports, potash – all of which play a role in lower, private-sector, capital investment.

To help counteract that drag, the provincial government’s 2016–2017 budget calls for an investment of more than $3.5B in infrastructure projects.

The funding will flow through the Saskatchewan Builds Capital Plan and the province’s Crown corporations.

The focus will be on energy distribution, power transmission and telecommunications networks, schools, hospitals and highways.

Some $875.7M is allocated for transportation infrastructure, including $500M to continue construction of the Regina Bypass.

There is $391M committed to K-12 schools and other educational facilities, $239M in healthcare capital commitments, including the continued construction of the Saskatchewan Hospital North Battleford and Integrated Correctional Facility. Other ongoing major projects include the $258M Children’s Hospital of Saskatchewan and $211M North Commuter Parkway.

The province is also planning significant investment to support its goal of supplying 50% of the province’s electricity through renewables by 2030. SaskPower plans to have the first 10-megawatt utility project up and running in 2018.

The residential sector will see singlefamily starts increase from 2015 levels to range from 2,600 to 2,800 units in 2016, and from 2,700 to 2,900 units in 2017. As markets improve with a rebounding economy, 2018 should see production increase to between 2,800 to 3,000 units. Multi-family starts will continue their decline from 2015 and range between 1,800 and 2,200 units in 2016, and then plateau in 2017 at between 1,800 and 2,400 before rising to between 2,200 and 2,600 in 2018.

Some major potash projects have been put on hold; others are moving

Winter 2016 | www.ciqs.org | CONSTRUCTION ECONOMIST | 23

forward, including the $1.7B expansion at Mosaic’s K3 mine in Esterhazy.

Another proposed new potash mine is moving ahead, and will perhaps establish a new model for future mineral development. The $3B project – a partnership between Encanto and the Muskowekwan First Nations – is unique, because the band will have a 100% share and full control over the mine.

When completed, it will be the first potash mine in Saskatchewan on First Nations land.

While Alberta is seeing large, multibillion oilsands projects shelved or reduced in scale, miniature oil-sands plants are popping up in Saskatchewan.

These smaller operations benefit from lower construction and operating costs, faster production ramp-ups and higher prices for their crude than traditional supersized oil-sands projects.

STRENGTH IN MOST CONSTRUCTION SECTORS IN MANITOBA There is good reason for a sunny outlook in Manitoba in 2017. Having escaped the downturns and just plain bad luck that hit Alberta and Saskatchewan, it will join BC and Ontario as the only provinces with projected GDP growth above the national average. The forecast is for GDP to increase by between 2.5% and 3% in 2017.

Rising exports in manufacturing, a healthy agricultural sector, increased spending on infrastructure, steady population growth, and low unemployment are all contributing to a strong economic performance.

The construction sector is also expected to shift to high gear in every sector, with major engineering projects providing a solid anchor for the industry.

The 2016 construction season will be the first of two peak-construction seasons for the $4.6B Keeyask Generating Station Phase 2, which is advancing in parallel with the associated Keeyask Transmission Project. Other major engineering projects in the energy sector include the 4.5B Bipole III Transmission Line, one of the largest in North America.

Major transportation initiatives include the province’s $3.7B, five-year transportation infrastructure program, and the long-term $3B East Side Transportation initiative, 1,028 KM of all season road that connects the east side of Lake Winnipeg with the larger road network.

The provincial transportation infrastructure program and water treatment facilities will be receiving an additional $200M in joint federalprovincial funding in 2016–2017.

Also underway are the $215M Southwest Transitway Stage 2 and Pembina Highway Underpass, a bus rapid transit project between downtown Winnipeg and the University of Manitoba, and the $400M Wastewater Treatment Plant Alterations at the North End Water Pollution Control Centre.

The commercial sector will see a sharp increase in activity with projects that will transform downtown Winnipeg. True North Square is a $400M mixed-use development with four towers in downtown Winnipeg with flexible office space, retail shops, residences, a full service hotel and services. A new 43-storey, $165M tower, a block from the iconic corner of Portage and Main, will be the tallest in the city. An existing 30-storey tower on Main St. will also get a $27M facelift with a new exterior and front entrance.

Bolstered by steady positive net migration, population growth is projected at 1.2% in 2016 and 2017.

That influx will help sustain the residential sector. After declining for three years in a row, single-detached starts are projected to increase and range from 2,500 to 2,700 units in 2016, and then rise to between 2,600 to 2,800 units in 2017, and between 2,700 and 2,900 in 2018. Multifamily starts are forecast to decline for the third consecutive year in 2016 and range from 2,500 to 2,900 units, increasing in 2017 from 2,400 to 2,800 units in 2017 and 2018.

That upward trend is expected to continue with projects such as the

24 | CONSTRUCTION ECONOMIST | www.ciqs.org | Winter 2016

$27M Bridgewater Trail Apartments breaking ground in 2016. Construction on the three-building complex is expected to finish by 2018. Another large-scale mixed-use development, Grant Park Pavilions, is also under way. The Red River Exhibition is set to embark on a $140M development plan that calls for the construction of a small hotel as well as a massive expansion of its exhibition hall and doubling of the fairgrounds.

Manitoba’s manufacturing sector is also busy with upgrades and expansions. Maple Leaf Foods Inc. is investing $35M to upgrade its facility in Winnipeg, and high-end apparel maker Canada Goose is preparing to expand in a new 103,000 sf facility ready in 2017 to support international expansion. Construction is also underway on Winnipeg’s first premium fashion-outlet mall. The $200M Outlet Collection Winnipeg mall is set to open in Q2 2017 Social infrastructure projects include Red River College’s $60M Skilled Trades and Technology Centre, scheduled to open in 2017, and a new, $25.2M emergency department at the Flin Flon General Hospital to be completed by Q4 2017.

About the author Michael Gabert, PQS is the Director and Regional Lead of BTY’s Prairie Region.

His focus areas are Cost Management, Project Monitoring and Technical Advisory services for public authorities, Owners, P3 Developers, Private Real Estate Developers, Architects and Financial Institutions. He has worked on a wide variety of project scopes including health care centres, highways and bridges, airports, educational facilities and commercial developments.

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Legal Corner

Roger Gillott

Richard Wong

Ethan McCarthy

Proposed changes to the Construction Lien Act: What do they mean for the construction industry?

T

he long‐awaited report (the Report) on potential amendments to the Construction Lien Act (the CLA), which was commissioned by the Ontario Ministry of the Attorney General (the Ministry1), has now been released. Among other things, the Report recommends the following: • the adoption of a prompt payment regime requiring payment within 28 days of submission of a proper invoice (subject to specific set‐off notices) • mandatory speedy adjudication of construction disputes, wherein a decision will be rendered within 30 days • mandatory holdback release (subject to specific set‐off notices), with permissible phased release of holdback on lengthy or segmented projects The current CLA was enacted in 1983 and has not undergone a holistic review since its enactment, until now.

Significant lobbying efforts by the construction industry, together with developments in the industry that include the increasing popularity of public‐private partnerships, necessitated a critical appraisal of the effectiveness of the CLA in achieving its policy objectives within the modern context.

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The Report was preceded by the attempted passage of Bill 69, the Prompt Payment Act, 2013 (Bill 69), which had resulted from the prompt payment movement in Ontario and other jurisdictions. While Bill 69 was not passed, the province decided that a broader review of the CLA was warranted. Extensive consultation with industry stakeholders followed, and culminated in the Report.

Issues considered by the report The Report was undertaken with the intent to perform a thorough and comprehensive assessment of the CLA, which was reflected in the breadth and scope of the substantive issues examined.

The Report divided these issues into distinct chapters addressing: (1) lienability; (2) preservation, perfection and expiry of liens; (3) holdback and substantial performance; (4) summary procedure; (5) construction trusts; (6) promptness of payment; (7) adjudication; (8) surety bonds; (9) technical amendments; and (10) industry education and periodic review.

The Report generated 100 individual recommendations.

This Osler Update will focus on the three key chapters of the Report: promptness of payment, mandatory adjudication, and holdback and

substantial performance. The remaining seven chapters of the Report are significant in their own right, including recommendations such as mandatory surety bonding for all public projects regardless of size, and lengthening the time periods to preserve and perfect liens.

In fact, as a result of the breadth and scope of all of these issues, when considered together, the Report recommends replacing the CLA, which primarily focuses on liens and trusts, with new legislation suggestively titled the “Construction Act: An Act respecting Security of Payment and Efficient Dispute Resolution in the Construction Industry.”

Prompt payment The Report recommends the enactment of a default statutory regime for prompt payment. The elements of the prompt payment regime are outlined below.

To which types of contracts would prompt payment apply?

• The statutory prompt payment regime would apply to all construction contracts at all levels of the construction pyramid, in both the public and private sectors. Parties would be free to draft their own contractual payment provisions,

Winter 2016 | www.ciqs.org | CONSTRUCTION ECONOMIST | 25

Legal Corner

provided they are consistent with the statutory regime. The mandatory provisions would be implied by law into any contracts that do not contain equivalent provisions.

What is the trigger for payment and what is the payment period?

The Report recommends the following: • Between the owner and the general contractor, payment must be made within 28 days of the submission of a “proper invoice” as described below.

• Between the general contractor and the subcontractor, payment must be made within a further seven days from the date of the owner’s payment (with an extra seven days added for each level down the construction pyramid).

• Payment obligations will be triggered by the delivery of a proper invoice, which means a properly documented invoice. Proper information and documentation would be defined by the contract, or by the legislation by default.

• Certification of payment by the payment certifier, if applicable, would follow submission of a proper invoice, and cannot be a precondition to the starting of the clock for payment.

• Parties would have the freedom to negotiate the payment cycle, but a monthly payment cycle would be implied if they fail to do so.

• Milestone‐based payment mechanisms are permissible, but must be disclosed to subcontractors during the bidding stage.

On what basis can payment be withheld, and when?

• Payers would be allowed to withhold disputed amounts (but not undisputed amounts) by delivering a “Notice of Intention to Withhold Payment,” setting out the amount being withheld and the reasons for the withholding within seven days of receipt of a proper invoice.

• Payers would be allowed to set off all outstanding debts, claims or damages, but only relating to the contract at issue, and not relating to other projects as is the case under the current CLA. • Essentially, the new approach would require payers to “get on with it” – in other words, to evaluate the payment application quickly, and either pay or assert a well‐defined, specific set‐off claim.

to refer disputes arising under that contract or subcontract to adjudication.

Adjudications would typically involve a single issue. Multiple issues/ disputes would only be addressed simultaneously in a single adjudication with the consent of the parties.

• Back‐to‐back adjudications would be permitted in respect of disputes between an owner and a general contractor that flow down to a subcontractor.

What remedies would be available in the event of non-payment?

• Late payments would attract mandatory non‐waivable interest at a rate that is the greater of the contractual rate and the pre‐judgment interest rate in the Courts of Justice Act. • The payee’s right to suspend work would arise if the payment dispute has been adjudicated and the payer refuses or fails to comply with the adjudicator’s direction to pay.

Who can adjudicate a dispute and how is the adjudicator nominated?

• Adjudicators would be members of a self‐regulating profession (e.g., lawyer, engineer, quantity surveyor, accountant or architect); have at least seven years’ relevant experience working with the Ontario construction industry; and have completed certain standardized training and certification with the government authority. Initially, a temporary roster of highly qualified adjudicators would be selected until the authority implements the training and certification system.

• Adjudicators would receive immunity from liability in respect of their decisions and not be compelled to testify in civil proceedings.

• The adjudicator would be nominated when a dispute arises by the party delivering notice of the adjudication.

The parties would then agree on an adjudicator within two business days after delivery of the notice, failing which the authority would step in to appoint an adjudicator within five business days.

Adjudication The Report proposes the implementation of mandatory adjudication as a dispute resolution mechanism applicable to all construction contracts at all levels of the construction pyramid, in both the public and private sectors. In this regime, the parties would be free to negotiate contractual provisions in respect of adjudication so long as they are consistent with the statutory regime. Otherwise, the default statutory adjudication scheme (to be set out in a regulation to the CLA) would apply. The Report also recommends the creation of a single authority tasked with certifying, training and administering the appointment of adjudicators.

Some of the additional elements of the adjudication regime are outlined below.

Who can require an adjudication?

• Any party to a construction contract or subcontract would be entitled

26 | CONSTRUCTION ECONOMIST | www.ciqs.org | Winter 2016

Which disputes get adjudicated?

• Adjudication would apply to disputes that arise from a claim for payment under a proper invoice submitted in respect of a construction contract or subcontract, including the following 1. valuations of the subject matter of the invoice 2. monetary claims made pursuant to the contract (e.g., change orders) To return to Table of Contents CLICK HERE

Legal Corner

If a party elects to have a dispute resolved through a lien proceeding, it can follow the traditional preservation and perfection process under the CLA. 3. claims in relation to security held for a construction contract 4. withholding and set‐off in respect of amounts owed under the invoice 5. delay issues relating to claims for payment • It is not entirely clear from the Report which claims would be excluded from mandatory adjudication, though it appears that the intent is to exclude negligence claims against design professionals as well as delay claims related purely to schedule extensions.

• Disputes under $25,000 may be referred by the parties either to adjudication or to the small claims court.

What process and at what cost?

• The default adjudication process would set out minimum standards for notice of adjudication, appointment of the adjudicator, timelines for the adjudication, duties and powers of the adjudicator (including establishing the adjudication process) and the binding interim nature of the adjudicator’s decision.

• The Report recommends that the total period of time for the adjudication process would be 30 days, from the initial referral of the dispute through appointment of the adjudicator, submission of relevant documents, interviewing of witnesses, retaining of experts, submissions by the parties, holding of a hearing and rendering the adjudicator’s decision. For large and complex claims, compliance with this time period may be a challenge.

• As a general rule, the parties would apportion the costs of the adjudicator equally and each would be responsible for its own legal costs, subject to the adjudicator’s ability to adjust the default apportionments based on a party’s bad faith, frivolous or vexatious conduct.

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How are adjudicated decisions enforced?

• Decisions would be binding on the parties on an interim basis (i.e., until the dispute is resolved by arbitration or formal legal proceedings or until the parties agree that the adjudication decision is final and binding).

Interestingly, the Report notes that the vast majority of adjudications conducted in the United Kingdom under a similar regime have, in practice, been accepted by the parties, effectively treating them as final.

• Decisions would be enforceable by way of application to the Superior Court of Justice in a similar manner that awards under the Arbitration Act, 1991 are enforced.

How would adjudication interface with the CLA? • The parties’ lien and trust rights under the CLA would not be affected by the adjudication regime. Therefore, if a party elects to have a dispute resolved through a lien proceeding, it can follow the traditional preservation and perfection process under the CLA and proceed with a lien action.

Trust claims can still be pursued through the courts, as well.

Holdback and substantial performance In its discussion of holdback and substantial performance, the Report considered the key sub‐issues outlined below.

Amount of holdback • The quantum of holdback would be maintained at the current rate of 10%.

Definitions of substantial performance and completion • The substantive criteria for a contract to be substantially performed should remain the same, but the formula in section 2(1) (b) of the CLA should be amended to increase the maximum cost of completion/correction to 3% of the first $1 million of the contract price, 2% of the next $1 million and 1% of the balance.

• The ‘deemed completion’ provision in section 2(3) should be similarly amended to increase the maximum cost of completion/correction to not more than the lesser of (a) 1% of the contract price and (b) $5,000 (from its current $1,000).

• These changes are designed to reflect the effects of inflation over time.

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Winter 2016 | www.ciqs.org | CONSTRUCTION ECONOMIST | 27

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The Ministry is currently undertaking consultations with key stakeholder groups to gauge reaction to the recommendations contained in the Report.

Finishing holdback • The finishing holdback provisions of the CLA would remain unchanged.

Mandatory release of holdback, subject to set-off • The CLA should be changed from the current permissive release of holdback, to make holdback release mandatory. However, the payer may assert a right of set‐off by publishing a notice of non‐ payment/set‐off, which specifically identifies the issues, and related dollar values, upon which the set‑off is based.

Phased, annual and segmented release of holdback • Parties would be allowed to contract for partial release of holdback on either an annual or phased basis (only for longer/larger projects surpassing certain monetary and duration thresholds).

• To address the concerns of design professionals, who have pushed for the release of the holdback on the design portion of their work, the designation of a design phase should be allowed in the contract for consulting services, but is not mandatory. This would facilitate the phased release of holdback for design professionals.

• In addition, projects involving clearly separable segments, including public private partnerships and other alternative financing and procurement projects in particular, would be allowed to segment their projects to provide for segmented holdback release.

Deferral agreements • Subject to an appropriate threshold, owners and contractors should be allowed to enter into deferral agreements, whereby portions of the work are deleted from the substantial performance calculation, for the purpose of allowing earlier certification and publication of substantial performance.

Deficiency holdback • Parties should not be restricted from contracting for a deficiency holdback, but the CLA should not make deficiency holdbacks a requirement.

Use of financial instruments or cash for holdback purposes • Letters of credit or demand‐worded repayment bonds should be allowed as a replacement for cash holdbacks.

Next steps The Ministry is currently undertaking consultations with key stakeholder groups to gauge reaction to the recommendations contained in the Report. Depending in part on the outcome of those consultations, the Ministry has suggested that it may propose draft legislation as early as the spring of 2017 to address the main principles in the Report.

In the meantime, other provinces and the federal government are closely watching developments in Ontario as they unfold, including British Columbia with the law institute’s proposed reform of the Builders’ Lien Act as well as the federal government with the introduction of Senate Bill S‐224 (the proposed Canada Prompt Payment Act).

28 | CONSTRUCTION ECONOMIST | www.ciqs.org | Winter 2016

Members of our Construction and Infrastructure Group, including Roger Gillott, Richard Wong, Joel Heard, Paul Ivanoff, Andrew Wong, Tobor Emakpor, Jake Sadikman, Elliot Smith and Rocco Sebastiano, are active in various organizations, including the Construction and Infrastructure Section of the Ontario Bar Association, and would be pleased to discuss the commercial and legal implications of these and other proposed recommendations in the Report in further detail.

End Notes: 1 Together with the Ministry of Economic Development, Employment and Infrastructure.

About the authors: Roger Gillott is a partner in Osler’s Construction & Infrastructure Group.

Educated at Oxford Law School, Roger has been practicing exclusively Construction Litigation, Arbitration and Dispute Resolution for over 20 years.

He has represented all players in the construction industry, on projects including nuclear reactors, subway stations and major industrial projects.

Richard Wong is a partner and co-chair of Osler’s Construction & Infrastructure Group, advising clients on project development issues from procurement to disputes. Richard has spoken at CIQS/RIQS events in 2015 and 2016 and is also engaged by Professional Engineers Ontario (PEO) to evaluate P.Eng Professional Practice.

Ethan McCarthy is an associate in Osler’s Construction & Infrastructure Group and a P. Eng (Civil). The key focus of his commercial practice is construction, infrastructure and energy, and has advised clients including Bruce Power, Atomic Energy of Canada Limited, and Pattern Energy.

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Legal Corner

Lien preservation rights under the Construction Lien Act

O

wners believing that contractors who have ceased work on a project, stand to lose their lien rights after 45 days, should think again. Ontario’s Construction Lien Act (the “Act”), provides that the time limit permitted for the preservation of a contractor’s lien rights is 45 days from the date of completion or abandonment of a contract, but something more is required to constitute abandonment and trigger the 45 day period, under the Act. If a contractor intends or reasonably believes that they will return to complete the project, the courts may consider that abandonment as defined under the Act, has in fact not occurred. It may be that the contractor intended to return once its account was paid, or following a holiday break.

The most recent case of Avision Construction Group Inc. v. The Trustees of Siri Guru Shaba of Cambridge, 2016 (“Avision Construction”), confirms the view taken by Ontario’s courts on this issue.

This matter concerned the construction of a temple in Cambridge, Ontario, beginning in 2013. The plaintiff, Avision Construction Group Inc. (“Avision”), was hired by the defendant owners to

construct the temple. After the plaintiff had retained subcontractors and commenced work, however, the owners advised that they did not have sufficient funds to carry on with the project and would have to acquire financing to continue.

The last day that Avision was on the project was on November 12, 2015, although it performed no further work after May of 2015. As a result of its outstanding accounts, Avision wrote to the owners on November 30, 2015, advising that further work would not be carried out unless payment was received.

However, Avision never indicated any intention to abandon the project at the time. Rather, it was ready and willing to continue following payment.

Correspondence between the parties’ lawyers continued into April 2016, to try to resolve the matter, after which, having heard nothing further from the owners’ lawyer, Avision registered a lien on the project on May 20, 2016. The owners brought this motion for summary judgment to have the lien vacated.

In defence of its lien action, Avision’s position was that as a contractor, the 45 days permitted to preserve its lien rights under section 31(2) of the Act,

Maurizio Artale

did not begin to run until at least April 2016, as it had not abandoned the project but was always willing attempt to arrive at a resolution up until this time. Avision maintained therefore, that its lien was registered on time.

Avision relied on the seminal Supreme Court of Canada case of Dieleman Planer Company Ltd. v. Elizabeth Townhouses Ltd. (1974) (“Dieleman”), for defining what constitutes abandonment. In this case, the Supreme Court opined that cessation of work and abandonment were not necessarily co-existent. The court stated that in order to constitute abandonment, a cessation of work would have to be permanent in nature, in the sense that the contractor did not intend to carry the project to completion. This case concerned a British Columbia lien action, based on the province’s Mechanics’ Lien Act of the time.

Dieleman has generally been followed since. It has been referred to most recently in Ontario in RSG Mechanical Inc. v. 1398796 Ontario Inc. (2013), Khalimov v. Hogarth (2015), and Centrum Renovations & Repair Inc. v. Ditta (2016), among others.

In his review of the defendants’ motion, Justice Sloan agreed with Avision, concluding that although work had ceased,

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the plaintiff had intended to resume work once the defendant overcame its financial problems and Avision received payment. Neither party ever terminated the contract in his view, and there was an intention until at least April 11, 2016, by both parties, to resolve their dispute and complete the contract. As such, he found Avision’s lien to have been registered on time. The defendants’ motion was dismissed.

Avision Construction and Dieleman speak to the preservation of contractors’ lien rights under section 31(2) of the Act. Section 31(3) instead refers to the preservation of the lien rights of other persons (i.e. subtrades, suppliers, etc.). For these parties, the courts have suggested other circumstances by which lien rights may continue to run in the face of a cessation in work. A subtrade or suppliers’ 45 day period may not begin to run if they intend to return to the project, and/or have undertaken preparatory work in anticipation of returning to the Project.

The recent cases of Toronto Zenith Contracting Limited v. Fermar Paving

Limited et al. (2016), and Mike Oram, as agent for the Trustee of Local 353 I.B.E.W. Trust Funds et al. and TripleA-Electric and Mechanical Corporation (2004), are illustrative of this. The courts here found that despite a winter break, preparatory work prepared by the lien claimants prior to returning to their respective projects, and prior to being told that their respective contracts were terminated, was work found to continue to add value to the projects and thus lien rights continued to run.

The recently released report of the Attorney General of Ontario respecting proposed reforms to Ontario’s Construction Lien Act, proposes among other things, that the time period permitted to allow for the preservation of a lien should be extended from 45 days (calendar) to 60; and termination of a contract should be added to the list of events triggering the commencement of the time period for preservation of a lien. This should not affect the ability of some contractors however, depending on the circumstance, to continue to enjoy

lien rights without the triggering of the 45 (or 60) day preservation period under the Act, if they have a continued intention to return to complete their contracts.

Owners should therefore be mindful of this when dealing with any disputes or work stoppages by contractors.

A stoppage of work beyond 45 days may not necessarily mean that a contractor’s lien rights have expired. However, every situation is different. Owners confronted with situations of this nature, would therefore best be advised to consult with their lawyers about what lien rights may apply.

About the author Maurizio Artale, Construction Law Group, Goldman Sloan Nash & Haber LLP. Maurizio’s practice includes commercial litigation with a focus on construction law. Maurizio represents owners, general contractors, subcontractors, project managers and suppliers in lien, contract, collection, insolvency, negligence and breach of trust actions.

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