3 minute read
Editor’s Message
Arif Ghaffur, PQS
Construction spending update
As 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 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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