Construction Economist Journal - Spring 2020

BRITISH COLUMBIA • PRAIRIES AND NORTHWEST TERRITORIES • ONTARIO • QUÉBEC • MARITIMES • NEWFOUNDLAND AND LABRADOR

CONSTRUCTION ECONOMIST Future of Quantity Surveyors

Roy Lewis

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

SPRING 2020

Reciprocity Agreements

Indu Elapatha

YQS Framework

Shane McKernan

STATISTICS CANADA RELEASES LABOUR FORCE SURVEY HIGHLIGHTING CHANGES IN EMPLOYMENT NATIONWIDE NEXT ISSUE:

PM 40065075

UPDATE ON COVID-19 • IMPACTS ON THE ECONOMY • IMPACTS ON CONSTRUCTION

ciqs.org

• CIQS Congress 2020 – Winnipeg, Canada • Company Profile – Tech-Cost Consultants Ltd. • Legal Corner – Robert J. Kennaley • Risk Management – Angela Lai

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JUNIOR QUANTITY SURVEYOR An opportunity for an individual, currently pursuing professional status, to take on a variety of tasks, developing skills and learning from Surveyors with a lengthy knowledge in the construction industry.

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Comfortable liaising directly with clients. Strong communication skills. RICS/ CIQS membership.

Please enquire, with confidentiality, to ian@bdconsultants.com.

www.bdconsultants.com

Take advantage of your member benefits.

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Call 1-888-589-5656 or go to tdinsurance.com/ciqs The TD Insurance Meloche Monnex program is underwritten by SECURITY NATIONAL INSURANCE COMPANY. It is distributed by Meloche Monnex Insurance and Financial Services, Inc. in Québec, by Meloche Monnex Financial Services Inc. in Ontario, and by TD Insurance Direct Agency Inc. in the rest of Canada. Our address: 50 Place Crémazie, 12th Floor, Montréal, Québec H2P 1B6. Due to provincial legislation, our car and recreational insurance program is not offered in British Columbia, Manitoba or Saskatchewan. All trade-marks are the property of their respective owners. ® The TD logo and other TD trade-marks are the property of The Toronto-Dominion Bank.

QUANTITY SURVEYORS, ESTIMATORS, PLANNERS A leading Cost Consulting and Project Management firm requires the following candidates for its Montreal and Ottawa offices: Junior, intermediate and senior level Q.S.’s, Estimators and Planners with experience on: • Commercial and institutional projects • Industrial projects (oil/gas, refineries, mining, metallurgical).

We offer competitive salaries, benefits, training and potential for growth. Relocation assistance will be provided.

We sincerely thank all applicants, but only those candidates which meet our requirements will be contacted.

Please send resume in strictest confidence to: LCO - Construction and Management Consultants Inc. Fax: 514-846-8913 | Phone: 514-846-8914 | E-Mail: MONTREAL@LCOGROUP.COM

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Spring 2020 | www.ciqs.org | CONSTRUCTION ECONOMIST | 3

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(F).................... . . . . . . editor@ciqs.org Send Change of Address to: Canadian Institute of Quantity Surveyors 90 Nolan Court, Unit 19, Markham, Ontario L3R 4L9

CIQS Board Chair: David Dooks, PQS(F) Vice Chair/Treasurer: Erin Brownlow, PQS Director/Registrar: Jerry Crawford, PQS

CONSTRUCTION ECONOMIST SPRING 2020

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

Features Holiday networking event – mentors, mentees, and future leaders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 CIQS Congress 2020. . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Infrastructure Ontario sets ambitious path forward. . . . . . 21 2020 Construction Adjudication Symposium – Prairies region: an effervescent interaction. . . . . . . . . . . 23 Risk management – a Quantity Surveyor’s role. . . . . . . 25 Waste management for remote locations and temporary communities. . . . . . . . . . . . . . . . . . . 28 CIQS international reciprocity agreements. . . . . . . . . 31

Education Director: Wendy Hobbs, PQS(F)

Company profile – Tech-Cost Consultants Ltd. . . . . . 32

Director: Arif Ghaffur, PQS(F) Director: Indu Elapatha, PQS Director: Roger Ward, PQS(F) Director: Tammy Stockley, PQS Director: Hiran Dassoruth, PQS

7 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

Messages 6

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

6

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

14

Executive Director’s Message . . . . . .

8

Young Quantity Surveyor Corner. . .

16

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

9

Congratulations 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 and Katie Woychyshyn Art Design/Production. .............. . . . . . . . . . . Dia Chea 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®).

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Chair’s Message

Comments and observations

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n 2013, I was selected by my peers to join the CIQS Board as the representative from the Maritimes. I took on several roles in committees including continuing professional development, website and social media, and international, as well as Board Treasurer, Vice Chair, and Chair. As a Director of the CIQS for several years, I have had the opportunity to attend meetings and events in several cities across Canada (Vancouver, Calgary, Winnipeg, Toronto, Quebec, Montreal, and Halifax), and have met and talked with many of our members, learning about their work, challenges, and successes. Opportunities to hear these members’ stories inspired me to engage as a volunteer.

An important point to understand as a member of the CIQS is our unique culture in the way we live and work, and how that varies from region to region across the vast landscape of Canada. This same diversity exists internationally, and the profession has adapted to meet the challenge and stay

on course. Representing the CIQS at international conferences and networking with members from other quantity surveyor (QS) associations, demonstrated for me how diverse, and yet how similar, we are. The one take-away for me is the cohesion shared among all those in the QS profession, whether you identify yourself as a Quantity Surveyor, Construction Economist, or Cost Manager. There is a common goal to hold ourselves to the highest level of standards and the passion to be recognized for excellence in our profession.

No doubt everyone in this profession has had the exciting task of trying to describe to someone what a quantity surveyor is. And no doubt you have stumbled at times to try and express in words or find a metaphor that best illustrates the meaning. I commend all who have remained steadfast to the cause of promoting the profession. It is important to realize that the combined efforts of our members and social media are gaining traction. When I joined

David Dooks, PQS(F)

the CIQS in 2003, the term “quantity surveyor” was unknown to most. While the term is usually not associated with the work that we do, broader understanding of the QS profession is growing. I meet other construction industry professionals in my region who now comment that, not only that they have seen information online regarding the profession, they have noticed CIQS activity through our social media accounts. While this may be a small achievement and possibly isolated to my local region, I will take it – and build on it. Our individual members are still the best means of promoting the profession across Canada. Their efforts and hard work deserve praise for significantly contributing to the growth and success of the profession, as well as increased demand for its members’ services.

When I transition to the role of CIQS Past Chair this summer, I will look forward to continuing my affiliation with the CIQS and to meeting and hearing the stories shared by our members.

Congratulations Corner Congratulations to the following Members who have qualified as a PQS or CEC. CIQS – British Columbia Hossam Elhosary, PQS Amy Eun Suk Kwon, CEC Craig Shirra, PQS Ajibola Soboyejo, CEC CIQS – Maritimes Omid Pourhosseini, CEC CIQS – Members at Large Obafemi Akintan, CEC Hazel Carpio, PQS

Wong Chi Cheung, PQS Parmanand Dhomun, PQS June Khai Ho, PQS Mayuran Kathiravelu, PQS Kevin Lam, PQS Yu Sin Lin, PQS Buddhika Nivunhella, PQS Ropo Olaegbe, PQS Lai Kwok Pan, PQS Vikram Singh, PQS Ben Tse, PQS Leon Wang, PQS

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Ng Tsz Yan, PQS Ming Chun Yeung, PQS CIQS – Ontario Maisha Abdul-Rahman, PQS Muthanna Abedi, CEC Ayodeji Abiola, PQS Khalid Abouseta, CEC Adil Ansari, CEC Attila Bogdan, PQS Lauren Boucher, PQS

Seyyed Reza Daneshi, CEC Lalith Kekulawala, PQS Jamie McClelland, PQS Nicholas Nadeau, PQS Alex Ratushnyak, PQS Roger Sherwood, PQS Gregory Stallard, PQS Sarah Walden, CEC Paul Winfield, CEC Billy Zang, PQS

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Message du Président du Conseil

Commentaires et observations

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n 2013, j’ai été sélectionné par mes pairs pour rejoindre le conseil d’administration de l’ICÉC en tant que représentant des Maritimes. J’ai assumé plusieurs rôles et responsabilités au sein des comités tels que le développement professionnel continu, le site Web et les médias sociaux, le volet international, et j’ai occupé des postes importants, dont trésorier du conseil, vice-président et président. En qualité de directeur de l’ICÉC depuis plusieurs années, j’ai assisté à des réunions et à des événements dans plusieurs villes du Canada (Vancouver, Calgary, Winnipeg, Toronto, Québec, Montréal et Halifax) où j’ai rencontré une grande majorité de nos membres, et à la suite de discussions, j’ai pu mieux découvrir leur travail, leurs défis et leurs réalisations. Ce sont les histoires de nos membres qui m’ont inspiré à m’engager comme bénévole.

En tant que membre de l’ICÉC, il est important de comprendre que notre culture est unique dans la façon dont nous vivons et travaillons, et de voir comment les variations se manifestent d’une région à l’autre à travers le vaste paysage du Canada. Alors que cette même diversité existe à l’international, la profession s’est adaptée pour relever le défi et maintenir le cap. La représentation de l’ICÉC lors des conférences internationales et du développement de réseaux avec des membres d’autres associations homologues a démontré à quel point la profession est diversifiée et pourtant similaire, et caractérisée par une cohésion commune entre tous les membres de la profession, quel que soit le titre utilisé : métreur, économiste de la construction ou gestionnaire des coûts.

Tous les membres sont animés par un objectif commun qui est de se hisser au plus haut niveau des normes et par CLICK HERE to return to Table of Contents

une passion commune qui est de faire reconnaître l’excellence de la profession.

Nul doute que quiconque œuvrant dans cette profession a eu, un jour ou l’autre, la tâche passionnante d’essayer de décrire ce qu’est un économiste en construction. Et nul doute qu’à un moment donné ou un autre, la définition a été un peu hâtive, comportant des mots simples ou une métaphore qui illustre le mieux le sens. Je félicite tous ceux qui sont restés fidèles à la cause de la promotion de la profession.

Il est important de constater que les efforts combinés de nos membres et des médias sociaux gagnent du terrain.

Lorsque je suis entré à l’ICÉC en 2003, le terme « économiste en construction » était inconnu pour la grande majorité.

Bien que le terme ne soit généralement pas associé au travail que nous effectuons, une compréhension plus large de la profession se développe.

Dans ma région, je rencontre d’autres

professionnels de l’industrie de la construction qui commentent aussi ce constat, non seulement ils ont vu des informations en ligne sur la profession, mais qu’ils ont remarqué l’activité de l’ICÉC via nos comptes de médias sociaux. Bien que cette hausse de visibilité puisse être une petite réussite et éventuellement isolée de ma région, je vais miser sur cette force. Nos membres sont toujours notre meilleur atout pour promouvoir la profession partout au Canada. Leurs efforts et leur travail acharné méritent des éloges pour avoir contribué de manière significative à la croissance et au succès de la profession, ainsi qu’à une demande accrue des services offerts par les membres.

Dans le cadre de ma transition vers la fonction de président sortant de l’ICÉC cet été, je me réjouis de poursuivre mon affiliation avec l’ICÉC, de rencontrer les membres et d’entendre leurs histoires et expériences.

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Executive Director’s Message

CIQS Board of Directors Meeting Highlights

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he CIQS Board of Directors held its quarterly meeting January 24-25, 2020 in Toronto, Ontario. The following are highlights from the meeting: • The Board of Directors hosted a meet and greet with Members on the evening of Thursday, January 23, 2020.

• Revisions were made to the PQS and CEC Licensing Agreements – List of Services. The list is under review of counsel. Please review the new licensing agreements, which will be included in your membership renewal for 2020-2021 membership year.

The CIQS received 12 submissions for Congress 2020 in Winnipeg, double the number of submissions received in 2019. Submissions have been reviewed and nine presentations have been selected for the program. Congress registration will launch the week of February 24 with a partial or full congress program. We hope to see you all in Winnipeg. Visit www.ciqs.org for more information.

• BCIT Accreditation Report: Diploma in Architectural and Building Technology (DABT).

The BCIT has reviewed the 2017 DABT program that implemented major changes. The CIQS Education Committee’s objective was to re-review the accreditation report completed by the CIQS in April 2015, to ensure the previously accredited program meets the competency expectations according to the recent curriculum changes effected by the BCIT. The approach used in this exercise is a detailed comparison of the courses of the program, including the electives, with those of

Sheila Lennon, CAE

PQS

985

PQS Retired

82

Honorary

16

CEC

368

CEC Retired

6

Associates

450

Subtotal

1907

Students

100

Total

2007

the CIQS Architectural, Mechanical and Electrical Syllabi. Graduates from the BCIT DABT program who have followed the ‘Economics/ Construction Operations’ electives will be deemed to have completed all 25 academic subjects required under the Architectural division.

• The RICS/CIQS Canadian Construction and Infrastructure Report for 2019 Q4 is now complete and will be available the week of February 24.

• Registrar’s membership report as of December 31, 2019 as set out in the table above.

• New for Congress 2020! Congress 2020 will offer an expanded program – two days of sessions including technical site tours. We are launching new offerings for delegates and their guests: CIQS

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Partner Program, Student Registration Fee, One Day Registration option, and much more. Visit the Congress 2020 page on the CIQS website. Early-bird deadline is May 15, 2020.

• Next CIQS Board of Directors Meetings o May 1-2, 2020 (Toronto) o July 9, 2020 (Winnipeg) Please send any questions regarding the above highlights to Sheila Lennon, Executive Director at execdir@ciqs.org.

Regards,

Sheila Lennon, CAE Executive Director To return to Table of Contents CLICK HERE

Editor’s Message

Statistics Canada labour force survey Arif Ghaffur, PQS(F)

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Employment, growth, and decline

he Labour Force Canada Survey (LFS)* conducted in early 2020 by the government agency Statistics Canada found that:

8.

Construction and agriculture driving job growth: Construction saw 16,000 new jobs and the agriculture industry saw 12,000 new jobs.

1. New jobs and overall unemployment falls: The economy gained 35,000 new full-time jobs in January and the unemployment rate fell by 0.1%.

9.

Particular sectors see fall in employment: Employment fell in both health care and social assistance with a loss of 16,000 positions.

2. New positions in Manitoba and New Brunswick: The highest numbers of new positions were in Manitoba and New Brunswick.

10. Alberta job losses continue: 19,000 workers lost jobs in Alberta; most of those positions were part-time.

3. Quebec creates more jobs: In addition to the above provinces, Quebec saw 19,000 new jobs being created.

4. New jobs increase in Manitoba: 6,500 people found work in Manitoba, albeit mostly part-time employment.

5. New Brunswick job growth continues: In New Brunswick, the number of people employed grew to 4,600.

6. Overall Canadian job growth continues: Since January 2019, 268,000 new jobs have been created in Canada.

7. Particular sectors drive job growth: Manufacturing, construction, and agriculture saw more Canadians working in January.

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11. Alberta unemployment rate remains high: The unemployment rate in Alberta was 7.3%.

12. Saskatchewan unemployment rate increases: In Saskatchewan the unemployment rate rose by 0.3% to 6%.

13. Unemployment drops in BC and Nova Scotia: The unemployment rates dropped in both British Columbia (down 0.5%) and Nova Scotia (down by 0.3%).

14. Job losses also due to weather-related reasons: Some 390,000 employees lost work for weather-related reasons during the reference week.

Based on Statistics Canada (www.statcan.gc.ca): a) LFS data is used to produce the wellknown unemployment rate as well as other standard labour market indicators such as the employment rate and the participation rate. b) The LFS also provides employment estimates by industry, occupation, public and private sectors, hours worked and much more; all cross-classifiable by a variety of demographic characteristics. c) Estimates are produced for Canada, the provinces, the territories and a large number of sub-provincial regions. d) For employees, data on wage rates, union status, job permanency, and establishment size are also produced. e) This data is used by different levels of government for the evaluation and planning of employment programs in Canada. f) Regional unemployment rates are used

by Employment and Social Development Canada to determine eligibility, level and duration of insurance benefits for persons living within a particular employment insurance region. g) The data is also used by labour market analysts, economists, consultants, planners, forecasters, and academics in both the private and public sectors. *Reference week of January 12 to January 18, 2020.

Do you have any thoughts on the above statistics? If so, please write to the Editor at editor@ciqs.org.

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Editor’s Message

Governance structure of the CIQS and CIQS Chapters

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IQS Members (PQS, CEC, Retirees, and Honorary) are provided corporate member rights by the CIQS as part of the contractual relationship between the CIQS and Members. The CIQS provides Terms of Reference to Chapters (which are not separate corporate entities), i.e. CIQS - British Columbia, CIQS - Prairies and Northwest Territories, CIQS - Ontario, CIQS Québec, CIQS - Maritimes, and CIQS - Newfoundland and Labrador. The roles and activities of CIQS Chapters are as follows: • Chapters are created by and subject to control of the Board of Directors of the CIQS. • Chapter governance is primarily set out in Terms of Reference.

• Chapters assist the CIQS in carrying out its purposes within the Chapter’s geographical boundaries.

• Chapter activities include: o Bringing forward to the CIQS Board of Directors issues particular to the Chapter’s Local Members. o Making recommendations to the CIQS Board of Directors with respect to these issues. o Organizing events: educational, marketing and networking, within the Chapter’s geographical boundaries.

• The Chapters all report to the CIQS Board of Directors.

If you have any questions, please reach out to your local Chapter.

CIQS - British Columbia Shane McKernan, PQS, President Email: president@ ciqs-bc.org

CIQS - Ontario Sheila Lennon, CAE, Executive Director (New Chapter Executive TBD) Email: execdir@ciqs.org

CIQS - Prairies and Northwest Territories Jerry Crawford, PQS, President Email: president@ ciqs-prairies.org

CIQS - Québec Hiran K. Dassoruth, PQS, President Email: president@ icec-quebec.org

CIQS - Maritimes David Dooks, PQS(F), President Email: president@ ciqs-maritimes.org

CIQS Newfoundland and Labrador Tammy Stockley, PQS, President Email: president@ ciqs-nl.org

Chapters are created by and subject to control of the Board of Directors of the CIQS.

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Editor’s Message

The Editor’s travels – places of interest

Call for articles

Chichen Itza, Mexico History, economics, and architecture

1. Concrete and steel framed structures  Is concrete cheaper?

2. Flat and sloping roofs and finishes  Are flat roofs cheaper to construct?

3. Asphalt and tarmacadam road finishing  Is tarmacadam cheaper?

Interested? Please send expressions of interest to editor@ciqs.org.

Over the winter holidays, I had the opportunity of visiting Chichen Itza in Yucatan, Mexico. Situated on the Yucatan Peninsula, Chichen Itza was once home to the Mayan people and now remains an active Temple of Kukulkan, Chichen Itza archaeological site.

The Temple of Kukulkan is the famous pyramid that dominates the site. Historic accounts place the city being established around the early 400s AD; however, it is certain that Chichen Itza was a powerful centre of political and economic activity in Mayan culture by roughly 600 AD. Rather than being a single organized civilization under one leader, Mayan society was a loose collection of independent areas. These areas were largely dependent on the interaction among trade networks throughout the civilization.

Chichen Itza is one of the New Seven Wonders of the World, and is listed as a UNESCO World Heritage Site. New discoveries continue to be unearthed in the ancient city’s area, giving more insight into the civilization and achievements of the Mayan people.

Courtesy of www.history.com.

CIQS Members – Leveraging your qualifications Are you a CIQS Member?

CIQS Members are key to expanding awareness of quantity surveying throughout Canada and the important role we play in the construction process. Leverage the value of your Professional Quantity Surveyor (PQS) and Construction Estimator Certified (CEC) designations and access highly specialized continuing professional development programs and a growing network of peers. Your CIQS membership includes: • Internationally recognized professional designations • Subscription to the Construction Economist journal • Regular updates on industry trends and issues via the CIQS newsletter • Invitation to the annual congress • Access to local CIQS Chapter meetings, events and mentoring programs • Special member rates for publications and seminars • Multiple opportunities for networking and professional development • Access to advertised job openings and posting of your resume on the CIQS website • Affinity programs, including auto and home insurance discounts • Access Insurance programs through agents qualified in our profession

Did you know?

• That the government of Alberta, via Service Alberta, is carrying out engagement in respect of prompt payment and considering potential amendments to the Builders Lien Act. • Potential changes include modernizing existing lien provisions, introducing prompt payment, considering interim dispute resolution, and enforcing remedies.

• The CIQS is delighted to continue to participate in providing input and feedback to prompt payment reforms across Canada, including this latest initiative being undertaken by the Government of Alberta.

...Continuing to achieve success through involvement!

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Editor’s Message

Letter to the Editor The reality of the future role of the Professional Quantity Surveyor

Dear Editor, Having spent four years with a South Wales building contractor as a building management trainee indentured pupil, I was well prepared to take on the building world at the tender age of 21 years. My period of indentureship was thorough and the combination of practical and theoretical training was intense. I was capable of working as an Agent (construction) in the operations arm of the industry and as a Quantity Surveyor/Estimator in the commercial arm. I chose the latter but I have always retained my ‘operational’ base in my work as a Professional Quantity Surveyor.

In Wales, Bills of Quantities were the norm, and the Standard Method of Measurement ruled supreme. However, my building company was very progressive for the 60s; it was exploring computer-based estimating and implementing a project management system that linked the estimate to project planning and cost control. Critical Path Network was the buzzword with the work sub-defined into activities, which were measured and resourced. These activities were linked to the estimate and created the project budget for cost control and monthly financial reporting. I was fascinated by this concept and was fortunate enough to be included in the implementation team.

I left Wales at the age of 24 and spent six years in Bermuda where I first experienced the Lump Sum concept in building contracts. I used my QS skills to create my own ‘bill of quantities’ for estimating purposes, my estimator skills to price the tender, my operational skills to plan and later project manage the job, and my QS skills once again to commercially manage the job in progress and earned value measurement, progress billing, subcontract management, and client interaction. There was no mention of the Standard Method of Measurement here, other than an occasional schedule of quantities and unit rates for Provisional Sums.

In 1977, I came to Canada. I was 31 years old and was hired as a Quantity Surveyor with George Wimpey Canada working in Ottawa and then London. Civil Engineers were everywhere and Schedules of Quantities and Unit Rates were the norm on all of the heavy civil projects – mostly

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Roy Lewis, PQS(F)

road construction for the Ontario Ministry of Transportation – but on building projects there were no Bills of Quantities, just valuation templates designed internally for the company. There was no Standard Method of Measurement, just the Ontario Ministry Standard Specifications and Work Scope Definitions.

In 1980, I came to Newfoundland and Labrador and worked as Manager of Operations Analysis for the Lundrigan Construction Group. Here, as in Ontario, the contracts were a mix of heavy civil Unit Rate Schedules and Lump Sums.

I operated in an environment dominated by civil engineers who considered my quantity surveying methods of contract and project management very mysterious; they considered me with much suspicion as a juju man! I drew on my earlier experiences and developed an accurate and timely project measurement/cost control system, which soon removed the suspicion by producing some very good project outcomes.

By now my career as a pure QS was over – I had graduated into the North American world of Project Control and Contract Management! My first mega- project was the Hibernia GBS Platform ($3.5 billion) and during my six-year tenure my QS skills were deployed in the Procurement/ Contract Management and Project Control fields.

My experience in the Energy Sector has exposed me to a much wider spectrum of related businesses and contractors – very few of which are builders or civil engineering contractors; however, each executes contracts and needs to manage and effectively undertake the work for which they have contracted. Many of these companies are short in integrated commercial/operational skills and the PQS skills can be applied here: just replace the building discipline with whatever discipline the company offers. Everything else is basically the same.

Today, many large projects look to the money market for project funding. This source of funds is suspicious of the Construction Project world and its related cost overrun reputation. External funding and financing companies are now using the PQS to manage the disbursement of project funds. I expect this trend to not only continue but to expand in scope; there is a big future for the PQS in this field!

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Editor’s Message

Involvement with the engineering disciplines: civil, mechanical, electrical, environmental, industrial, etc., would encourage cross population. There are many engineers who in reality work everyday as quantity surveyors; they just do not use the name.

In conclusion, our future in Canada is directly linked to how we can deliver quantity surveying skills to industry in general. This will involve the transition from a pure ‘building’ base to a more ’commercial’ base that can deliver services to multi-disciplined industries and commercial development – radical thinking maybe for some traditionalists, but reality for many of our members.

Roy Lewis Professional Quantity Surveyor (Fellow)

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Spring 2020 | www.ciqs.org | CONSTRUCTION ECONOMIST | 13

Legal Corner

Legal Corner

CCAA proceedings and the labour and material payment bond claim

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n the last couple of years, several high-profile Canadian companies have sought protection under the Creditors Companies Arrangement Act (“CCAA”). In a number of cases, the company had a labour and material bond, which had been given to underwrite the company’s obligations to pay subtrade suppliers of services and materials in construction. In this article, we will discuss the subcontractor’s ability, where the principal under the bond has obtained CCAA protection, to litigate the bond claim notwithstanding the usual Initial Order (issued under section 11.02 of the CCAA) staying proceedings “against or in respective of” the principal, its business or its property.

Some would argue, for example, that because a claimant will not be able to prove a claim against the bond without first establishing that the principal owes it monies under the subject contract or subcontract, any proceeding to enforce the bond must be a proceeding “in respect of” the principal such that the stay must apply. We suggest, however, that the language of the CCAA itself, as well as applicable case law, confirms that the stay ought not apply.

First, an action against the principal is not, based on the plain wording of the standard form bond itself, a condition precedent to a claim. In addition, numerous cases confirm that claimants can and do pursue labour and material payment bond claims in proceedings to which the underlying debtor/principal is not made a party.

See, for example, Truro (Town) v. Toronto General Insurance Co., [1974] SCR 1129, 1973 CanLII 169 (SCC), Harris Steel Ltd. et al. v. Alta Surety Co., 1992 CanLII 4560 (NS SC), Campbell Comeau Engineering Ltd. v. Alta Surety Company,

Robert J. Kennaley

Subcontractors should do what they can to preserve remedies that do not rely on privity of contract.

1996 CanLII 5343 (NS SC), Williams v.

Axa Pacific Insurance Co., 2003 CanLII 49306 (ON SC) and Harris Steel Ltd. v.

Seaboard Surety Company of Canada, 2003 CanLII 49313 (ON SC).

In addition, a labour and material payment bond is a guarantee, made by the surety, that the bonded contractor or subcontractor will pay its subcontractors for their labour and materials supplied to the bonded project. This is significant given section 11.04 of the CCAA, which provides that an order for a stay under section 11.02 has no effect on proceedings against a person, other than the company in respect of which the order is made, who is obligated under a guarantee in relation to that company.

The rationale for s.11.04 (as it applies to sureties) was addressed in Browne v. Southern Canada Power Co. [1941] CarswellQue 14 (C.A. Que.), an oft-cited case of the Quebec Court of Appeal in which the court rejected a surety’s argument that an action against it on a bond should be stayed. The Court stated: “It is a somewhat startling proposition that a surety can avail himself of the bankruptcy of his principal debtor to avoid or modify his own obligation.

A contract of commercial suretyship,

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such as is under consideration in the present case, is generally for the very purpose of guaranteeing the solvency of the principal debtor… The very special remedies authorized by law for the exclusive benefit of a debtor company are not available to third parties. The Companies’ Creditors Arrangement Act is a special statute, to be restrictively interpreted, and its benefits accrue to those alone envisaged by the statute. Its provisions only come into play after the debtor has become bankrupt, thus involving the sureties, and what happens after that event affects the company only… [They] do not and were not intended to operate as a release of any of the obligations of the company’s guarantors… It is always possible that a debtor, whether a person or a company, will become bankrupt. That is not something inherent in the debt, but it is in most cases the reason why a guarantee is demanded.”

Similarly, in Northern Transportation Co., the Alberta Court of Queen’s Bench adopted the approach in Brown to hold that a s.11.02 stay ought not extend to those who guarantee the debtor’s obligations: To return to Table of Contents CLICK HERE

Legal Corner

The nature of a contract of guarantee is that the primary debtor will perform his contract and the guarantor has to answer for the consequence of the primary debtor’s default: Schell v. McCallum & Vannatter (1918), 57 S.C.R. 15 (SCC), [1918] 2 WWR 735, at paras 50, 51 Brodeur J. (dissenting).

In addressing the public policy objectives of the Act to keep the debtor company in operation and to treat the creditors fairly, the Court in Keddy Motors further held at p.

5 that: “[s]uits against guarantors who are principals ought not to have any adverse effect upon the operations of the company; indeed, satisfaction of debts by realization of guarantee should enhance the financial position of the company.

The principals – not the company – will suffer the effect.”

We also suggest that a reading of section 11.03(2) of the Act supports the argument that no stay applies.

Sureties, of course, will often take

guarantees from the directors of the principal company. Section 11.03(2) provides that a section 11.02 stay “does not apply in respect of an action against a director on a guarantee given by the director relating to the company’s obligations.” This accordingly allows the surety to proceed against the directors on the guarantees notwithstanding the stay. We suggest that section 11 ought not be interpreted to shield the surety from claims against guarantees it gives (through bonds) while allowing the surety (by virtue of section 11.03(2)) to pursue the guarantees it has received from the principal’s directors. This, we suggest,

would be an inequitable interpretation of section 11, which would lead to absurd consequences.

In the end, where an insolvency above them in the construction pyramid seems possible, subcontractors should do what they can to preserve remedies that do not rely on privity of contract, including claims for lien, hypothecs in Quebec, trust claims and labour and material payment bond claims.

Where such a bond claim is made, claimants should consider taking steps to push the claim forward promptly, notwithstanding any stay of proceedings ordered under the CCAA.

About the author Robert J. Kennaley worked in the construction industry for 15 years before going to law school. He has practiced exclusively in the area of construction law since graduating from law school 22 years ago and is currently the principal of Kennaley Construction Law. The firm has offices in downtown Toronto, Paris, Barrie, and Simcoe, Ontario. He can be contacted for comment at 416-700-4142 or at www.kennaley.ca.

The Construction Economist is also available in electronic format. Please visit the CIQS website www.ciqs.org and press the “Publications” tab.

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YQS Corner

Developing a YQS framework Goals and strategies for future CIQS growth

Shane McKernan, PQS

I

n the fall of 2019, the CIQS national board formally created a new appointment: YQS Observer. I am honoured to be the first person to be elected to fulfill that role. The board held its first 2020 meeting in January and, following just a few months of planning, there have been great strides in creating a framework for a formal YQS program in Canada. Our goal is to understand the need for this type of program and how best to implement it into a self-sustaining group that will become integrated into the CIQS. The board has created a subcommittee tasked with evaluating these goals and strategies. Some key items raised for consideration include: • YQS program/engagement plan and schematic framework.

• Long-term and short-term goals.

• Relevance of YQS to CIQS and how it will help build the next generation of upcoming Quantity Surveyors.

• Primary risks and opportunities of this program in relation to the growth of the CIQS. While no hard dates have been set for release of specific goals, the overall draft YQS Engagement Plan is expected to be reviewed and approved prior to the 2020 Congress in Q2. We hope to formally launch the Engagement Plan at the 2020 Congress event. We are considering a Leadership/Mentor & Mentee event for later this year that may become an annual event, across all Chapters. The Ontario Chapter held a successful (and sold out) leadership event in December 2019, which included a great keynote speaker with lots of young and aspiring QSs in attendance. This was a good litmus test for the appetite of these types of events, not just for all members, but

specifically YQS members. In the coming months we look forward to sharing our progress with membership as well as planning some YQS events in 2020.

About the author Shane McKernan, PQS is a Project Manager for Landa Global Properties, based out of Vancouver, British Columbia. With over a decade of experience in the construction sector, Shane’s experience includes cost consulting, project loan monitoring and project & construction management. Shane has been on the CIQS – BC Board of Directors since 2013, which he joined as the Board’s first ever student member; he is now the Chapter President.

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Did you know?

Public Private Partnerships, or PPP is a method that allows a consortium of bidders to design, build, finance and operate an asset over a period that can typically be up to 20-30 years.

The asset can, for example be infrastructure, and such projects are backed by private financiers, who receive a regular income stream from the asset during the period.

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Article by Sharon Lui, Executive/Events Assistant.

HOLIDAY

NETWORKING EVENT MENTORS, MENTEES, AND FUTURE LEADERS

O

–

n December 10, 2019, the CIQS hosted its 2019 Holiday Networking Reception and Dinner event – Mentors, Mentees, and Future Leaders at the historic National Club in Toronto. The sold-out event brought in over 100 attendees including CIQS members, non-members and students in the field of construction economics, for an evening of mingling and fine dining. The night opened with corporate networking in the bar lounge, where attendees were able to meet with a diverse group of construction industry stakeholders. Guests spent the rest of the evening in the gorgeous Main Dining Room, enjoying a delectable three-course meal.

Arif Ghaffur, a CIQS Director, provided a warm welcome to the group and specifically thanked the sponsors, Fellows and recipients of the Award of Merit who attended the event. He then introduced keynote speaker of the evening, Paul Quinless PQS, VP of Stuart Olsen. Paul’s informative presentation was certainly the highlight of the evening as he led the audience into the evolution of his career origins and insights.

Paul discussed the importance of mentor/mentee relationships and offered key lessons derived from his own experiences as both a mentor and mentee. Following the presentation, Sheila Lennon, CIQS Executive Director, provided a brief overview of exciting future events, including the 7th Annual Construction and Project Management Seminar (in partnership with the RICS) in Oakville, and Congress 2020 in Winnipeg.

The evening concluded with Shane McKernan, BC Chapter President, presenting Paul with a personalized plaque on behalf of the CIQS. All in all, it was a wonderful evening focused on mentorship, building connections and sharing fresh ideas. Thank you also to our generous sponsors who helped to make this evening a success! In particular: Altus, Hanscomb, PKolon CC, Turner &

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Townsend, Adjudico, Pelican Woodcliff, Atrium Consultants, FTI Consulting, Domino High Voltage, and Rooflifters. To find out more about future networking events, please visit our website www.ciqs.org.

Matt Ainley, Paul Quinless, Sinéad Quinless, Compton Cho.

Shane Mckernan, Susan Neil, Mel Yungblut, Sheri Thompson, Ian Duncan, Sheila Lennon.

Spring 2020 | www.ciqs.org | CONSTRUCTION ECONOMIST | 17

INFRASTRUCTURE ONTARIO

SETS AMBITIOUS PATH FORWARD

O

ntario is in the midst of an infrastructure and construction boom and Toronto is the fastest growing city in North America by population. Outside of Toronto, the Greater Toronto and Hamilton Area (GTHA) includes thriving residential cities that have strong economic ties to Toronto with residents commuting regularly over long distances by car or rail to work.

Right-sizing transit to serve these growing populations has been a challenge as transit projects have fallen behind but fixing this problem is the mandate given to Infrastructure Ontario, a governmental body that oversees the province’s major projects. At the RICS and CIQS 7th Annual Construction and Project Management Seminar held at Noble Hall in Oakville on February 20, senior representatives from Infrastructure Ontario presented on their company’s accomplishments, and current and future projects.

The event began with Arif Ghaffur, President, Lakeland Consulting Inc., and Editor of the Construction Economist, providing his welcome and opening remarks on the event to all guests. Following Arif’s introduction, Alan Hand, Senior Partner, A.W. Hooker Associates Ltd. welcomed the guest speakers to the stage.

Infrastructure Ontario’s senior representatives, Michael Lindsay President, Project Delivery, and David Ho, Executive Vice President, Procurement & Program Management, focused on how Infrastructure Ontario plans to partner with the industry to get things built.

“There’s a lot of work coming in the province and we’re deeply thoughtful on the best way to deliver it,” said Michael Lindsay. “We’re looking for the industry to help shape the design, delivery and upkeep of the transportation assets.”

Lindsay described a 60-billion-dollar pipeline of projects ranging across all types of asset classes. This pipeline is double the capital value of all the projects Infrastructure Ontario has delivered since it was established in 2005.

This rapid ramp up brings challenges – the industry has a skill and capacity gap that is growing at an alarming rate – but Lindsay speaks of a provincial government who has prioritized infrastructure improvements and is willing to do what it takes to get them done.

He pointed to a recent announcement by Minister of Transportation Caroline Mulroney on the proposed Building Transit Faster Act. This new act is meant to provide the province and Infrastructure Ontario with additional tools to remove barriers and expedite the planning, design and construction process for transit projects.

“This is a unique opportunity,” said Lindsay. “There’s been a recognition that to take a quantum leap forward, we need CLICK HERE to return to Table of Contents

to build added depth and scale. Transit that people can use. It’s absolutely what is required to get people moving across the City of Toronto.”

But Infrastructure Ontario does not work alone. It partners with the industry and the local communities for the successful completion of its projects. Lindsay recognizes the need to work with professional bodies like RICS and other stakeholders to ensure risk is collaboratively managed and contracts are fair.

Achieving the scale-up required to achieve the projects in the pipeline “requires real partners in the private sector,” he added, “leveraging the best of thinking from the private sector in the design and delivery of these projects.” Much of this work happens even before the procurement is begun.

David Ho spoke of the work Infrastructure Ontario is doing to centralize the best of processes, procurement, methodologies, quantitative risk analysis and management to find better outcomes.

“We know intuitively and through physical evidence that it is hard doing big transit,” said Ho, “We have to mature our understanding of the inputs that go into predicting that something is going to be late.”

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Ho spoke of the need to put aside anecdotal predictions in favour of data. Sound methodologies can use data science to predict the probability of a project being late and make informed decisions for the best version of cost contingencies.

The definition of success can pivot between cost, speed and quality depending on what’s most important, explained Ho. “Due diligence can suffer when time prevails above all else. Our commitment is to do better.”

Once the speakers concluded their presentations, Anil Sawhney, Director of the Infrastructure Sector, RICS, provided a brief reflection and closing remarks on the presentations.

Following his remarks, David Dooks, Chair, CIQS, presented the Award of Excellence to Craig Bye, Director, Hanscomb Limited.

Following this event, RICS is continuing the dialogue with Infrastructure Ontario as we work to address industry challenges. In April, the RICS Summit Series Americas will include a summit in Toronto featuring RICS Connect, which aims to connect new talent with local employers. In May, RICS is holding a Construction Dispute Symposium in Toronto to discuss collaborative and adversarial approaches to dispute resolution in the construction sector.

“THERE’S BEEN A RECOGNITION THAT TO TAKE A QUANTUM LEAP FORWARD, WE NEED TO BUILD ADDED DEPTH AND SCALE.”

About the author Amie Silverwood is the Content Manager – Communications and Media for RICS in the Americas. Her focus is on connecting qualified professionals with forwardthinking thought leadership on the issues that matter most to those who work in the built and natural environments.

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2020 Construction Adjudication Symposium Prairies region: an effervescent interaction Prompt payment, lien reform, and adjudication current overview

T

he Construction Adjudication Symposium was jointly held

by CIQS Prairies & NWT Chapter and the RICS on February 27, 2020 at the Best Western Premier Calgary Plaza Hotel, with 136 registered participants in attendance.

This event brought together over 20 leading experts, construction stakeholders and industry participants for a day-long discussion about prompt payment and adjudication and the emerging trends and implications facing the new construction landscape.

There were six diverse topic workshops held throughout the day and a guest speaker dinner event.

Jerry Crawford, President, CIQS Prairies & NWT Chapter, opened the conference with recognition of the sponsors, First Nations representatives and reference to the importance of the Professional Quantity Surveyor going forward in the future.

During the opening remarks, the May 2019 Toronto Construction Adjudication Symposium was cited as a key factor in the vision for hosting the 2020 event in Calgary.

Encouragement from several industry stakeholders was an important factor in planning this event. Stakeholders included Bill Black, President, Calgary Construction Association; and the Prairies & NWT Chapter Board.

Another theme touched on during the initial delivery to the stakeholders in attendance was the importance of lateral thinking and drawing upon experience in multiple construction theatres to be effective in the future.

The introduction of Event Chair (Laura Cundari, Blake, Cassels & Graydon LLP) was then given by Jerry Crawford, KGC Consulting Ltd. Laura Cundari, FCIArb, is a Partner at the firm’s Vancouver office and has extensive experience in Litigation and Arbitration. The audience was advised that the construction industry was at a critical transition point regarding several imminent changes.

The first workshop speaker, Bruce Thompson, Wood PLC, addressed emerging trends, with a focus on his industry experience working with the UK Model. He shared how the Canadian Adjudication system is closely based on the United Kingdom (UK) model, with a strong and active role for the

Jerry Crawford giving his introduction message and opening remarks to the Event and Programme Chair CLICK HERE to return to Table of Contents

Professional Quantity Surveyor working closely with the legal profession.

Bruce Thompson emphasized that the adjudicator will have an important inquisitorial role in the Canadian environment.

The behaviour of parties leading up to dispute could be a factor in the adjudicator’s determination. He noted that abusive behaviour might prove counter-productive, no matter how right the position of the abuser party might be. Ethics and jurisdictional factors can have a significant determination on the outcome of any dispute going into adjudication.

The second panel on Worldwide Trends Towards Prompt Payment & Adjudication was moderated by Jane Sidnell, Rose LLP, with Ali Fard, Driver Trett; and Gerald McEniry, Revay and Associates Limited. Several insightful experiences were provided, including references to the practical constraints and limitations on adjudication.

Gerald McEniry spoke of the pilot project approach adopted in Quebec. The approach seems to be receiving favourable acceptance on a couple of the infrastructure projects into which it has been incorporated in the process.

Some disputes are so complicated that traditional arbitration may be a preferred course of action due to the timeline constraints of the adjudication period. The theme of unethical ambush tactics was again emphasized as a tempting behaviour practice to avoid, however grievous the historical chronology of the circumstances.

The next workshop was on Prompt Payment Reforms & Lien Reform Momentum Across Canada, moderated by Jane Sidnell, with Matt Ainley as the feature speaker representing the General Contractors Alliance of Canada.

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2020 Construction Adjudication Symposium Using the UK experience as a guide, Matt Ainley indicated that, with approximately 1,500 adjudications per year (based on UK population statistics), Canada might see 700 adjudications conducted. The federal legislation Bill C97, yet to be legislated in law, is following the Ontario Construction Act Template.

The third workshop, Implications of Prompt Payment for Construction (Legal Perspective), was moderated by William Kenny, Miller Thomson LLP, with panelists David Wahl, Bennett Jones LLP; Philip Biggar, Goodfellow & Schuett Law; and Sean Ralph of Dentons LLP. Much of the conversation focused around various scenarios that could arise after the adjudicator makes a written determination, such as the way the adjudicator’s decision could be treated in a formal litigation proceeding; and, if contested, how the decision could be treated on jurisdictional grounds within the legal framework process.

A key point raised in this panel and in other panels was the importance of correctly identifying and crystalizing the exact nature of dispute. Failure to address the dispute correctly by the adjudicator would lead to a problematic outcome.

A period of participant and stakeholder networking was engaged in before the start of the later afternoon session.

This event presented the symposium delegates with the chance to greet old friends and make new ones over cocktails and tasty appetizers.

Immediately after the break, the CIQS Prairies & NWT Chapter and the RICS announced Wellspring as their charity of choice for the donation of this event’s proceeds. Bill Black delivered the charity selection message and also spoke of the significance of the event as it pertains to helping achieve enhanced collaboration with the Builders Owners & Consultants (BOC).

The first late afternoon session examined the implications of prompt payment from the general and trade contractors’ perspective, again moderated by William Kenny, Miller Thomson LLP. The panel consisted of Terry Milot, Executive Vice President, Chemco Electrical Contractors; and Weston Rudd, General Counsel, Graham Group. Both stakeholders spoke extensively of the need for prompt payment and the financial pain encountered working with elongated payment cycles. Weston Rudd spoke of the preference for consistency in provincial harmonization regarding the standardization of the process.

The final moderator, Leanna Olson, Miller Thomson LLP, was then introduced to oversee the two final workshop sessions, beginning with a Surety Bonding Perspective session by Sean Marchant, Intact Insurance. Reference was made to the New Form 32 under Section 85.1 of the Ontario Construction Act. Section 12 of the accompanying General regulation, requires that all “public contracts” with a contract price of $500,000 or more require the contractor to furnish both a performance bond and a labour and materials bond that, in each case, must be in 24 | CONSTRUCTION ECONOMIST | www.ciqs.org | Spring 2020

the prescribed forms and have coverage limits of at least 50% of the contract price.

The Act defines a “public contract” as a contract where the owner is the Crown, a municipality, or a broader public sector organization, but excludes contracts where the contractor is an architect or engineer from the application of that section Thus, the provision is meant to capture all government-procured construction contracts with a contract price of $500,000 or more.

The final workshop, focused on the Owners Perspective, was moderated by Leanna Olson, panelled by Nico Duursema, Cerilon Group Inc.; Sarah Heppinstall, First Capital Realty; and Mark Scharf, University of Calgary. Clarity of invoicing content and increase in staffing resources in the accounting department to pay promptly would be a challenge and a change in cultural behaviour for many organizations.

An extended networking and dinner session preceded Barrie Marshall, ADR Institute of Canada and ADR Institute of Alberta, who delivered a riveting talk on the Alberta perspective and position in prompt payment initiatives thus far, and initiatives currently underway in the following of federal legislation progress.

The feature dinner and keynote speaker, Bruce Reynolds, Senior Partner, Singleton Urquhart Reynolds Vogel, LLP of Toronto, capped the evening with a robust, wide-reaching, intellectual and practical perspective of the Canadian prompt payment scenario.

In summary Bruce talked about four key areas in the emerging trends and considerations of adjudication in Canada; these are: 1. There must be fairness in the adjudication process.

2. Adjudicator training is mission critical, and is required in the adjudication process as a whole.

3. The Adjudicator must answer the right question in the matter that is being adjudicated.

4. Risk associated with ethics and future behaviour of procurement purchasing authorities around exercising the “bitter exclusion provision” and debarring contractors and vendors if an adjudication process is triggered.

The evening wrapped up with photographs and brief interactions. The CIQS Prairies NWT Chapter thanks the sponsors, moderators, speakers and the CIQS National office for a roundly well-organized Construction Adjudication Symposium.

About the author Joshua Ikubor is a senior consultant with Turner and Townsend. He has over 20 years of experience in leading teams, projects and individuals. As a Professional Quantity Surveyor and Chartered member of the RICS his passion is to educate professionals on emerging trends.

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Risk management – a Quantity Surveyor’s role

The concepts of risk management have been around for hundreds, if not thousands, of years. It all started with gambling. Gambling is based on games of chance, where skill makes little or no difference. Gaming houses are able to make a profit because they can predict the chance of the gambler winning and tilt the balance in their favour. We assess risk in our daily lives from crossing the road, making everyday decisions, taking out insurance policies or even deciding to leave a job for another – we weigh the options. We make judgements on risk in everyday events and where possible use previous judgements to help inform our decisions. Risk is inherent in ALL activities and ALL future events, particularly in the construction industry.

The 1994, Sir Michael Latham, who was a British Conservative Member of Parliament wrote an influential joint government and industry report on the UK construction industry titled Constructing the Team that introduced risk management to the construction industry. He stated: “No construction project is risk free. Risk can be managed, minimized, shared, transferred or accepted. It cannot be ignored.”

RISKS IN THE CONSTRUCTION INDUSTRY It is essential that risks are recognized and there are three ways that risks can be dealt with: CLICK HERE to return to Table of Contents

Spring 2020 | www.ciqs.org | CONSTRUCTION ECONOMIST | 25

• Risks may be avoided – this is not a viable proposition as construction by its very nature has many risks and avoiding it will result in non-activity and projects not proceeding.

• Risks may be accepted – it is essential that risks are not accepted in ignorance or unintentionally, e.g., contractors entering into biased contracts which places more risk on them. Also, transfer or minimization of risks should always be considered e.g., design for specialized works such as piling being transferred to sub-contractors to avoid the structural engineer taking on the risk.

• Risks can be ignored – never a good idea and will result in unsuccessful projects.

SO, WHAT IS RISK MANAGEMENT? Risk management has been identified as ‘a process of identifying and then actively managing risk for projects with the aim of making the project more likely to succeed.’

Hence, it is important that risks need to be identified, assessed and managed to enhance the successful outcome of a project. As with most things it is necessary to take risks to maximise benefits, which is all about the weighing the risks. It is important to note that nothing ventured is nothing gained, and the key principle is that risk-taking is necessary to gain rewards. Risk management is not about eliminating risks altogether, but about controlling risks, just as we control costs.

THE RISK MANAGEMENT PROCESS As Quantity Surveyors, our cost plans often cover design and construction risks through the design reserve and the construction contingency; however, we should consider a risk contingency, which would cover for informed identification of risks. However, this would require an active risk management process, which should form part of design team meetings. It is recommended that this be undertaken at the start of any project

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Diagram 1 (Source: Davis Langdon Management Consulting)

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“Risk management is an underutilized tool, which should be part of every project.”

Diagram 2 (Source: Davis Langdon Management Consulting)

to ensure active management and mitigation of risks. For risk management to be effective, risks need to be: • Identified – what risks would affect the achievement of the project’s objectives.

• Assessed – risks are assessed and ranked.

• Re-evaluated – risks may go away but at the same time some further risks may be identified.

• Controlled – this includes identifying appropriate responses to the risks, allocating owners, and then monitoring, executing, and controlling the responses.

The above should be undertaken through a risk register, with a baseline register set through a risk management workshop and then discussed/reviewed at every design team meeting.

With risk identification, the earlier the better as opportunities to mitigate or remove reduce with time with circa 80% of costs committed at the concept stage.

Diagram 1 shows that potential for change reduces with time, resistance to change increases with time and the cost of the change increases further down the line. It is best to focus the risk study at inception of the project.

Identification of risks can be supported by categorization of risks as shown below. Typically, we only consider and manage project risks, but we could alert the Client to other risks such as business, political, funding, business strategy and even global risks.

In identifying risks, we need to have a risk description i.e. ‘there is the risk that…’ and a consequence i.e. ‘this

will result in…’ – we should consider the result of a risk occurring, things that cause damage and also that a risk can remain a threat but never cause damage.

Having identified the risk, one then needs to understand that will happen if the risk occurs. These are the consequences of risk occurring and the things that can cause damage. Risks can remain a threat and never cause damage except maybe keep you up at night.

Once identified, these should be put into a risk register, analyzed in terms of likelihood, impact and rating in order for a risk status to be allocated, and then actively managed. There are numerous templates/tools for this to be undertaken.

The risk register should be an active tool reviewed at every design team meeting and updated for new and mitigated risks.

THE QUANTITY SURVEYOR’S ROLE As the Quantity Surveyor we can facilitate the risk workshop, draft the risk register and actively manage it as part of our scope. As a further risk management scope, we can also cost the risks for a risk contingency to be included within our cost plans, which can also be undertaken through various methods such as Monte Carlo simulation and the Central Limit Theorem.

Risk management is an underutilized tool, which should be part of every project, and which we as Quantity Surveyors are well placed to lead and provide advice to the client.

About the author Angela Lai, FRICS, PQS, LEED AP O+M is the Managing Partner of Core Two, a property and construction cost consultancy based in Vancouver, BC. Angela has over 18 years’ experience in the construction and development industry spanning South Africa, the UK and Canada. Angela’s experience is diverse having worked as a cost manager, loan monitor and a management consultant, and having specialist expertise in sustainability, life cycle and FM costing. She is also an instructor at BCIT, Passive House Canada and for the RICS training hub.

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M

WASTE MANAGEMENT FOR REMOTE LOCATIONS AND TEMPORARY COMMUNITIES

y experience in assisting remote and temporary communities with water and wastewater treatment challenges has shown that there is often a lack of experienced management for their overall operation. Accurate budgeting and cost management are lacking, as is a suitable labour pool of trained workers. All of these are essential to any project to ensure that operations are successful and that the communities have the benefits of reliable and viable systems. There is a need for these costs.

There are various solutions for smaller communities affected by the varying size of waste streams and difficulties encountered by climate, remoteness, and content make-up that are not the norm.

In this context, a “remote location” is one that has only seasonal access by road or water transportation, while a “temporary community” is one with an established time span for the construction of a project or operation of a resource-industry facility.

WASTE SOURCES Set out below is a summary of the various waste sources and methods of disposing of waste in the most economic manner for a remote location, while ensuring that environmental impact is minimized. The management and operation of waste disposal facilities and systems does require supervision and a degree of technical competence and skill.

1. Wastewater treatment plant: Sludge, compost, compression, incineration, and landfill.

2. Domestic solid wastes: Sorting items, recycle and off-site disposal, landfill, and incineration.

3. Kitchen waste: Compost, landfill, and incineration.

4. Industrial solid or liquid waste: Haul to waste processor, incineration, and landfill.

5. Domestic waste (glass etc.): Sort and haul to recycle facility.

6. Cardboard, paper, scrap metals: Sort and haul to recycle facility.

7. Non-combustible construction debris etc.: Sort, recycle, and landfill.

8. Animal remains: Incineration.

WASTE MANAGEMENT FOR REMOTE LOCATIONS AND TEMPORARY COMMUNITIES

MEANS OF DISPOSAL 1. Composting: The biodegrading of materials that will, after time, break down to form a soil type material – but, in Northern climates during the winter, this process is dormant.

2. Incineration: Total destruction of materials by heat – but it is necessary to have initial fuel sources such as diesel or dirty oil to create heat.

3. Landfill: Requires the on-site construction of a landfill cell with membrane liners and soil to progressively cover the waste.

4. Waste processor: Hauling to a waste processor requires on site 28 | CONSTRUCTION ECONOMIST | www.ciqs.org | Spring 2020

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preparation, packaging and handling operations prior to shipment off-site to a major disposal centre.

This could be part of an annual resupply process.

5. Hazardous materials: These require specialized containers and identification prior to shipment to a certified disposal facility – and there will be cost incurred for the disposal process.

LOCAL LANDFILL FACILITY A landfill cell has to be constructed in accordance with local, provincial, and federal regulations; it requires a multi-layer membrane and leachate gathering system. The preferred construction of the cell is initial excavation in order to create material to provide the periodic cover material and final capping of the cell. In areas with substantial rock, an alternative method is to construct a bermed cell. The challenge in this form of construction is sourcing local material for covering and capping. An additional problem is the freezing of the stockpiled cover material during winter months. A solution to this problem is to incinerate the waste material during the winter months. This will also extend the life of the landfill cell.

TRANSPORTATION The movement of waste material off-site to an approved disposal site or recycling site will incur costs, even when backhaul opportunities arise. Most locations do tend to have limited winter roads or summer barge services; both of which have limited durations. Therefore, in order to mitigate costs of disposal, incineration should play a major factor for both waste disposal and reduction.

About the author Roger Ward PQS(F), FCIOB is Business & Construction Advisory Consultant for Gwent Building Systems Ltd. With over 40 years of experience in various positions within the construction industry, Roger started off as a draughtsman, then worked his way up to Project Construction Director. He now works as a consultant, specializing in construction claims, and writing RFPs for mine site remediation.

Roger has substantial amount of experience on projects throughout the construction sectors, including industrial buildings, petrochemical facilities and various infrastructure projects. He has also had many opportunities to work on construction projects overseas in Nigeria, South Korea, China, and the Bahamas.

QSM

MECHANICAL AND ELECTRICAL COST CONSULTING

RECYCLABLE ITEMS Recyclable items fall into various categories followed by subcategories. The two main methods of processing are: 1. Processing for re-use in whole or part.

2. Neutralization prior to final disposal.

There are numerous items in the waste streams that can be recycled through a properly managed waste disposal program. The amount of recycling that can be carried out at remote or isolated locations is limited to sorting, packaging, and preparation for shipment.

Biodegradable waste can be composted to supplement local soils for gardening opportunities for the growing of fruits and vegetables.

In addition to the above, there are a number of other factors that will impact both the methods and processes being used. These are seasonal transportation access, seasonal weather conditions, volume of items, structure of the communities, and the desire to reduce environmental impact.

The key to success of any program lies in the education of all involved.

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Dennis M. Smith PQS dennis@qsmcon.ca www.qsmcon.ca

CELL OFFICE

416-949-8540 905-649-8540

Let QSM bring its experience to your next project!

Spring 2020 | www.ciqs.org | CONSTRUCTION ECONOMIST | 29

Our concern for the environment is more than just talk

This publication is printed on Forest Stewardship Council® (FSC®) certified paper with vegetable oil-based inks. Please do your part for the environment by reusing and recycling.

CIQS international reciprocity agreements The CIQS has signed reciprocity agreements with international professional bodies having similar objectives, giving CIQS members access to services and programs offered by other professional organizations, and vice versa.

What is a reciprocity agreement with the CIQS all about?

A reciprocity agreement is basically a twoway accord: two or more parties agree to share their resources to achieve common objectives. In these arrangements, the CIQS and foreign organizations agree to mutual recognition of professional licenses and credentials.

The CIQS has signed Reciprocity Agreements with nine professional organizations around the world. They are: - Building Surveyors Institute of Japan (BSIJ) - Australian Institute of Quantity Surveyors (AIQS) - Association of South African Quantity Surveyors (ASAQS) - Hong Kong Institute of Surveyors (HKIS) - New Zealand Institute of Quantity Surveyors (NZIQS) - The Royal Institution of Surveyors Malaysia (RISM) - Singapore Institute of Surveyors and Valuers (SISV) - Nigerian Institute of Quantity Surveyors (NIQS) - Jamaican Institute of Quantity Surveyors (JIQS) For a complete listing and further details, please visit www.ciqs.org/english/ reciprocity-agreements.

Benefits to CIQS members from reciprocity agreements.

CIQS members can take advantage of international reciprocity agreements.

They allow CIQS members to apply for membership in those other professional bodies, and permit members of those other professions to apply for the Canadian PQS/ CEC designations. In addition, services and programs provided by the signing organizations are available to the members of those organizations.

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Can a corporate member of the other organization having reciprocity with the CIQS directly obtain a PQS/ CEC designation?

Subject to the specifics of the reciprocity agreement, an applicant still must fulfill CIQS ethics and bylaws requirements, submit to a professional inteview, and show proof of compliance with minimum Canadian industry experience, etc. These conditions vary depending on the academic and professional experience requirements of the other association.

How does a reciprocity agreement help a member of the other organization to expedite an application for PQS/CEC designation?

In the case of a member of an organization listed above, the CIQS will quickly and fairly assess that person’s academic and professional credentials, and provide a clear path to a Canadian PQS/CEC designation.

What is the CIQS process of establishing a reciprocity agreement?

An extensive review of membership criteria, academic requirements, national standards, and other common objectives is undertaken.

The CIQS membership requirements are substantially equivalent to those required for certification by the other organizations that already have agreements.

Can an internationally trained Quantity Surveyor having corporate membership of a similar professional organization, but not listed above, expect to have a reciprocity agreement in the future?

Establishing reciprocity agreements is an ongoing process of the CIQS, which is working to that end with a number of countries. Reciprocity with the Institute of Quantity Surveyors of Sri Lanka (IQSSL) has already been approved by the CIQS board, so execution of an agreement is expected in the near the future.

If you have any questions about this, please contact the CIQS at 905-477-0008.

About the author Indu Elapatha, PQS, MRICS, is a Professional Quantity Surveyor with nearly three decades of experience in the construction industry. Her experience is broadened to include ICI, residential development, and infrastructure projects. She currently works with Hanscomb Ltd. as a Senior Cost Consultant.

Indu is the current BC representative to the CIQS National Council, and a member of the CIQS education committee. She is also past Publications Chair of CIQS National, past President of CIQS - BC, and past Director of Communications and Bylaws in the BC affiliate of the CIQS.

QS Online Cost Consultants Inc. Halifax, Nova Scotia p. 902 405-1504 halifax@qsonlinecostconsultants.com www.qsonlinecostconsultants.com

Spring 2020 | www.ciqs.org | CONSTRUCTION ECONOMIST | 31

Company profile – Tech-Cost Consultants Ltd. 37 years and counting: an Albertan success

Tech-Cost Consultants Ltd. (TechCost) was founded by Alan Nessick in 1982. Since opening in Calgary, we have developed an extensive portfolio providing tailored construction cost consulting, progress monitoring, and cost management services throughout Western Canada. TechCost’s mission is to deliver effective solutions ensuring our clients receive value in the continuous management and control of their costs.

With offices in Calgary and Edmonton, we consult on the planning, development, and implementation of residential, institutional, commercial, and industrial capital projects. Our services include capital budgeting, cost planning, progress monitoring, cost control, estimating, project management, value management, life cycle costing, business case development, alternative procurement strategies, capital reserve fund analysis, forensic analysis, expert witness, and earned value analysis.

The fundamentals of quantity surveying remain consistent; but technology advancements change the approach in which services are delivered. Continuous learning and leveraging the latest technology allow us to remain current with our integrated cost management framework to support our clients’ needs.

Our team: Our work family is a group of professionals from different backgrounds around the globe. Working collaboratively in a high stress environment, we support each other by celebrating our personal differences and professional skills to enable our company to thrive. Our collegial atmosphere allows relationships to be cherished.

32 | CONSTRUCTION ECONOMIST | www.ciqs.org | Spring 2020

Alan Nessick PQS(F). Alan has over 40 years of experience. Originally from London, a true Cockney, born within the sound of the Bow Bells. He made Canada his home in 1979, starting his life in Toronto, spending time in Vancouver, and finally settling in Calgary. He is married, with a love for golf, which keeps him busy in his transition away from full time work.

He has extensive ties to the construction industry and has served on the board of the Calgary Construction Association.

Kevin Drake PQS, MRICS, CET. Kevin is a native Haligonian who began his quantity surveying career in 1988, obtaining MCIQS in 1991, and has stayed in the industry ever since. He is a family man, married for 29 years with two sons and has an avid thirst for music and travel. Kevin remains a rugby fanatic having represented Nova Scotia at Canada Games and playing Junior and Senior rugby levels for over 25 years.

Joining Alan and TechCost in 2007, Kevin as senior partner is accountable for all facets of the business.

Ryan Makar PQS, CET. Ryan has 19+ years of experience in quantity surveying.

He is originally from Edmonton, but has called Calgary home since 2004. Ryan spent the next eight years working in the Alberta Energy, Oil and Gas mega-project industry before joining TechCost as a partner in 2014. Ryan and his partner, Tess, occupy their spare time pursuing outdoor activities such as mountain biking, hiking, camping, fly-fishing, golfing, and skiing.

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Company profile

Phillip (Phil) Vesty PQS, BSc (Hons). Phil is a Senior Quantity Surveyor with over 30 years of experience. Phil is originally from Leicester, UK. He spent 14 years in New Zealand before joining his Canadian-born wife in Edmonton in 2009, at which time he joined TechCost’s Edmonton team. Our Olympian Phil, was in the 1984 Los Angeles Olympics and finished 13th in the 20km race walking event. Phil works out of our Edmonton office and leads many of our Northern Alberta projects.

Brandon Heger CEC. Brandon has nine years of experience as an electrician, 10 years as a Quantity Surveyor, and is working towards his PQS designation. Brandon has owned an electrical contracting business, and has been a consultant for TechCost since 2009, recently joining our team fulltime. Brandon is a rural Alberta boy, born and raised just outside Calgary. He is a devoted family man with two young daughters longing for the days of fishing and golfing.

Kelly Parker PQS, BSc (Hons). Kelly has over 20 years of experience working as a Mechanical and Electrical Quantity Surveyor for contractors in the UK before relocating to Canada and joining TechCost in 2015. Kelly and her son followed family to Canada. Originally from Liverpool, she often feels land-locked but the enchantment of the big blue sky of Alberta is more than a fair trade.

Crystal Zvacek MBA. Crystal originally hails from Saskatchewan’s farmland and now calls Calgary home. She brings with her 10 years of operations and marketing experience and supports our team part-time in an administrative function. She is a keen volunteer and an artist who enjoys writing and painting.

Charlene McKeigan PQS, CET. Charlene has over five years of experience as a Quantity Surveyor. Charlene, originally from the Philippines with a nursing degree, immigrated in 2010, and retrained to be a Quantity Surveyor. She has worked at TechCost since 2014. Married with a toddler at home, she always finds time to unwind with family; going camping, hiking, and visiting the zoo are some of their favorites.

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Our TechCost family is diverse in both its expertise and individuals’ experiences. This diversity results in a dynamic, cohesive and professional cost consulting company and is at the core of our success.

Does your company employ quantity surveyors, estimators, and such professionals? Would you like your company like to be considered to be featured in the Construction Economist? If so, email Sheila Lennon execdir@ciqs.org.

Spring 2020 | www.ciqs.org | CONSTRUCTION ECONOMIST | 33

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