Construction Economist - Fall 2022

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 info@ciqs.org www.ciqs.org

Chief Executive Officer

Sheila Lennon, CAE ceo@ciqs.org

Managing Editor

Arif Ghaffur, PQS(F) aghaffur@ciqs.org

Editor Chris Court, PQS(F) editor@ciqs.org

Assistants to Editor

Ajibola Soboyejo, PQS Shane McKernan, PQS

Send Change of Address to: Canadian Institute of Quantity Surveyors

90 Nolan Court, Unit 19, Markham, Ontario L3R 4L9

CIQS Board

Chair: Arif Ghaffur, PQS(F)

Vice-Chair: Tammy Stockley, PQS(F)

Past Chair: Erin Brownlow, PQS(F)

Education Director: Adam Ding, PQS

Director: Hiran Dassoruth, PQS

Director: Jack Chen, PQS

Director: Antoine Aurelis, PQS

Director: Dominic Leadsom, PQS

Director: Ajibola Soboyejo, PQS

Advisor: Roy Lewis, PQS(F)

YQS Observer: Mykola Pulnyev, PQS

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

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 Katie Woychyshyn Art Design/Production Kiersten Drysdale

Advertising Coordinator Stefanie Hagidiakow Marketing Manager Jeff Kutny jeff@kelman.ca 866-985-9789

Advocate, assemble, lead: CIQS Congress 2022 recap . . . 20

Decarbonization: The economics of Canada’s carbon pricing, part 2 . . . . . . . . . . . . . . . . . 22

Requesting relief under construction contracts: best practices . . . . . . . . . . . . 26

Canadian construction: Indicators of growth, composition, and changes . . . . 28

Exciting times ahead for the CIQS

It gives me great pleasure to write my first message for Construction Economist as the Chair of the Canadian Institute of Quantity Surveyors (CIQS) Formed in 1959, the CIQS has a deep history in the Canadian construction industry with our members being key contributors to projects in Canada and beyond .

My journey with the CIQS began when I embarked on achieving the Professional Quantity Surveyor (PQS) designation in 2009 Around that time, I also started to write for Construction Economist, proudly having my first article published in 2010

In 2015, I was bestowed the confidence of the CIQS Board to take over the vacant role of the Editor of Construction Economist . The CIQS Board and I we embarked on an ambitious plan to refresh the journal and position it as the leading journal for construction economics in Canada .

With the experience of writing/contributing to over 40 articles as a regular contributor and as the Editor, I have strived to ensure that we address issues and opportunities that are both current and relevant . In 2022, this baton was passed to our current Editor, Chris Court PQS(F), who is graciously upholding the standard of Construction Economist .

Did you know?

Certification & Licensing

The Professional Quantity Surveyor (PQS) is an individual who is certified and licenced by the CIQS to provide quantity surveying services both in Canada and internationally

Use of Designations

The term Professional Quantity Surveyor and PQS are licensed trademarks owned by the CIQS and can only be used by a current member certified by the CIQS

Arif Ghaffur, PQS(F)

Today, CIQS members are working across all sectors of the construction industry, at every stage of construction projects, and in every Canadian province/territory, including from the following employer/owner “pools”:

1 Material, labour, or equipment supplier

2 Trade or specialist contractor

3 General or main contractor

4 Financier, developer or owner 5 Cost or management consultant/advisor

6 Insurers or insurance broker/assessor

7 Project manager/construction manager

8 Federal/provincial/territorial government

9 Municipal/local government

10 Academic or knowledge share institution

CIQS members are also working outside Canada on the international arena as the CIQS maintains reciprocity agreements and strong relationships with international associations such as the Pacific Association of Quantity Surveyors (PAQS)

As a director, and having previously been an Observer of the Board and Vice Chair of the CIQS, I am very aware of the hard work and dedication of the directors as they volunteer their time contributing to the elevation of the profession In this vein, the CIQS has embarked on an ambitious Strategic Plan (for 2022–2025) which is based on strategy, oversight, and governments by the CIQS Board of Directors

The strategic plan requires the continuation of existing initiatives and the creation of several initiatives, which include committees for chapter relations, education, external relations, young quantity surveyors, member engagement and governance, as well as ethics and conduct Further initiatives include risk management, value proposition, prompt payment, and best practices

Day-to-day management of Institute remains the responsibility of the Chief Executive Officer, Sheila Lennon, and includes operations, financials, international relations, publications (including Construction Economist), learning, member services, marketing communications, membership/metrics, events/congress, and management of external state quarters such as legal counsel, accounting, insurance brokers, the Institute’s management system, the publisher of the Construction Economist, bookkeeping, and IT support

There are exciting times ahead and the CIQS is well-positioned to continue its push towards making the profession a career of choice The CIQS Board remains committed to making excellent progress in achieving positive organizational change that benefits members and elevates our profession

As the CIQS continues its excellent work, I am grateful for the opportunity to be a contributor to initiatives that provide us a sustainable and resilient profession I look forward to working with Shelia Lennon, staff and the Board in fulfilling the CIQS strategic plan

In parallel, I encourage you to reach out and become involved with your local chapters as we seek to enhance member events and benefits Run by a volunteer chapter executive, each chapter comprises members in good CIQS standing who have been elected by its local members Local chapter chairs can be accessed via Sheila Lennon (ceo@ciqs.org)

In closing, I would like to again thank outgoing Chair, Erin Brownlow, for her hard work and dedication in upholding the principles of the CIQS The CIQS is well positioned to elevate itself to the next level in promoting Professional Quantity Surveying (PQS) and Construction Estimating Certified (CEC) as designations of choice

I hope that you and your families have had an enjoyable Summer and I wish you all the best for Fall

A.W. Hooker Associates Ltd., offers leading edge Cost Consulting with a comprehensive portfolio of services from a team of Professional Quantity Surveyors; including, Architectural, Structural, Civil, Mechanical, Electrical, Independent Certification, Loan Monitoring, Expert Witness, Adjudication and Client Representation roles.

JOIN OUR TEAM

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Abstract from presentation by Andrea Lea (Glaholt Bowles) and Catherine MacInnis (IBI Group) entitled “BIM & RISK MANAGEMENT STRATEGIES” delivered at CIQS 2021 Congress.

I encourage you to reach out and become involved with your local chapters as we seek to enhance member events and benefits.

Des lendemains qui chantent pour l’ICÉC

C’est avec grand plaisir que j’écris mon premier message pour Construction Economist en tant que président de l’Institut canadien des économistes en construction (ICÉC) Formé en 1959, l’ICÉC est profondément enraciné dans l’industrie de la construction canadienne et nos membres sont des contributeurs clés aux projets au Canada et à l’étranger

Mon parcours avec l’ICÉC remonte au moment où j’ai entrepris d’obtenir le titre d’économiste en construction agréé (ÉCA) en 2009 À cette époque, j’ai également commencé à écrire pour Construction Economist, et j’ai fièrement publié mon premier article en 2010

En 2015, le conseil d’administration de l’ICÉC m’a confié le poste vacant de rédacteur en chef du Construction Economist Le conseil d’administration de l’ICÉC et moi-même avons entrepris un plan ambitieux pour revigorer la revue et la positionner comme la principale revue d’économie de la construction au Canada

Ayant rédigé/contribué à plus de 40 articles en tant que contributeur régulier et en tant que rédacteur en chef, j’ai utilisé cette expérience pour veiller à aborder des questions et des opportunités qui sont à la fois actuelles et pertinentes En 2022, c’est notre rédacteur en chef actuel, Chris Court ÉCA(F), qui a pris le relai et il maintient avec dignité le niveau du Construction Economist

Aujourd’hui, les membres de l’ICÉC travaillent dans tous les secteurs de l’industrie de la construction, à toutes les étapes des projets de construction et dans toutes les provinces et tous les territoires du Canada, y compris dans les « groupes » d’employeurs et de propriétaires suivants :

1 Fournisseur de matériaux, de main-d’œuvre ou d’équipement

2 Entrepreneur spécialisé

3 Entrepreneur général ou maître des travaux

4 Financier, promoteur ou propriétaire

5 Consultant/conseiller en coûts ou en gestion

6 Assureurs ou courtier d’assurance/assesseur

7 Chef de projet/directeur des travaux

8 Gouvernement fédéral/provincial/territorial

9 Gouvernement municipal/local

10 Établissement universitaire ou de partage des connaissances

Les membres de l’ICÉC travaillent également hors du Canada sur la scène internationale et l’ICÉC maintient des accords de réciprocité et des relations solides avec des associations internationales telles que la Pacific Association of Quantity Surveyors (PAQS)

Arif Ghaffur, PQS(F)

En tant qu’administrateur, ancien observateur du conseil et ancien vice-président de l’ICÉC, j’ai pleinement conscience du travail acharné et du dévouement des administrateurs qui donnent de leur temps pour contribuer à l’amélioration de la profession Dans cette optique, l’ICÉC a endossé un plan stratégique ambitieux (pour 2022-2025) qui repose sur la stratégie, la surveillance et le gouvernement par le biais du conseil d’administration de l’ICÉC

Le plan stratégique exige la poursuite des initiatives existantes et la création de plusieurs initiatives, dont des comités pour les relations avec les chapitres, l’éducation, les relations extérieures, les jeunes économistes en construction, l’engagement des membres et la gouvernance, l’éthique et la conduite D’autres initiatives comprennent la gestion des risques, la proposition de valeur, le paiement rapide et les meilleures pratiques

La gestion quotidienne de l’Institut reste sous la responsabilité de la directrice générale, Sheila Lennon, et comprend les activités, les finances, les relations internationales, les publications (y compris Construction Economist), l’apprentissage, les services aux membres, les communications de commercialisation, les adhésions/mesures, les événements/ congrès, et la gestion des services externes tels que le conseil juridique, la comptabilité, les courtiers d’assurance, le système de gestion de l’Institut, l’éditeur du Construction Economist, la comptabilité et l’assistance informatique

L’avenir s’annonce passionnant, et l’ICÉC est bien placé pour poursuivre son action visant à faire de la profession une carrière de choix Le conseil d’administration de l’ICÉC reste déterminé à faire d’excellents progrès dans la réalisation de changements organisationnels positifs qui profitent aux membres et qui élèvent notre profession

Alors que l’ICÉC poursuit son excellent travail, je suis reconnaissant d’avoir l’occasion de contribuer à des initiatives qui nous assurent une profession durable et résiliente Je suis ravi à l’idée de travailler avec Shelia Lennon, le personnel et le conseil d’administration pour réaliser le plan stratégique de l’ICÉC

En parallèle, je vous encourage à vous rapprocher de vos chapitres locaux et à vous impliquer dans ceux-ci, car nous cherchons à améliorer les événements et les avantages pour les membres Dirigé par un comité exécutif bénévole, chaque chapitre est composé de membres en règle de l’ICÉC élus par les membres locaux Les présidents des chapitres locaux peuvent être contactés en passant par Sheila Lennon (courriel : ceo@ciqs.org)

Message du Président du Conseil

Pour conclure, j’aimerais remercier à nouveau la présidente sortante, Erin Brownlow, pour son travail acharné et son dévouement à la défense des principes de l’ICÉC . L’ICÉC est prêt à passer au niveau suivant en promouvant la profession

d’économiste en construction agréé (ÉCA) et d’estimateur en construction certifié (ECC) comme des désignations de choix J’espère que vous et vos familles avez passé un agréable été et je vous souhaite le meilleur pour l’automne

Résumé de la présentation d’Andrea Lea (Glaholt Bowles) et Catherine MacInnis (IBI Group) intitulée « LA MDB ET LA GESTION DES RISQUES » au Congrès de l’ICÉC en 2021.

Education That Fits You

With online classes starting throughout the year, we make it simple to fit learning into your schedule. Select individual courses best suited to your interests, or register for those courses that make up a certificate or designation requirement. You can work toward a program at your own pace – you register (and pay) on a course-bycourse basis.

TRAINING THAT DELIVERS CONCRETE RESULTS

Continuing Education at George Brown College

Discover our courses and programs in construction, estimating, quantity surveying and Ontario’s Building Code. Taught by industry professionals using the latest tools and standards, our courses provide you with the skills to succeed. Develop your knowledge with our series of Canadian Institute of Quantity Surveyors (CIQS) accredited courses. Expand your career potential by completing a program and achieving a credential from George Brown College. Learn from home with our online courses.

Programs

Building Officials Fundamentals Program

Construction Estimating Program

Construction Project Management Program

Construction Superintendent Program

Electrical Estimating Program

Mechanical Estimating Program

We also offer Canadian Construction Association (CCA) Gold Seal credit courses that you can apply towards your Gold Seal Certified (GSC) designation.

For more information, contact us at cetechnology@georgebrown.ca

Sheila Lennon, CAE

Getting the message through the virtual noise

Stay on top of the latest industry and CIQS news –read our eblasts and follow us on social media.

Effective communication is the dissemination of information among people with the expectation of a desired outcome . We all communicate with others in various ways every single day with the hope that the recipients will listen and understand the message we are trying to convey .

Marketers, businesses, organizations, and individuals have all found creative ways to utilize various digital communication tools over the course of the pandemic In fact, it is forecast that the number of email users worldwide will increase to 4 3 billion by the end of next year, and within that same timeframe it is expected that the “number of business and consumer emails sent and received [will] grow to more than 347 billion”1 in the same timeframe . Earthweb .com has drilled down even further, reporting that on average every person receives over 100 emails per day, of which 85% are spam . They also report that the average working professional sends over 40 emails per day . That is a lot of digital verbiage to wade through every day!

The CIQS has therefore revamped its communications strategy to combat the virtual noise .

Over the last few years, we have ramped up our marketing and communications efforts to educate students, parents, and educators about the multitudes of career paths available within the quantity surveying profession by presenting a school Lunch & Learns and attending virtual career fairs and meet-and-greets We also launched

several online marketing campaigns and print ads to bring awareness to the Institute and the benefits of hiring a Professional Quantity Surveyor or Construction Estimator Certified professional as an integral member of a construction project .

More importantly, we implemented a comprehensive communications plan that incorporates the use of social media, a more user-friendly website, a rebranded member newsletter, virtual networking events, a new member engagement software, and a more focused use of e-blasts because effective communication is the backbone of a strong community .

At a quick glance, our communication efforts seem to rise to the top . We have a 99%delivery rate of our member e-blasts with a 56% open rate and a 12% click rate, compared to the average statistics for non-profit membership organizations of a 35 95% delivery rate, 1 51% open rate and a 10 .82% click rate, according to Constant Contact

Our social media strategy has been highly successful as well The unique visitors on our LinkedIn page increased by 1,582 5%, the page views went up by 1,600 .3% and we gained 775 followers over the last year

It is great to see that a large percentage of our members take advantage of the information and programs that their CIQS membership makes available to them We would, however, like to see a consistent increase in the number of members who read the material we provide to ensure they are not missing out on important

information or opportunities for personal career growth, whether they are event notifications or calls for volunteers for a variety of CIQS projects and committees One such opportunity that is currently available is for members interested in helping the leaders of tomorrow succeed and grow by volunteering to become a CIQS mentor To learn more about this program, please reach out to me at ceo@ciqs.org

Other ways in which our members can take an active role in the advancement of their profession and the Institute is to participate in government relations initiatives such as our Push Politics campaigns where we ask you to make your voice heard with your local Member of Parliament We have created a website focused on our various Push Politics campaigns, www.count-on-us.org, where you can download a letter template created for a particular campaign that you can sign and to mail to your MP Our next campaign is currently in the production stage Check your inbox this fall for more information because our strength lies in numbers!

Make sure to never miss our announcements, calls for participation or event notices Follow us on LinkedIn, visit our websites (www.ciqs.org | www.count-on-us.org | www.qscareer.org) and opt in to receive marketing and membership email communications Take an active role today to help the CIQS lead your profession forward for tomorrow

Reference 1 www.lifewire.com

“The two words ‘information’ and ‘communication’ are often used interchangeably, but they signify quite different things. Information is given; communication is getting through.”

– Sydney J. Harris

Faire passer le message à travers le bruit des médias sociaux et du marketing par courriel

Restez au fait des dernières nouvelles de l’industrie et de l’ICÉC –Lisez nos courriels et suivez-nous sur les médias sociaux.

« Les deux mots « information » et « communication » sont souvent utilisés de manière interchangeable, mais ils signifient des choses bien différentes. L’information est donnée; la communication est transmise. » – Sydney J. Harris

La communication efficace est la diffusion d’informations entre des personnes dans l’attente d’un résultat souhaité . Chaque jour, nous communiquons tous avec les autres de différentes manières, en espérant que les destinataires écouteront et comprendront le message que nous essayons de transmettre

Les spécialistes en commercialisation, les entreprises, les organisations et les particuliers ont tous trouvé des moyens créatifs d’utiliser divers outils de communication numérique au cours de la pandémie D’ailleurs, on prévoit que le nombre d’utilisateurs de courriels dans le monde atteindra les 4,3 milliards d’ici la fin de l’année prochaine et, dans la même période, on s’attend à ce que le « nombre de courriel professionnels et grand public envoyés et reçus [passe] à plus de 347 milliards1 » Earthweb com est allé encore plus loin et indique qu’en moyenne, chaque personne reçoit plus de 100 courriels par jour, dont 85 % sont des pourriels Ils indiquent également que le professionnel moyen envoie plus de 40 courriels par jour . Cela fait beaucoup de verbiage numérique à parcourir chaque jour !

L’ICÉC a donc revu sa stratégie de communication pour combattre le bruit virtuel .

Au cours des dernières années, nous avons intensifié nos efforts de commercialisation et de communication afin d’informer les élèves, les parents et les éducateurs des nombreuses

carrières possibles au sein du secteur de l’économie en construction à travers des déjeuners éducatifs (Lunch & Learns) dans les écoles et en participant à des rencontres et à des salons de l’emploi virtuels Nous avons également lancé plusieurs campagnes de commercialisation en ligne et des cartes publicitaires pour faire connaître l’Institut et les avantages d’engager un économiste en construction agréé ou un estimateur en construction certifié en tant que membre à part entière d’un projet de construction

Plus important encore, nous avons mis en œuvre un plan de communication complet qui intègre l’utilisation des médias sociaux, un site Web plus convivial, une infolettre pour les membres avec un nouveau visuel, des événements de réseautage virtuels, un nouveau logiciel d’engagement des membres et une utilisation plus ciblée des bulletins électroniques, car une communication efficace sous-tend une communauté forte .

Au premier coup d’œil, nos efforts de communication semblent être à la hauteur Nous avons un taux de livraison de 99 % de nos bulletins électroniques destinés aux membres, avec un taux d’ouverture de 56 % et un taux de clics de 12 %, alors que, d’après Constant Contact, les statistiques moyennes pour les organisations à but non lucratif sont de 35,95 % pour le taux de livraison, 1,51 % pour le taux d’ouverture et 10,82 % pour le taux de clics

Notre stratégie en matière de médias sociaux a également été couronnée

de succès Le nombre de visiteurs uniques sur notre page LinkedIn a augmenté de 1 582,5 %, le nombre de pages vues a augmenté de 1 600,3 % et nous avons gagné 775 abonnés au cours de l’année dernière

Nous sommes fort heureux de voir qu’un grand pourcentage de nos membres profite des informations et des programmes disponibles par le biais de leur adhésion à l’ICÉC Nous aimerions cependant voir une augmentation constante du nombre de membres qui lisent le contenu que nous fournissons pour éviter qu’ils ne passent à côté d’informations importantes ou d’opportunités de développement de leur carrière, qu’il s’agisse d’avis d’événements ou d’appels aux bénévoles pour divers projets et comités de l’ICÉC Une de ces opportunités est actuellement disponible pour les membres qui aimeraient soutenir la réussite et le développement des chefs de file de demain en se portant volontaires pour devenir mentor de l’ICÉC Pour en savoir plus sur ce programme, veuillez me contacter à l’adresse suivante ceo@ciqs.org

Nos membres peuvent également jouer un rôle actif dans l’avancement de leur profession et de l’Institut en participant à des initiatives de relations gouvernementales telles que nos campagnes Push Politics, dans le cadre desquelles nous vous demandons de faire entendre votre voix auprès de votre député local Nous avons créé un site Web consacré à nos

Sheila Lennon, CAE

différentes campagnes Push Politics, www.count-on-us.org, où vous pouvez télécharger un modèle de lettre créé pour une campagne en particulier, que vous pouvez signer et envoyer à votre député Notre prochaine campagne est actuellement en phase de production Consultez votre boîte de réception cet automne pour obtenir

plus d’informations, car le nombre fait notre force !

Ne manquez jamais nos annonces, nos appels à participation ou nos avis d’événements Suivez-nous sur LinkedIn, visitez nos sites Web (www.fr.ciqs.org | www.count-on-us.org | www.qscareer.org) et acceptez de recevoir des communications par

courriel relatives à la commercialisation et à l’adhésion Endossez un rôle actif dès aujourd’hui pour aider l’ICÉC à faire progresser votre profession pour demain

Reference 1 www.lifewire.com

QUANTITY SURVEYORS, ESTIMATORS, PLANNERS

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Nous sommes fort heureux de voir qu’un grand pourcentage de nos membres profite des informations et des programmes disponibles par le biais de leur adhésion à l’ICÉC.

Inflation, another pressure on the housing industry

Just after both the federal and provincial governments announced their focus on making housing more affordable, inflation is wreaking havoc on the housing industry . Inflation rates had not reached their recent record heights since the 1970s and 1980s, affecting the affordability of everything from gas, food, to housing prices, to name a few Inflation hit a record high of just over 12% in 1981 as shown on the chart below which summarizes the evolution of inflation rates since the 1970s 1

With the currently tight labour market and increasing inflation, many unions have been negotiating significant raises for their members . This has resulted in companies having to increase their prices to cover their employees’ increased salaries If inflation remains high much longer, we could see our economy turn to ‘stagflation’ “In economics, stagflation or recession-inflation is a situation in which the inflation rate is high or increasing, the economic growth rate slows, and unemployment remains steadily high. It presents a dilemma for economic policy, since actions intended to lower inflation may exacerbate unemployment.”2 The Bank of Canada is worried that if inflation lasts for too long, it will become entrenched and it will take longer to return to the 2% target . 3 The Bank of

Chris Court, PQS(F)

Canada is predicting that inflation will not be back to this target until the end of 2024 . There are still three more interest rate announcements in 2022 and it will be interesting to see what the Bank of Canada does to end the year .

Inflation is currently sitting at 7 6%, which is down from the high of 8 .1% in July 2022;4 the main drop from June was due to a drop in gas prices The Bank of Canada’s July surprise 1% increase in the lending rate has resulted in a drop in resale values and property listings across the province A report prepared by Strata noted cancelled listings across the GTA spiked by 643% compared to the start of 2022 5 Property values have dropped already this year, but sellers are still expecting early 2022 selling prices 6 After realizing that the market is not the same, many are removing their listings . TD bank released a report suggesting that house prices in Canada could drop between 20% to 25% compared to the peak prices of 2022 7 This decrease will not wipe out all the gains since the pandemic so house owners should not be overly concerned . The main concern in falling home values is for homeowners who bought a house just before the drop in values, as they may not be able to afford closing on the house If the appraisal for a house mandated by a bank for a mortgage closing falls below

the purchase price, the bank will require the purchaser to bridge the gap For some buyers, bridging the gap may mean having to come up with a few hundreds of thousands of dollars, which might force some to walk away from the deal

For those currently renting their homes, they have most likely been notified by their landlords that their rents will be increasing Landlords who have variable rate mortgages, or who are about to renew their mortgages, will be facing increased payments If that is the case, they will likely offset the increases by passing them down to their tenants Another factor is that landlords are renting their units for longer periods since property values are decreasing and first-time buyers are waiting for lower prices, causing rental vacancies to plummet This has resulted in increases to apartment rents depending on unit sizes as follows: Studio, 24 9%, One bedroom, 19 4%, One-plus-den, 19 3%, Two bedroom, 15 4%, Two-plus-den,13 6%, Three-plus bedroom, 12 9% 8 With all the increases to the cost of living from rent to food to gas, this will have a major impact on personal budgets

The Bank of Canada’s mandate to get inflation back to the 2% target is a double-edged sword The main tool at its disposal is to increase the lending interest rate to restrict spending and make loans and mortgages less accessible to individuals If people must make larger interest payments, they will have less money to spend on other needs, and hopefully that will eventually reduce inflation Increasing the lending rate may cause a recession because people will stop spending money, which will reduce retail and service spending, causing companies to lay off workers The Bank of Canada can control only the lending rate; it has no control on other events in the world such as the Russian invasion in Ukraine, supply chains issues, food prices, and housing costs

To ease inflation, the economy may need to take a hit – and lowincome Canadians will be affected the most

Inflation is hurting every industry and everyone’s wallet We thought COVID-19 had been hard the past couple of years, but I think inflation will be a harder battle to win Hopefully 2023 will be better fingers crossed

If you have feedback, suggestions, and of course any articles that you would like to be considered for publication, please email editor@ciqs.org or ceo@ciqs.org

Editor

7 TD Bank Sees up to 25% Drop in Canadian Home Prices by Early 2023 The Canadian Press, August 2022 8 Toronto Rents are Rising at Fastest Pace in More Than a Decade, Report Says Global News, July 2022

Did you know?

Certification & Licensing

The Construction Estimator Certified (CEC) is an individual who is certified and licenced by the CIQS to provide construction estimating services both in Canada and internationally .

Use of Designations

The term Construction Estimator Certified and CEC are licensed trademarks owned by the CIQS* and can only be used by a current member certified by the CIQS .

*The French equivalent terms Estimateur en Construction Certifié are also licensed trademarks of the CIQS.

The changing legislative landscape across Canada

Sahil Shoor

There is an ever-changing legislative landscape in Canada on how to best to address prompt payment in the construction industry This article provides a brief overview covering the developments in each province in Canada, with particular attention placed on the recent developments in Alberta, Saskatchewan, and Quebec

Alberta

In February 2022, the Province of Alberta introduced new amendments to the Builders’ Lien Act These amendments came into force on August 29, 2022 The Builders’ Lien Act is now renamed the Prompt Payment and Construction Lien Act (“PPCLA”)

The PPCLA applies to all contracts and subcontracts entered into on or after August 29, 2022 Construction contracts entered into before this date must be amended to comply with the PPCLA if they are to continue past August 29, 2024

The PPCLA introduces three main points of significance: (1) a new dispute resolution mechanism, known as adjudication, to resolve disputes; (2) strict payments and notice timelines –for example, once a “proper invoice” has been rendered, the recipient has 28 days to pay, unless it delivers a notice of dispute, which must be brought within 14 days upon receipt of the proper invoice; and (3) lien registration deadlines are now 60 days, instead of 45 days, from the last day the services or materials were supplied

Saskatchewan

On March 1, 2022, the Builders’ Lien (Prompt Payment) Amendment Act came into force This legislation fundamentally mirrors that of Ontario’s regime The Saskatchewan Construction Dispute Resolution Office is a new not-for-profit corporation that is the official adjudication authority . The ADR Institute for Saskatchewan is tasked with providing adjudicators to the office .

The prompt payment and adjudication regime does not apply to architects, engineers, land surveyors and persons providing services or materials for any improvement with respect to a mine or mineral resource (including any activities respecting exploration, development, production, decommissioning or reclamation) or an improvement related

to infrastructure in connection with the generation, transmission, or distribution of electrical energy

Ontario

On October 1, 2019, changes to the Construction Act (formerly the Construction Lien Act) introducing prompt payment and adjudication came into force The prompt payment regime includes strict payment deadlines Ontario is the first jurisdiction with a prompt payment and adjudication regime layered on top of an existing construction lien regime Ontario’s legislation has become a model for other provinces to emulate, notably Alberta, for example

Manitoba

The Province has tabled Bill 28 titled The Prompt Payment for Construction Act This Bill is in its early stages, having only received its first reading on March 16, 2022 There is likely to be many amendments to the wording of the Bill before it is implemented Nonetheless, as currently drafted, the Bill would introduce a 20-day prompt payment period once a proper invoice has been delivered

Nova Scotia

On April 12, 2019, the Builders’ Lien Act (amended) received Royal Assent This Act still has yet to come into force Once in force, the current lien legislation will be renamed the Builders’ Lien and Prompt Payment Act This prompt payment regime takes a narrow approach regarding the availability of adjudication, as it limits the availability of adjudication to disputes that are the “subject of a notice of non-payment ” The regulations have not yet been released

British Columbia

On January 24, 2022, the Province, in apparent furtherance of the British Columbia Law Institute’s published Report in July 2020 on the Builders Lien Act, established an industry working group to facilitate progress on implementing prompt payment

legislation . No legislation has been tabled to date however

New Brunswick

In July 2019 and April 2020, the Office of Attorney General published reports setting out recommendations to reform the Mechanics’ Lien Act to introduce prompt payment and adjudication .

Notably, on April 1, 2022, the Remedies Act came into force, which replaced the Mechanics’ Lien Act However, the Remedies Act does not introduce prompt payment or adjudication

Quebec

In 2018, the Chair of the Conseil du trésor, by order, authorized the implementation of a Pilot Project to facilitate payment to enterprises that are parties to public construction work contracts and related public subcontracts . On March 3, 2022, a report on the Pilot Project was published . This report showed positive impacts from payment calendars and adjudication processes – there was

About the author

better collaboration between disputing parties and faster dispute resolution outcomes . The Coalition Against Late Payments in Construction made a recommendation to the Committee on Public Finance to implement the Pilot Project provisions into Bill 12 titled An Act mainly to promote Québec-sourced and responsible procurement by public bodies, to reinforce the integrity regime of enterprises and to increase the powers of the Autorité des marchés publics Bill 12 is now at the Committee Stage at the National Assembly

Federal

On June 21, 2019, Parliament passed the Federal Prompt Payment for Construction Work Act . However, this Act is not yet in force The Act addresses the non-payment of contractors and subcontractors performing construction work for federal construction projects . Once in force, it will not grandfather existing contracts and it will provide for a one-year deferral period before it applies to existing contracts .

Recognized as “Top 40 under 40” in Canadian Construction in 2021 by On-Site and SitePartners and the “Next Generation Partner” by Legal 500 Canada 2022, Sahil Shoor, is a Partner with Gowling WLG (Canada) LLP He is called to the Bar in both Ontario and BC His national practice is focused on complex litigation and dispute resolution in the sectors that drive Canada’s economic development, including commercial construction, real estate development, infrastructure and civil works, power, and energy (nuclear, hydro-electric and power generating stations), and transit/transportation (P3) He also provides advice on COVID-19 excusable and delay claims and force majeure events

Sahil focuses on practical and commercial solutions to complex issues that arise throughout the lifecycle of major projects, where he has advised all the key participants in the supply chain: developers, owners, contractors, subcontractors, consultants, and manufacturers While he is a firm believer in proactive project management to avoid disputes, he always has an eye on positioning clients to best achieve their objectives and is as comfortable managing large trials on highly technical disputes in litigation and arbitration as he is in performing early case assessments, and conducting mediations, adjudications, and other forms of alternative dispute resolution

Sahil is intimate with the industry changes effected by Ontario’s new Construction Act and has a record of effective advocacy as counsel before courts in ON, SK, and BC and arbitration panels (international and domestic disputes)

Adam Ding, PQS

Lessons from Congress 2022: The future of QS education?

Like many of our members, I had the opportunity of attending CIQS Congress 2022 in person . It was a well-organized event with so much information! I learned a lot from a variety of interesting topics such as netzero, MEP, P3, prompt payment, dispute resolution, ICMS, LCC etc The congress definitely carries amazing educational values for our members as well as for anyone of the public desiring to find out what we really do

Specifically, I want to mention two presentations from the congress that prompt me to think more about training and education in general keynote speech by Jamie McMillan from KickAss Careers, who told an intriguing personal story about how she chose skilled trades in her struggling youth and later succeeded in the construction industry The other was by Amit Sharma and Amr Elsadek from Turner & Townsend titled Quantity Surveying – The Next Level, which showcased how technology is being implemented in our profession

Some of my brief takeaways from the congress on the future of QS education include:

1 The future is with the same foundation. Quantity surveyors still require a solid knowledge of construction process, and the CIQS is to find more efficient ways to deliver such

2 . The future is with technology. the increasing use of technologies such as BIM, quantity surveyors need to be trained with proper tech skills for new challenges/opportunities

3 The future is with the young people. Like it or not, the millennials will take over (They are already doing that training and education will need to be flexible enough to meet their real needs

On a personal note, I would like to express my gratitude to our past/current education committee members for their tremendous efforts in serving the Institute Without their hard work, we would never be able to achieve all that we have in just the last couple of years

If you would like to volunteer with us on our upcoming exciting adventures, please do not hesitate to contact the CIQS to express your interest . Donate your time to make a difference in other people’s lives and you will not regret it!

No challenge too big, no detail too small

Turner & Townsend is the program, project and cost management consultancy behind some of the world’s most notable projects, including the Union Station Enhancement Project - the first major rail project procured through an Alliancing contract in Canada.

making the difference

Shane McKernan, PQS

A new chapter

As we enter a hopefully cooler fall after a hot summer, I want to reflect on an incredible journey I’ve had writing these YQS articles for Construction Economist . The CIQS National board formally created a YQS Observer role (and subsequentially, the YQS Corner in Construction Economist) in the fall of 2019, where I had the honour of being elected the first of its position . Since inception of the YQS Corner, I’ve had the opportunity to write these articles and provide relevant industry information, events, skills workshops, and annual interviews with the up-and-coming quantity surveyors of our industry . It has been amazing learning about how diverse our talent pool is, and the great stories on how so many of us came to this industry and have made it not just our careers, but our passions

There have been incredible strides by the CIQS since 2019 in creating the YQS framework, which include many initiatives and goals outside this section in Construction Economist, such as our own portal for relevant industry news and resources, creation of a YQS program and engagement plan, and new bursaries introduced to allow YQS across all provinces to attend the annual National Congress . We’ve even been able to mix in several virtual coffee talks to keep members in touch during the pandemic . It has been a rewarding experience these past few years and I’m excited to see where this group will be in the next few .

The YQS vision is to strengthen the quantity surveying and estimating profession by promoting its value to our peers across Canada while becoming the future leaders of the industry . Some of our objectives over the last few years have been professional development, networking, providing

resources and support, and community involvement I can confidently say that we have achieved all of these since our inception There is no better time to be a professional or aspiring QS, and it has been an inspiring journey seeing the development of the YQS program and the students/ professionals who want to be part of it .

This will be my final article for the YQS Corner, as I move now to writing for the Projects Corner in this journal . I look forward to profiling some of the most interesting and groundbreaking projects Canada has to offer from coast to coast, starting with our winter edition this year Keep your eye out for the next YQS Corner author, whom the CIQS will be announcing soon!

Please check out our networking and information portal, www.qscareer.org, for resources, event information, and more

About the author

Shane McKernan, PQS, GSC, B Tech , is the Director of Construction for Chard Development, based in Vancouver, BC With over 15 years of experience in the construction sector, Shane’s experience includes estimating, cost consulting, project loan monitoring, and project and construction management . Shane is the current Past-President of the CIQS – BC Chapter, where he joined as the board’s first-ever student member in 2013 Shane also previously sat on the CIQS National Council as the YQS Observer for two terms and is an Assistant to the Construction Economist editor

ADVOCATE, ASSEMBLE, LEAD CIQS CONGRESS 2022 RECAP

That’s a wrap!

This year’s CIQS Congress was held on June 16-18 at the Westin in Ottawa, ON It was the first in-person Congress that the CIQS hosted since before the pandemic hit, and it was wonderful to see so many members and industry stakeholders gather over the course of three days in the nation’s capital This was the largest Congress in over a decade, and you could feel the energetic vibe as members caught up with old friends they had not seen in person in several years role model, and advocate for the next generation of skilled trade professionals as the founder of KickAss Careers

Congress delegates and guests enjoyed majestic sunset views of the Parliament Buildings while indulging in delectable hors d’oeuvres, delicious drinks, and divine conversation during the welcome reception at TwentyTwo, one of Ottawa’s most desirable venues at the top of the Westin hotel .

This year’s event focused on professional development by offering delegates two full days of technical sessions . The educational program kicked off with a presentation on advocacy by Huw Williams, president of IMPACT Public Affairs, where he shared

his insights with the group on the current political climate in Canada, and details of the CIQS’s government relations initiative The remaining technical sessions focused on a wide range of topics, such as prompt payment, risk management, MEP pre-fabrication initiatives, P3 projects, and dispute resolution .

The second day began with a keynote presentation by Jamie McMillan, who shared an inspirational presentation about how she overcame hardship to successfully climb the proverbial mountain of life to attain her goals and land where she is today: an iron worker,

The Annual General Meeting was offered as a hybrid event for the first time to ensure that all members with voting rights had an opportunity to make their voices heard . All members, virtual or in person, voted online with GetQuorum, and those who attended remotely were able to participate in the discussion via Zoom . The format worked out better than anyone could have imagined, with members logging in from across the globe It turned

out to be the largest AGM since the inception of the CIQS with 599 voting members registered to vote, of which 400 submitted proxies

During the AGM, CIQS CEO, Sheila Lennon, thanked Erin Brownlow for her leadership and personal mentorship during her tenure as CIQS chair The incoming chair, Arif Ghaffur, made an inaugural address and thanked Erin for achieving some insurmountable objectives during her time as chair

Congress wrapped up with an entertaining evening of awards and networking at the annual Chair’s Dinner Congratulations to the exam awards, fellowship and honorary life winners who were celebrated that evening Following the scrumptious meal and award ceremony, guests were invited to try their luck at the casino tables, and to create amusing mementos at the photo booth

Thank you to everyone who supported this year’s Congress, either by attending, sponsoring, or presenting Check out our Congress 2023 page on www.ciqs.org for photos of this year’s Congress, and to learn what we are planning for next year Hope to see you all next June in Calgary, AB for Congress 2023!

About the author Alexandra Parliament is the Director, Marketing & Communications at the CIQS She has over 25 years of experience in her field and owned a boutique marketing agency for more than 17 years

She has a formal education in print journalism and has worked in the marketing and communications departments of a PR Agency, a national Marketing Agency, a national magazine, and one of the largest loyalty programs in Canada .

She has extensive experience working with professional organizations, charities, and chambers of commerce on the provincial, national, and international stages

She has been published in a variety of magazines and online real estate, construction, and business publications .

The David Lai YQS Congress Bursary Program funds six Young Quantity Surveyors (YQS) from across Canada to attend Congress, all expenses paid,* to give those who may not otherwise be able to attend the opportunity to experience everything that the CIQS Congress has to offer, and to make valuable contacts with industry professionals from across the country

All CEC, PQS, and Associate members in good standing under the age of 40 are eligible to apply

This year’s Bursary recipients are:

Joshua Akom, PQS – CIQS Prairies & NWT Chapter

Sydney Parsons, Associate – CIQS Maritimes Chapter

Ajibola Soboyejo, PQS – CIQS British Columbia Chapter

Carl Pedersen, PQS – CIQS Prairies & NWT Chapter

Bryan Dewar, PQS – CIQS Ontario Chapter

Ibrahim Oladapo, PQS – CIQS Prairies & NWT Chapter

“It was a pleasure to attend the CIQS Annual Congress 2022 in Ottawa, where we had excellent presentations and panel discussions from the best in the industry. One of my takeaways is that professional associations require strong leadership to achieve their advocacy goals and that they should take a multipartisan approach. Overall, it was a rewarding experience with lots of knowledge shared, and useful takeaways. It was also great meeting and networking with other professionals. I look forward to the CIQS Congress in Calgary next year!” – Ibrahim Oladapo, PQS

“Attending Congress was my first in-person introduction to the CIQS. I had an idea of what being a PQS or CEC represented, but I didn’t fully understand the true power of what these designations hold until I had the opportunity to attend Congress. I was amazed by all the people I had the opportunity to network with and the various academic backgrounds they have. The three-day event was nothing short of a magnificent experience which assured me that I have chosen the right career path. It became clear to the that they sky is the limit in a Quantity Surveyor position and receiving a designation from the CIQS is an honour.” – Sydney Parsons, Associate

Thank you to Hanscomb Quantity Surveyors for pledging $11,000 over five years in support of this program as a Bursary Benefactor .

* Some restrictions apply.

Erin Brownlow, PQS(F)

Jerry Crawford, PQS(F)

Lloyd Hussey, PQS(F)

Tammy Stockley, PQS(F)

Harland Lindsay, PQS(F) Ian Duncan, PQS(F)

Decarbonization – The economics of Canada’s carbon pricing (Part 2)

On the path to decarbonizing Canada’s buildings and new constructions, owners will need guidance on costs and available financing for sustainability driven projects. Estimates have indicated that Canada will need C$20 to C$32 billion annually to retrofit its entire building stock to net zero by 2050.

Introduction

In Part 1, we reviewed the federal carbon pricing framework across Canada’s provinces, the carbon pricing outlook through to 2030, and the implication for buildings and construction owners The carbon price is guaranteed to increase by $15 per tonne each year until 2030 when it reaches $170 per tonne This is in line with the minimum effective carbon rates that the OECD recommends for its 44 member countries by 2030 to reach NetZero by midcentury Given the predictability of the rates, Canada’s building and construction owners can better plan to reduce their exposures to this additional cost These can be achieved through several means including fuel switching,

adopting renewables and non-emitting sources, reducing energy usage through retrofits, investments into carbon offsets, etc . The effectiveness of measure(s) adopted to reduce the burden of the carbon pricing will depend on factors such as the type of building (whether new or existing), use of the building, local laws, and policies etc .

Retrofitting existing buildings Estimate suggests that 70%-80% of buildings that exist in Canada today will still be standing in 2050 . The operation of existing buildings already account for 13% of Canada’s total greenhouse gas (GHG) emissions which makes them a

Image 1: Incentives and Green loans can help deliver low to no emission buildings for Canada. Design by Author in Canva.

key focus for decarbonization Indoor space heating mostly relies on fossil fuels, especially natural gas, which is a major contributor to emissions Hence, retrofitting existing building heating to electric sources such as heat pump is fast becoming a viable option to reduce emissions Natural gas prices, which have been historically low, have been projected by the Canada Energy Regulator (CER) to increase through to 2040 . Switching heating fuel source in existing buildings can be a viable option to reduce exposures to the increases in cost of natural gas and the carbon pricing . Retrofitting existing buildings to wean off fossil fuel dependencies is quite expensive, and available estimates from Efficiency Canada indicate that Canada will need C$20 to C$32 billion annually to retrofit its entire building stock .

What about new construction?

New construction is a massive opportunity to lower Canada’s projected carbon footprints . Leading the way, the federal government announced that new federal buildings will be net

zero and has pledged to reduce embodied carbon by 30% starting in 2025 . Embodied carbon, being the carbon locked into the materials used for building construction are notoriously difficult to decarbonize, and there is still no Canadian standard to quantify and analyze them With the ongoing transition to low carbon construction, new investments in business-asusual, fossil-fuel-driven buildings may be foolhardy; however, investments in low carbon or green buildings remain slow largely due to financing, since green building usually presents a higher cost than traditional construction .

Financing efficient buildings – loans and incentives

The two types of financing currently available for efficient buildings are green loans and sustainability-linked financing . In 2020, Bloomberg LP estimated the volume of the global green and sustainability-linked finance at around US$30 trillion Buildings that meet green and sustainability metrics will increasingly benefit from this growing finance vehicle . Green construction loans are gaining popularity in Canada

Figure 1: Projected Natural Gas Production and Prices through 2040. (Source: CER)

Retrofitting existing buildings to wean off fossil fuel dependencies is quite expensive, and available estimates from Efficiency Canada indicate that Canada will need C$20 to C$32 billion annually to retrofit its entire building stock.

In 2021, Ivanhoé Cambridge and Hines provided Canada’s largest green real estate loan of C$780 million for the CIBC SQUARE, 141 Bay in downtown Toronto Also, Canada Infrastructure Bank (CIB) earmarked C$2 billion for energy efficient building retrofits of existing buildings, which is available to both public and private buildings . The CIB expects their investment to help prove the viability of energy retrofits to attract additional private capital with favorable terms Evergreen, a not-for-profit that is dedicated to low carbon, inclusive, and sustainable cities has called for a Canadian Green Bank to among others, “attract and stimulate private-public investments and growth into… green infrastructure projects ” Across the border, the Biden administration has been backed a national green bank with US$20 billion and, by most indications, Canada should follow along soon .

The Canada Green Buildings Strategy which was announced last August by Natural resources Minister Jonathan Wilkinson for Spring 2023 is expected to establish guidance for finance and investments for net zero buildings . In the meantime, various incentives are offered through government and utilities across Canada to promote energy efficiency retrofits for buildings For instance, through Efficiency Manitoba, building owners can receive incentive for up to 100% of the material cost for roof and wall envelope insulation upgrades, and there are performance-based financial incentives available per project per fuel type for custom energy solutions . Several financial incentives are available across different provinces These amounts

are usually paid out after the project is complete and serves to motivate the owner to undertaking the retrofits . Financial incentives are usually short-lived and are usually removed after the retrofit becomes more ‘mainstream’ . It is therefore prudent for building owners to consider available incentives in their jurisdictions when planning their retrofits and construction .

Final thoughts

The Canadian government instituted carbon pricing as a revenue-neutral instrument to promote green and net zero activities across the economy, with pricing predictability that allows for businesses and owners to properly plan and forecast In this author’s opinion, the program’s best feature is that it places the ongoing transition to a low carbon future at the top of mind for several stakeholders across sectors of the economy Consequently, as construction economists, we should focus our lens to understanding the exposures that projects have to the rising costs of carbon and greenhouse gas emissions to properly guide clients

Further reading

Environment and Climate Change Canada, (2022) 2030 Emissions Reduction Plan: Canada’s Next Steps for Clean Air and a Strong Economy. Gatineau, QC: Her Majesty the Queen in Right of Canada, represented by the Minister of Environment and Climate Change, 2022

Author’s acknowledgement

The author wishes to acknowledge Anjola Olufowobi, fourth year Biomedical and Mechanical Engineering student at Carleton University, Ottawa . Anjola provided research assistance from the ‘2030 Emission Reduction Plan’ and Canada’s energy incentive programs for this article .

About the author

Ayo Daniel Abiola, P.Eng, PQS is the Engineering Manager for the Energy and Sustainability Services (ESS) at Black and McDonald Limited He has experience delivering mechanical services and sustainability solutions for buildings and infrastructure development . He has also contributed to the development of resilient renewable energy infrastructure for the Canadian climate and environment .

Ayo is a licensed professional engineer in Alberta, BC, Ontario, and Saskatchewan . He is also a Certified Energy Manager He has provided services for construction projects and developments located across Canada, US, and the Middle East

Image 2: Rendering of 141 Bay Street by DBOX. The construction is backed by a $780 million green construction loan.

Congratulations to the following ‘Designation Holders’ who have qualified as a PQS or CEC (Including reinstatements).

CIQS – British Columbia

Amir Naderi, PQS

Eugene Van Den Berg, PQS

Jacob James Lewis, PQS

Jennifer C Sawicky, CEC

Juan Carlos Castillo, CEC

Ka Hei Ip, CEC

Kristian Keinhorst, PQS

Lam Chi Shing Ken, CEC

Pasindu Gunathilake, PQS

Qi Huang, CEC

Tian Heng Wang, CEC

Vikramjit Singh Sandhu, CEC

Zin Mar Lwin, CEC

CIQS – Maritimes

Adam Gordon, CEC

CIQS – Newfoundland and Labrador N/A

CIQS – Members at Large

Chiu Kwun Ching, CEC

Dinesh Gunasena Kalu Bandarage, PQS

John Buenaventura Bernalte, CEC

Joselito Mascarinas Barbosa, CEC

Lau Chun Yin, PQS

Lucy Makina, PQS

Manoj Baburao Barsagade, CEC

Messay Berihun Kassaye, PQS

Mushfiq Husain Adil, CEC

Oghenekore Aghoghovwia, PQS

Pasan Lahiru Srilal Palihawadana, CEC

Rajesh Narayana Pillai Puthiyaveetil, CEC

Ryad Kasem Abdullah, CEC

San Yu Maung, CEC

Shrey Bahadur, PQS

Siraj Ahmed, CEC

Tang Hoi Tung, PQS

CIQS – Ontario

Abdulrahman Ahmed

Hassan Ba-Abad, PQS

Behzad Mirzamohammadi, CEC

Beverly Domingo, CEC

Cameron Stitski, CEC

Chan Chun Bon, CEC

Clinton Michael Saddington, CEC

Danping Liu, CEC

Elizabeth Culanculan Cordenillo, CEC

George Vescio, CEC

Gideon Ojo, CEC

Hany Hassan Aly, PQS

Harsh Gupta, CEC

Ibrahim Ahmed, CEC

Inoka Darshanee

Samarathunga Arachchi, CEC

Israa Alazawi, CEC

Jacob James Strasser, CEC

Jose Alan Flores Gumalas, CEC

Ka Man Chan, PQS

Kamyar Akhavankazemi, CEC

Marissa Jocel Brioso Balbuena, CEC Marvin Gorospe, CEC

Michael Jules Vandeputte, CEC

Morteza Tamimi, PQS

Nima Haghighi, CEC

Pedram Riahi, CEC

Rahul Prabhudayal Agrawal, CEC Rinushan Sureshkumar, CEC

Sameer Chandrashekhar Bhirud, CEC

Steven Esgaio, PQS

Sujay Ramganesh, CEC

Sunday Oluwafemi Daramola, PQS

Sura Abbas, CEC

Suraj Darra, PQS

Syed Jamalshah Mohamedhn Lowtun, PQS

Timothy McNamara, CEC

Vishnu Vardhan Rao Dugyala, CEC

Xandry Agno, CEC Yong Tan, CEC

Zain Ghaffur, CEC

CIQS – Prairies and NWT

Ashley E Haider, PQS

David A . Simpson, CEC

Delia Tabor, PQS

Ermias Belachewu, PQS

Evan Faris, CEC

Humberto J Goitia, CEC

Johnson Peter Addai, PQS

Julien Gelineau, CEC

Scott MacIntyre, CEC

Seyed Milad Ahmadpoursharif, CEC

Yuen Ying Ma, PQS

CIQS – Québec

Castália Nunes Tavares, CEC/ECC Faisal Morshed, PQS/ECA Kreshen Dorsamy, CEC/ECC Patrick Proulx, PQS/ECA

Paulo V Hayet, CEC/ECC

Samuel Oluwagbenga Owolabi, CEC/ECC Saoud Manuoullah, PQS/ECA

Requesting relief under construction contracts: BEST PRACTICES

Our firm was recently asked to provide thoughts on best practices in pursuing additional compensation and/ or adjustments to the schedule to complete work on construction contracts (“Relief”)

Recognizing that the terms “changes” and “claims” are typically addressed in contracts, we are sharing some of the observations that we have heard clients voice over the years

These observations relate to concerns that have impacted the process of issue resolution during project delivery and often obstructed relationships between key stakeholders

The following are the concerns and our specific suggestions for the “top 10” best practices, recognizing that contracts and situations differ

1

BASIS

Concern: “We don’t know the contractual basis…”

Best Practice: Establish the contractual basis and the specific provisions being relied upon in seeking relief

3

RESERVE

Concern: “If only we knew…”

Best Practice: Even if the matter may not lead to Relief, notify the other party, and retract in the future if Relief is not required .

4

UPDATES

Concern: “We could have taken measures…”

Best Practice: Provide regular updates and interim submissions during the progress of the work, including any mitigation actions put in place to enable the other party to make informed decisions

5

MAINTAIN

Concern: “If only you would have kept sufficient information…”

Best Practice: Maintain and compile sufficient schedule and cost information that can support the pursuit of the request

2

NOTIFY

Concern: “We were not notified…”

Best Practice: Provide a contractual notice that is complete, timely and compliant with the specific requirements of the contract

6

DETAILS

Concern: “We have not been provided with sufficient information…”

Best Practice: Provide sufficient details and substantiation, including any contractual substantiation requirements to enable the other party to understand and address the Relief being sought

7 SUBSTANTIATE

Concern: “There are no supporting records…”

Best Practice: Ensure that the request is supported by relevant contemporaneous records that support the details provided .

8 CONSOLIDATION

Concern: “We are receiving the information at the end of the project…”

Best Practice: Avoid consolidating requests into one submission . Notify, update, and provide details on an individual, progressive, and timely basis

9 CAUSATION

Concern: “We cannot link the cause to the effect…”

Best Practice: Link events or documents to effects and demonstrate a causal link in a manner that will assist in the review and resolution

10 PRESENTATION

Concern: “We don’t fully understand what is being sought and why…”

Best Practice: Present the request for relief in a manner that is clear, concise, and supported by records/substantiation

About the authors

Daniel Josiah, PGDip, PQS, MRICS, MCIArb, is Director, Contracts & Commercial with Lakeland Consulting Inc ., where he provides services to a wide range of clients in the private and public . Daniel has a particular expertise in issues around scope, schedule, and cost, and has prepared expert reports for the purposes of negotiation, alternative dispute resolution, and litigation In 2020, Daniel was selected by On-Site Magazine and SitePartners in inaugural edition of the 40 under 40 in Canadian Construction .

Zain Ghaffur, LL .M ., BSc (Hons), MCIArb, is a Senior Contracts & Commercial Specialist with Lakeland Consulting Inc . Zain advises clients on all phases of projects, particularly in relation to matters of contractual claims and disputes He is currently working on a large-scale infrastructure project supporting the review and resolution of complex contractual issues

Note: The above is provided for informational purposes only and does not constitute legal or other advice or an opinion of any kind or a substitute for legal counsel. The reader of this paper is advised to seek specific legal advice regarding any specific legal issues or concerns.

Canadian construction –Indicators of growth, composition, and changes *

Construction industry GDP and investment

Rather than gaining momentum, activities within the industry appear to have declined in the second quarter of 2022, when compared to the first . As of June 2022, the industry’s GDP has dropped by 0 6% from January 2022 Compared to the 4% year-over-year increase that was observed in February 2022, data as of June 2022 suggests that the industry’s GDP grew by only 1 . 2% over the past year .

However, the industry had increases of 31% and 3% in investments in residential and non-residential construction sectors respectively Though there was a year-over-year increase in investment as expected in residential construction as of June 2022, the 10% year-over-year increase was not significant enough to surpass the 16% year-over-year increase recorded in February 2022

While the 3% year-over-year increase in investment in non-residential construction may appear low, it is vital to highlight that non-residential construction is still gaining steady momentum with a 16% year-over-year increase in investment (more than the 13% year-over-year increase observed in February 2022)

Housing starts and completions

Housing starts and completions appear to be gaining momentum from the decline recorded in the year’s first quarter, with 50% and 6% increases respectively . However, these gains have not been significant enough to yield increases that surpass last year’s Q2 records . The housing starts and completions in Q2 2022, compared to Q2 2021, have dropped by 3% and 11%, respectively . It is becoming more evident that the industry is not outperforming previous years’ housing starts and completions . Are there factors crippling the industry in this regard? Could this be another indication of how inflation is impacting the industry despite the increased investments, or the reported development?

Building construction price index

Inflation is still very much in effect in the industry, impacting construction prices in various metropolitan areas to varying degrees . Over the past year (Q2 2021 to Q2 2022), the average construction price index increased by 16% and

11% for residential and non-residential sectors With Toronto topping the inflation charts, Edmonton and Montreal experienced above-average price increases in residential and non-residential construction sectors compared to the other cities as of Q2 2022, while Calgary experienced an above average increase in residential construction sector only

Employment in the Canadian construction industry

As of July 2022, although the overall unemployment rate in the industry declined further from last year, data indicates an increase in the unemployment rate for females over the same period The employment composition as of July 2022 is 87 3% for male and 12 7% for female employees

*Based on available data from Statistics Canada as on September 1, 2022, as follows:

1 Growth in Construction Industry Gross Domestic Product (GDP), as of June 2022: Statistics Canada. Table 36-10-0434-01 Gross domestic product (GDP) at basic prices, by industry, monthly (x 1,000,000)

2 . Composition & Changes in Investments in Construction, as of June 2022: Statistics Canada. Table 34-10-0175-01 Investment in Building Construction

3 Changes in Construction Price Index Across Metropolises, as of Q2 2022: Statistics Canada. Table 18-10-0135-01 Building construction price indexes, by type of building

4 Housing Starts Composition, as at Q2 2022 (Residential Construction): Statistics Canada. Table 34-10-0135-01 Canada Mortgage and Housing Corporation, housing starts, under construction and completions, all areas, quarterly

5 Changes in Housing Starts and Housing Completions, as of Q2 2022: Statistics Canada. Table 34-10-0135-01 Canada Mortgage and Housing Corporation, housing starts, under construction and completions, all areas, quarterly

6 . Composition of Employment in All Industries Vs Construction, as of July 2022: Statistics Canada. Table 14-10-0022-01 Labour force characteristics by industry, monthly, unadjusted for seasonality (x 1,000)

Recent data on the Canadian Construction Industry performance indicators provide insights into how the industry is reacting to inflation and other events in Canada.

About the authors

Ajibola Soboyejo, MSc, MRICS, PQS is a Senior Consultant at Altus Group Ajibola is a professional quantity surveyor specializing in BIM estimating, cost planning, cost control, and project management . Ajibola possesses both Master’s and Bachelor’s degrees in Quantity Surveying and has worked on series of commercial real estate projects in Nigeria and Canada .

Udayan Chatterjee, B .Tech, PMP, MRICS, PMI-SP is Associate Director of Contracts and Commercial at Lakeland Consulting Inc Udayan is a commercial and project management professional with expertise in quantum assessment, schedule forensics, contract and claims management . He holds a Bachelor’s degree in Electrical Engineering and has worked on various large-scale transportation, mining and commercial construction projects across Canada and India .

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Construction Economist is made possible by the companies below who convey their important messages on our pages We thank them for their support of the Canadian Institute of Quantity Surveyors and its publication and encourage you to contact them when making your purchasing decisions To make it easier to contact these companies, we have included the page number of their advertisement, their phone number, and, where applicable, their website .

Company Page Phone # Website

A .W . Hooker Associates Ltd . 5 905-823-8111 www .awhooker .com

Altus Group 32 416-641-9703 www altusgroup com

Arbitech Inc 25 800-838-8183 www arbitech ca

CB Ross Partners 16 416-487-3330 www cbross ca

ConEcon Consultants 17 604-522-8970 www conecon ca

Envista Forensics 27 416-268-9677 www .envistaforensics .com/services/ construction-consulting

George Brown College 8 800-265-2002 www coned georgebrown ca

Lakeland Consulting Inc . 2 905 829 4000 www .lakelandconsulting .com

LCO Construction and Management 11 514-846-8914 www .lcogroup .com

Margie Strub Construction Law 27 647-792-0010 www margiestrub com

Pelican Woodcliff Inc 7 905-889-9996 www pelicanwoodcliff com

QS Online Cost Consultants Inc 30 902-405-1504 www qsonlinecostconsultants com

QSM – Mechanical Quantity Surveying 13 416-949-8540 www .qsmcon .ca

The GeoFocus Group 31 416-622-0456 www .thegeofocusgroup .com

Turner & Townsend 18 416-925-1424 www turnerandtownsend com

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

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