On-Site June 2017 by Annex Business Media

JUNE 2017

> IN SIDE <

PROJE RISK CT FIN PG.5 ANCE 0

MACHINE CONTROL 20 YEARS LATER PG. 38

PROPANE

OFTEN UNDERESTIMATED

PG. 45

LAW

THE BREAK-UP

TOP CONTRACTORS

PG. 52

GOING DIGITAL PG. 19

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VOLUME 62, NO.4/ JUNE 2017

COVER STORY 19 Top Contractors Our annual survey of Canada’s largest construction firms.

30 Top contractors under

50 employees

Rosati Group reported annual revenue of $44.09M in 2016, making them the first repeat winner of On-Site’s Top Contractor under 50 employees category.

DEPARTMENTS 7 Comment Tenacious contractors thrive in tough times

10 News

Industry news

16 Construction Stats The latest stats on construction activity and employment

COLUMNS 50 Risk Is the project finance industry digging deep enough?

52 Contractors and the Law Breaking up is hard to do

53 Index of Advertisers

38 The evolution of machine control

A number of technologies are beginning to snowball in Canada’s construction sector. Leading contractors discuss the tools they are adopting to up productivity, lower cost and maintain competitive advantage.

A lot has changed in 20 years – operators are faster and more accurate than ever.

Construction in a digital world

Propane: The underestimated fuel Construction firms are beginning to recognize the versatility of propane, using it in a growing number of applications across the jobsite.

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COMMENT

Tenacious contractors thrive in tough times

Get the latest construction news! Follow us on Twitter @OnSiteMag

Each spring, the On-Site team sets out to discover what exactly it takes to be one of Canada’s Top Contractors. It never fails, by time the June issue is wrapped up and ready to be sent to the printer, we come up with the same key elements – great people, innovative approach to business, and tenacity. Tenacity was particularly key last year. 2016 was a tough one for construction. “Most guys were off 20 to 30 per cent [in annual revenue],” states David Bowcott, Global Director – Growth, Innovation & Insight, Global Construction and Infrastructure Group at Aon Risk Solutions. There are several factors that contributed to the overall slide in revenue. For one, the governments talked a good game on infrastructure spending, but have been slow to get things to commercial close. On top of that, several high profile projects were delayed – Gordie Howe bridge, 427, LRT, etc. – so, it’s little wonder that many companies were reporting lower numbers for this year’s survey. If slow infrastructure spending and delayed jobs weren’t bad enough, resources also played a significant role in the decline. “Several of the top players had big industrial books and lost tons of revenue with the oil sands slowdown,” says Bowcott. “The largest single decline in private sector investment has come in the oil and gas and mining sector, where annual activity has declined from about $83 billion a few years ago to an estimated $45 billion in 2017,” explains Michael Atkinson, president of the Canadian Construction Association.

Thanks to The Conference Board of Canada’s Provincial Outlook: Spring 2017, which was released at the end of May, contractors have reason to be optimistic about the year ahead. Alberta and Saskatchewan are expected to emerge out of recession and lead the provinces in economic growth this year. British Columbia is forecast to see growth ease this year, but the province will still tie with Saskatchewan for second place. Marie-Christine Bernard, associate director of the Provincial Forecast, says “difficulties in the resources sector are slowly dissipating and helping Alberta and Saskatchewan emerge out of recession. However, the turnaround is still in its early stages and a full recovery will take time.” As for Canada’s top construction firms, they’re not worried. They’ve seen tough times before, and know what it takes to thrive – great people, innovative approach to business, and tenacity. Thank you to all that participated in this year’s Top Contractors report. Your contributions to On-Site are key to the quality, diversity and relevance of our magazine.

Corinne Lynds / Editor CLynds@on-sitemag.com

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CONTRIBUTORS

MEET OUR CONTRIBUTORS FOR THIS ISSUE

www.on-sitemag.com / Fax: 416-510-5140

PUBLISHER | Peter Leonard (416) 510-6847 PLeonard@on-sitemag.com

JACOB STOLLER / Principal, StollerStrategies

EDITOR/EDITORIAL DIRECTOR | Corinne Lynds (416) 510-6821 CLynds@on-sitemag.com

“On Top Contractors and technology: The transformation [of technology in construction] isn’t about the arrival of a single ‘killer app’ – what we’re seeing is a tipping point where the assimilation of a number of technologies is beginning to snowball.”

MEDIA DESIGNER | Lisa Zambri lzambri@annexbizmedia.com ASSOCIATE PUBLISHER | David Skene (416) 510-6884 DSkene@on-sitemag.com SALES & MARKETING COORDINATOR | Kim Rossiter (416) 510-6794 KRossiter@on-sitemag.com ACCOUNT COORDINATOR | Cheryl Fisher (416) 510-5194 CFisher@annexbizmedia.com

“ d a p

CIRCULATION MANAGER | Urszula Grzyb 416-442-5600 x3537 ugrzyb@annexbizmedia.com

KRISTA JOHANSON / Borden Ladner Gervais LLP

Vice President | Tim Dimopoulos (416) 510-5100 tdimopoulos@annexbizmedia.com

On contract breakups: “In most cases where a right to terminate for default is disputed, the contractor downs its tools and leaves the site, and brings a lawsuit or arbitration for breach of contract. Meanwhile, the owner hires someone else to finish the work.”

COO | Ted Markle tmarkle@annexweb.com President & CEO | Mike Fredericks Established in 1957, On-Site is published by Annex Business Media 80 Valleybrook Drive, North York, ON M3B 2S9 Publications Mail Agreement No. 40065710 ISSN: 1910-118X (Print) ISSN 2371-8544 (Online)

DAVID BOWCOTT / Global Director – Growth, Innovation & Insight, Global Construction and Infrastructure Group at Aon Risk Solutions On project finance: “As contractors play a more pivotal role in securing project financing for owners and concessionaires, it’s vital they pay attention to these trends and the tools being used to obtain optimal project finance terms.”

Circulation email: apotal@annexbizmedia.com Tel: 416-442-5600 ext 3258 Fax: 416-510-5170 Mail: 80 Valleybrook Drive, Toronto, ON M3B 2S9 SUBSCRIPTION RATES Canada $81.00 per year, Outside Canada US$139.00 per year, Single Copy Canada $13.00. On-Site is published 7 times per year except for occasional combined, expanded or premium issues, which count as two subscription issues. Occasionally, On-Site will mail information on behalf of industry-related groups whose products and services we believe may be of interest to you. If you prefer not to receive this information, please contact our circulation department in any of the four ways listed above. Annex Privacy Officer privacy@annexbizmedia.com Tel: 800-668-2374 Content copyright ©2017 by Annex Publishing & Printing Inc may not be reprinted without permission.

NATE HENDLEY / Freelance Writer & Author On machine control: “Earthworks companies have been using machine control technology on their equipment for roughly two decades. Such controls check grade, provide geographic coordinates, automate equipment functions and collect data, with the goal of boosting productivity, accuracy and the bottom-line.”

On-Site receives unsolicited materials (including letters to the editor, press releases, promotional items and images) from time to time. On-Site, its affiliates and assignees may use, reproduce, publish, re-publish, distribute, store and archive such unsolicited submissions in whole or in part in any form or medium whatsoever, without compensation of any sort. DISCLAIMER This publication is for informational purposes only The content and “expert” advice presented are not intended as a substitute for informed professional engineering advice. You should not act on information contained in this publication without seeking specific advice from qualified engineering professionals.

C r w d

ES &

MEMBER OF

Canadian Construction Association

(8 go

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INDUSTRY NEWS

INDUSTRY>NEWS Canstruction competition raises awareness of hunger gap Visitors to Toronto’s financial district may have wondered why an avocado made out of canned fish adorned the lobby of the TD Centre. It was just one of 18 structures on display, as teams of professional designers, architects, engineers and students took part in Toronto’s 18th Annual Canstruction Toronto Competition. In all 50,000 lbs. of donated non-perishable food were sculpted into audacious, edible statues in an effort to fill Toronto’s hunger gap. “Canstruction is a unique food drive and a way for the design community to collaborate creatively while giving back to our community,” says Helen Kabriel, co-chair of Canstruction Toronto. “We not only make a meaningful contribution to Daily Bread Food Bank, but the structures

also provoke a city-wide discussion on hunger and the challenges facing Toronto.” The “Canstructures” were on display for public viewing in the lobbies of the TD Bank, TD North and Ernst & Young towers at 66 Wellington Street West until May 19th, before being disassembled and donated to Daily Bread Food Bank, the city’s largest distributor of food to food banks and meal programs. “Canstruction is a terrific, very creative way to get people thinking and talking about hunger in our city, and it fills our shelves with food during a slow time for

donations, so it’s a complete win-win,” said Gail Nyberg, executive director of Daily Bread Food Bank. In 2016, Canstruction accounted for 56 per cent of public donations in May. The Canstruction competition recognizes a variety of factors, not just design aesthetics. The “Best Use of Labels” award focuses on creative graphic possibilities, the “Best Meal” award considers the variety and quality of the food donated, and “Structural Ingenuity” considers the complexity of the design. SOURCE: CANSTRUCTION

Letter to the Editor: Hi Corinne, I’ve been doing commercial aerial photography in Canada for a long time, and over the past few years, I’ve added UAV photography to my services. I’ve just read your article on UAVs in the April 2017 issue of On-Site Magazine and would like to comment on one very important aspect of commercial UAV operations. Transport Canada regulations state that UAVs (drones) cannot be operated within 100 feet of sidewalks or roadways unless these can be secured to prevent access from people or vehicles unrelated to the operation. This means that a drone generally could not be used for many urban locations unless a street or sidewalk is closed to the public, which can be an expensive option. Commercial drone regulations in the United States prohibit flying over people unrelated to the operation, but leave the horizontal distance to the operator’s discretion. In Canada, as far as I know, the 100-feet rule is firm. I know when I applied for a Special Flight Operating Certificate for

an operation in downtown Calgary, I was told this distance was non-negotiable and my operation required closing an alleyway. I’m sure most of your readers who are engaged in commercial drone activity are aware of these regulations, but I thought it would be worth pointing out in case some are not. Thank you for your attention. Rick Boden Work Above Aerial Photography P.S. Regarding the 100-feet rule, it has pretty much made it so I am unable to use the drone in the city, and I lose a lot of business to those who work outside of that rule. It would be great if Transport Canada would adopt the US standard, but drone operators don’t have that much influence with them. If the construction industry were to lobby for a change to that one rule, there may be more effect.

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INDUSTRY NEWS Work on Gordie Howe International Bridge progresses with contract awards Windsor-Detroit Bridge Authority (WDBA) and its partners are kicking off the 2017 construction season with Phase Two of the Preparatory Activities at the Canadian Port of Entry (POE). Three contracts have been awarded for High Voltage Cabling and accessories, transmission and distribution line relocation works totaling approximately $86 million. The contracts have been awarded to Prysmian Cables and Systems Canada Ltd. for cable and accessories; Valard Construction LP for transmission lines relocations; and AMS, a joint venture of Amico Infrastructures Inc. and Mid-South Contractors Ltd. for distribution line relocation. The utility relocations as part of this work will focus on the Hydro One power corridor that supports Ontario’s power grid. The site of the future Canadian POE contains overhead lines that need to be relocated. Many of these overhead lines will be moved underground and some connected onto new transmission towers. Through these contracts, these overhead lines will be relocated underground and the manufactured cables placed in

concrete-encased duct banks. “The second stage of preparatory works is another step in delivering Canadian and US sites that are ready for construction to our eventual private-sector partner. The more work we complete now, the more quickly our partner will be able to begin construction after financial close,” said Michael Cautillo, president and CEO, Windsor-Detroit Bridge Authority In addition to working closely with Hydro One, WDBA will work with West Windsor Power to relocate high-voltage transmission lines that are being impacted by the project. Undertaking this work at this time will ensure the Canadian POE site will be ready for the private-sector partner chosen to build the Gordie Howe International Bridge project. SOURCE: WINDSOR-DETROIT BRIDGE AUTHORITY

Leadership search underway for Canada Infrastructure Bank

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As part of the Government’s historic Investing in Canada plan to invest more than $180 billion in infrastructure, the Canada Infrastructure Bank is a new tool for provincial, territorial, and municipal partners to finance the infrastructure that Canadians need. The Honourable Amarjeet Sohi, Minister of Infrastructure and Communities, announced that the Government of Canada has launched open, transparent and merit-based selection processes to identify the Bank’s senior leadership with the goal of having the Canada Infrastructure Bank operational in late 2017, subject to Parliamentary approval. Through these processes, the Government will first select a chairperson of the board, followed by the board of directors and chief executive officer. “We are excited to be taking this next step towards the creation of the Bank. We will be looking for talented and experienced leaders from across the country to ensure that the Bank meets its mandate: build more infrastructure for Canadians that will create growth and equip our communities for a more sustainable and productive future,” said Sohi. The selection processes are designed to attract highly qualified individuals, while taking into consideration the desire to achieve gender parity and to reflect Canada’s linguistic, cultural, and regional diversity. Applications for each of these opportunities can be submitted through the Government of Canada’s Governor in Council Appointments website. The Government of Canada also announced that the Bank will be located in Toronto, which has established a global reputation Continued on Pg 14 2017-04-05 12:46 PM

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INDUSTRY NEWS for excellence as a centre for infrastructure financing. The Bank will be set up to be able to finance infrastructure in all parts of Canada. “The Canada Infrastructure Bank will allow us to transform how we plan, fund and build the projects we need to improve the lives of Canadians and our competitiveness around the world. The Canada Infrastructure Bank will help create thousands of jobs, shorten commutes, make our economy more attractive for investment and ultimately strengthen our middle class,” said Bill Morneau, Minister of Finance. SOURCE: INFRASTRUCTURE CANADA

First mass timber market condo complete Adera celebrated the installation of its final mass timber panel at its Virtuoso project in UBC’s Wesbrook Village last month. The development is the first market condominium project built using mass timber in the form of CrossLam Cross-Laminated Timber (CLT) panels supplied by Structurlam Products LP. Adera, recently recognized with the Design Excellence Award at the 2017 Canadian Home Builders’ Association (CHBA) National Awards for Housing Excellence, is passionate about its commitment to sustainability and excellence in architectural quality. Introducing luxury wood construction to the industry was a natural evolution for the company, leveraging expertise from nine REAP (Residential Environmental Assessment Program) certified projects in the UBC area. UBC Properties Trust, the master planners of Wesbrook Village, have recognized practical innovations in mass timber, embracing the use of this technology to construct Brock Commons Tallwood House, the world’s tallest wood frame building. The structure features the use of mass timber materials and was completed in less than 70 days, approximately four months faster than a typical project of its size. The use of mass timber at Virtuoso gives the structure a sustainable and smart advantage. Luxury wood construction has been proven to meet, or exceed, concrete structures built to code in virtually every way. Mass timber provides legitimate fire resistance, and outperforms concrete in seismic conditions. And wood is a superior renewable building resource. Prefabricated panels arrive on site ready to install, producing less waste. Each floor at Virtuoso consists of approximately 160 CLT panels, which were lifted at a rate of one every 12 minutes. Seagate Structures, Adera’s partner for the framing of the building, worked at a phenomenal speed installing 4,500 sq. ft. of flooring in less than three hours. SOURCE ADERA DEVELOPMENT CORPORATION

The Canada Prompt Payment Act passes 3rd reading in the Senate The Senate Passed Bill S-224, the Canada Prompt Payment Act, Senator Don Plett’s Bill addressing the systemic problem of delays in the construction industry. The Act will ensure contractors and sub-contractors on federal government construction work are paid in a timely manner. The bill passed late in the day May 4, unanimously. “As a former trade contractor, I know that in the construction industry, it is a tolerated practice that there are no strict timelines for payment, even when all parties are satisfied with the work completed,” said Senator Plett. “Delay in payment is the number one reason small- and medium-sized businesses in the construction industry are going out of business in Canada.” Among other things, Bill S-224 ensures the government institution must make progress payments to a contractor on a monthly basis, or at shorter intervals provided for in the respective contract. This payment requirement is consistent down the contractual chain. The bill also accounts for milestone payments, when applicable, and permits contractors the right to suspend work, terminate a contract and collect interest on late payment. Senator Plett noted in his remarks that only two witnesses — the General Contractor who testified, as well as the Hon. Steve MacKinnon, Parliamentary Secretary for the Minister of Public Services and Procurement, representing the Government – were opposed to the bill. “We had twenty witnesses at committee. Eighteen were not only supportive, but were pleading with the committee to pass this legislation quickly, and to finally give them an enforceable solution to this problem,” the Senator stated. “Only two of those twenty witnesses raised concerns. And which two would those be? Those who are not paying their bills on time.” Senator Plett brought forward a number of amendments at committee stage to strengthen and clarify the legislation, as well as to deal with some concerns that were raised by the general contractors and senators from the committee. All proposed amendments were adopted unanimously by the committee, and subsequently by the Senate. As for the next stage, despite the mild opposition expressed by the Parliamentary Secretary in committee, Senator Plett noted, “this is not a partisan issue. The NDP supports this. The Conservatives support this. And several Liberal MPs have indicated their strong support for this bill. I have every reason to believe that Bill S-224 will pass the House of Commons and quickly. They owe it to Canadian workers.”

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CONSTRUCTION STATS A selection of data reflecting trends in the Canadian construction industry

INVESTMENT IN NON-RESIDENTIAL BUILDING CONSTRUCTION CONTINUES TO SLIDE Investment in non-residential building construction totalled $12.3 billion in the first quarter of 2017, down 0.5 per cent from the previous quarter. This marked the sixth decrease in seven quarters. Nationally, the decline largely reflected lower spending on the construction of institutional buildings and, to a lesser extent, on the construction of industrial buildings. Overall, total investment fell in five provinces in the first quarter, with Ontario posting the largest decline and Saskatchewan a distant second.

BUILDING PERMITS DOWN IN MARCH The value of building permits issued by Canadian municipalities fell 5.8 per cent to $7.0 billion in March, marking a second consecutive monthly decrease. Nationally, the decline was mainly the result of lower construction intentions for multi-family dwellings, particularly in British Columbia and Ontario. All provinces and territories, except Ontario and Quebec, registered decreases in the total value of building permits in March. SOURCE: STATISTICS CANADA

SOURCE: STATISTICS CANADA

NON-RESIDENTIAL BUILDING CONSTRUCTION PRICE INDEX UP The Non-residential Building Construction Price Index (NRBCPI) was up 0.9 per cent in the first quarter compared with the previous quarter. The increase reflected higher prices for construction of industrial (+0.9 per cent), institutional (+0.9 per cent) and commercial structures (+0.8 per cent). Contractors reported quarterly increases in six of the seven census metropolitan areas covered by the survey. Vancouver (+1.9 per cent) and Ottawa (+1.0 per cent) had the largest increases, led by higher material prices. Edmonton (-0.1 per cent) reported the lone price decrease in the first quarter. SOURCE: STATISTICS CANADA

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THE TOP 40 PG. 23

CONSTRUCTION IN A DIGITAL WORLD PG. 24

THE TOP 5 CONSISTENCY IS KEY

TOP CONTRACTORS

PG. 30

GOING DIGITAL

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Aon Risk Solutions

Construction Services Group

There are many reasons why more than 25% of all contractors and construction companies in Canada choose Aon to be their broker. Learn what sets us apart today. Weâ&#x20AC;&#x2122;re here to empower results! aon.ca

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TOP CONTRACTORS

WELCOME LETTER

n behalf of On-Site and Aon, I would like to welcome you to the 2017 Top Contractors issue. We are thrilled to be returning as the official partner of this issue and continuing to support such an important publication. Furthermore, we are pleased to announce that for the second consecutive year, many of the top contractors on this list are clients of Aon. Aon’s Construction Services Group represents our largest industry specialty in which our network of140 dedicated construction and infrastructure specialists empower results for clients in the large, mid, and small markets. We are proud to support 2,500 valued Aon construction clients with cutting-edge risk and performance solutions. The construction industry in Canada is complex and dynamic. Despite an economic slowdown and difficult recovery over the past few years, we remain optimistic that Canada will have a substantial pipeline of construction projects over the next 15 years. With the coming boom of construction activity, it is crucial for contractors to focus on attracting and retaining top talent to gain a competitive edge and support long-term growth. Contractors will face new delivery models, new global contractor players, more risk in lifecycle of the assets they build, and more requirements for project finance solutions. We are eager to help our contractors take full advantage of coming opportunities and will stand with clients of all sizes as they transform risks into results. Canada will also continue to be a global marketplace where domestic contractors work with international contractors to assist in restoring and expanding Canadian infrastructure. We have witnessed an increase in owners turning to their contractor partners to help them design, build, and operate their assets in a way that optimizes the asset’s performance over its entire life (total cost of ownership or asset management). This is a tremendous opportunity for our contractor clients, which is why Aon continues to invest in its construction specialty to better support them. Congratulations to all of On-Site’s top contractors! We wish everyone within the Canadian construction industry a profitable and successful 2017. Best regards, Christine Lithgow President and CEO, Aon Risk Solutions Canada

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West Block Rehabilitation, Ottawa

SHARING YOUR VISION. BUILDING SUCCESS. We are more than builders. We are construction partners who are passionate about what we do and about our partners’ needs. PCL is proud to be part of the restoration and rehabilitation of one of Canada’s historic landmarks on Parliament Hill.

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TOP CANADIAN CONTRACTORS 2016 was not an easy year for the construction industry. Infrastructure spending lagged, there were several high-profile job delays, and a slow down in the oil sands impacted many of the top players. Despite these challenges, I’m happy to report that Canada’s Top Contractors persevered – in many cases growing and sustaining their firms in a tough business climate. With this in mind, I’m very happy to present Canada’s Top 40 Canadian Contractors, and Top 5 Companies with 50 or Under Employees. Construction firms are ranked by written responses to research conducted by On-Site, and based on annual revenue reported for 2016 This annual ranking of companies is an invaluable industry tool, based on direct analysis of the companies involved. It helps us to understand what segments of the construction industry are growing, and allows us to identify trends in both good, and bad years. Thank you once again for participating in our annual report. Your contributions to On-Site are key to the quality, diversity and relevance of our magazine. Without further ado, here are your 2016 Top Contractors. Corinne Lynds, Editor

TOP 5 COMPANIES

WITH 50 OR UNDER EMPLOYEES Rosati Group $44,091,530

Acadian Construction $40,000,000

O.N. Site Construction Inc. $19,536,000

RAM Construction Inc. $18,000,000

North Construction $10,000,000

TOP CONTRACTORS

TOP 40 Rank

Company

2016 (last year)

1 SNC-Lavalin

$8,500,000,000

PCL Constructors Inc.

$8,200,000,000

Aecon Group Inc.

$3,213,000,000

EllisDon

$2,948,000,000

Ledcor Group of Companies

$2,817,900,000

Graham Group Ltd.

$2,200,000,000

Pomerleau Inc.

$1,700,000,000

Kiewit Canada Corp.

$1,600,690,000

Bird Construction

$1,589,868,000

Stuart Olson

$1,000,000,000

Flynn Group of Companies

$804,000,000

Bondfield Construction Company Ltd. $766,100,000

EBC inc.

$636,197,538

Clark Builders

$634,000,000

Turner Construction Company

$535,566,000

Reliance Construction

$406,422,000

17 Broccolini

$381,000,000

Con-Drain Company (1983) Ltd.

$355,000,000

Govan Brown

$351,000,000

The State Group Inc.

$340,000,000

Axiom Builders Inc.

$325,000,000

North American Construction Group

$216,180,000

Dawson Wallace Construction Ltd.

$200,000,000

Walsh Canada

$190,000,000

Manshield Construction

$180,000,000

NorLand Ltd.

$179,000,000

Marco Group of Companies

$167,000,000

Buttcon Ltd.

$166,000,000

Delnor Construction Ltd.

$162,600,000

Eastern Construction Company Ltd.

$160,000,000

Pennecon Ltd.

$156,662,503

Scott Builders Inc.

$154,500,000

Avondale Construction Ltd.

$143,000,000

FWS Group of Companies

$140,000,000

QM Environmental

$139,000,000

Fillmore Construction Management

$125,000,000

Bockstael Construction

$98,700,000

Kelly Panteluk Construction Ltd.

$95,000,000

Jacob Bros. Construction Inc.

$90,000,000

Kinetic Construction Ltd.

$90,000,000

BASED ON WRITTEN RESPONSES TO RESEARCH CONDUCTED BY ON-SITE. SOME CONTRACTORS DECLINED TO PARTICIPATE IN THIS RESEARCH.

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TOP CONTRACTORS

CONSTRUCTION IN A

DIGITAL WORLD The construction industry has a reputation for being slow to adopt innovative technology. Many contractors believe this is about to change. BY JACOB STOLLER

f all the wonders of technology, perhaps the most stunning is its ability to transform entire industries. The retail sector will never be the same since the advent of e-commerce. Robotics and autonomous machines are transforming our factories, forever changing what it means to be a factory worker. “Shared economy” networks are reinventing the taxicab and hospitality industries. Few would cite a bricks and mortar industry like construction in this context, but according to some of the top contractors in Canada, this is about to change. “I’ve been doing IT for 25 years, and the pace and rate of change today is faster than anything that I’ve ever seen,” says Mark Bryant, chief information officer, at Edmonton-based PCL Construction. The transformation isn’t about the arrival of a single “killer app” – what we’re seeing is a tipping point where the assimilation of a number of technologies is beginning to snowball. “We think we’re at an inflection point,” says Mathew Kattapuram, senior vice-president, strategic business development for Toronto-based Aecon Group Inc. “Because you’ve got a conver-

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TOP CONTRACTORS

“I’ve been doing IT for 25 years, and the pace and rate of change today is faster than anything that I’ve ever seen,” Mark Bryant, PCL Construction

gence of artificial intelligence, robotics, cloud computing, the internet of things, BIM, and 3D printing. The additive effect is amplifying the innovations tremendously. So we haven’t seen anything yet.” The industry has plenty of areas to work on. To illustrate, Kattapuram cites a study by the New York-based Boston Consulting Group. Productivity in the U.S. economy, according to the study, has grown by 153 per cent since 1964, but during the same period, it has declined 19 per cent in the Engineering, Construction, and Services (ECS) sector. “Labour efficiency has lagged in construction, and Kiewit is turning that curve northward,” says Chris Dill, vice-president of technology at Omaha, Neb.-based Kiewit Corporation “So we’re looking at opportunities to get away from this linear relationship that more work equals more people.” Projects, on the other hand, are getting more complex and challenging to manage. “The jobs that large contractors are taking on are very large from a dollar amount value perspective, and very complex in terms of the scope and technical engineering required to execute [them],” says Dill. “So with that comes the need to have technology tools that help you deal with that complexity.”

THE RISE OF VIRTUAL CONSTRUCTION Amidst all the technologies transforming the industry, Building Information Systems (BIM) has become the focal point. BIM itself is no longer new, but many leading Canadian firms are getting to the point where the use of BIM is mainstream. “Last year was the year that BIM was

really adopted in the company,” says Ivanka Iordanova, BIM-VDC director for Montreal-based Pomerleau Inc., who was hired by the firm in 2011 to set up its BIM team. “Today, it’s no longer considered an innovation here. This is a strange feeling, but a real victory for our team. BIM is seen as already here.” “In North America, we’re just scratching the surface with BIM,” says Dill. “Europe is ahead of us in that game. But it’s coming, and its going to transform how we plan and build our work. I think you’ll see the model becoming the centre of everything in terms of project management, procurement, material management and more. Everything will be managed out of a model in the not too distant future.” And if there’s any doubt, the British government has mandated the use of BIM in tenders for public buildings. “I think you’ll see other governments follow quickly,” says Bryant. Soon, Bryant predicts, people won’t even talk about virtual construction. “I think the word ‘virtual’ will drop in the next 18-months. These tools will become mainstream.”

TRANSFORMING THE INDUSTRY One of the most powerful aspects of digital

modeling is that it allows contractors to employ prototyping – something the automotive and aerospace industries have used for decades. “What these technologies do is reduce any impacts of conceptual errors, due to the ability to simulate the construction process,” says Robert Fernandez, vice-president, marketing and business development at Calgary-based Stuart Olson Construction Ltd. “While you can do that using conventional methods such as drawings, etc., the process is usually quite lengthy. When you do it in a virtual environment, you can accelerate the process.” This virtual environment opens the door to next-generation construction technologies such as modularization, which has already seen wide adoption in Europe. “We built the New Central Library in Calgary using a BIM-based design,” says Fernandez. “This allowed us to put a whole mechanical floor on top of the building, basically in prefab modules, which couldn’t have otherwise worked using traditional design methodology. In this case, we had folks on the job site, including sub trades, connect the dots between digital and real construction.” In another example, PCL used virtual construction to improve the construction process at the Humber River Hospital project in Toronto, where the contractor constructed 300 prefabricated washrooms offsite, and then installed them in the building. Bryant refers to this as “agile development,” which involves ironing out the bugs in a project in a virtual test environment to ensure discrepancies never

“Labour efficiency has lagged in construction, and Kiewit is turning that curve northward. “We’re looking at opportunities to get away from this linear relationship that more work equals more people,” Chris Dill, Kiewit Corp.

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TOP CONTRACTORS

make it to the job site. “You’re putting it all together in a controlled facility instead of at the construction phase,” says Bryant. “This is a lot easier than installing multiple washrooms on multiple floors of a facility, and then having your labour needing to go back and forth between floors to make changes. This in essence improves efficiency on-site. We’re seeing more of that happening.” At Pomerleau, BIM modeling is being used as an enabler for Lean construction, an approach that applies advanced manufacturing techniques to minimize waste and maximize value for the client. Another game changer is the ability to innovate – not just over the construction horizon but for the entire lifecycle of the project. “We’re engaged in public-private partnerships where we’re involved in design, construction, maintenance, and operations,” says Kattapuram, “so our clients are looking for the lowest net present value over a 30-year horizon, rather

than just a construction horizon.” The models aren’t necessarily virtual. Using 3D printing, the firm recently created a physical model of a compressor station to help maintenance people understand some of the challenges they would be facing. In general, digital models are extraordinary communication enablers. Superintendents, building owners, workers, and sub trades can easily go back and forth between model and actual, sorting out the details with the assurance that everybody is on the same page.

CHANGING THE CULTURE While the successes of the leaders are impressive, many firms have yet to begin the journey, and according to John Bockstael, president and chief executive officer, Bockstael Construction in Winnipeg, and chair of Canadian Construction Innovations, many have still to be convinced that the effort is worthwhile. “We hear about companies being ‘BIM

“We think we’re at an inflection point, because you’ve got a convergence of artificial intelligence, robotics, cloud computing, the internet of things, BIM, and 3D printing. The additive effect is amplifying the innovations tremendously. So we haven’t seen anything yet,” Mathew Kattapuram, Aecon Group Inc.

lonely’,” says Bockstael. “Maybe it’s a subcontractor who’s decided to start doing their work by BIM, but the architects and engineers they work for aren’t doing it. So they’re trying to work through it on their own.” The investment is significant – colleges and universities aren’t providing the necessary training, so companies have to do that in-house, funding it off their own payroll, and Bockstael has heard from many firms that are reluctant to make that investment. “This is where owners come into play,” says Bockstael. “A buyer of construction has to come along and say, ‘I want this, because I see the benefits of information modeling in terms of care and maintenance of my building in the future.’” There’s a long way to go, however. “We still deal with specifications that want us to submit our operation and maintenance manuals in hard copy,” says Bockstael. When companies do make that digital leap, they need to build a culture to support it, and this takes time. According to Kattapuram, the process is similar to building a safety culture. “You have to build the culture from bottom up… Top down never works,” he says. “We’ve seen that before.” Often, seeing is believing, and given the visual nature of BIM, Iordanova notes, construction people tend to get addicted. “Immediately after two of our job sites adopted BIM, I got these folks to talk to the other project managers and superintendents so they could show the benefits to their colleagues,” says Iordanova.

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“Last year was the year that BIM was really adopted in the company. Today, it’s no longer considered an innovation here. This is a strange feeling, but a real victory for our team. BIM is seen as already here,” Ivanka Iordanova, Pomerleau Inc.

“That’s how it works.” Another challenge is that people unfamiliar with technology often find it difficult to describe their processes so they can be digitized. “Paper-based systems are often tied to tribal knowledge, and often people don’t define their scope very well,” says Charles Cooper, owner of Huntsville, Ont.based Muskoka Hydrovac. “So it’s often hard to take manual processes and convert them to IT.” The answer, says Cooper, is to have frequent back and forth conversations between IT and the field. According to Yuri Bartzis, BIM / virtual construction manager for Mississauga, Ont.-based Maple Reinders Constructors Ltd., this conversation often takes place across the generation gap, between experienced workers who are

close to retirement, and the younger more digitally savvy millenials, who are taking their place. “We’ve got some great experienced guys that are towards the tail end of their careers, and the firm really wanted to bring in young talent that could learn from them, and also bring in that technology aspect,” says Bartzis. “So we’ve been showing our experienced guys what the technology can do, and they’re coming back with some great ideas on where to take it. For example, on our Mid Halton Wastewater Treatment Plant project in Oakville, we showed our experienced guys how technology can be useful for prefabrication, and they’re coming back with some great ways to implement the technologies to make it useful on the construction site.”

Perhaps this demographic shift will be the most important driver for moving construction into the digital age. According to BuildForce Canada, as many as 248,000 skilled construction workers are retiring en masse over the next decade. If these experienced workers are replaced by millenials, who can’t even imagine a world without the internet, it’s anybody’s guess how fast the digital construction revolution will develop.

Jacob Stoller is a principal of Toronto-based consultancy StollerStrategies. Send comments to editor@on-sitemag.com.

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TOP CONTRACTORS

CONSISTENCY

IS KEY

Rosati Construction Group is a repeat winner of On-Site’s Top 5 Under 50 BY CORINNE LYNDS

or the second time in three years, the Rosati Group has earned On-Site’s Top Contractor in the 50 employees or less category. The company’s first win came in 2014, and it should be noted that they didn’t participate last year. Founded in 1969 by Vince and Olivia Rosati, the Rosati Group now consists of several companies owned by the Rosati family. Since 1999, Tony and Nick Rosati (the second generation of owners) have built the family business into one of the largest general contractors in Southwestern Ontario. Three years later, Rosati Construction Inc. continues to be the driving force behind the Rosati Group, which specializes in design-build for commercial and industrial projects. Other services offered are construction management, building systems, machine foundations, land development and leasing. The company’s total revenue in 2016 came in precisely at $44,091,530. Denis Gauthier, vice-president of project development, attributes the company’s continued success to putting the customer first. “Our focus is on customer satisfaction, commitment to quality work and value. We strive to meet each of our client’s goals on small and large projects alike. This focus resonates with business leaders and allows us to foster additional work.” In 2014 when On-Site previously profiled the Rosati Group, community involvement was a key focus. Gauthier confirms that is still very much part of the company’s culture. “Community involvement has always been a big part of Rosati. Our co-owners and founders

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TOP 5 UNDER 50 Company: Rosati Group Location: Windsor, Ont. Annual Revenue: $44,091,529.85 Sectors: Building construction (non-residential), construction management Works In: Commercial buildings, industrial buildings, institutional buildings, contract management, demolition, design/build, general contracting Website: www.rosatigroup.com

Company: Acadian Construction Location: Dieppe, NB Annual Revenue: $40,000,000 Sectors: Building construction (non-residential), construction management Works In: Commercial buildings, industrial buildings, institutional buildings, general contracting Website: www.acadianconstruction.com

Company: O.N. Site Construction Inc. Location: Oakville, Ont. Annual Revenue: $19,536,000 Sectors: Building construction (non residential), construction management Works In: Commercial buildings, environmental remediation, contract management, general contracting Website: www.onsiteconstruction.ca

Company: RAM Construction Inc. Location: Delta, BC Annual Revenue: $18,000,000 Sectors: Building construction (non-residential), construction management, trade contracting Works In: Commercial buildings, industrial buildings, institutional buildings, design/ build, general contracting Website: www.ramconst.com

Company: North Construction Inc. Location: North Vancouver Annual Revenue: $10,000,000 Sectors: Building construction (residential), building construction (non-residential), engineering, construction management, trade contracting Works In: Commercial buildings, industrial buildings, residential construction, bridges, engineering, utilities, environmental remediation, marine, mining, oil and gas, roadbuilding, transportation, sewage, waterworks, demolition, design/build, general contracting, aggregate, concrete, steel, fabricating Website: www.north-construction.com

Aon Risk Solutions

believe a great deal in giving back. In fact, Rosati received the Windsor Chamber of Commerce ‘Believe In Windsor Essex’ award on May 23rd.” The award recognizes businesses with a greater focus in community involvement. With a staff of roughly 45 people (23 in the office, and 20 to 25 in the field), Rosati Group is poised for another strong, consistent year in 2017. Below is a list of some of the recent projects the contractor has been involved in: • Leamington District Secondary High School – 120,000 sq. ft. • LCBO Retail Store LaSalle – 8,000 sq. ft. • IAT Global – Industrial – 27,000 sq. ft. • The Fort Fun Centre – Entertainment Complex – Renovation and Conversion Project – 28,000 sq. ft. • Lakeshore MedArts – Multi-tenant Health Centre – 20,000 sq. ft. • Sutts, Strosberg LLP – Office Expansion and Renovations – 15,000 sq. ft. • Service Mold – Industrial Building – 28,000 sq. ft. • Centreline Holdings – Industrial Expansion – 30,000 sq. ft. • Select Tool – Plant 2 – Industrial Building – 22,000 sq. ft. • Briadco – Industrial Expansions – 14,440 sq. ft.

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TOP CONTRACTORS

LISTINGS

A Acadian Construction 200 Champlain St, Suite 210 Dieppe NB E1A 1P1 T: 506-857-1909 F: 506-857-0342 www.acadianconstruction.com $40,000,000 C, M, N, O Aecon Group Inc. 20 Carlson Court, Suite 800 Toronto ON M9W 7K6 T: 416-297-2600 www.aecon.com $3,213,000,000 A, B, C, D, E, F, G, H, J, K, M, N, O, Q, R, S, T ,U, V, W, X, Y, Z AirPlus Canada 40 Shields Court, 102 Markham ON L3R 0M5 T: 416-298-6874 www.airplus.ca $10,000,000 A, B, C, D, E, F, G, H, J, K, M, N, O, Q, R, S, T, U, V, W, X, Y, Z Annapolis Maintenance Services Ltd. 146 Corvette Drive PO Box 260 Cornwallis Park NS B0S 1H0 T: 902-638-3464 F: 902-638-3535 $650,000 C, E, N, O, U Arbutus Sundecks 5340 Paton Drive Delta BC V4K 2G3 T: 604-338-7910 F: 604-338-7910 www.arbutusvinyl.com $1,700,000 A, B, C, D, E, F, G, H, J, K, M, N, O, Q, R, S, T, U, V, W, X, Y, Z Arpi's Industries Ltd. 6815 40 Street SE Calgary AB T2C 2W7 T: 403-236-2444 F: 403-236-8345 www.arpis.com A, C, D, E Avondale Construction Ltd. 49 Hobsons Lake Drive Halifax NS B3S 0E4 T: 902-876-1818 F: 902-876-1822 www.avondaleconstruction.com $143,000,000 C, F, H, N, O

Axiom Builders Inc. 838 W Hastings St, Suite 1100 Vancouver BC V6C 0A6 T: 604-412-0459 www.axiombuilders.ca $325,000,000 C, V

B Beedie Developement Group. 3030 Gilmore Diversion Burnaby BC V5G 3B4 T: 604-909-8710 www.beediegroup.ca N, U Bird Construction 5700 Explorer Drive, Suite 400 Mississauga ON L4W 0C6 T: 905-602-4122 F: 905-602-4122 www.bird.ca $1,589,868,000 C, E, F, H, J, M, N, O, R, S, T, V, X, Z Blackstone Paving Inc. 6611 216 St. Langley BC V0X 1T0 T: 604-530-1889 F: 604-534-1302 www.blackstonepavinginc.com A, C, N, O, U, W Blue Star Construction Corp. 411 Four Valley Dr. Unit 35 Vaughan ON L4K 5Y8 T: 905-760-0080 F: 905-760-0026 www.bluestarconstruction.ca A, B, C, D, E, F, G, H, J, K, M, N, O, Q, R, S, T, U, V, W, X, Y, Z Bockstael Construction 200-100 Paquin Rd. Winnipeg MB R2J 3V4 T: 204-806-5030 www.bockstael.com $98,700,000 A, B, C, E, H, J, R, S, T, V, W, Y, Z Bondfield Construction Company Ltd. 407 Basaltic Road Concord ON L4K 4W8 T: 416-667-8422 F: 416-667-8462 www.bondfield.com $766,100,000 C, E, F, H, M, N, O, T, U, V

ACTIVITIES Bragg Creek Excavating Inc. PO Box 1209 Bragg Creek AB T0L 0K0 T: 403-949-2756 F: 403-949-5665 www.braggcreekexcavating.com $600,000 X BROCCOLINI Suite 500, 16766 Trans-Canada Hwy Kirkland QC H9H 4M7 T: 514-737-0076 www.broccolini.com $381,000,000 C, N, V Buttcon Ltd. 8000 Jane Street, Tower B, Suite 401 Concord ON L4K 5B8 T: 905-907-4242 F: 905-907-8096 www.buttcon.com $166,000,000 A, B, C, D, E, F, G, H, J, K, M, N, O, Q, R, S, T, U, V, W, X, Y, Z

The following letter codes are used to indicate areas of activity for the contractors in the listings on these pages. A Aggregates B Bridges C Commercial Buildings D Communication Engineering E Concrete F Contract Management G Demolition H Design/Build J Electric Power/Utilities K Environmental Remediation M General Contracting N Industrial Buldings O Institutional Buildings Q Marine-Related R Mining-Related S Oil and Gas-Related T Other Transportation Construction U Residential Houses V Residential Multi-Unit W Roadbuidling X Sewer Y Structural Steel Z Waterworks

Canadian Turner Construction Company 1601 - 700 West Pender Street Vancouver BC V6C 1G8 T: 604-398-2204 www.turnerconstruction.com

ComFact Corp. 401-5575 North Service Road Burlington ON L7L 6M1 T: 1-855-879-7545 www.comfactcorporation.com $6,000,000 A, B, C, D, E, F, G, H, J, K, M, N, O, Q, R, S, T, U, V, W, X, Y, Z

Caruana Interiors and Contracting 9,8 Riel Dr. St. Albert AB T8N 3Z7 T: 780-935-5831 F: 780-328-4114 www.caruanainteriors.ca $1,400,000 C, M, U

Con-Drain Company (1983) Ltd. 30 Floral Parkway Vaughan ON L4K 4R1 T: 905-669-5400 F: 905-669-5040 www.condrain.com $355,000,000 A, B, C, M, N, O, U, V

Central Restoration & Renovation Ltd. 53 Burnt Park Drive Red Deer AB T4P 0J7 T: 403-347-4001 F: 403-347-4037 centralrestorationsltd.ca C, J, K, M, N, O, U, V

Cornell Design & Landscaping Ltd. 114-325 4th Avene SW Moose Jaw SK S6H 5V2 T: 306-693-8733 F: 306-693-8732 www.cornelltrees.com $500,000

Clark Builders 4703 53 Avenue Edmonton AB T6B 3R6 T: 780-395-3311 F: 780-395-3533 www.clarkbuilders.com $634,000,000 A, B, C, D, E, F, G, H, J, K, M, N, O, Q, R, S, T, U, V, W, X, Y, Z

Crestline Development Corp. 249 Major Mackenzie Drive East, Suite 205 Richmond Hill ON L4C 9M8 T: 905-770-3805 F: 905-770-3071 www.thecrestlinegroup.com

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S Curtis GEO Solutions Inc. Unit 1A,820 28 Street NE Calgary AB T2A 6K1 T: 403-273-5868 F: 403-273-5957 www.curtisgeo.ca A, B, C, D, E, F, G, H, J, K, M, N, O, Q, R, S, T, U, V, W, X, Y, Z

D Danco Building Services 8510 Old Scugog Road Enniskillen ON L0B 1J0 T: 905-261-7240 $4,546,354 A, C, E, F, G, H, M, N, O, U, V, W, Y, Dawson Wallace Construction Ltd. 4611 Eleniak Road Edmonton AB T6B 2N1 T: 780-466-8700 F: 780-466-9613 www.dawsonwallace.com $200,000,000 C, N

Eastern Construction Company Ltd. 505 Consumers Road, Suite 1100 Toronto ON M2J 5G2 T: 416-497-7110 F: 416-497-7241 www.easternconstruction.com $160,000,000 C, H, M, N, O, V

E EBC inc. 1095, rue Valets QuÃ©bec QC G2E 3M3 T: 418-872-0600 F: 418-872-1417 www.ebcinc.com $636,197,538 B, C, R, T, V, W, Z Elite Construction Inc. 35 Romina Drive, Suite 100 Concord ON L4K 4Z9 T: 905-660-1663 F: 905-660-1667 eliteconstruction.com

Dean Group 20 Adelaide Street East, Suite 800 Toronto ON M5C 2T6 T: 416 368 6446 www.deangroup.ca B, C, D, J, K, N, O, Q, R, S, U, V, W

EllisDon Corp. 1004 Middlegate Road, Suite 1000 Mississauga ON L4Y 1M4 T: 905-803-6675 $2,948,000,000 www.ellisdon.com B, C, E, F, H, J, M, N, O, S, T, V, W, Y

Delnor Construction Ltd. 3609-74 Avenue Edmonton AB T6B 2T7 T: 780-469-1304 F: 780-466-0798 www.delnor.ca $162,600,000 C, H, M, N, O, U, V

Evolve Builders Group Inc 60 Manitoba Street Guelph ON N1E 3B9 T: 519-265-6546 F: 519-265-6576 www.evolvebuilders.ca $2,800,000 H, M, O, U

Don Wurch Electric 80 Marygrove Crescent Winnipeg MB R3Y 1M2 T: 204-999-1008 wurchelectric.com $500,000 C, J, U Dural Flooring Ltd. 244 Brockport Unit 17 Toronto ON M9W 6X9 T: 416-759-2255 F: 416-288-8885 www.duralflooring.com C, N, O, V

F Fiberline Composites Canada Inc. 2450 Brasilia Circle Mississauga ON L5N 2G1 T: 647-227-2007 www.fiberline.com B, C, D, H, N, T, U Fillmore Construction Management 9114 - 34A Avenue Edmonton AB T6E 5P4 T: 780-235-6014 F: 780-437-3998 www.fillmoreconstruction.com $125,000,000 C, G, H, N, O, V

Flintstones Masonry & Home Improvements Ltd. 520 Ardersier Road Victoria BC V8Z 1C7 T: 250-880-1188 www.flintstonesmasonry.com $6,000,000 C, E, H, M, U Flynn Group of Companies 6435 Northwest Drive Mississauga ON L4V 1K2 T: 905-671-3971 www.flynncompanies.com $804,000,000 C, N, O FWS Group of Companies 275 Commerce Drive Winnipeg MB R3P 1B3 T: 204-487-5601 www.fwsgroup.com $140,000,000 B, M, N, T, V, Y, Z

G Govan Brown 108 Vine Avenue Toronto ON M6P 1V7 T: 416-703-5100 F: 416-703-5200 www.govanbrown.com $351.000.000 A, B, C, D, E, F, G, H, J, K, M, N, O, Q, R, T, U, W, X, Y, Z GradeWork Consulting Inc. PO Box 811 Thorhild AB T0A 3J0 T: 780-868-5775 www.gradework.ca $150,000 H, M, N, S, W Graham Group Ltd. 10840 27th Street SE Calgary AB T2Z 3R6 T: 403-570-5231 F: 403-570-5000 www.grahambuilds.com $2,200,000,000 B, C, D, F, G, H, J, M, N, O, R, S, T, V, W, X, Z

Grascan Construction Ltd. 61 Steinway Blvd. Toronto ON M9W 6H6 T: 416-644-8858 F: 416-644-8864 grascan.com $77,372,000 B, F, G, H, M, T, W Grayveld Builders Corp. 42 Campbell Avenue Oro-Medonte ON L0L 1T0 T: 705-487-1659 www.grayveld.com $700,000 C, E, F, H, M, N, Q, Y

H Hanna Construction Box 1333 Parksville BC V9P 2H3 T: 250-248-1069 www.hannaconstruction.ca A, C, E, F, M, N, O, U, V, Y

J Jacob Bros. Construction Inc. 101 - 19162 22nd Avenue Surrey BC V3Z 3S6 T: 604-803-2841 F: 604-541-0343 www.jacobbros.ca $90,000,000 B, C, E, F, H, J, M, N, O, Q, S, T, U, V, W, X, Z JJL Rebar Inc. 372 Salisbury Drive Oakville ON L6L 3W4 T: 416-526-6811 F: 905-502-5410 www.jjlrebar.com $935,639 A, B, C, D, E, F, G, H, J, K, M, N, O, Q, R, S, T, U, V, W, X, Y, Z

K Kelly Panteluk Construction Ltd. #98 Panteluk Street Estevan SK S4A 2A3 T: 306-634-2166 F: 306-634-7822 kpcldirtmovers.com $95,000,000 A, B, G, H, J, K, M, R, S, T, W, X, Z

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TOP CONTRACTORS

LISTINGS

Kiewit Canada Corp. 10333 Southport Rd SW Ste 200 Calgary AB T2W 3X6 T: 403-693-8701 F: 403-267-2339 www.kiewit.ca $1,600,690,000 B, C, E, F, H, J, M, N, Q ,R, S, T, W, X, Y, Z Kinetic Construction Ltd. 201-862 Cloverdale Avenue Victoria BC V8X 2S8 T: 250-381-6331 F: 250-386-2286 www.kineticconstruction.com $90,000,000 C, N, O, V

L Ledcor Group of Companies 1200-1067 West Cordova Street Vancouver BC V6C 1C7 T: 604-681-7500 F: 604-681-9700 www.ledcor.com $2,817,900,000 LSC Pre-Cast Systems Ltd. 8285A Lickman Road Chilliwack BC V2R 3Z9 T: 604-792-4244 F: 604-792-4241 www.lscprecast.com B, C, H, N,O, Q, R, U, V

M Manshield Construction 955 Cobalt Crescent Thunder Bay ON P7K 1B9 T: 807-346-1650 F: 807-346-1654 www.manshield.com $180,000,000 C, N, O, U, Marco Group of Companies 78 O'Leary Avenue, P.O. Box 13580 Stn A St. John's NFLD A1B 4B8 T: 709-754-3737 F: 709-754-3715 www.marcogroup.ca $167,000,000 C, F, H, M, N, O Matrix Solutions Suite 600, 2014 11 Avenue SW Calgary AB T2R 0K1 T: 403-237-0606 F: 403-263-2493 www.matrix-solutions.com

“What these technologies do is reduce any impacts of conceptual errors, due to the ability to simulate the construction process,” Robert Fernandez, Stuart Olson Construction Ltd.

Metro Group / CCMET 6991 Curragh Avenue Burnaby BC V5J 4V6 T: 604-436-9111 www.ccmet.ca $28,000,000 A, B, C, K, M, N, O, Q, T, V, W Midi Construction Ltd. 20 Watertower Road Saint John NB E2M 7K2 T: 506-635-3900 F: 506-693-6001 www.midiconstruction.ca $1,750,000 X, Z Modular Services Inc. 210, 20440 Township Road 500 Camrose County AB T0B 2M1 T: 780-662-0525 F: 780-662-0456 www.modserv.ca

N Newway Group 3750 First Avenue Burnaby BC V5C 3V9 T: 604-299-3709 F: 604-299-6209 newwayforming.com C, E, O, V Niemela Construction 3541 Navatanee Drive Kamloops BC V2H 1S1 T: 250-851-6378 A, B, C, D, E, F, G, H, J, K, M, N, O, Q, R, S, T, U, V, W, X, Y, Z NorLand Ltd. 3183 Norland Avenue Burnaby BC V5B 3A9 T: 604-291-1255 F: 604-291-2813 www.NorLandLimited.com $179,000,000 B, F, G, H, J, K, M, Q, R, S, T, W, X, Z

North American Construction Group Suite 300,18817 Stony Plain Road Edmonton AB T5S 0C2 T: 780-960-7171 F: 780-969-5599 www.nacg.ca $216,180,000 M, R, S North Construction 378 Esplanade E North Vancouver BC V7L 1A4 T: 604-904-2300 www.north-construction.com $10,000,000 A, B, C, D, E, F, G, H, J, K, M, N, O, Q, R, S, T, U, V, W, X, Y, Z

O O.N.Site Construction Inc. 2861 Sherwood Heights Drive Oakville ON L6J 7K1 T: 905-829-8895 F: 905 829-8708 www.onsiteconstruction.ca $19,536,000 C, F, K, M On-Site Solutions Inc. 83 Galaxy Blvd Toronto ON M9W 5X6 T: 416-654-6000 www.onsitegc.ca $1,200,000 A, B ,C, D, E, F, G, H, J, K, M, N, O, Q, R, S, T, U, V, W, X, Y, Z Owen King Ltd. 87 Brant Sideroad 15 Walkerton ON N0G 2V0 T: 519-881-1771 F: 519-881-1585 www.owenkinglimited.com $5,000,000 B

P P.D.Q. Mechanical Ltd. 12910 - 146 Street Edmonton AB T5L 2H7 T: 780-965-9774 $6,000,000 C, N, O, S ,X PCL Constructors Inc. 9915 56 Avenue Edmonton AB T6E 5L7 T: 780-733-5000 www.PCL.com $8,200,000,000 A, B, C, D, E, F, G, H, J, M, N, O, Q, R, S, T, V, W, X, Y, Z Pennecon Ltd. 1309 Topsail Road St. John's NFLD A1B 3N4 T: 709-782-3404 F: 709-782-0129 www.pennecon.com $156,662,503 B, E, F, J, M, Q, S, U, W, X, Z Pomerleau Inc. 521, 6e Ave. Saint-Georges QC G5Y 0H1 T: 418-228-6688 F: 418-228-3524 www.pomerleau.ca $1,700,000,000 A, B, C, D, E, F, G, H, J, K, M, N, O, Q, R, T, U, V, W, X, Y, Z Priestly Demolition Inc. 3200 Lloydtown-Aurora Road King ON L7B 0G3 T: 905-841-3735 F: 905-841-6282 www.priestly.ca $79,563,660 G

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OnSite_

Intelligent Solutions: Machine Control

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The Intersection of Infrastructure and Technology

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TOP CONTRACTORS

LISTINGS

“A buyer of construction has to come along and say, ‘I want this, because I see the benefits of information modeling in terms of care and maintenance of my building in the future.’” John Bockstael, Bockstael Construction

QM ENVIRONMENTAL 3580 Laird Road, Unit 1 Mississauga ON L5L 5Z7 T: 416-253-6000 F: 416-253-6699 $139,000,000 www.qmenv.com K

R RAM Construction Inc. 101 - 8369 River Way Delta BC V4G 1G2 T: 604-940-5265 www.ramconst.com $18,000,000 C, H, M, N, O Reliance Construction 3285 Jean-Baptiste Deschamps Montreal QC H8T 3E4 T: 514-631-7999 F: 514-631-3888 www.relianceconstruction.com $406,422,000 C, F, H, M, N, V Rosati Group 6555 Malden Road Windsor ON N9H 1T5 T: 519-734-6511 F: 519-734-7872 www.rosatigroup.com $44,091,530 C, F, G, H, M, N, O

S Scott Builders Inc. 8105 49th Ave Close Red Deer AB T4P 2V5 T: 403-343-7270 www.scottbuilders.com $154,500,000 A, B, C, E, N, V, W, SiteCast Construction Corp. 200-16 Concourse Gate Ottawa ON K2E 7S8 T: 613-225-6646 www.sitecast.ca C, E, F, H, M, N, O

W SNC-Lavalin 455 René-Lévesque Blvd. West Montreal QC H2Z 1Z3 T: 514-393-1000 F: 514-866-0795 $8,500,000,000 Sterling Plumbing and Heating Ltd. 1625 8th Avenue Regina SK S4R 1E6 T: 306-586-5050 F: 306-586-5050 Sterlingplumbing.ca C, H, U, V Stuart Olson Inc. 600, 4820 Richard Road SW Calgary, AB T3E 6L1 T: 403-685-7777 F: 403-685-7770 www.stuartolson.com $1,000,000,000 F, J, M, N, R, S

T The State Group Inc. 3206 Orlando Drive Mississauga ON L4V 1R5 T: 905-293-7501 F: 905-672-1919 www.stategroup.com $340,000,000 H, J, N, S ,T Thomas Cavanagh Const. Ltd. 9094 Cavanagh Road Ashton ON K0A 1B0 T: 613-229-4473 F: 613 253 0071 Timberline Custom Homes/Northey Contracting Inc 5584 Hwy 28 Woodview ON K0L 3E0 T: 705 654-4312 www.timberlinecustomhomes.ca $3,500,000 F, H, M, U, W, X

Triplecrete Ltd. 40 Rivalda Road Toronto ON M9M 2M3 T: 416-742-5090 F: 416-742-5091 www.triplecrete.com C, N, O, U, V Turner Construction Company 700W Pender Street Vancouver BC V6C 1G8 T: 604-398-2200 www.turnerconstruction.com $535,566,000 A, B, C, D, E, F, G, H, J, K, M, N, O, Q, R, S, T, U, V, W, X, Y, Z

U Unicorn Trucking, Contracting & Quarry Ltd. 12204 256th Street Maple Ridge BC V4R 1B6 T: 604-462-7762 F: 604-462-0441 $1,000,000 A, B, C, D, E, F, G, H, J, K, M, N, O, Q, R, S, T, U, V, W, X, Y, Z

V VanderWal Home & Commercial Group Inc. 4427 VanderWal Drive Petrolia ON N0N 1R0 T: 1-877-251-6875 F: 1-866-873-0360 www.trusses.ca C, H, N, O, U, V, Y

Wales McLelland Construction Company Ltd. 6211 Fraserwood Place Richmond BC V6W 1J2 T: 604-638-1212 F: 604-276-9930 www.walesmclelland.com Walsh Canada 2700 Steeles Avenue West, Unit 2 Vaughan ON L4K 3C8 T: 905-532-0662 F: 905-532-0051 www.walshgroup.com $190,000,000 H, M, O, T, V, X, Z Wal-Tech Drainage 391 Carroll St West Strathroy ON N7G 1B2 T: 519-661-9199 $800,000 A, B, C, D, E, F, G, H, J, K, M, N, O, Q, R, S, T, U, V, W, X, Y, Z Westcor Construction Ltd. 2420 39 Avenue NE Calgary AB T2E 6X1 T: 403-663-8677 F: 403-663-8678 www.westcor.net $42,000,000 C, F, H, M, N, O Westridge Construction Ltd. 435 Henderson Drive Regina SK S4N 5W8 T: 306-352-2434 F: 306-352-0199 www.westridge.ca $73,851,609 B, C, F, M, N, O, V, X, Z

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OnSite_

“Komatsu quality is second to none!” KEVIN URIG

KMU TrUcKing & ExcavaTing / avon, oH

THE CUSTOMER IS ALWAYS RIGHT. “Komatsu’s product support is the biggest thing with me. Their equipment is quality. The products with intelligent Machine Control technology help make my crews more efficient, and my estimates more competitive. We have never had any major issues, and if we have a concern, they stand behind us. Komatsu is a great company to work with!”

USED WITH PRIDE

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MACHINE CONTROL

The evolution of

Machine Control A lot has changed in 20 years – operators are faster and more accurate than ever BY NATE HENDLEY

arthworks companies have been using machine control technology on their equipment for roughly two decades. Such controls check grade, provide geographic coordinates, automate equipment functions and collect data, with the goal of boosting productivity, accuracy and the bottom-line. Since their introduction, machine control systems have made huge strides, in technology, popularity and affordability. “To look at the changes that have happened since the mid-90s you need only look at the differences in phones from that time to this,” says David Rowlett, U.S. manager, machine control division at Leica Geosystems (part of the Hexagon AB company). If cell phones have advanced tremendously in processing power, memory and speed, modern machine control systems provide “better data processing capability, visualization capability, sensing capability and so on,” explains Rowlett.

IMPROVED SATELLITE ACCESS Machine control systems use satellite network data to pinpoint locations and assess grade. Early machine controls relied solely on information from the Global Positioning System (GPS), an American-run satellite network, for this purpose. Modern machine controls can tap into the Global Navigation Satellite System (GNSS), a newer linkage encompassing satellite networks from different countries. “One of the big benefits [of GNSS] is you increase the number of satellites that your system can use. So, you have the improved ability to utilize satellite signals for your grading activity,” says Jeff Drake, business area manager for earth moving machine control systems at Trimble. Rowlett explains “a broader mix of constellations reduces the risk of satellites not being available, and makes it easier to receive data in more demanding locations, next to buildings and treelines, and things of that nature.”

Sensor technology on machine control systems “has come leaps and bounds ahead of where it was. 3D wasn’t an option [two decades ago],” adds Kyle Birch, segment manager of Leica machine controls in Canada. 3D technology offers a much more detailed and accurate view of terrain for equipment operators. Contractors are using machine control systems more broadly than in decades past. “In the early days, this type of technology was predominately used on dozers and motor graders. Over the last 20 years we’ve seen the expansion of the technology onto additional machine types, for example excavators, wheel tractor scrapers, wheel loaders, asphalt pavers, concrete pavers and compactors,” says Drake.

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“For just about any machine that needs precision and repeatability, we can adapt these technologies to it,” adds Rowlett. Modern machine control systems also have on-board connectivity and receive data files from the office and send back performance information, on the amount of work done, material moved or added, etc. Progress on projects can be monitored in near real-time at headquarters. Drones are another recent development. They can fly over construction sites, collecting data on ground conditions, machine positions, etc., which is then transmitted to field crews.

ADOPTION RATE STILL LOW Bulldozers remain the most likely piece of earth moving gear to be equipped with

a machine control system. Most of these dozers use the technology for “GPS grade control,” says Jamal Mohammed, sales manager at SITECH Mid-Canada, which distributes Trimble machine controls. “The whole premise of GPS in your vehicle is to tell you where you are. It’s no different with a dozer. GPS information from satellites is telling the dozer where it is … it’s telling the operator where his blade is, where his blade needs to go,” explains Mohammed. “When he gets close to grade, he’s able to flip it into what we call automatic. The computer will take over the hydraulics and actually control the blade to get to grade.” In Canada, highway construction firms are among the top adopters of machine control technology. “You would be very hard pressed to find a big highway project

David Rowlet

that doesn’t have 3D machine control running on [at least some machines],” says Birch. That said, “mom and pops and mid-sized contractors” are also becoming enamoured with machine control technology, notes Mohammed. Such companies “can’t afford a survey crew to stand there every day” and are looking to consolidate their workload and save money in the long run, he explains. Still, the overall adoption rate of on-sitemag.com / 39

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MACHINE CONTROL machine control technology remains low. Birch estimates “under five per cent” of existing earth moving equipment in Canada is equipped with machine control systems. This rises to maybe 10 per cent for brand new purchases, he adds. The latter statistic reflects a growing trend that has seen machine-control makers and OEMs working together, to provide earth moving equipment with factory-built controls. Caterpillar, for example, has a partnership with Trimble for this purpose. “You can order every major brand of bulldozer from the factory with systems on them today. Right now, it’s certain models but I think the day will come when every machine has this capability,” says Rowlett, noting the efficiencies of machine control systems are too great for equipment manufacturers to ignore. If the increasing availability of factory-built controls is likely to spur adoption, lower cost is another enticement. Early machine control systems were priced “around $200,000” for a single piece of equipment, says Mohammed. Drake puts the figure at “probably upwards of $150,000.” Regardless of exact cost, machine control systems (which include support gear such as GPS bay stations, radio infrastructure and portable rovers “to establish the coordinate system that the machine will work in,” says Drake) were once very expensive. Today, machine control systems vary in price “depending on the size of the project and number of machines you want to outfit, but if you were looking at a small site project, to outfit one machine with lower-cost bay stations, you could probably get [a system for under] $100,000 at this point,” states Drake. While still a hefty investment, machine control technology can lead to big savings.

SAVE TIME AND MONEY Civil contractors Amico Affiliates, for example, used Leica machine control technology to work on the six-lane Herb Gray Parkway Project (a major roadway near the U.S./Canada border in Windsor, Ont.).

Historically used on motor graders, machine controls are now being used on excavators, asphalt pavers, compactors and all kinds of other construction equipment.

Instead of relying on traditional surveying methods, involving grade stakes marked for elevation and constant manual checking of grade, Amico opted for Leica’s MS50 MultiStation and SmartNet global positioning systems. While paving, a sonic sensor alerted operators if they needed to go lower or higher. The machine control systems saved time and money (fewer crews were needed for surveying and paving) while enhancing safety and grade check accuracy, says Leica.

Windley Contracting acquired Trimble’s GCS900 Grade Control System for a $40 million project to widen Highway 97 in British Columbia. According to Trimble, the system increased excavating productivity by 50 per cent, saved the company $2,500 a week in surveying costs and reduced staking expenses by 75 per cent. Windley used a Trimble Internet Base Station Service (IBSS) consisting of a GNSS receiver, GNSS antenna, radio and a radio antenna to provide satellite posi-

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OnSite_

OFFICE Powerful accounting, financial and office operations software for transaction processing and reporting.

TEAM Cloud-based solutions to power collaboration between the entire project team.

FIELD Extending capabilities into the field through mobile device data capture and management.

SOFTWARE WITH INTEGRATION BUILT IN, NOT BOLTED ON.

If there is one thing this industry needs less of, it’s complexity. That’s why our Office / Team / Field solutions are built from the ground up as a complete, integrated platform. Rather than software add-ons that communicate poorly, we provide smooth workflows and centralized information for complete visibility and control. It’s time to simplify your solution.

Viewpoint.com/control

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MACHINE CONTROL tioning data. A 3D control system gave cab operators a detailed view of the site. Work began in 2011 and the expanded highway was opened to the public August 2013. This March, Trimble revealed Trimble Earthworks for Excavators and Trimble Earthworks for Dozers, new machine control systems with Android operating systems. Earthworks for Excavators offers “the industry’s first integrated 3D aftermarket excavator automatics capability,” according to Trimble.

3D technology offers a much more detailed and accurate view of terraine for equipment operators.

WHAT’S AHEAD? Over the next 20 years, expect to see machine control systems with better sensors, better data collection ability as well as more automation on more equipment. Lurking on the horizon are fully autonomous earth moving machines. The technology already exists, but isn’t common yet in construction circles. “You see a lot more autonomous machines in the mining industry. In mining, if the worst happens and a machine runs amok, it’s probably just going to crash into a high wall

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and no major harm done,” says Rowlett. “Construction sites, however, are frequently in the middle of traffic or next to an elementary school … [that said] as we approach the day when we have autonomous cars on our streets and we build safety measures in them, I think you’ll see earth moving equipment be autonomous as well.” No matter how advanced machine control technology gets, trained operators will still be a necessity. “I often get asked, can I take anybody off the street and stick them in a machine now that I’ve got a blade that’s automated? The answer is ‘no’ because the operator knows a lot more than just where the blade needs to be and how to put it there,” says Rowlett. “They still have to know what material needs to be removed, where it needs to go, how it needs to get there. There’s still a lot of art to that.”

Corrosion resistant design Nate Hendley is a Toronto-based freelance writer and author. Please send comments to editor@on-sitemag.com.

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OnSite_

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Some manufacturers promise quick parts delivery if their machines go down — but are you 100% certain they’ll arrive on time to get you back up and running? At Volvo, we guarantee your parts will be in hand within 48 hours*. We’re pushing boundaries in service, so you can push boundaries on the job. Contact your local dealer, or visit volvoce.com/parts48 for complete details. *Guarantee applies to Class 1 parts orders. 24-Hour Parts Delivery Guarantee in the United States, including Alaska, and a 48-Hour Parts Delivery Guarantee in Canada and Hawaii. See website for complete details.

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GREEN CONSTRUCTION

Propane:

The underestimated fuel

Propane is being used to power a growing number of jobsite applications BY JEREMY WISHART

ropane has been a fixture on construction sites for years, most often used for power generation and materials handling. Recently, however, site managers are using propane to power a growing number of applications. More construction firms are beginning to recognize the advantages that propane has to offer — it’s a versatile fuel that

saves time and money on a jobsite, and aids in reducing emissions.

FLEXIBLE FUEL Versatility is definitely one of propane’s key advantages. It powers equipment vital to construction jobsite operations, such as unloading products from trailers and powering tools and jobsite lights. It is also

used for towable prime power generators and portable generators, which provide power to all parts of a jobsite if electricity isn’t accessible. Propane-powered portable light towers are also used to keep large projects well-lit during long days or overnight work. Propane produces fewer emissions than diesel or gasoline, so contractors on-sitemag.com / 45

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GREEN CONSTRUCTION

Using propane autogas work trucks can give contractors a one-fuel solution to help lower costs and reduce emissions.

“Contractors that decide to use propane, have two refueling strategies to choose from: a cylinder exchange program, or on-site refueling” are able to use it indoors or outdoors, without being tethered to electrical outlets or bound by the limits of a battery’s charge. Propane-powered aerial lifts, forklifts, and wheel buggies make moving materials on, off, and around a site easier and more efficient. Even propane-powered heaters are used safely indoors with proper ventilation, providing a more comfortable workspace for employees and meet the humidity or heat conditions needed for drying/curing material finishes. Propane engines are also used to power concrete finishing equipment, such as riding trowels, grinders, polishers, floor strippers, and concrete saws.

PRODUCTIVITY GAINS On sites where longer days are necessary,

propane is advantageous. It requires minimal downtime for refueling. For many machines, refueling is as simple as swapping out an empty cylinder for a full one. The process takes a matter of minutes. There’s no downtime spent searching for the correct fuel or running equipment to a refueling station. Contractors that decide to use propane, have two refueling strategies to choose from: a cylinder exchange program, or on-site refueling. By choosing a cylinder exchange program, contractors simply store propane cylinders in a cage at a corporate office or on a jobsite. A set schedule can be determined with a local propane retailer to exchange empty cylinders for full cylinders.

For larger operations, an on-site refueling strategy may be the better option. This requires a propane tank to be installed at a corporate office. In some cases, the construction contractor’s local propane retailer will set up a portable propane refueling solution directly on the jobsite, if it is a long-term project. Training employees to refill cylinders for use is handled by the propane retailer. Having on-site refueling is also beneficial to businesses considering incorporating propane autogas trucks into transport fleets.

MANAGING MULTIPLE SITES During busy construction months, managers and employees may have a lot of back-and-forth travel between sites. Using propane autogas work trucks can give contractors a one-fuel solution to help lower costs and reduce emissions, as they move employees and equipment from one site to another. Conversion kits are available for a wide variety of medium-duty pickups and

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OnSite_

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DOCKET #: 13870

FILE NAME: 13870_INTNT-P-008-2017-E

PROOF #: 01 ARTIST: JC

DATE: May 19, 2017 10:40 AM

2017-06-13 2017-05-2910:37 9:11AM AM

GREEN CONSTRUCTION

Propane emits fewer greenhouse gas emissions, and there’s no risk of spills.

“Cylinders operate using a closed-loop fueling system, which eliminates the possibility of wasted fuel, and protects workers from harmful exhaust fumes.” vans, so an existing vehicle fleet may be converted. Training operators to refuel propane vehicles is done quickly and easily by working with a local retailer. An added bouns is that propane vehicles don’t require the additional fluids and filters needed on lower-emissions diesel technology. Refueling with propane autogas in vehicles is similar to using traditional fuels, and fleets can use either on-site refueling infrastructure, or make use of a public refueling network available 24/7 through a card lock system. Some companies claim that using propane autogas vehicles is reducing the fuel costs for their fleets by as much as 30 to 50 per cent.

COST SAVINGS Propane costs mirror those of gasoline and diesel, but over time are more consistent.

The cost per gallon is typically lower than gasoline and diesel, and construction companies can further protect themselves from market fluctuations by entering into fuel contracts with a local propane retailer. This helps with annual budgeting. Using propane also ensures fuel purchased won’t be fuel wasted for companies that store equipment during the winter. Unlike traditional fuels, propane won’t deteriorate in storage and doesn’t contain ethanol, which can harm small engines. It also can’t be siphoned out of equipment fuel cylinders for other uses, providing a measure of security to jobsites.

CLEAN AND GREEN More and more businesses are seeking green services to gain competitive advantage. That’s no different for contractors looking to stand out during the bid

process, which often requires projects to include some form of green or renewable energy. Propane emits fewer greenhouse gas emissions, and there’s no risk of spills. The cylinders operate using a closed-loop fueling system, which eliminates the possibility of wasted fuel. It should also be noted employees operating propane equipment won’t leave the jobsite smelling like gasoline or diesel, and won’t breathe in harmful exhaust fumes – known to contain carcinogens. Propane equipment is already fueling many of the equipment must-haves on jobsites across Canada. As contractors begin to recognize the versatility, cost savings, productivity and security of this cleaner fuel, it’s easy to understand why propane use is on the rise.

Jeremy Wishart is the deputy director of business development at the Propane Education & Research Council. Send comments to editor@on-sitemag.com.

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June 2017

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RISK By David Bowcott

Is the project finance industry digging deep enough?

very project needs money to move forward. Those funds are made up of equity and debt. The equity is contributed by the owner (or the concessionaire of the project) as a first layer of defense against project failure. The remainder of the project’s capital costs is made up of debt. Both equity and debt have methodologies to determine whether they feel they want to participate in the project. Generally speaking, the equity has a heartier risk appetite in comparison to the debt, as it sits first in line if the project fails. For the purposes of this article, I’m interested in the debt and its underwriting methodology, which determines whether it wishes to move forward with the project, and how it determines the price (or interest) it will charge given the project’s various risks. Before we get into the criteria or methodology used by the debt to determine the terms it will put forward, let’s identify the most common sources of project debt (there are others). Banks – The banks use their depositor’s funds to lend money to projects on a regular basis. Often the banks have very shortterm windows for such lending. Generally, banks will lend for durations no greater than 5 to 10 years. In some jurisdictions around the world banks have been known to lend for much longer durations, likely because the options for a solid return on its depositors funds are very limited (think negative interest rates). Private Placements Debt – The sale of debt directly to a private investor. In the world of project finance, significant private placement debt capacity can be found from life insurance companies and some pension funds. Generally these sources of debt have longer-term liabilities and feel

comfortable offering terms for long-term obligations (30 to 40 years). Rated Bonds – Bonds that are rated by third-party rating agencies like S&P, Moodys and DBRS. Generally these debt instruments are longer term in duration and are bought up by sources of capital that have longer-term liabilities on their balance sheet, like pension funds and life insurance companies. As such, these instruments have a much longer duration (30 to 40 years). Each of the above has its methodology for underwriting. A common underwriting theme, until recently, that is shared by the above sources is that they were all risk averse when it comes to construction. As a result they have (or had) underwriting criteria that tended to focus less on the risk of construction being successfully completed and much more on the security being provided by those responsible for construction. Basically, traditional project debt underwriting wanted to know if they could be paid back in the event the construction phase was unsuccessful. Such underwriting is known as recoverability underwriting. This isn’t to say the underwriting process was devoid of any criteria to qualify those constructing the asset, but there was a heavy focus on the financial strength of those responsible for construction and the associated security they put up to equity and debt to guarantee construction. In recent years, there has been a shift to underwriting methodologies that delve deeper into the qualifications and ability of those responsible for construction to actually complete the project. This trend has been aided by post financial crisis regulatory pressure on the capital community to better, and more deeply, underwrite the projects to which they are providing financing. It appears the debt underwrit-

ing community, though still focused on recoverability in the event of credit default, is moving more towards a model that assesses the probability of the construction stakeholders to complete the projects they undertake. This underwriting community has a growing interest in business and safety risks associated with the construction community, and the various risk controls or best practices that can be taken to prevent or mitigate those risks from taking place. Further the debt community is focusing more energy on insurance solutions that offer liquidity for the key risks, which could lead to schedule and cost overruns.They have a growing interest in insurance structures that incentivize the construction stakeholders to implement these best practices that prevent and/or mitigate risks from transpiring. As contractors play a more pivotal role in securing project financing for owners and concessionaires, it’s vital they pay attention to these trends and the tools being used to obtain optimal project finance terms. Not only do some of these solutions provide better project finance terms, they also create less constraint on the construction contractor’s capital base. Regardless of your size or geographical area of operations, you should ensure your company is well versed on sources of project finance capacity, project finance underwriting methodologies, and the various risk controls and risk finance solutions being used to efficiently obtain capital for the projects you are building.

David Bowcott is Global Director – Growth, Innovation & Insight, Global Construction and Infrastructure Group at Aon Risk Solutions. Please send comments to editor@ on-sitemag.com.

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CONTRACTORS & THE LAW By Krista Johanson

Breaking up is hard to do Bombardier Transportation Canada Inc. v. Metrolinx

recent Ontario court decision illustrates the expected – and unexpected – challenges that arise when one party wishes to end a contractual relationship. In Bombardier Transportation Canada Inc. v. Metrolinx, 2017 ONSC 2372, Bombardier had entered into a $770-million contract with Metrolinx to design and build a fleet of light rail transit vehicles for new transit lines in Toronto. After a series of very public delays in meeting milestone deadlines, Metrolinx put Bombardier on notice that it was in default and then terminated the contract. Bombardier objected to the termination, saying it had cured the default by developing a new schedule it was confident it could meet. In most cases where a right to terminate for default is disputed, the contractor downs its tools and leaves the site, and brings a lawsuit or arbitration for breach of contract. Meanwhile, the owner hires someone else to finish the work. Eventually, the court, or arbitrator, decides whether the owner had a contractual right to terminate under the contract. If the termination was justified, the owner is entitled to damages flowing from the contractor’s breach, such as the costs of a replacement contractor. If the termination was not justified, either because the contractor was not in default, or because the owner followed the wrong procedure (for example, by giving the contractor a shorter time to cure the default than set out in the contract) the contractor is entitled to damages flowing from the owner’s breach, such as the profit it would have made on the job. At this point, the job is long over. Bombardier did something different. It sought an injunction, asking Ontario Superior Court of Justice to order Metrolinx to preserve the status quo by keeping Bombardier on site. Bombardier based its argument on the dispute resolution procedure set out in the contract. That dispute resolution procedure had several mandatory steps, beginning with a decision by the engineer, continuing through negotiations, and ending with arbitration. Similar procedures are found in many standard form construction contracts, including the “CCDC 2.” Bombardier argued that this dispute resolution procedure was mandatory for all disputes between the parties, including disputes over termination. Because Bombardier disagreed that it was in default, it contended, Metrolinx was required to go through all the steps of the dispute resolution process before terminating the contract. Metrolinx said this procedure was not applicable, because the clause giving it the right to terminate stated that it applied notwithstanding any other provision. The Court agreed with Bombardier’s interpretation, finding that the right to terminate was contingent on the engineer determining

that there was a default, and that determination was itself subject to the dispute resolution clause. So Bombardier remains on the job as the parties continue through the dispute resolution procedure. An injunction is an unlikely tool for a contractor to use to push back against an aggressive owner. Generally, a court will not grant an injunction unless there is a serious question to be tried, the balance of convenience favours the injunction and, most importantly in commercial cases, the party seeking the injunction would suffer “irreparable harm” if the injunction isn’t granted. “Irreparable harm”, to the Courts, means losses that cannot be compensated by a payment of damages. Most business losses can be compensated in this manner. Bombardier managed to persuade the Court that this case was an exception, due in large part to the size of the Project. Termination for default would affect Bombardier’s ability to bid on future projects, and the damage to Bombardier’s supply chain and potential loss of an expert workforce (which would need to be laid off) would impede its ability to restart the Project should the dispute resolution process determine that there was no default. These losses would be impossible to quantify and therefore not compensable by damages. Most contractors are just not going to have that kind of evidence available to them. That doesn’t mean that owners should ignore this decision. As set out above, a failure to follow the proper procedure in terminating a contract can result in damages awarded to the contractor, even where the contractor was actually in breach. Owners must now consider, in addition to any cure period, whether the contract dispute resolution procedure is a precondition to termination, or risk having to pay damages for terminating too soon. It’s a nightmare scenario, on a time-sensitive contract, to be stuck with a non-performing contractor until several lengthy layers of dispute resolution have concluded. (Recognizing this, the Court directed Bombardier to take all reasonable steps to expedite that process.) Termination is a complex area of law and the stakes are high. Parties negotiating construction contracts should consider spelling out exactly what mandatory dispute resolution procedures should and shouldn’t apply in the specific event of a termination. This article is provided for general information only and may not be relied upon as legal advice. Krista Johanson is a lawyer at Borden Ladner Gervais LLP (BLG). She practices in the area of commercial litigation with an emphasis on contract and construction disputes. Send comments to editor@ on-sitemag.com

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