Contractor Advantage January / February 2024 by Espress Labs Inc.

ROUGH CONSTRUCTION ISSUE THE WORD ON LUMBER

Publications Mail Agreement #40006677

INSULATION MARKET STAYS HOT POST-PANDEMIC

January / February 2024

WHAT DO YOU

HEAR?

THANKS TO INSULATION – NOTHING. When it comes to acoustics, insulation plays an important role. But which performs better, fibreglass or mineral wool? The results may surprise you. Fibreglass and mineral wool actually perform the same for sound absorption and sound transmission. The choice for a specific project comes down to application needs (like vapor retarders, melting points and moisture repellency) and budget. No matter the project, JM has the solution.

Learn more about our fiberglass and mineral wool options at JM.com BID-446

Castle Building Centres Group Ltd. is a Canadian member-owned, Lumber, Building Materials and Hardware buying group representing over 300 member locations across Canada.

Contractor Advantage Magazine is the exclusive publication of Castle Building Centres Group Ltd. featuring quality Castle vendor brands available at Castle Building Centres locations. Visit castle.ca to find a Castle location in your area.

Editorial Director Castle Castle Building Centres Group Ltd. Jennifer Mercieca Art Direction and Design Espress Labs Inc. Contributors Lawrence Cummer Lisa Gordon

Advertising Inquiries and Marketing Contact Jennifer Mercieca Director of Communications Castle Building Centres Group Ltd. 905-564-3307 jmercieca@castle.ca Material Contact Linda Saaman Marketing Administrative Assistant Castle Building Centres Group Ltd. 905-564-3307 ext 219 lsaaman@castle.ca

JANUARY / FEBRUARY 2024 Volume 29 Issue 1

Published and designed exclusively for Castle Building Centres Group Ltd. by Espress Labs Inc. On the cover: Johns Manville

ABOUT CONTRACTOR ADVANTAGE

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CONTRIBUTORS

LAWRENCE CUMMER Lawrence (“Law”) Cummer is a freelance writer and editor and has been a frequent contributor to Contractor Advantage, Ideas and Rough Construction for nearly a decade. Over his more than 20-year career, Law has written about contracting and construction, general business, information technology, health and safety, personal finance and almost every topic in between. He has a passion for storytelling and sharing how people can work better, easier — and “smarter” — from contractors to technologists to business executives.

LISA GORDON Lisa Gordon is a freelance writer and editor based in Port Dover, Ontario. For nearly 25 years, she has specialized in creating custom content for trade and association magazines, websites, newsletters and marketing materials. Contact her at mustangmediaservices.ca.

MARGARET GRAZIANO Margaret Graziano is the founder and CEO of KeenAlignment, as well as a Wall Street Journal Best-Selling Author for her book “Ignite Culture.” She has been recognized as one of Silicon Valley’s Top 100 Women Leaders. Magi’s groundbreaking work is driven by her power to uncover and catalyze human potential. Go to https://keenalignment.scoreapp.com to take KeenAlignment’s Culture Assessment and see if you have an Emergent Culture.

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CONTENTS

TABLE OF OF TABLE

06 THE WORD ON LUMBER THE POWER OF 18 UNLOCKING ORGANIZATIONAL CULTURE:

Lumber industry experts predict bland market performance in 2024.

FULFILLING PEOPLE’S NEEDS TO CREATE A THRIVING WORKPLACE

Dealing with troubling workplace environments can be difficult. It’s not always clear what the deeper issue is and the friction and conflict it breeds can be tough to reverse.

INSULATION MARKET STAYS HOT POST-PANDEMIC Despite several challenges ahead, the need for insulation for renovations and new builds continues to be pronounced. // JANUARY - FEBRUARY 2024

THE WORD ON LUMBER

Lumber industry experts predict bland market performance in 2024 Written by Lisa Gordon

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Photo courtesy of CanWel // JANUARY - FEBRUARY 2024

FEATURE STORY // THE WORD ON LUMBER The Canadian lumber market saw its fair share of challenges in 2023. Now, as 2024 unfolds, the future is anything but cut and dried. The national lumber market is influenced by many factors and can fluctuate from year to year, and even from season to season. In 2023, Canada saw a segment downturn as higher interest rates and inflation slowed the housing market, while an unprecedented number of wildfires caused concerns about supply disruptions. Meanwhile, the war between Russia and Ukraine continued, while new conflicts emerged in Israel and Palestine. Going a little farther back, the Covid-19 pandemic created a surge in “staycations.” Consequently, consumers invested in their homes and the demand for renovation materials soared. This,

coupled with supply chain disruptions, led to unprecedented lumber price hikes. Post-pandemic, all of these factors contributed to a sluggish lumber market in 2023 as prices started to drop. Mike Park is Vice President of National Commodities for Gillfor Distribution, a Canadian building products distributor headquartered in Bolton, Ont. He told Contractor Advantage that 2023 had its challenges, but that is no secret. “A softer demand for new home construction is definitely showing its impact on the market as a whole, probably more so in the back half of [2023], as the front half still had some momentum from the previous year,” he explained.

Photo courtesy of Adams Building Supply

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Although Park feels the market will remain flat or slightly lower through the spring of 2024, he is cautiously optimistic for the second half of this year. With some economists predicting interest rate cuts starting as early as June 2024, Park feels this could give the lumber market a kickstart.

Madison’s Lumber Reporter, which has tracked softwood lumber prices and trends since 1952, reported at the end of September 2023 that North American softwood lumber price trendlines had finally started to normalize following three years of “extreme volatility.”

“It’s all about interest rates; as interest rates start to fall – and obviously housing prices need to come down a bit as well, which is already happening – then we will see a resurgence in demand and activity, but not until then,” he said.

“This means that next year [in 2024] it will be less difficult to judge what is going on with sales and prices; thus, the industry will be better able to plan,” said Madison’s in its report.

Photo courtesy of Hodgins Building Centre

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FEATURE STORY // THE WORD ON LUMBER While some predict that lower 2023 lumber market activity will lead to an uptick in demand for 2024, Steve Marshall, Vice President of Treated Wood CanWel, a division of Vancouver-based Doman Building Materials Group Inc., sees it differently. “We remain in a high-interest rate and high inflation economy in Canada and the U.S.,” said Marshall, who has been dealing in treated wood for 30 years. “When we face economic headwinds, consumers tend not to make as many large purchases. The good news is that treated

wood has been a fairly resilient product line in tough economic times.” However, he continued: “We are very sober about our predictions for 2024. I am thinking treated wood sales will be flat, maybe two or three percent growth at best.” Kelvin Johnston, Senior Buyer-Commodity Lumber and Panels for Castle Building Centres Group Ltd., agrees with Marshall’s projection.

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Photo courtesy of Materiaux Létourneau

“We had a decent volume in 2023,” he said. “Our piece count was about the same as in the last year – except the prices are down about 30 percent on commodity items, so our dollar figures are off, but our piece count is pretty good. “In 2024, it will have some challenges, but we think the market is going to be pretty much flat.” SUPPLY AND YIELD On the supply side, the lumber industry has pretty much recovered from the impacts of the pandemic. Sawmills got back to regular production before implementing further adjustments, and more timber has become available as forests continue to be responsibly managed. However, the increased wildfire activity in 2023 has created a hurdle for the coming year. While burned trees are still harvested, time is of the essence since they are more susceptible

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to deterioration, cracks and insect damage if they are not harvested within the first two years post-fire. “The Government of Quebec is putting a lot of pressure on the system to harvest the fire-killed trees, but lack of manpower and equipment is an issue in the logging industry,” noted Doman’s Marshall. “They are already running at capacity.” Johnston, who is tasked with providing Castle stores nationwide with advice on when to buy lumber commodities and panels, also weighed in about the effects of the wildfires on the lumber industry. “I think most would agree that supply-side issues for premium lumber would be a concern,” he commented. “Typically, sawmills cut about four percent of their premium lumber from burnt logs; that may go as high as 20 percent for some.”

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Photo courtesy of Adams Building Supply

FEATURE STORY // THE WORD ON LUMBER

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FEATURE STORY // THE WORD ON LUMBER He explained that not only is the process slower and harder on equipment, but there is no guarantee that a burnt log will yield even one stick of premium lumber. He said this situation could cause a rise in treated lumber prices moving forward. “Since treated lumber is made only with premium [lumber], I think the price will be higher in the spring [of 2024] than it is today, and the cost will be higher next summer [2024] than it was this summer,” predicted Johnston. BRIGHTER HORIZONS Planning for 2024 will continue to be challenging. The uncertainty surrounding interest rates, a lack of tradespeople and manpower for new builds, and continued overseas conflicts can all impact the market – with challenges varying depending on the product. However, stores aim to keep their shelves stocked. “We will not sacrifice our fill rate for market conditions; having stock is something we hang our hat on,” explained Gillfor Distribution’s Mike Park, who oversees the commodity inventories Photo courtesy of CanWel

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from coast to coast. “We react to the market, especially in times of market uncertainty, like now.” When it comes to treated lumber projections, CanWel/Doman Building Materials Group references historical data and customer outlooks and buys inventory accordingly. “We use historical numbers in treated lumber,” said Marshall. “We always track that history, and we work with our customers to review that history, and we rely on the customers’ forecasts for next year.” How long will this flat market last? Generally, there is a positive feeling about next year. “The outlook for 2025 is very good,” noted Castle’s Johnston. “I am very optimistic about 2025.” Any consumer market can change depending on numerous internal and outside forces, and the lumber industry is no different. Barring any significant change in the landscape, the sector is expected to wade through sluggish activity in 2024, with a brighter outlook on the horizon for 2025. —

UNLOCKING THE POWER OF ORGANIZATIONAL CULTURE: FULFILLING PEOPLE’S NEEDS TO CREATE A THRIVING WORKPLACE Written by Margaret Graziano

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Dealing with troubling workplace environments can be difficult. It’s not always clear what the deeper issue is and the friction and conflict it breeds can be tough to reverse. At the heart of any organization are its people. Without a dedicated, aligned, and fully engaged workforce, no progress can be made. High-performance organizations excel in creating an environment that recognizes and addresses the fundamental human needs that drive their members. THE HIERARCHY OF NEEDS Psychologist Abraham Maslow’s hierarchy of needs, once revolutionary, is now widely embraced and frequently applied to organizational psychology. Leveraging this framework to identify what individuals require for success and taking the necessary actions to fulfill these needs can support the cultivation of an emergent culture that fosters growth, success, and satisfaction in your organization.

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1. PHYSIOLOGICAL The lowest level in Maslow’s hierarchy is physiological needs. These are the most basic human requirements, encompassing necessities like food, water, and shelter. Although it isn’t the organization’s responsibility to directly provide for these needs, it is crucial to ensure they are met indirectly. This involves paying a living wage so that these basic needs are met and offering a sense of certainty to employees about their job security and expectations regarding their roles.

Establishing effective lines of communication between employees and their superiors is a great way to create certainty. When integrating new hires, make sure they have clarity on what their role is and what their responsibilities are. Encourage them to ask questions. For existing employees, having occasional checkins ensures they are aligned with their jobs and not struggling to fulfill their physiological needs or produce at work.

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2. SAFETY Individuals need to feel secure both psychologically and physically in the workplace. This means that constant yelling or outbursts from superiors or colleagues cannot be tolerated. There cannot be fear of physical or psychological harm. Having rules and guidelines that discourage and have consequences for this type of behaviour is often necessary. Optimizing the hiring process and having the right people in the organization is also big part of promoting feelings of safety. If someone is incredibly capable but ruins the

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productivity of others by spreading fear and/or anger, they are a net negative to the organization. It is impossible for people to be productive or creative in a state of fear. Boundaries need to also be respected. Treating people how they want to be treated goes a long way towards making them feel safe in their environment. An organization that provides safety for its employees earns trust, thus possessing a foundational element of a healthy, high-performance culture.

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3. LOVE AND BELONGING Love is a fundamental emotional need for people. While this is commonly thought of as something that relates to relationships with friends, family, and significant others, there are also ways to fulfill this emotional requirement in the workplace. An organization that has an environment of kindness, respect, and inclusivity is able to satisfy this basic human desire. Everyone has a need to belong and be accepted for who they are. Understanding the motives of new hires for joining the organization and what they believe they will gain from their work can aid in fostering a sense of belonging. Organizations can further support this need by asking existing employees various questions and attempting to better understand each individual. Some questions to ask are: • Are they happy in their role and doing their work? Is it aligned with what’s important? • How do they feel they are contributing through their work? • What matters to them? What causes do they care about? • What do they want to be doing with their life? • How can their job help them experience belonging? Asking about their job satisfaction, contributions, and personal aspirations emphasizes the importance of each individual’s role in the organization’s success, cementing a feeling of belonging and increasing engagement and satisfaction.

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4. ESTEEM NEEDS “I feel significant,” “I feel respected,” and “I feel like I’m contributing,” are all feelings that are necessary to meet the level of esteem. When people feel recognized and valued, they are motivated to continue being effective and valuable. Making sure every person in your organization feels they play an important role in the organization’s success, no matter their job, is paramount. However, it is crucial to distinguish between significance (feeling important and making a difference) and contribution (being a part of something bigger than you or your ego and making a difference, even without recognition or

significance). The latter is the pinnacle of Maslow’s Hierarchy and the highest level of effectiveness, known as self-actualization. 5. SELF-ACTUALIZATION Self-actualization involves realizing one’s potential, fully developing one’s abilities, and having a true appreciation for life. It encompasses fulfilling the spiritual needs of growth and contribution, preventing employees from feeling like mere automatons solely focused on financial gain and only going through the motions. Selfactualized people are at their most capable, productive, and fulfilled selves and regularly tap into their highest level of thinking and creativity.

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According to Maslow, individuals must fulfill lower needs before pursuing higher ones. To reach self-actualization, every need in Maslow’s hierarchy must be addressed first. Because of this, Maslow asserts that less than 1 percent of the adult population ever achieves this level. Keep in mind that this was published over 50 years ago. In today’s world, psychologists think it is closer to 5 percent, solely because there is a deep desire in humans to contribute and feel a sense of fulfillment - the more people evolve, the more they want to experience these higher feelings of satisfaction in their work. IMPORTANCE FOR CULTURE Meeting people’s needs is essential for creating an emergent culture. Consider the three fundamental elements of an emergent culture: Cause, Framework, and Energy. Cause revolves

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around making a difference and defining the organization’s noble cause. Framework pertains to the structures in place for optimizing employees’ creative potential and ability to produce, including hiring processes, delegation, team assignments, and utilizing individuals’ strengths. Energy is how people treat each other, the moods they bring to work, and how the work that gets done within and between departments creates or mitigates the sense of belonging and unity. It is about bringing the values of the organization to life. The fundamentals of an emergent culture are closely intertwined with the needs of individuals within the organization. Prioritizing the well-being and fulfillment of employees is key to catalyzing to Maslow’s top 1 percent, nurturing an emergent company culture that contributes to personal and organizational success and growth. —

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INSULATION MARKET STAYS HOT POST-PANDEMIC

Written by Lawrence Cummer

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Photo courtesy of Johns Manville

Despite several challenges ahead, the need for insulation for renovations and new builds continues to be pronounced. After all, the purpose of a home is to protect homeowners from the elements and that means — at a minimum staying warm during cold Canadian winters. Of course, like all construction, that doesn’t mean everything’s coming up roses. “The industry is in a

little bit of a crisis,” says Gino Allegro, Canadian Sales Manager at Johns Manville. Allegro, who had just finished chairing an Ottawa meeting of the Board of Directors of NAIMA (North American Insulation Manufacturers Association) Canada, the association for manufacturers of glass fibre, rock wool, and slag wool insulation, says the current national housing crisis is top of mind across members.

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Photo courtesy of Rockwool

FEATURE STORY // INSULATION MARKET STAYS HOT POST-PANDEMIC “There are a lot of people coming into Canada, and while they may be staying with family or sponsors today, those are temporary. They are going to need real accommodations, and there’s going to be a huge pent-up demand in the next 10 years. The federal government is working on this.” In a 2022 report, the Canada Mortgage and Housing Corporation noted that housing supply has not responded to demand for the past 20 years, especially in large urban areas, leading to the housing affordability challenge we see today. Add to that the lack of skilled labour and the crisis becomes even more clear.

But for manufacturers, distributors, and installers of insulation, that pent-up demand combined with growing environmental expectations means a steady requirement for insulation products. While there will be ebbs and flows, “the insulation industry is going to be in robust demand for the next 10 years,” Allegro says. NET-ZERO GOALS By creating a thermal barrier that reduces heat transfer, insulation is, of course, a vital part of reducing the energy required to heat and cool spaces — and as a result lowering energy bills and reducing greenhouse gas (GHG) emissions.

Photo courtesy of Johns Manville

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Photo courtesy of Adams Building Supply // JANUARY - FEBRUARY 2024

As a nation, Canada has a goal of achieving netzero emissions by the year 2050. Recognizing the impact that homes and buildings have on GHG emissions, building codes have already started to create a path towards achieving net-zero standards by 2030. The federal codes, creating a net-zero-ready standard, are being harmonized with provincial codes at different rates across the country. Still, the demand for higher performance in energy efficiency is high in every province or territory. “The ‘built environment’ accounts for 13% of greenhouse gas emissions in Canada —both Photo courtesy of Johns Manville

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building codes and consumer preferences are driving towards net-zero-ready as an increasing standard for residential construction across Canada. Continuous insulation is a necessity in net-zero design. Also, looking for construction methodologies that minimize concrete and steel, such as more use of wood or mass timber framing into taller (above 4 storey) structures,” says Martha Swinn, Canadian sales leader at DuPont. The thermal efficiency of insulation will be a major requirement but contractors must remember how insulation functions as part of a building system in reducing energy consumption.

FEATURE STORY // INSULATION MARKET STAYS HOT POST-PANDEMIC

Photo courtesy of CertainTeed Canada

“Obviously with more stringent codes, more insulation will be needed in order for structures to become more thermally efficient, but also there will be a need for greater air tightness,” says Brent Belanger, Architectural Services Manager at CertainTeed Canada. Codes alone aren’t driving the green building movement, so Belanger and others are seeing a lot of concern around carbon footprints from consumers. To that end, householders (and homeowners to be) have evolved in their expectations around environmental friendliness. “Initially people were thinking of green buildings just in terms of thermal efficiency, but now that has evolved,” Belanger says. “It’s not just the building performance, but what’s going into the building products and the making of them.” To that end, with its own commitment to a netzero 2050 target, Belanger says CertainTeed Canada invests significant resources into the lifecycle analysis of its insulation products, and the publishing of EPDs, environmental

product declarations that provide environmental information about the product from creation to disposal and aids in comparison with other solutions. It appears everyone is doing their part. According to NAIMA, its members in Canada and the U.S. used more than 3.5 billion lbs. of recycled glass and slag in the production of their residential, commercial, industrial, and air-handling thermal and acoustical insulation in 2022. The association says this reduces demand for virgin resources and diverts glass and slag from landfills. Since the industry’s recycling program began in 1992, NAIMA says its members’ plants have diverted more than 100.5 billion lbs. of recycled materials from the waste stream. Manufacturer innovations are making a difference in efforts to reduce Global Warming Potential (GWP). For example, by reformulating the production of Styrofoam for its XPS (Extruded Polystyrene) insulation products, DuPont was able to reduce GWP by 93% since 2019.

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FEATURE STORY // INSULATION MARKET STAYS HOT POST-PANDEMIC Moving forward, “Innovation will focus on building envelope solutions, including continuous insulation and full weatherization systems, to support resiliency — temperature, rain, wind, and fire,” Swinn says. “And also, to support alternate construction methodologies in off-site space.” Swinn says contractors can expect building science experts like Dupont to continue their longtime advocacy around energy efficiency through next-generation sustainable, climate-conscious products. It’s important to note that achieving net-zero homes is going to require more than adding additional glass fibre batts to the attic or in the walls — after all, only so much can fit between 2x6 studs. As R-value requirements climb to meet thermal efficiency expectations the trend will be to move outside the house using rigid insulation boards, says Mike Goyette, National Sales Director at Rockwool North America.

According to Goyette, a major trend impacting the insulation market is the increase in renovations and retrofits — primarily to meet growing energy performance demands. “There is a lot of new insulation going into old buildings,” he says. “It might be, for example, going from say 6” to 24” in the attic. They are really loading it up.” “Some people are even willing to rip down the outside of their home and then rebrick to improve performance. The rebuild and retrofit market is growing.” COMFORTABLE AND QUIET While protecting the environment is a top concern, comfort is king when it comes to why people add insulation to their homes. While properly insulated homes see reduced heat transfer, staying warm in the winter and cool in the summer months, they also improve indoor air quality, according to NAIMA. They can also, Goyette notes, reduce noise.

Photos courtesy of CertainTeed Canada

As codes get closer to net-zero requirements, Belanger says he expects under-slab insulation to be mandated in addition to insulated sheathing and increases in attic insulation. “You’re looking

at every part of the building; every facet of the building envelope is going to have more insulation.”

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FEATURE STORY // INSULATION MARKET STAYS HOT POST-PANDEMIC “There’s cold, yes, but there’s also acoustics,” he says. “If you insulate with acoustical products you aren’t going to hear that toilet flush from the bathroom or the teenager cranking up the music in the other room.” As a result of the 2020 pandemic and more people working from home, finding a way to control acoustics has become more important to consumers, he says. Despite offices reopening and Photo courtesy of Adams Building Supply

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hybrid work conditions, the trend towards sounddampening insulation hasn’t gone away. “I think the trend continues, in part, because more people are putting in basement apartments in their homes,” he says, adding that this too is a result of Canada’s housing cost challenges. “If you talk to anyone who works the lumber desk at your local Castle, you’ll see that the basement apartment trend is what’s keeping them busy.”

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FEATURE STORY // INSULATION MARKET STAYS HOT POST-PANDEMIC Safety is a concern, and with it the movement towards non-combustible insulation materials is huge, says Goyette. It’s a sentiment echoed by Belanger, who notes that insulation is very helpful in improving the fire resistance of a home.

“Whether it’s an addition or renovation project, or new construction, you only get one shot at this before the drywall is put on,” he says. “It’s not the most expensive part of the house, but it’ll provide that added level of comfort.”

“Performance, whether its fire, thermal or acoustic, is critical on insulation, and unfortunately, being behind a wall it suffers from being out of sight, out of mind,” Belanger notes.

“One shot while the studs are bare, and you can do it easily. If you’re doing any kind of construction, more on insulation may cost a little bit more, but can make a huge difference in comfort and energy efficiency.” —

Allegro reminds contractors and homeowners that there’s only one cost-effective shot to get it right. Photos courtesy of Rockwool

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