Road2Growth Issue 1 2025 by Kelman & Associates

TIMES OF TURMOIL

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ROAD2GROWTH

ECONOMIC STABILITY AND A PROSPEROUS CONSTRUCTION INDUSTRY

BOARD OF DIRECTORS

MHCA EXECUTIVE COMMITTEE

Board Chair John Highmoor, B.A., B.Sc. (C.E.), Tri-Core Projects

Vice-Chair Kevin Brown, P.Eng., G.S.C. Maple Leaf Construction Ltd.

Immediate Past Chair Dennis Cruise, CET, G.S.C., Bituminex Paving Ltd.

Secretary Tony Teixeira, J.C. Paving Ltd.

Treasurer Marcel Machado, B.Sc. (C.E.), Nelson River Construction Inc.

President and CEO Chris Lorenc, B.A., LL.B.

EXECUTIVE DIRECTORS AT LARGE

Nicole Chabot, B.A. G.S.C. L. Chabot Enterprises Ltd.

Richard Wilson CET, G.S.C. M.D. Steele Construction Ltd.

BOARD DIRECTORS

Tyler Bennett, M.E.T. Sigfusson Northern Ltd.

Michael Byrne AON Reed Stenhouse Inc.

Denis Collet, B.Comm Gravier Collet Gravel Inc.

Alex Gray, CET Russell Redi-Mix GIP Group

Tina Larson, P.Eng., M.Sc Lafarge Canada

Michelle Magdic BFL Canada

Greg McKee SMS Equipment Inc.

Peter Paulic Brandt Tractor Ltd.

Managing

Marketing

Advertising Coordinator: Sabrina Simmonds

ABOUT

The MHCA is a prominent membership-based advocate for the heavy construction and related industries in Manitoba, representing over 400 contractors, suppliers and financial companies.

Founded in 1943, the MHCA advances progressive public policies and innovative programs in a manner consistent with the broad public interest.

The MHCA serves as the primary ‘go to’ resource for the heavy construction and related industries for information, networking, public policy advocacy and member services.

It promotes sustainable investment in core infrastructure – streets, highways, bridges, water/wastewater systems, active transportation, water-control structures, trade gateways and corridors – to support economic growth and social development that benefits our province and country.

MHCA champions workplace safety education and training through its leading-edge WorkSafely program established in 1990.

It actively participates in local, provincial, regional and national advocacy groups and collaborates extensively with public and private-sector stakeholders to advance common core values, including economic growth, diversity, and safe work, which benefit our communities, province and country.

It has an earned reputation for effective advocacy.

WINDS OF CHANGE BLOW HARD ON SHIP OF STATE

These are tough times to be in the business of advocacy, given the shifting sands in the political landscape.

First, as I write this, Canada has a “lame duck” prime minister. And, by the time it lands on your desk, a new federal Liberal Party leader will, perhaps briefly, slide into the Prime Minister's Office, a choice not of Canadians but members of a political party. Brief though the stay may be, it can’t sit well with voters who take their roles seriously.

This quirk of our parliamentary democracy that leaves us without a strong hand on the rudder is particularly worrisome as Canada girds for a trade war with its largest (by a long shot) trading partner.

Again, as I write this, we are staring down the barrel of a 25% tariff on every item exported to the US. The damage such punitive action can work is profound. And yet again – as you read this, it may be “all okay again” or so much worse. President Trump is nothing if not unpredictable and erratic.

So, for organizations in the business of advocacy, solidifying relationships, looking for purchase on “making things better”, it’s hard not to let anxiety take hold, steal hope and maybe get a little bit demoralized.

One must look for little glimmers in this.

It was heartening, then, to hear from one top Liberal leadership contender encouraging words of how to get this ship on course. In his candidacy announcement, former Bank of Canada/ England governor Mark Carney said the

federal government had lost its way, so to speak, on economic issues.

It is time, he said, to stop the spending and start investing.

I don’t know if Mark Carney is the right person for the office – only time and more talk will tell – but I do pull some hope from those words. The difference between spending and investing, I have always said, is that spending guarantees only that money flows, while investment sees a return that can be quantified. That is true whether it be investing in social, cultural or economic programs.

It is that approach Canada needs, and has been missing for some years. For years now, premiers, business groups, those who watch trade and supply chains have all bemoaned the lack of predictable, sustained and strategic investment in trade corridors and gateways.

More than 65% of Canada’s GDP is derived from trade. It is trade that floats our economy. (For more on that, please see comment from the Canadian Chamber of Commerce and the Canadian Construction Association on page 12-15.)

Smart, strategic investment in the trade corridors across our nation is required to give our domestic and global trade partners the confidence that Canada can move imports and exports to their destinations in a reliable, efficient manner.

Canada has not implemented strategic planning for such long-term

investment – something other countries, many of whom Canada competes against for global markets, have been doing for years. We need serious attention to this because our country’s reputation across the world has been badly damaged by the federal government’s sporadic, volatile approach to trade transportation infrastructure investments.

We are so dependent on the United States for our trade – more than 75% (greater than $458 billion) of trade is to the US.

That dependency underscores the risk posed when trade wars and retaliation rear their heads.

We’ve been here before. President Trump’s first term in office was similarly marked by threats and intimidation of tariffs, which sparked the renegotiation of NAFTA.

It’s time Canada invested in itself, diversified its global markets and expanded trade relations with many more countries.

But that can only happen if we have the ability to deliver the goods.

That starts with investing – not spending – in the right places. The right time is now.

Whoever is sitting in the prime minister’s seat in Parliament when 2025 closes out must understand that, if we are to grow our economy and pave the road to future prosperity.

Chris Lorenc, B.A., LL.B. President and CEO, MHCA

ANY COMPANY WORKING WITH THE HEAVY CONSTRUCTION INDUSTRY IN MANITOBA WILL BENEFIT FROM MEMBERSHIP.

Members say five of the biggest reasons they value the association are:

1 2 3 4 5

NETWORKING

Our members, big and small companies throughout Manitoba, meet and learn from each other at our premier events and by participating in our standing committees, where industry, policy and budget concerns are addressed.

ADVOCACY

The MHCA is a prominent advocate respected across Manitoba for its informed and progressive approach to shaping public policy. It is often sought out for advice and opinion by media, governments and the public.

MEMBERSHIP DIRECTORY & EQUIPMENT RENTAL RATES GUIDE

This directory is the go-to tool used by contractors, suppliers, government and purchasers of all industry services in Manitoba. It includes the annually updated and relied-upon equipment rental rate guide.

SAFETY TRAINING

The MHCA WorkSafely Program, established in 1990, provides workplace safety and education training to reduce workplace incidents. This includes the Certificate of Recognition (COR®) recognized by SAFE Work Manitoba as the required safety training standard.

HEAVY NEWS

Our weekly newsletter keeps members aware of MHCA activities, events, concerns, advocacy activities and includes tender ads and results.

Are You Interested in Joining?

Visit https://mhca.mb.ca/benefits-of-membership or contact Christine Miller, MHCA Operations Manager, at 204-594-9053 or christine@mhca.mb.ca.

CALENDAR OF EVENTS

Be sure to read the Heavy News, check out www.mhca.mb.ca, X (formerly Twitter), Facebook, Instagram, LinkedIn or contact Christine Miller, Operations Manager, at 204-594-9053 or christine@mhca.mb.ca for information on additional events throughout the year.

MHCA PUBLICATIONS

ESSENTIAL BUSINESS TOOLS

MHCA’s publications are widely circulated, reaching the desks of the heavy construction industry, purchasers of its related services, stakeholder and business associations, government leaders, senior decision makers and numerous other government officials at all levels.

QUARTERLY MAGAZINE

Road2Growth – INFRASTRUCTURE: the foundation to economic growth MHCA produces a quarterly magazine, Road2Growth – Infrastructure: the foundation to economic growth, which focuses on profiling the work of the heavy construction industry, including MHCA advocacy and WorkSafely news.

HEAVY NEWS

› Distributed to members, elected officials, senior public administrators and related stakeholder communities

› Provides current tender ads and results

› Posted online at www.mhca.mb.ca and via social media; delivered electronically every week by email

MEMBERSHIP DIRECTORY & EQUIPMENT RENTAL RATES GUIDE

› The annual MHCA Membership Directory & Equipment Rental Rates Guide is the definitive reference guide and business tool used by industry and purchasers of its services

› This “go-to” guide lists members and the full scope of the products and services they offer

› The only heavy equipment Rental Rates Guide in Manitoba

› Public and private sector project owners use the directory to contact suppliers of services, including contractors, materials, equipment, aggregates, oils, design and engineering

MHCA WEBSITE

Our website – www.mhca.mb.ca – promotes our vision, mission, services and provides members with the latest news, policy briefs and WorkSafely materials and resources, including the new e-News.

AS THREATS TO OUR ECONOMY LOOM, IS CANADA READY TO MEET THE MOMENT?

Pascal Chan

Canadian Chamber of Commerce, Vice President

Over the past few months, the threat of tariffs from our largest trading partner has captured headlines, but the challenges our economy faces have been building for years. Canada has been contending with a decade of extremely weak productivity and recently declining GDP per capita. In 2023, GDP declined by 1.7%, which was enough to secure the title of worst performance in the G7. Meanwhile, Canada’s productivity has fallen in 9 of the past 10 quarters, with the Bank of Canada sounding the alarm with a call to address the problem.

Our supply chains have also been under considerable strain due to wildfires, floods, blockades and the COVID-19 pandemic. Those issues have been compounded by repeated labour disruptions that resulted in the most working days lost in 2023 in nearly 4 decades.

cross-border trade, with 3.7 million jobs supported by exports and investment.

We have one of the world’s most integrated trading relationships, one that has been built over decades, as we are the largest export market for the U.S., accounting for more than $300 billion in goods. As demonstrated by our Business Data Lab’s Canada-U.S. Trade Tracker, Canada is the top export destination for 34 U.S. states, and not just those near the border in places like Michigan and Montana; it’s a relationship that supports the U.S. economy nationwide, reaching all the way down to the Southern border in Mississippi and Florida.

Additionally, our reliance on the U.S. for our trade and prosperity has underlined the need to more effectively diversify our trading partners. There are opportunities in the Indo-Pacific, as well as with the European Union and United Kingdom, but we can’t grow those partnerships without the infrastructure required to increase our capacity for trade with them.

The unfortunate reality is that Canada’s infrastructure has been subject to decades of underinvestment. Given more than two-thirds of our GDP depends on trade, improving our ability to get goods to and from market is what determines whether we will be able to grow our economy, and with it, secure economic prosperity for Canadians.

During this period of economic uncertainty, we need to look at what we can control. Our next Prime Minister needs to be prepared for situations

With the chaos and uncertainty caused by a second Trump Presidency, Canadians are looking to their own elected officials to demonstrate leadership when it comes to securing their economic well-being. While the priority must remain growing, rather than damaging, our most important trading relationship, Canada’s next Prime Minister must focus on opportunities to grow our economy.

Over the past 2 years alone, we’ve seen the Canadian rail network grind to a halt, our largest East and West Coast ports shut down simultaneously, the St. Lawrence Seaway closed, strikes at our B.C. ports in back-to-back years, as well as the threat of a strike from Canada Border Services agents and Air Canada pilots. Businesses relying on our supply chains to move goods simply have no certainty to speak of.

With a second Trump administration now in place, the threat of tariffs has placed our trading relationship with our closest ally and largest trading partner into question. The economic links between Canada and the U.S. are responsible for $3.6 billion in daily

priority must remain growing, rather than damaging, our most important trading relationship, Canada’s next Prime Minister must focus on opportunities to grow our economy.

Recently, a First Ministers Meeting was held to consider how to rapidly advance internal trade; a step in the right direction and something the Canadian Chamber has championed for quite some time. Interprovincial trade drives one-fifth of Canada’s GDP, yet internal trade barriers still act like a 21% tariff. Removing them could boost GDP per capita by 4%, which is real growth — right here at home — at a time when businesses and workers need it most.

like the one we face now and make the strategic, long-term investment that will enable us to solidify supply chains, leverage our resources and re-establish Canada as a serious player in the global economy.

In other words, we need leadership that will get major, trade-enabling projects built. Canada is at a critical point and needs to show that we can deliver the goods the world needs by land, sea and air. This is our opportunity, and we must meet the moment.

Pascal Chan is the Vice President, Strategic Policy & Supply Chains at the Canadian Chamber of Commerce

IN A NEW AGE

A NEW FEDERAL GOVERNMENT BRINGS NEW OPPORTUNITIES FOR ECONOMIC ADVANCEMENT

Rodrigue Gilbert CCA President

Construction is more than just the backbone of Canada’s infrastructure; it’s the engine that drives our economy and sustains our quality of life. Our industry builds the highways and bridges that connect communities, constructs the ports and airports that enable trade from around the globe, and lays the foundation for schools, hospitals, and homes that shelter and nurture our families and future generations.

If you ask any Canadian what is the biggest concern they have for our country at the moment, they will frequently point to the housing crisis, the rising cost of living, and economic uncertainty. One industry lies at the core of each of those issues – and that’s construction.

A healthy construction sector is essential for a robust Canadian economy. Without it, we cannot address the pressing issues of affordability, accessibility, and economic resilience.

No federal administration can deny the importance of supporting our industry. Construction contributes $162 billion annually to Canada’s GDP and employs over 1.6 million Canadians. Supporting construction means supporting job creation, trade, critical infrastructure, productivity and growth.

Every crane on the skyline, every new road, bridge or highway, and every worker on a job site symbolizes progress. From highways that connect provinces to green buildings that push the envelope of sustainability, construction is integral to enabling trade, enhancing productivity, and fostering innovation. Yet, despite its importance,

the construction industry faces challenges that threaten its ability to deliver on its promise. Labour shortages, outdated procurement processes and the need for long-term infrastructure investment are among the critical issues that demand immediate attention.

Over the past year, the Canadian Construction Association (CCA) has engaged federal leaders to champion the needs of our industry. At the core of these efforts was the 2024 Hill Day, where industry leaders called on the government to take bold action.

Canada needs to invest in long-term infrastructure in a way that prioritizes growth and resilience. We need to grow the construction workforce to combat the labour shortage and build a pipeline of skilled workers. And we need to modernize procurement and cut tape to allow the industry to deliver projects faster and more efficiently.

The federal government, regardless of which party holds power, must recognize the construction sector as a critical partner in shaping the country’s future. Supporting construction is not just an investment in roads or buildings, it’s an investment in economic stability, national competitiveness and the wellbeing of all Canadians.

With housing affordability at the forefront of Canadians’ priorities, construction offers tangible solutions. By building more homes, creating more jobs, and enabling greater access to essential services, the industry can help alleviate the housing crisis and drive down costs for families.

Facing geopolitical turmoil from our neighbours down south also presents the clear need for further investment in trade-enabling infrastructure. The lack of long-term planning and investments to strengthen our trade infrastructure

has led to Canada falling to 32nd place amongst global comparators in the 2019 global ranking of quality of transportation infrastructure – down from the top 10 in 2009. Additionally, our fall 2024 Construction Quarterly Economic Insights report detailed that the replacement value of deteriorating public infrastructure is up 40 per cent year-over-year, with the overall cost of non-residential building up 9.3 per cent in 2024.

The need for long-term public investment in trade-enabling infrastructure could not be more important. As Canada enters a period of political transition, the stakes for our industry have never been higher. Decisions made today will determine the construction sector’s ability to support economic recovery and long-term prosperity. The CCA remains committed to advocating for policies that empower the industry to thrive. We are actively collaborating with federal leaders, offering practical solutions to challenges and ensuring that the construction industry’s voice is heard at every decision-making table.

The construction industry is uniquely positioned to lead Canada into a new era of growth and stability. Government, industry leaders and communities must work together to ensure that the next chapter in Canada’s story is one of progress, prosperity and possibility.

Rodrigue Gilbert is the President of the Canadian Construction Association. With over two decades of government and political advisory experience, Rod is focused on driving progressive and sustainable practices in the construction industry and advocating for transformational policies to build a strong foundation for Canada’s future.

HOW ROADS

MANITOBA NEEDS A PUBLIC REPORT THAT SHOWS THE CONDITION OF HIGHWAYS, BRIDGES

Mathias Leiendecker Contributor, Craig Kelman & Associates

HOW ROADS? ARE THE

Manitoba is currently facing an infrastructure investment deficit of approximately $9 billion – the cost of bringing its highways, roads and bridges to good shape. But that’s a number that’s not been publicly shared, in a comprehensive report, with taxpayers.

The Government of Manitoba does not publish a public report on the condition and the investment need of its highways, roads and bridges. So, how can Manitobans know what needs repair and rehabilitation, and how much the highways infrastructure budget should be to address the need in a reasonable time period?

“Highway 75 is a perfect example,” says Manitoba Chambers of Commerce President & CEO Chuck Davidson. “Anyone who’s driven down it in the last couple of years knows of the terrible condition it is in.”

Manitoba Heavy Construction Association (MHCA) has pressed Manitoba Transportation and Infrastructure (MTI) for years to prepare and publicly release a report as a foundational piece to building an efficient, seamless and reliable transportation network that serves as the platform of Manitoba’s economy. Aside from safety concerns, when roads such as Highway 75 aren’t in adequate shape, businesses and, ultimately, consumers suffer – transportation costs are a big piece of the price of supplies, materials or finished products. And sometimes those moving products in and out of Canada have to find alternative routes or modes of shipping.

Manitoba’s trade economy suffers.

“It’s really about dollars and sense when you talk about the movement of goods and services,” Davidson says.

“A report like this would provide transparency and certainty to help businesses make decisions in terms of what kinds of transportation routes they want and where they might decide to set up a business.”

Attracting investment and new business to the province is easier with such information at hand.

“Any kind of information like this is good for them to have at their fingertips when they are in that decision-making process.”

A public condition and needs report for transportation infrastructure is foundational to Manitoba’s economic growth strategy, MHCA President & CEO Chris Lorenc says.

The report would

Some 53% of Manitoba’s economy is based on trade, Lorenc notes.

“Our trade corridors and gateways need to be seamlessly connected to allow for the efficient movement of people to jobs and goods to market. We produce more than we ourselves consume in Manitoba so we have to protect our access to markets,” he says.

But if you can’t move it, you can’t sell it. Regardless of trade deals, buyers will move to markets where transportation networks are reliable.

The report would require not only a comprehensive assessment of the current infrastructure but an assetmanagement plan and a financial strategy, both of which are key to how much investment is required and a reasonable time span to improve roads, bridges and highways or expand the transportation system capacity.

“Such a resource could stimulate job creation and economic growth by supporting targeted and timely infrastructure upgrades,” says Denys Volkov, Executive Director of the Association of Manitoba Municipalities.

“This would enable municipalities to better align their infrastructure priorities with a provincial roadmap, while also

offering input to ensure resources are allocated efficiently and efforts are not duplicated.”

Manitoba’s municipalities currently receive less than 10 cents per tax dollar, yet own 60% of public infrastructure. This has created a large funding gap on an already significant infrastructure investment deficit, making a public report long overdue to begin moving forward on infrastructure needs.

“Studies show that one-third of core municipal infrastructure is in fair or very poor condition. Increased provincial support is crucial to help local communities address aging infrastructure and maintain the services residents depend on,” says Volkov.

Additionally, recent developments in Canada’s trade relationship with the United States have raised concerns about businesses’ ability to move goods to the south, indicating now would be a good time to develop infrastructure not just north-south, but also east-west.

“Seventy-five percent of all goods that are traded from Manitoba are going to the United States,” notes Davidson. “We should be looking at other jurisdictions or other markets but to do

that you still need the infrastructure. If we are going to be significantly impacted by trade with the US then we do need to start looking at other potential jurisdictions to trade with.

“Is the infrastructure set up for us to go down that path?”

Davidson said a condition and needs report is key information businesses, particularly those thinking of moving to a new jurisdiction, look for when making decisions because it lays out government’s priorities.

Any move toward a provincial public infrastructure report requires consultation with municipalities, to incorporate local insight and ensure the report accurately reflects municipal realities, Volkov stressed.

“With municipalities facing a significant infrastructure deficit, the AMM has consistently advocated for the Province of Manitoba to commit at least $1 billion annually to strategic infrastructure investments,” says Volkov. “This funding could also support the development of a comprehensive report on the condition of Manitoba’s road networks, helping to address critical infrastructure needs.”

Two-thirds of Canada’s economy is trade. The quality of life of Canadians relies on our ability to move products around the world as efficiently as possible.

– John Law, Senior Executive, Canada West Foundation

WORKING

TOGETHER TO MOVE TRADE FASTER, SMARTER ACROSS THE PRAIRIES

Julia Waterer

Contributor, Craig Kelman & Associates

In April 2023, the Manitoba government signed a Memorandum of Understanding (MOU) with Alberta and Saskatchewan to facilitate a more streamlined, cohesive trade network across those provinces and engage competitively with global markets.

“Two-thirds of Canada’s economy is trade,” says John Law. “The quality of life of Canadians relies on our ability to move products around the world as efficiently as possible.”

Law, Senior Executive in Residence with the Canada West Foundation, has examined best practices of other countries to enhance domestic and international trade opportunities and grow their economies.

In 2022, he authored the Canada West Foundation Report From Shovel Ready to Shovel Worthy, which looked at how the practices in other jurisdictions could be translated into the Canadian trade landscape.

“When we talk about trade corridors, we don’t mean only highways, but also rail, airports and seaports. The network and logistics are huge and complex, and we can be doing so much better in terms of efficiency and reliability,” Law says.

The agreement with Alberta and Saskatchewan is intended to promote collaboration and cooperation on highway planning, efficiency measures supporting trade, advocacy on federal regulatory and funding issues impacting prairie transportationbased trade, and assessing privatesector investments and Indigenous partnerships in improving or developing new economic corridors.

“This endeavour has become an on-the-ground effort to improve the competitiveness of the Canadian trade network. I learn the most from discussions with those people who are on the front lines of moving products for Canadian industries daily,” says Law.

stability would make moving oversized goods easier and safer.

“Everything we ship to Western Canada is 16 to 18 feet wide and requires piloting, line lifts and permitting. If we could feasibly reduce the time and work hours it takes to move these projects across the prairies because the infrastructure and roads are built for it, it makes the financial considerations less risky,” Plett says.

Agriculture is the cornerstone of the prairie provinces’ economy, and changes like oversized road infrastructure support would only improve how local goods get to market.

“In the world of farming, everything is bigger and getting

The Manitoba government is delivering major highway and other transport investment strategies to grow its trade gateway capacity, including upgrading strategic provincial roads to be able to carry heavier loads year-round, transforming the Perimeter Highway to freeway standards and investing in the Hudson Bay Railway and CentrePort Canada.

SMARTER

“Trade and its associated supply chains don’t end at our provincial borders.”

The Manitoba government is delivering major highway and other transport investment strategies to grow its trade gateway capacity, including upgrading strategic provincial roads to be able to carry heavier loads yearround, transforming the Perimeter Highway to freeway standards and investing in the Hudson Bay Railway and CentrePort Canada.

“The Canadian potash business is one example – Saskatchewan has the world’s largest potash reserve and exports 13 million tonnes annually. The industry has invested heavily in its own dedicated transportation infrastructure to meet that industry’s specific requirements for shipping and storage.”

Law says there are lessons to be learned from what that industry has done to deliver its product. Similar strategic customization, planning and design could be replicated by other major trade industries in Canada.

There are real, identifiable examples of changes that could make Manitoba trade and shipping industry more efficient.

Ryan Plett from Novid, Inc., a company in Rosenort which manufactures liquid crop input storage tanks, says that measures like widened main routes and improved shoulder

bigger all the time. We need to plan accordingly,” says Plett.

To date, the MOU has progressed to the point where the prairie provinces are moving ahead with complimentary infrastructure investment projects.

“There is also hope for future federal investment, and the research behind the MOU means we are in a place where we can make informed recommendations to the government as to best practices moving forward,” Plett states.

John Law’s 2022 report, From Shovel Ready to Shovel-Worthy –The Path to a National Trade Infrastructure Plan for the Next Generation of Economic Growth, and his 2016 report, can be viewed here: https://cwf.ca/research/publications/ the-infrastructure-that-matters-most.

THE BUSINESS COUNCIL OF MANITOBA: ADVOCATING FOR ECONOMIC GROWTH IN TRANSPORTATION AND TRADE

Mathias Leiendecker Contributor, Craig Kelman & Associates

Make Manitoba a preferred place to live, work and invest. That’s been the goal of the Business Council of Manitoba since its inception 28 years ago.

When the Winnipeg Jets left town in 1996, concerns were raised amongst leading businesses that Winnipeg would start to become a minor league town. The goal of the Business Council was to keep Manitoba and Winnipeg on the map.

“Big business can do that in a variety of ways, and that’s why we were started –to make Manitoba a preferred place to live, work and invest. That is still our mission, and that hasn’t changed since day one,” says Bramwell Strain, President & CEO of the Business Council.

The council represents Manitoba’s ‘economic engine,’ with over 100 of the province’s leading businesses, presidents and CEOs dedicated to economic growth, community development and well-being.

“We consist of some of the largest but also most impactful businesses in the province, and impactful doesn’t always mean size,” says Strain, “Being part of the council, you have to understand the mandate vision of the organization, which is about the collective and not the individual. We don’t advocate for individual members on various issues; membership means you support the overall vision of a better Manitoba for all.”

The council also partners with a group of business associations nicknamed ‘the group of six,’ including Manitoba Heavy Construction

Association (MHCA), who share a common goal to build Manitoba’s economy, including trade infrastructure. The group consists of:

› Canadian Manufacturers and Exporters

› Manitoba Chambers of Commerce

› Manitoba Heavy Construction Association

› The Business Council of Manitoba

› Winnipeg Chamber of Commerce

› Winnipeg Construction Association “MHCA has been a leader each year with our Annual Leaders Forum. They do the bulk of the work, bringing our collective membership together to leadership candidates. This year will be around the federal election, which could allow us to bring those candidates in and the opportunity to share ideas and what’s important to our industry. MHCA’s leadership has been key, and they should be complimented on it,” says Strain.

Manitoba’s economy remains dependent on its ability to move goods through transportation and trade. The province’s central positioning in North American trade corridors provides outlets in all directions.

“We partner with MHCA on trade routes, construction routes, roads, bridges and more. That is all very important to them and to us. Our group of six shares those same ideas and goals that follow what we call the seven key pillars that governments must address to demonstrate their commitment to growing Manitoba’s economy – see page 23. It’s about

using our shared strengths collectively. We have been doing that for over a decade now with those groups and are still committed to those pillars today,” says Strain.

Looking toward the future, Strain and his team at the Business Council are preparing their platform for the likelihood of a federal election.

“Each election gives us an opportunity to highlight to each party what’s important to Manitoba, Canada and the economy. This allows us to get in on ground level on their platforms. Elections are always like a reset button to reinforce these seven pillars and explain their importance directly,” says Strain. “When government consistently hears the same message from businesses, that has a large impact. It’s the consistency that is important.”

Strain also looks forward to continuing development on a partner project with the MHCA on western trade corridors, a long-term commitment to boost domestic, continental and international trade that brings public and private investments to Western Canada’s transportation network.

“We are really looking forward to improvement to getting our goods to tidewater and market. Whether that be south through the US or to the west to ports or the north in Churchill,” says Strain. “The building of that common infrastructure and aligning government around what’s best for Canada and North America will continue to be a vital part of what we are focusing on for the future.”

GROWING MANITOBA'S ECONOMY

Pillars in Support of ‘Growing Manitoba’s Economy’

In today’s globally competitive business environment it is imperative that government create a climate that attracts new business and allows existing businesses to grow and thrive. For Manitoba to reach its full potential there are seven key public policy pillars that governments must address to demonstrate their commitment to "Growing Manitoba's Economy.

I. FISCAL COMPETITIVENESS

Manitoba must have an eﬀec�ve and scally prudent government commi�ed to crea�ng a compe��ve tax jurisdic�on to a�ract and retain new investment.

II. VENTURE CAPITAL

An accessible venture capital fund and supportive tax credit policies to leverage investment in the growth of new and existing businesses.

III. GLOBAL TRADE

Commitment to pursuing an expanded global trade prole for Manitoba which derives substan�al economic benet.

IV. INFRASTRUCTURE INVESTMENT

Commitment to a strategic, sustained, disciplined approach to investment in Manitoba's core infrastructure.

V. INDIGENOUS ENGAGEMENT

Commitment to an Indigenous Engagement Strategy to ensure inclusion and partnership in economic growth policies.

VI. SKILLED WORKFORCE

Commitment to attracting, training, educating and retaining a skilled, responsive workforce as a fundamental to ongoing economic growth.

VII. 'NEW FISCAL DEAL' FOR MUNICIPALITIES Commitment to address the exis�ng scal framework between the province and municipali�es to meet the challenges of the future.

CONCLUSION

The above principles are supported and respectfully submitted by the following supporting organizations each of which are committed to pursuing 'Growing Manitoba's Economy,' as a public policy priority.

Business Council of Manitoba (BCM)

Canadian Manufacturers and Exporters (CME)

Manitoba Chambers of Commerce (MCC)

Manitoba Heavy Construc�on Associa�on (MHCA)

Manitoba Home Builders' Associa�on (MHBA)

The Winnipeg Chamber of Commerce (WCC)

DIGGING UP GREENING INITIATIVES IN CANADIAN HEAVY CIVIL CONSTRUCTION

Julia Waterer

Contributor, Craig Kelman & Associates

The current feasible supply chain for these fuel alternatives is limited to urban, centralized sites. The demand for alternative fuels will undoubtedly grow, but we are not in a place where we can adopt them entirely.

Greening initiatives and improved environmental sustainability are increasingly top of mind for industries. Fighting climate change wherever possible is vital to support the future generation of Canadians, but also to the future of competitive business globally.

As part of the trend, the Canadian Construction Association created a working group to assess how Canada’s heavy construction industry can promote sustainability in everything from equipment to the way roads, water infrastructure and bridges are built.

“Improving sustainability is the best way to stay on the cutting edge

of business,” says Nicole Chabot, Vice-president of L. Chabot Ent. and a board member of the CCA, where she chairs the Civil National Advisory Council.

“We need to focus on the achievable evolution of best practices in terms of greening initiatives. Heavy civil needs to get started on these initiatives before we are in the position of being told, says Chabot, a past Chair of the Manitoba Heavy Construction Association.

“We came to the CCA with the plan to start a working group that would look at ways the heavy civil industry could take a proactive approach to sustainability.

“The goal of the Civil NAC Greening Working Group is to identify and bring forward issues in widespread greening initiatives and find opportunities and solutions to these issues.”

The real value of the initiative is in the fact it is member-led says Louis-Phillipe Champagne, Associate Vice-President of Public Affairs and Industry Practices for CCA.

“We are very proud of that fact. This is an integrated approach by our membership to find ways to make change. It is a roadmap of how to green our industry and how to advocate for our interests to governments and owners,” Champagne says.

Discussions of sustainability and ‘greening’ are not new by any means, but how this applies to the heavy civil construction industry is complicated and not without significant hurdles.

Champagne outlines two main obstacles:

“First, we need constant innovation and new ideas, especially around energy production. For example, fuel alternatives and their machinery are often cost-prohibitive.

“Second, the current feasible supply chain for these fuel alternatives is limited to urban, centralized sites. The demand for alternative fuels will undoubtedly grow, but we are not in a place where we can adopt them entirely.”

“One of the primary challenges is worksites in rural areas with no grid,” says Chabot.

“While ideally, we could run our equipment on electricity, it is cost prohibitive and most often not even feasible to electrify remote areas, and the diesel-powered generators that could bring electric equipment options to us means we are right back to using diesel to power the equipment ultimately.”

fuel and running equipment, either.

Many of the finite resources we use in heavy civil are sourced from a distance away from the worksite. As these resources deplete, contractors must go further and further afield to extract them, which increases emissions and costs.

“Recycling resources, while more efficient in terms of miles covered, can also be cost prohibitive in terms of time and labour. Recycling can also use as much fuel or create as much emissions as building from scratch. There are a high number of barriers to immediate implementation of green initiatives,” Chabot explains.

These barriers are why Chabot and Civil NAC Greening Working Group Committee member Matt Pitcairn, President of the BC Road Builders and Heavy Construction Association, decided to establish a framework for sustainability.

Chabot says what’s needed are programs that incentivize sustainable activity, and private and

share best practices, here and globally, to find steps that work.”

An example of a successful first step is BC’s CleanRoads Innovation Program.

“Our program is a new financial instrument which incentivizes and encourages investment in green technology via carbon offsets,” says Pitcairn.

“Greener options cost more; that’s just the way it is currently. We needed to find a way to monetize the investment in greener equipment with reduced lifetime emissions and offset the purchase cost.”

Eligible project activities for the carbon offset program include vehicle and equipment electrification, which is an expanding sector but requires significant infrastructure to support.

“To support these green initiatives, we also need buy-in from multiple levels of government, private investment and political will,” adds Chabot. “Partnerships will be what

PROGRESS REPORTS

The ‘strength in numbers’ equation is solid in industry advocacy, especially for an industry that relies on long-term investment planning.

The MHCA’s advocacy gets results:

HIGHWAYS PROJECTS ’24

MHCA and Manitoba Transportation & Infrastructure representatives have formed a working group to look at persistent issues preventing the predictable, smooth rollout of the highways capital program, including the tender ad schedule and carryover of projects. The goal is to fully tender/ award and complete the annually scheduled projects, for full expenditure of the program budget.

MHCA continues to speak to senior MTI offices about delays in advertising tenders as scheduled.

WINNIPEG PUBLIC WORKS TENDERS

The City of Winnipeg Public Works department held a 2024 construction season review with industry members Jan 19, and will host an in-person meeting for MHCA members in the coming weeks. The issues discussed included specifications, coming spec changes, prompt payment and working days/ liquidated damages.

Public Work officials said industry should see earlier advertising of tenders than was done in 2024. By 2026, the department expects to hit the goal of seeing the majority of the year’s tender program advertised by the end of February.

WINNIPEG SOCIAL PROCUREMENT PILOT PROJECTS

MHCA, with the Winnipeg Construction Association, submitted a response to the City’s report on the outcomes of its social procurement pilot projects in the 2024 construction season. The MHCA and WCA identified a number of shortcomings of the pilot clause/tracking/reporting in the 2024 construction season, including the inherent weakness in assessing outcomes due to the general reluctance within workforces to complete the voluntary self-identification form.

The City gave notice the employment clause asking for the number/percentage of hours worked by equity individuals would not be used in future pilots, and future use of employment clauses would not be project-based.

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STORY OF A NEW CAR, A METAL BAR, AND A LESSON I SHOULD HAVE LEARNED THE FIRST TIME

In this issue of Road2Growth, I’ve decided to make myself the cautionary tale. At the risk of looking a little foolish, I’m sharing a story to drive home an important lesson about near misses because sometimes, they come with a second chance to do things right.

Back in November 2023, I ordered an electric car – Volvo’s sleek new EX30, cloud blue with a matching interior. It was supposed to arrive in April 2024, but (as these things tend to go) spring came and went… then summer… and still, no car. In an effort to maintain our excitement, my husband became an unofficial Volvo brand ambassador, watching no fewer than 50 YouTube videos about this yet-to-materialize vehicle. We convinced ourselves that regularly checking in with the dealership might somehow expedite the process. It did not.

Then came the tariffs on Chinesemanufactured vehicles (since Volvo is now owned by Geely Holdings), which only added to the delays. But finally – finally – in November 2024, three days before we left for vacation, the car arrived. And let me tell you, it was worth the wait. One of the first five in Winnipeg, it was an absolute dream to drive.

Then came the lesson.

A week after returning from vacation it was still unseasonably mild, so I decided to decorate the house

for Christmas. I picked up my greenery, eucalyptus and all the festive fixings, and then went to retrieve my trusty birch sticks from their usual storage spot in the garage.

Now, let me set the scene. My garage has full-wall storage racks, and my vehicles are parked nose-in toward them. The container with my birch sticks was neatly tucked away at the very top. Being 5’8” with, shall we say, substantial feet, I often rely on the “tippy-toe reach” method. As I reached up, I unknowingly triggered an avalanche – several fivefoot-long, narrow metal bars resting on the rack’s top edge came crashing down. Right onto the car.

My heart stopped. I rushed to inspect the damage… and miraculously, there was none. Phew! A close call.

A near miss.

Now, a smarter person would have recognized the warning sign. I even had the thought, for a fleeting moment, that I should grab a step ladder and move the car before trying again. But that would have been a hassle. I could just reach the container. It would be fine.

Back onto my tippy toes I went. And wouldn’t you know it? More metal bars. More falling. Only this time, one of them didn’t miss. A sharp edge dug into the hood of my brand-new car, slicing through the paint and right into the metal.

Dang.

In that moment, my stomach sank. I knew better. I had already had the warning. And yet, I had chosen to ignore it. I even went through the completely irrational (but human) reaction of briefly blaming my husband, who had reorganized the garage months prior. But deep down, I knew the truth: this was 100% on me.

Since that day, I haven’t been able to shake the lesson. This was a car Annoying? Yes. Costly? Sure. But at the end of the day, it’s just an object that can be fixed. Yet how often do we do the same thing when the stakes are much, much higher?

Near misses are messengers from the future. They give us a rare opportunity to see the consequences of our actions before they happen. They warn us when we’re cutting corners, getting complacent or taking unnecessary risks. The first slipup is a mistake but the bigger error is not using it as a chance to prevent the real disaster.

So, take it from me. Next time you get that gut feeling, that warning sign, that almost incident, listen to it. Your future self (and maybe your shiny new car) will thank you.

Jacquelyn Oduro Director, MHCA WorkSafely Education & Training

Jacquelyn

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NEW COR® COMPANIES

These companies have been verified by (and certified through) WorkSafely as meeting all elements of the COR® program.

MHCA applauds all of its members who have achieved the nationally recognized COR® through any member of the Canadian Federation of Construction Safety Associations (CFCSA).

2025 – QUARTER 1 As of February 25, 2025

› 12884445 Canada Inc. o/a SCMS

› 4136225 Manitoba Ltd. o/a P. Baker Backhoe Services

› AJ’s Maintenance & Supply Ltd.

› Anderson Logging Inc.

› Cyr Drilling International Ltd.

› Delaurier Concrete & Construction Ltd.

› Fox Lake Construction LP

› Kissemattawa Echoing Construction Ltd.

› Northlands Dene First Nation

› Red Sucker Lake First Nation

› T & A Trucking Inc.

› War Lake First Nation

RECOGNISING IMPAIRMENT AT WORK

Katie Woychyshyn Contributor, Craig Kelman & Associates

It’s important to sit down and check in with all employees, get to know them. You want to make sure nobody is having a diabetic episode, is in a depression, and having an alcoholic flare-up. You want to make sure they’re capable of doing the job they are normally do.

– Dave McPherson, Senior Safety Advisor, Northern Region and Indigenous Liaison at MHCA

Being impaired on the job is a major risk and safety concern – not only to the impaired person but for all those on-site.

Dave McPherson, Senior Safety Advisor, Northern Region and Indigenous Liaison at MHCA, says that

spotting impairment in a workplace is all about experience. As a worksite supervisor/manager and 28-year non-practicing alcoholic, he states that morning check-ins with crew are imperative when making sure the workplace is impairment-free.

“It’s important to sit down and check in with all employees, get to know them,” McPherson says. “You want to make sure nobody is having a diabetic episode, is in a depression, and having an alcoholic flareup. You want to make sure they’re capable of doing the job they are normally do.”

The Canadian Center for Occupational Health and Safety defines workplace impairment as “issues that may distract a person from focusing on their tasks include those that are related to family or relationship problems, fatigue (mental or physical), traumatic shock, or medical conditions or treatments.”

Workplace impairment can affect any worker. For those with alcohol or substance abuse history, it can be particularly difficult to not imbibe when travelling, staying in hotels or working in remote areas.

It is up to managers and supervisors to keep an eye out for those who may be under the influence at worksites.

“You’ll be able to tell who’s under the influence and who’s able to go to work,” says McPherson. “They’re going to talk differently. They’re going to look differently; you should be able to see it. Depending on circumstances, you may be able to smell alcohol during a conversation.”

Additionally, he adds, special note should be taken if an employee is avoiding people during a check-in.

Not only does workplace impairment affect the safety and health of those on a worksite, it leaves a company vulnerable to liability should harm occur on the site – especially if management knows about the impairment.

For supervisors or managers, McPherson stresses that it is important to become involved immediately if there is an impaired person at work. “If I feel that they’re under the influence, I would get them off my site,” he states. “They wouldn’t drive off the site; I would them off the site.”

Once off the site, he advises, drive that employee directly home. In a circumstance where the employee refuses and takes their own vehicle, McPherson recommends the manager call the police for further help in preventing harm.

“Being a non-practicing alcoholic, I think one of the things that people have to understand about alcoholism

and addiction to drugs is that you play it every day, one day at a time,” he states, acknowledging the challenges those with substance abuse tendencies face.

“I haven’t drunk in 28 years, but I ‘woke up sober’ this morning.”

McPherson says he makes people who might be struggling aware that “there’s all kinds of help out there.”

No matter what kind of workplace impairment, managers need to assess the risk and keep employees safe.

“You got to err on the side of safety, instead of the side of production. This guy might be your best worker, but if he’s under the influence of drugs or alcohol, you got to err on the side of safety.”

CELEBRATING A HUGE MILESTONE: 20 YEARS COR® CERTIFIED

Two decades of maintaining the highest level of health and safety certification has paid off for early adopters who say meeting a higher standard has led to a workplace shift in culture that pays dividends for all.

Tri-Wave Construction is celebrating its 20th anniversary of Certificate of Recognition – a nationally recognized standard for health and safety that protects workers and also sends a clear signal to public offices when evaluating bids on construction tenders.

“Maintaining our COR® certification comes with the expectations from all workers for a safe workplace that exceeds the minimum standards of the legislation,” says Elaine Alvis, Safety Manager of Tri-Wave Construction Ltd.

The workers drive the implementation and enforcement of the safety program by requesting that the standards be maintained, therefore reducing the number and severity of incidents.

WORKSAFELY SERVES AS THE AUTHORITY HAVING JURISDICTION TO GRANT COR® IN MANITOBA

What is COR®?

COR® is an occupational safety and health accreditation program that verifies a fully implemented safety and health management system meeting national standards. The objectives of COR® are to provide industry employers with effective tools to develop, implement, assess and promote continual improvement of their safety and health management system to prevent or mitigate incidents and injuries, as well as their associated human and financial costs.

COR® is nationally registered, trademarked and endorsed by the Canadian Federation of Construction Safety Associations and is delivered through member associations that have a formal Memorandum of Understanding to serve as the Authority Having Jurisdiction to grant COR® in their respective province/territory.

Because project owners look for the COR® stamp to know a company strives for safety excellence, certification is a business proposition, and that delivers not just safety but job security, as well, says Alvis.

Sustaining the COR® standard has allowed Tri-Wave to bid on projects with a standard that can only be validated through the lower WCB premiums resulting from the COR® certification, she notes. This has

resulted in a workforce of long-term employees who are well-educated and experienced within the industry.

The process of shifting employees to a higher standard can take time, but it pays off, says Steve Bennett, Health and Safety Manager of Uni-Jet Industrial Pipe Services.

Uni-Jet is also celebrating 20 years of COR certification. Bennett says workers understand the financial benefits of having an excellent, recognized safety program and culture, which has opened job opportunities across the country, giving everyone job security.

“Our safety culture has definitely changed over the last 20 years. Let’s just say it was a work in progress, but everyone has been involved in our safety program and understands the importance of working safely; we want everyone to go home at the end of the day.”

When COR® is firmly instilled, it becomes a natural fit embraced company-wide, says Perry Schoffner, Safety Manager at Ernst Hansch Construction. Commitment to safety is regarded as everyone’s responsibility at Ernst Hansch.

The key to the cultural shift, says Schoffner, is ensuring all workers see they have contributions to make

not just in following procedures but in making improvements where necessary. COR® has reduced incidents, improved efficiency and strengthened employee engagement at Ernst Hansch, ensuring that safety remains a shared responsibility.

“To achieve and sustain long-term COR certification, prioritize ongoing training, engage employees in safety discussions, and foster a culture where reporting hazards and near-misses is encouraged,” Schoffner advises.

But companies must stay consistent in your messaging – train and inform all your new employees, and teach them the right way of doing things from day one, Uni-Jet’s Bennett stresses.

“Long-term employees are sometimes the hardest ones to buy into the safety culture, but we are past that point now, so it makes my job easier to have senior employees on board.”

Continuously review and improve your safety programs to adapt to changing risks, Schoffner adds, and ensure leadership actively demonstrates a commitment to safety.

“Most importantly, view COR as more than a certification – make it a mindset that drives safer, more efficient operations every day.”

WORKSAFELY SALUTES THESE COMPANIES FOR 20 YEARS OF CONSISTENTLY VERIFIED COR® CERTIFICATION

› Al-San Underground Ltd.

› Beaver Sewer & Water Services Ltd.

› Birds Hill Gravel & Stone Ltd.

› C & B Stirling Enterprises Ltd.

› Cambrian Excavators Ltd.

› Cook Brothers Cartage Ltd.

› Derksen Trucking Ltd.

› Dyck Construction (Wpgosis) Ltd.

› Ernst Hansch Construction Ltd.

› H. Baudry Construction (1980) Ltd.

› J.C. Paving Ltd.

› J.K.W. Construction Ltd.

› Lafarge Canada Inc. –Ready Mix & Aggregates

› Macaw MacDonald Ltd.

› Nelson River Construction Inc.

› Paragon Industries Ltd.

› Preset Piling Ltd.

› Rohl Enterprises Ltd.

› Timber Wolf Trucking Ltd.

› Tri-Core Projects Ltd.

› Tri-Line Construction Ltd.

› Tri-Wave Construction Ltd.

› Uni-Jet Industrial Pipe Services

MAKING HEAVY CONSTRUCTION WELCOMING TO WOMEN

Katie Woychyshyn Contributor, Craig Kelman & Associates

Despite heavy construction’s labour shortage, women only make up 5% of the industry’s workforce. To attract and retain more women in the field, industry leaders must focus on training that empowers women, while also shifting workplace culture.

Carol Paul, Executive Director of the Manitoba Construction Sector Council, has 35 years of experience working with under-represented groups. Paul started working with the MHCA in 2012. Over time, she has noticed women being more

outspoken when training in construction alongside other women.

This prompted a change.

“We did women-only programs,” Carol says. “We did blast hole drilling in the north for heavy construction. Women began, more and more, to see themselves in the workplace.”

Shelly Plett, Owner of SWS Training, says women training together tend to band together – both in women-only and co-ed classes. Based in Morden, SWS Training sees 70 to 100 students per year, with an average of 20% to 30% of those students being women.

“We’re running a class right now, actually, where we have four women in a class of 13, and right away, they became friends,” says Plett. “They encourage each other. They support each other. It’s huge to train alongside other women who are working towards the same goal you are.”

In an industry dominated by men, it’s difficult for women to feel they belong.

“The heavy construction industry is different than an office job,” Plett says. “We have to work on building that type of a welcoming environment for women.”

A few years ago, Carol realized women in the industry lacked other women they could lean on. She established a women’s mentorship program – pairing new workers with industry leaders. She also started gathering circles for women in the industry and helped establish the Manitoba Women in Trades conference.

Though this networking helped empower women coming into the industry, there was still an issue: workplace culture.

Often women felt singled out in the workplace. In some cases, management would tell their other employees how to act around the new female worker. Though well-meaning, it put the spotlight on the woman. To avoid this, Paul says that management should reinforce the need to respect everyone on the team –not just the women.

There were also situations where women would encounter uncomfortable situations when interacting at their workplace. “I think the men want the women to succeed,” she says, “but they may not necessarily have the right response to difficult situations.”

She recommends that companies help men and women develop communication skills so employees can navigate conflicts with more success.

In 2025, MHCA is supporting Be More than a Bystander. The program revolves around speaking up in the workplace to make sure all people are treated with respect and dignity, regardless of who they are.

“This is a missing piece of the puzzle,” says Paul. “It may not be something associations are asking for, but once it is in place and progressive organizations like Manitoba Heavy are involved, associations will see: This is an important initiative for our membership and to make sure we attract more people, more women, to the heavy construction industry.”

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MHCA 2024 'HEAVY' SANTA

Jarrod Sundmark

UNDERSTANDING LIQUIDATED DAMAGES

Associate, Construction Law Group, Thompson Dorfman Sweatman LLP

At the outset of a construction project, all parties share a common goal of the timely completion of the project. To both incentivize performance by contractors and provide a mechanism compensation to owners in case of delays, liquidated damages clauses are commonly included in construction contracts. Given their potentially significant implications, it is crucial for owners, contractors and subcontractors alike to understand how these clauses function.

What are Liquidated Damages?

Liquidated damages are predetermined sums stipulated within a contract which one party agrees to pay the other in the event

of a breach. In the construction and infrastructure context, these clauses are typically tied to the project schedule and completion deadlines. For example, a contract might specify a completion date and require the contractor to pay the owner $1,000 for every day the project is delayed beyond that date.

Unlike penalty clauses, which are punitive in nature, liquidated damages are meant to compensate the nonbreaching party for actual losses caused by the breach. These provisions help simplify the process of claiming damages, as they avoid the need for the owner to prove the extent of their losses, which can otherwise be costly, complex and timeconsuming through litigation.

There are other ways in which contractors may challenge an assessment of liquidated damages, or in which they may seek an extension to the project schedule to avoid the assessment in the first place. These considerations are especially important in instances where the delays to the project are because of a number of concurrent causes.

The Legal Framework

While liquidated damages clauses are common in construction contracts, the enforceability of these clauses is often challenged.

In order to be enforceable, the general rule is that the liquidated damages charged must be a reasonable or genuine pre-estimate of the loss or damage that would flow from that breach, assessed at the time the contract was formed.

If the sum charged is extravagant, extortionate, unconscionable or unreasonable in comparison with the greatest loss that could conceivably be proved to have followed from the breach, the provision will be held to be a “penalty clause,” and thus unenforceable.

The words used in the contract, such as “penalty” or “liquidated damages,” are not always determinative. Courts focus primarily on the quantum of the damages to determine whether the provision is intended to compensate for actual losses or to punish the contractor.

Key Considerations for Contractors

If the delay on the project was caused or contributed to by the owner (or those for whom the owner is responsible under the contract), the legal doctrine called the “prevention principle” may act as a defence to an assertion of liquidated damages. The prevention principle outlines that the owner should be prevented from benefiting from their own delay by asserting liquidated damages against the contractor. In other words, to assert liquidated damages against a contractor, the delay complained of must be solely the fault of the contractor.

Further, if the delay on the project was caused or contributed to by factors outside the contractor’s control (e.g., extreme weather, a pandemic, etc.), this may give rise a potential force majeure argument.

In either of these scenarios, the contractor may also seek an extension of the project schedule in accordance with the contract to avoid the assessment of liquidated damages altogether.

The contract governing the project will often contain provisions which allow a contractor to seek an extension to the project schedule upon the occurrence of certain events

(e.g., owner-caused delay, force majeure event, etc.). These change/delay provisions of the contract will often require formal notice to be provided by the contractor within a certain amount of time of becoming aware of the potential for delay. A valid change to the schedule approved through the contract may then allow the contractor to complete the project on time. It is critical that parties review the contract in detail at the outset of a project so they are aware of what sort of events may result in an extension to the project schedule, and to be aware of the timing and content requirements of the related notice provisions.

Conclusion

Liquidated damages are an important tool in construction contracts, offering parties a clear way to address delays and compensate for losses. To be enforceable, these clauses must be a reasonable pre-estimate of damages, and not punitive. Both contractors and owners must carefully review the terms of their contracts to understand their rights and obligations. By following proper procedures and seeking extensions when applicable, both parties can avoid disputes and ensure smoother project delivery.

Jarrod Sundmark’s practice is focused on construction litigation and dispute resolution. He advises owners, contractors, and design professionals on matters such as tendering, contract drafting and review, project management issues, builders’ liens, payment disputes, and delay and deficiency claims.

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