August 19, 2010

Industry concerned with post-stimulus ‘infrastructure deficit’

VINCE VERSACE

staff writer

Though the Construction Sector Council finds that Ontario construction has entered a recovery phase, as stimulus works heads down the stretch, continued growth requires better long-term planning, industry stakeholders say.

“The lack of private-sector projects and the ending of the stimulus, with no sign of a long-term plan to deal with the infrastructure deficit, adds a great deal of uncertainty,” said Clive Thurston, president of the Ontario General Contractors Association (OGCA).

The CSC said Ontario is expected to “enjoy strong markets” until the end of 2010 as government programs address core infrastructure needs. Non-residential markets were “slow to ramp-up” during the recession, due infrastructure stimulus fund distribution delays, noted the CSC in its Construction Looking Forward industry analysis for 2010-2018.

“As a result, the 2010 construction season has produced an over-abundance of work, leading to concerns about whether projects will be completed in time to satisfy the government spending deadline of March 31, 2011,” the CSC concluded.

OGCA also expressed concerns with the consequences of the federal government taking its foot off the funding accelerator without a clear infrastructure funding plan to follow.

“When you do not have a long-term plan in place you stagger from one extreme to the next, rushing projects out the door before they are ready,” added Thurston. “This poses risks to everyone from the safety of workers to the financial liability and risks to trades, contractors and municipalities.”

The CSC projects that beyond 2012 Ontario’s construction industry will steadily grow until 2018. Once stimulus funding ends, approximately half the jobs created by these programs will be lost. In 2010-2011 construction’s utility, industrial and commercial sectors are expected to grow with non-residential construction, generating an expected 21,000 jobs.

From 2012 to 2018 both non-residential and residential construction are expected “to settle into patterns of regular annual growth” from two to six per cent. New job creation is expected to reach 90,000 by 2018 with growth relatively even across all construction sectors.

“The CSC report demonstrates the need for purchasers, industry and lawmakers to focus on two key priorities: getting maximum value per dollar spent on construction and ensuring we have the most robust long-term labour supply possible,” said Sean Reid, regional director of the Progressive Contractors Association of Canada.

Ontario’s labour markets are “expected to tighten” as the increased activity generates a higher demand for skilled workers from 2012 to 2018. The construction sector will need to focus on training new workers and recruiting skilled hands, from other jurisdictions, in order to meet demand, the CSC analysis conclude.

The Council of Ontario Construction Associations (COCA) noted that the CSC’s projections are not surprising and that the United States’ economic recovery is integral to Ontario.

“Our economy is so tied to the success of the U.S. economy and its economy seems to be struggling through this recovery phase,” said Ian Cunningham, president of COCA. “The near term growth prospects in Ontario could be subdued due to that.”

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