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Calgary’s Resilient Construction Sector

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Workers on-site at the $1.4 billion Calgary Cancer Centre. (Credit PCL Construction).

As in most major cities, the visuals of construction activity are constants and Calgary is no exception. The dreaded cliché of orange plastic cones can be seen everywhere, and for many frustrated drivers, all of the time.

On the business side, it’s a positive sign as construction continues to be a major sector of the Canadian economy. When the ancillary numbers are crunched – both directly and indirectly from things taxes, fees and salaries to residential, non-residential and engineering, repair and other construction services – it adds up to more than $73 billion. The industry accounts for approximately six per cent of Canada’s GDP and employs millions of workers.

Despite industry and business speedbumps such as delays due to weather, pandemic-related lockdowns and slowdowns, and the Calgary economy, the construction sector remains sturdy and resilient. Calgary continues as one of Canada’s largest and most influential markets for commercial, residential and infrastructure construction.

The 2021 construction outlook for the city includes some high-profile and high-visibility projects like the colossal $1.4 billion Calgary Cancer Centre, the Peter Lougheed Centre (the 506,000 square foot hospital project by Ellis Don), office space and parks in the East Village and University District, the $500 million expansion of the BMO Centre (from 500K square feet to 1M square feet), the first leg of Calgary’s $4.9 billion Green Line LRT project and a 2021 total City budget of $660 million for other transportation, roads and transit infrastructure.

According to Bill Black, president and COO, Calgary Construction Association (CCA,) the professional association of more than 850-member companies throughout the Calgary region, an erratic 2020 has taken a toll on the Calgary construction sector. “Aside from the Cancer Centre, the Peter Lougheed Centre, and the new BMO centre, we do not have the list of signature projects that we have had in other years. Many contractors are getting used to more mid-sized projects and smaller scopes overall are the reality of the volumes that we are now seeing. Of course there will be some work coming out of the City based on some of the stimulus money, but 2021 is likely another survival year for many and very tight margins for those who do have work.”

There is agreement across the sector that things will be slow as construction regains momentum. “There has been a significant reduction of new projects in the construction market compared to about five years ago,” notes Alistair McKnight, Calgary district manager with PCL. “The new projects that are progressing are generally smaller in value and have increased competition across all scopes of work.

“Our industry has the necessary design, engineer, project management and labour required to perform even the most complex projects and working with the CCA, a major focus needs to be on ensuring there is extra focus on payment timeliness as many companies in the industry need to ensure positive cash flow to run their business.”

Although the impact of COVID-19 on the construction sector is not a part of the daily news coverage, and despite the fact that there have been no major outbreaks in Calgary’s construction sites, the pandemic has most definitely taken its toll.

“On March 27, 2020, the Alberta government declared construction to be an essential service,” points out Kerensa Swanson Fromherz, Calgary’s director of Transportation Infrastructure. “We are grateful that construction was allowed to continue and are appreciative of the innovation and resilience demonstrated by the industry throughout 2020.”

PCL’s Alistair McKnight underscores the “essential service” designation as vital for the construction sector. “Our industry focuses on safety risks each and every day, and so as an industry we were able to ensure appropriate safety measures were deployed immediately when the pandemic was first announced. The resilience and adaptability of our industry was impressive in ensuring active projects were not impacted,” he says.

Bill Black adds that, with construction deemed an essential service and on-site work continuing, it’s been about new safety measures, the adjustment to more remote office work and more virtual presence for meetings and interactions. “The adjustment and the different ways of working have required a lot of effort and additional cost which most private owners are refusing to even discuss. This is an unfair burden placed on an already strapped industry.”

McKnight enthusiastically highlights some of PCL’s post-COVID workload. “With approximately 1,300 workers on site most days, we are on schedule and on budget to complete the Calgary Cancer Centre next year. We are also working on the preconstruction and construction services on the BMO Centre Expansion, the 17th Ave SE Stampede Crossing and 17th Ave SE Extension as part of the Rivers District masterplan. Late last year we started the exciting Minto Communities in Bridgeland, and PCL stays focused on ongoing solar projects in the Southern Alberta market as well as serving existing clients in the civil and commercial sectors.”

It’s a basic fact of the construction industry that, like other major municipalities, the City is commercial and institutional construction’s biggest customer. Infrastructure projects and expenditures like the ring road related work, Green Line work, overpasses, and kilometres of road widenings, paving, interchanges and overpasses.

While 2020 shutdowns and lockdowns did affect scheduling, the City’s infrastructure planning and investment is on-schedule according to the detailed 2019 Citizen Satisfaction Survey masterplan. The $30 million annual budget for Calgary paving work continues and some major projects include Macleod Trail South, Blackfoot Trail, Metis Trail North East, and Crowchild Trail North West as well as pavement rehabilitation work in the communities of Silver Springs, Woodbine, Midnapore, and Sundance.

Alberta Transportation continues construction of the Southwest Calgary Ring Road and the West Calgary Ring Road, and while the City’s major project of Ring Road integration continues, an opening date for Phase 2 of the SW Ring Road has not yet been announced by the province.

“As part of the Tsuut’ina Trail Phase 1 opening that took place last October,” Swanson Fromherz explains, “the City coordinated with the province and simultaneously opened associated connections, specifically Westhills Way SW, 90 Avenue SW and the Southland Drive SW connection via 90 Avenue SW. Also, the widening of Anderson Road and Glenmore Trail, construction improvements at the intersection of Richmond Road and Sarcee Trail and several pathway improvements throughout the area to help manage increased traffic volumes.”

As with many aspects of life and business, the construction sector is prepping for (or already dealing with) a post-COVID new normal.

The CCA’s Bill Black has a professional hunch that, despite the relief of those who are still working, there’s no doubt that disruptions to operations along with the stresses and concerns of the past year have had an impact. “There is definitely some fatigue, as this came on the heels of years of poor economic performance and, while there was the initial adrenaline rush of crisis response that has subsided, this new norm is hard work and there are at least two more tough years ahead.”

As Calgary life and business resoundingly says good riddance to last year’s COVID commotion, PCL’s Alistair McKnight adds: “It’s critical that all contractors in the industry maintain extra vigilance in HSE protocols to combat COVID-19. The health and safety of our collective workforce remains a priority for all of us,” he says.

“Our market is resilient and adaptable, and we remain optimistic that with government stimulus spending and private sector confidence we will see increased positivity in our market in the coming years.”

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