Home Month and Year May 2024 Road Ahead

Road Ahead

Dennis Leonard, Chair of the Alberta Roadbuilders & Heavy Construction Association, on his Industry’s Concerns 


If you’ve traveled on an Alberta highway lately, you probably didn’t think much about the actual road you were on. Details like when it was built, by whom, who maintains it and how, and the costs associated with all of the above are unlikely to have entered your mind. Most of us take the provincial highways and infrastructure we travel on for granted; they are a given part of life, always there, ready and waiting for use.  


We all know of course that Alberta’s $70 billion provincial highway network – spanning approximately 31,400 kilometres, including 28,000 kilometres paved – did not just magically appear nor does it maintain itself. A large, complex, decades-old industry built and maintains these roads today. 


And just as Alberta’s highway network, the backbone for the rest of the economy, is nothing short of essential, those building and maintaining it are essential too. And for almost 80 years, they have been united as an industry.  


Today, they are called the Alberta Roadbuilders & Heavy Construction Association (ARHCA), the largest heavy construction association in Canada. The ARHCA represents between 700 and 1,000 Alberta companies, and 50,000 Albertans who rely on the heavy construction industry for employment.  


These contractors work on the construction and rehabilitation of highways, municipal roads, bridges, sewer and water projects. The ARHCA also represents the suppliers (equipment dealers, finance companies, aggregate suppliers, law firms, etc.) and consulting engineers who work with the contractors.  


ARHCA member companies also build streets, curbs, gutters, sewers, water systems and other infrastructure for residential, commercial, oilfield, oil sands and forestry projects.  


“Our members are doing reasonably well in Alberta,” says ARHCA chair, Dennis Leonard. Leonard is the general manager at Ironclad Earthworks Ltd. in Calgary. After years as an ARHCA member and committee member, he began his one-year tenure as chair last November. “We have a fluctuating market that happens over and over, and we’re experiencing more cycles than we did previously. We have a year or two that goes well, then harder times. COVID was a harder time, and very unique for our members, but our industry has come back and is working well. They’re ready to do more work.”  


ARHCA members, Leonard explains, generally fall into one of three sectors: paving, bridge builders and earth movers, such as Ironclad. “Those are really very broad categories, but most companies fit into them,” he notes. “It’s essentially our heavy construction industry. And our work is either in the public or private sector, but as road builders, we typically deal with the public sector, the government.”  


Born into the industry – his grandfather and father each owned construction companies – Leonard didn’t originally intend to do construction. He obtained a Bachelor of Commerce from the University of Calgary but rather than pursue a career in accounting, Leonard was drawn to heavy construction. His endorsement of the industry is sincere: “People that do construction love building, that’s why they’re there. I love going through the city and seeing everything that my grandfather, my father, myself have had hands in building. It makes me proud.” 


As chair, a large part of Leonard’s job is to lobby the provincial government on behalf of members. “The biggest thing we’re concerned about right now is how to balance consumer – taxpayer – needs,” he explains. “We want to maintain our road system, first and foremost. Not only does that generate work for us, but it makes the public happy. It’s needed.”  


Specifically, the ARHCA is concerned about its partnership with the provincial government: “There’s a lot of risk transfer in our industry right now where people want certainty on pricing. So they pass all the risks down to companies. Depending on the size of the company, that can be extremely difficult to absorb.”  


On the heels of the latest provincial budget released February 29, ARHCA members are also concerned about fluctuating provincial budgets that don’t meet maintenance needs. “It can be extremely difficult to do business in this province when we consistently don’t meet the targets that we’re shooting for with budgets,” Leonard says frankly. “We’re building a growing network of roads right now, but we’re not growing budgets to maintain them.” 


Maintenance budgets, he points out, are going up at most by the level of inflation: “But if you’re building many more roads each year – for example the ring roads in Edmonton and Calgary – your budget for maintenance should go up too, but it’s not. Maintenance budgets are actually going down or staying level.”  


“The latest provincial budget was still largely decreased in a lot of our sectors,” Leonard laments. “And historically the government hasn’t even managed to fully tender out the full value of the work declared in the budget; they’ve always under-utilized. So if we anticipate a similar situation to last year, a few hundred million dollars will go unspent.” 


In the past, a backlog of projects on the shelf was always ready to go in the event there was money to spend, but since COVID, the backlog has been used up and not replenished. “I think the government is addressing the issue and is in talks with the engineering associations to move forward quite heavily on that,” he notes.  


The approach advocated by ARHCA is to set asphalt targets based on what’s needed. “If we want to keep contractors employed, we need targets that aren’t necessarily financial,” Leonard explains. “We are geared up to do say 3 million tons of asphalt in this province per year on highways and roads. That is always the target, but it’s never been made formal. And each year we’ve decreased, so now we’re down to twoandaquarter million tons. How do you maintain the same level of roads with 30 per cent less asphalt?”  


Leonard is somewhat encouraged by his latest discussions with UCP Minister of Transportation and Economic Corridors, Devin Dreeshen, on the topic. Dreeshen’s mandate from Premier Danielle Smith is to deal with industry, resolve some issues and encourage more partnership.  


“He’s been very open, honest and receptive to our thoughts and plans, and we hope to have more discussions and turn this into action,” Leonard offers. “A lot of our members would be very happy with a budget of tons of asphalt versus monetary. Because monetary amounts don’t fix highways, asphalt does. It’s not a question of how many dollars, but rather, how many tons of asphalt are needed.”  


“The Minister’s office is thinking about things in a different fashion than previous Ministers and that’s definitely refreshing,” Leonard continues. “However we haven’t had action on it yet. So we’re looking forward to that.”  


“We’re really just trying to get value for the taxpayer,” Leonard says. “We are trying to encourage the government to deal with us in order to determine the best ways to tender and where the best value can be achieved.”  


To this end, the ARHCA released a policy paper, The Case for an Alberta Highway Trust Co., two years ago, in which it proposed that a delegated transportation authority be created to procure engineering and construction services in a transparent and business-like manner, independent from day-to-day politician interference in its management of a predictable funding contract with the province.  


“It’s a provocative and bold approach to managing our highway system,” Leonard concedes. “A way for us to assist the government in project planning and scheduling, budgeting and financing, road repairs, procurement and contract management. There have been some impasses with the government since we first presented the idea, but there are certain concessions that could be made from all parties. If we want value for taxpayers, we’re going to have to get more people involved.”  


“The big thing is getting that partnership to where it needs to be,” Leonard reiterates. “Much like in any other business, if you’re not partnered up and trying to do the work, it won’t be as successful as it could be. We’re not saying the roads in Alberta are poor, by no means. It’s just that they could be managed better, and our dollars better spent still.”  


Another aspect of ARHCA’s advocacy is its Fix Our Roads campaign, which it has run for the last few years. The campaign uses stickers, billboards and other advertising to gain public, and subsequently government, attention. 


Aside from its advocacy work, ARHCA provides other services to its members, including networking and learning opportunities, golf tournaments, a safety program, awards programs, industry studies and reports, employee benefits plans and a rental rate guidebook. “It’s used by all the engineers, owners and construction companies across the province,” Leonard notes. “For as long as I’ve been in the industry, it’s the tool everybody uses.” 


ARHCA has eight staff and over 100 volunteer committee members, who sit on a number of committees, including Finance, Safety, Environment and several others.  


Hiring workers for the broader industry is always a challenge, given the seasonality and shrinking budgets. “Every time we go through a cycle it proves more and more difficult to find quality workers,” Leonard says. 


Looking to the future, Leonard sees automation playing a greater role in the industry, much like in many others. “We’re constantly trying new technologies, trying to figure out what works best,” he says. “I’m hoping automation will help alleviate some of the issues we have with finding workers. We’re also seeing a lot of environmental innovations which help reduce our environmental footprint.”  


With a passion for his industry and role at ARHCA, Leonard is optimistic. “As chair until the end of this year, I will try to effect as much change as I can,” he concludes. “It’s a tough term, but it’s going well so far.”  


So the next time you take a drive on one of Alberta’s highways, spare a thought for the thousands of men and women who worked to build and maintain them. Their hard work makes our lives better.