Ontario, Quebec Shut Projects, But Canada Keeps Most Construction Essential
Canadian construction and engineering sector groups are pushing to keep projects across the country safely open for business amid a tightening of COVID-19 restrictions in the nation’s largest province.
Both the Association of Consulting Engineering Cos./Canada and the Canadian Construction Association (CCA) are urging federal authorities to keep work going on key infrastructure projects, although provinces have largely allowed public and private construction to continue as a needed economic driver, with social distance rules and other mitigations in place.
In particular, ACEC has urged Prime Minister Justin Trudeau to keep critical construction sectors moving and lay plans for accelerating infrastructure spending to combat economic downturn, while the CCA has taken a similar stance.
“It’s a checkerboard,” said John Gamble, president and CEO of ACEC/Canada. “We have seen provinces go back and forth on this, on what they deem to be critical infrastructure.”
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Andrew Heal, a construction lawyer and vice chair of the National Construction and Infrastructure Law Section of the Canadian Bar Association, says that in Canada, "we are in the moderate middle. We are perhaps not at one end where everything is 100% open ike Sweden … but we have not seen the kinds of shutdowns as Boston has done.”
New pressure is coming from authorities in Ontario, Canada's largest construction market, as they tighten restrictions on building activity because of surging virus deaths and infections. The province, which has more than 6,200 coronavirus infections, second only to Quebec, recently removed industrial and commercial construction projects from its essential services list.
Provinces Shut Sites—and Don't
Still, even as Ontario beefs up restrictions, Quebec, which shut down all but critical infrastructure and security work as it grappled with roughly half of all coronavirus deaths in Canada, may ease up its rules as the wave crests, Gamble noted.
Provincial premier Francois Legault had shut down all businesses deemed “non-essential” in March with an intended mid-April reopening now extended to May 4, he has suggested opening construction sooner. It generates about $40 billion annually in investments, says Canada's CBC news service, citing government data.
Quebec construction union CSD says two-thirds of 6,660 member respondents in a recent survey, wanted to continue working as long as sites are safe. The government projects that the virus peak would be around April 18. The union also wants contractors that are repeat violators to pay fines of up to $50,000.
“The Canadian economy will be better off if we remain open for business safely, those businesses that are essential,” Heal said. “Even Quebec recognizes that with a narrow group of essential construction projects.”
Other provinces still have a more hands-off approach.
While a couple of large energy projects in British Columbia, LNG Canada and BC Hydro, scaled back work on their own to prevent the spread of the infection, the province has not moved to shut down any construction. The western prairie states of Alberta, Manitoba and Saskatchewan have taken a similar approach, stressing social distancing and hygiene while letting construction work move forward.
Canada’s eastern Maritime provinces, Newfoundland, Nova Scotia, New Brunswick and Labrador, have also avoided issuing shutdown orders, although contractors and owners have halted work on mine, dam, energy and other projects.
The already delayed and overbudget Muskrat Falls and Labrador-Link hydroelectric projects are in construction shutdown as of March 17, with just 80 employees on site to maintain operations and safety. With the indefinite halt, owner Nalcor Energy told provincial regulators in early April it can no longer reliably estimate that planned completion can happen by the end of the year "until there is greater certainty on the path forward."
The project, originally budgeted to cost $7.4 billion in 2012, now is about $5 billion over budget, said CBC.
Heal has been advising firms on how to take advantage of Canada’s wage replacement program, in which the federal government will cover up to 75% of worker pay. The qualifications—a 30% decline in business—can be challenging for construction and engineering firms given that current payments are more likely to reflect work that happened months ago, he noted.
Cities and construction groups also are asking the federal government to relax rules for expected cost overruns on infrastructure projects facing COVID-19 delays, since current rules for federal funds on municipal projects don’t allow provinces and cities to seek more funding if a project goes over budget for any reason, such as delay due to weather or labor disruption.
With virus delays likely to push projects over budget, municipal officials are concerned whether they have enough cash to cover extra costs.