Summary from April 30 CCPPP Conference Call: COVID-19 & the Infrastructure Sector

April 30, 2020

Joining us on the call was Mary Van Buren, President of the Canadian Construction Association, who discussed COVID-19's impact on the construction industry and how it is adapting.

• The construction industry has risen to the occasion. We’re putting the safety and well-being of our workers, their families and our communities as our first priority. They’ve responded to calls to supply front-line health workers with PPE and collected food and money for food banks and other charities.
• CCA’s position has been that sites that are compliant with health authority guidelines should remain open and those that cannot comply should close.
• The first month of the pandemic was difficult as governments reacted and developed new guidelines almost daily. The CCA board met daily and this enabled the organization to share best practices very quickly with members.
• Also worked collaboratively with the federal government to share what industry needed to continue as an essential service. And, worked closely with organizations such as CCPPP and the Association of Consulting Engineering Companies, which was important to bring a whole and consistent message to the federal government. This led to some early wins like greater flexibility in the 75 per cent wage program.
• The construction industry is willing and able to help Canada’s economy restart. Seventy per cent of construction businesses are small- to medium-sized companies and have seen significant declines in their revenue as a result of the pandemic. They also have higher costs and lower productivity. CCA isn’t expecting them to see normal revenue streams for at least another four months.
• Infrastructure investment is a proven strategy to help kick-start the economy. For every dollar invested in infrastructure it returns in a multiplier of 0.4 to 1.5 in returns. This makes sense for Canada. The career opportunities will also be attractive. We were already looking for skilled workers. It’s going to be a very exciting time as we move back to recovery.
• In order for the construction industry to thrive, it must survive. There are 2 elements that CCA thinks are critical:

1. Liquidity and confidence to address the current contracts. Have asked the federal government for an emergency COVID-19 reimbursement fund to help give comfort to contractors that are in the midst of federal projects that there is funding to help mitigate some of the costs they have incurred, notionally we suggested five per cent of the contract but this will vary based on the nature of the contract.
2. Making sure the economic stimulus is expanded over a period of time – probably about 18 months. CCA wants to ensure it is not a boom and bust. There needs to be coordination between all levels of government. The Investing in Canada Plan is available but it hasn’t been taken up as well as it could be. It’s possible the government could move up the spending in the 12-year, $180-billion plan to now. It’s important red tape is eliminated so we can get working on shovel-ready projects. More flexibility in categories of funding would also be helpful to suit the regional needs of the country.

• Also need clarity in health protocols. We all want our workers and communities to be safe and so we want to make sure those standards are clear as we return to the new normal. Also want to make there is a consistent and affordable supply of PPE that does not take away from the needs of front-line health-care workers.
• The construction industry is resilient and we’re working together to make sure it can come back even stronger. COVID-19 can be a catalyst for using new technology, innovation and reimagining a more streamlined procurement process. Investing in infrastructure is an investment in our communities and this investment will deliver value for generations to come.
• In response to questions from participants:
• The definition of shovel ready is going to vary across the country. One of things that should be looked at is how many projects applied for the 2018 funds [under the Investing in Canada Plan] that were rejected for various reasons? Of those, how many could get to shovel ready quickly? What regulatory requirements are there etc.? There needs to be flexibility in the understanding of what shovel ready means. CCA has advocated that government keep the tendering process going during the pandemic so we can get going. I don’t have a list of projects. That’s why we need the alignment between all three levels of government. The Federation of Canadian Municipalities has also been doing some great work in this area.
• Streamlining procurement – we’ve needed a big disruption to poke us into doing things differently, like moving applications online. We also need confidence in our regulatory environment and streamlining security clearances so new Canadians/immigrants can get hired quickly. It’s a big bucket of opportunity.
• The hard costs of the pandemic for projects already underway are pretty obvious – companies can show their receipts for PPE, sanitation supplies, security, lease extensions etc. What’s harder and still needs to be figured out is how to measure the loss of productivity. If you normally had a crew of 100 on and now you’re down to a crew of 75, in some trades it might be easier to figure out if you know how much drywall, for example, you can install in an average day and how much you’re installing now. We’re all looking for open mindedness and flexibility when it comes to determining these costs because ultimately we all want those projects to do well and we want to make sure the industry is whole so it can help lead the country out of recession.
• The federal government is looking to do as much as it can to support a return to recovery. But can the federal government afford to support 100 per cent funding of infrastructure projects [rather than the usual 1/3 fed, 1/3 provincial and 1/3 municipal]? We need to think about the role of the private sector and how it can help. Is this the time for them to take on a bigger role? It’s about who has the money to pay for it. There are billions available in the Investing in Canada Plan and the Canada Infrastructure Bank, too. All options need to be on the table.
• The capacity issue for subcontractors and for companies to bid on projects is a regional issue. Alberta and Atlantic Canada don’t have that issue. It’s largely an issue in some sectors in southern Ontario and in British Columbia to a certain degree. CCA has asked the federal government for a 25-year commitment to infrastructure so that the spending is predictable and consistent, rather than a boom and bust cycle. Educational programs for the labour needed for infrastructure have stopped or slowed down during the pandemic, too. We need to keep getting those apprentices out. We also need to make sure we’re attracting people in areas where we have capacity issues. We are in a war for talent.
• CCA has a committee that is working on language related to COVID-19 for contracts.
• The federal government has made a commitment to be more open about projects they are planning to bring to tender. CCA has asked for a 25-year investment plan not a one-year, two-year, three-year cycle. Industry would like that confidence and predictability so you could do more investment in innovation or hire more apprentices.

Thank you for joining the call. Our next conference call will be held on Thursday, May 7 at 1 p.m.