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December 31, 2012

What can construction expect nationally in 2013?

In 2013, federal construction industry advocates will be anxious to see the structure and size of the Canadian government’s new national infrastructure plan.

“We’ve been very adamant that the program needs to be announced earlier rather than later because we want to ensure that there’s no gap in funding when the Building Canada Plan runs out and we don’t miss a construction season,” said Michael Atkinson, president of the Canadian Construction Association.

The current Building Canada Plan, the nation’s first long-term infrastructure plan, will expire in March 2014 and many key stakeholders have been advocating for its replacement in the 2013 budget to allow the industry time to plan for it.

It is not only the federal government that the Canadian construction industry will be looking to, provincial and territorial governments also have to get on board.

“It’s going to be important to see how the provincial governments respond to it as well and because it really is a partnership that involves all levels of government,” said Atkinson.

“We’re aware of the fact that bringing in the new program means the framework agreements they signed, with provincial and territorial governments on the Building Canada Plan, are going to need to be fine-tuned at least, if not revised, in order to bring the new program on stream,” he said.

Atkinson said he would be shocked if a long-term infrastructure plan was not included in the 2013 budget as it has been hinted at in the last two budgets.

Association of Consulting Engineering Companies – Canada (ACEC) president John Gamble will be looking for at least a 20-year infrastructure plan.

“That’s what best allows us to leverage the best value for the taxpayer,” he said.

“The assets that we design today are going to have implications both for the state of our infrastructure and for our economy for decades to come. So, we have to make the right decisions today to really realize the value.”

Gamble said the design and construction industry will continue to evolve in terms of how projects are delivered. More and more, stakeholders are becoming each other’s clients, through delivery systems such as design-build or public-private partnerships.

“The fact is our client may be a property management company, our client might be a construction company, our client may become a bank. That dynamic is changing<0x2026>it’s going to require us to look at how we do business and who we do business with,” he said, adding that moving forward ACEC needs to do a better job at engaging the private sector. ACEC will do so by strengthening and leveraging its existing relationships.

Engineering is a sector with very good mobility within the country and Gamble said they should be celebrating the New West Partnership Trade Agreement, an accord between the governments of British Columbia, Alberta and Saskatchewan, that creates the nation’s largest barrier-free interprovincial market but there are unintended consequences.

“Even very modest value assignments are required to be broadly advertised in cattle calls to the point we’re now seeing projects where the value of all the proposals, that have been written, is actually more than the value of the assignment. That is just money that disappears out of the GDP.

“It’s entirely inefficient and it drives professional services towards price based competition, which is incredibly short-sighted because engineering decisions, again have a ripple effect for many decades,” he said.

“Engineering may be less than one per cent of the entire cost of designing, building, operating and decommissioning an asset, but it’s that one per cent that has an enormous consequence to how much you’re going to be paying down the road.”

Bob Blakely, director of Canadian Affairs for the Building and Construction Trades Department, hopes that 2013 will be the “year of the tradesperson” where governments value tradespeople and provide training support.

“We would like to see a public policy framework around making sure that when you spend government money on training, if you spend government money on training — that’s great. That’s getting some public policy purposes done, but if you’re then going to go and build something, why not insist on having trained people build it?” he said.

“You would think that letting somebody who low bids it, simply by not bothering to train, well isn’t that a bit self-defeating? If we’re using government money to do it, we should try and hit on all of our policy initiatives.”

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