Western Canadian construction: More boom or will it bust?

by Jim Bray

Times have been quite good for western Canada’s construction industry over the past few years as a robust economy has helped allow for plenty of building in all four western provinces. But with the price of oil now low and governments and corporations looking at ways to save some bucks for what looks like might be some very rainy days on the horizon, is this going to continue?

It appears so, but not without challenges. Western Canada’s construction trade associations are forecasting there’ll be enough work to keep just about everyone working. The problem, it appears, is finding enough people who want to work.

Truck West contacted all four provincial organizations who make up the Western Canada Roadbuilder & Heavy Construction Association (WCR&HCA) and obtained copies of some reports that predict continued good times. The reports were created by BuildForce Canada, a national industry-led organization “committed to working with the construction industry to provide information and resources to assist with its management of workforce requirements.”

BuildForce’s “Looking Forward” document focusing on Manitoba, blue skies the years 2014-2023, and begins with the claim that “for more than a decade, Manitoba has been on a construction boom that has rivalled the other Western provinces and raised employment to record levels.”

The report claims the boom exhausted the local workforce, leaving challenges in finding enough bodies to handle all the new construction work, which the document notes has been distributed across both residential and non-residential markets. The organization predicts this growth – and the worker shortage – will continue over the next several years.

Alberta’s estimate noted Wild Rose Country continues to lead Canada in activity, adding jobs and “building the productive capacity of the provincial economy to new heights.”

Alberta’s economy is joined at the hip to oil sands development, of course, and despite a slowdown in 2009, things were back with a vengeance by 2013 and continue to look good, despite the crash in oil prices that’s causing a lot of corporate and government navel-gazing.

“Construction employment growth continues in virtually every year of the new 2014-2023 forecast scenario,” BuildForce said, “but year-to-year growth rates are lower than the past decade.” Despite the slowdown, however, the document forecasts that
“human resources challenges related to skills, training, mobility and competition will continue on nearly the same scale.”

As for the oil sands, the organization said the economic recovery after 2008 doubled the number of employees who were left working after the crash, and noted that the demand for skilled trades and specialty occupations, has “exhausted the available labour force in Alberta” and set the pace for “a new wave of interprovincial mobility, immigration and human resources strategies to accommodate the change.”

The Saskatchewan Heavy Construction Association’s report noted that the provincial budget for 2015 highways and infrastructure work totals $664.5 million dollars, a 7% increase over last year’s.

The 2015 expenditures will focus on municipal programs, maintenance and rehabilitation, and upgrades and enhancements to the transportation system, including some $250 million to repair, rehabilitate and upgrade existing highways and structures as well as more than $100 million for major projects such as continued work on Hwy. 39 north west of Estevan, the twinning of Hwy. 16 from Saskatoon to Clavet, and the preconstruction of the east Regina bypass project.

SHCA president Shantel Lipp praised the Brad Wall government for “making good on their commitment of spending $2 billion over four years.”

It’s the same story in British Columbia. BuildForce noted that construction employment in the westernmost province is “poised to jump to a new record level by 2017 – passing the last peak in 2007.”

The report claims that most of the growth comes in non-residential construction markets, noting that investments in “the major resource and infrastructure projects in the north are the biggest contributors.”

Another document, released to Truck West by B.C. Road Builders & Heavy Construction Association president Jack Davidson, claimed the big news for 2015 is that “the value of all ‘major’ capital projects that are planned or underway (in the province) sits at $344 billion.”

About $60 billion of that is residential, while “just over $90 billion is estimated to be earmarked for LNG plants and related pipelines” with about $40 billion earmarked for mining projects. The report also noted that there isn’t much going on in the province when it comes to manufacturing projects, with the notable exception of the $4.8 billion Rio Tinto Kitimat Smelter Project, which is already underway.

So it appears there’s plenty of work to be had in construction across the west despite slumping energy prices. The trick may be finding people to do it.

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