Hundreds of billions worth of construction projects are on the drawing board in B.C. As a result, most construction contractors geared up for even more work this year, despite an already intense pace. This will keep the industry’s GDP and employment contributions growing at the same pace as the provincial economy.
The Independent Contractors and Businesses Association hosted its annual CEO Breakfast at Buildex this month to highlight its wages and benefits survey and talk to industry experts about trends in the real estate market.
Construction is the unsung hero of our provincial economy. What the 250,000 men and women in construction do accounts for about 10 per cent of our economy,” said Chris Gardner, ICBA president. “It doesn’t get the kind of attention that other industries do.”
While the past five years have been some of the busiest for B.C.’s construction sector, Gardner noted some small cracks have begun to appear in the market. He noted that 40 per cent of the association’s members indicated they will be busier this year than last year – the lowest percentage the survey has seen in five years. About 50 per cent of members said they would be as busy this year as they were last.
Gardner said the interior market remains about the same as last year with Vancouver Island and the Lower Mainland experiencing some softening.
“Surprisingly, in northern B.C. the confidence level is not as strong as you might expect,” said Gardner. “The challenge there is that the upstream drilling activity has not started. As of today, there are only 12 gas rigs that are operational in B.C. and that is partly because of delays in the project. So, companies have delayed their drilling activity. And that’s unfortunate because it is impacting jobs and families in northeastern B.C.
“That being said, the construction market is still very strong and healthy.”
The top issue for members remains the same, with 64 per cent of construction contractor members say they cannot find enough workers.
“This issue cuts across our entire economy,” said Gardner. “It’s not just about contractors not being able to find workers. It is in the retail sector, the hotel sector, the restaurant sector. Every sector of our economy is facing a shortage of workers. We are going over a demographic cliff in Canada.”
Many of the trades experiencing shortages are crucial to construction work, including masons, drywallers, iron workers and fabricators. Gardner explained that this has put enormous upward pressure on wages, with the average hourly wage of all trades jumping from $28.32 in 2018 to a projected $32.60 in 2021.
Gardner added that the province has made the situation more dire with the community benefits agreement, which he said excludes open shop workers from major projects like the Pattullo Bridge.
“It’s not fair, it’s not right and it is discriminatory,” Gardner.
The event then switched gears as Gardner sat down for a conversation with Bob Rennie and Andrew Ramlo of the Rennie Group to discuss the current state of the real estate market and the economic and demographic factors that are driving it.
Ramlo explained that as baby boomers age out of the workforce and start to have increased healthcare costs, the population is not growing enough to fill the gaps. The federal government is increasing its immigration targets to try and fill these gaps so there are enough taxpayers to cover these costs.
Rennie noted that later in the decade immigration, despite its political challenges, will need to increase even more.
“My concern 25 years from now is who will be my lawyer, who is going to bring me a bedpan and who is going to pay taxes without immigration?” Rennie said. “You are going to see fractured political parties start to go towards anti immigration policies like Trump. And yes, you get zero unemployment, but you don’t have a sustainable economy.”
Ramlo explained that much of the immigrant population in B.C. will go into the lower mainland. He predicts by 2041, the lower mainland’s population will increase by 1.01 million and require a net of 450,000 new homes to be built.
“We have a crisis coming with all these jobs and without the supply,” said Rennie.
Gardner added that government often makes it more difficult to get supply by increasing red tape and taxes for those trying to develop it.
Ramlo explained that while some have speculated the aging population is poised to free up tens of thousands of homes in the coming decade, it won’t nearly be enough to meet demand.
Rennie noted that there must be ways to increase the amount of housing by taking away some of the political risk of density. He suggested offering $10,000 per door for any application that is approved within 12 months, and $15,000 per door for rental projects. He explained that this revenue could give municipalities the political will they need to build supply.
“We are not going to satisfy the supply chain and keep up with jobs growth and immigration unless we really shrink that approval process,” said Rennie.
Small businesses – including thousands in construction – looking for relief from higher taxes, suffocating red tape and other anti-employer policies enacted by the BC NDP Government over the past three years, got nothing in today’s 2020-21 BC Budget, says the Independent Contractors and Businesses Association (ICBA).
“For job creators and employers, this was a Seinfeld ‘budget about nothing’ – but far less funny,” said Jordan Bateman, ICBA VP-Communications. “Finance Minister Carole James offered absolutely nothing to businesses staggering under the weight of higher taxes, red tape, and anti-employer policies. Small business, the economic engine of B.C., is being left to rust away.”
The Budget, balanced on a razor’s edge but with growing debt, failed to include any meaningful funding for a Massey Tunnel replacement, no tax relief for employers, a tepid reannouncement of some union-focused trades apprentice programs, and no new major capital projects.
“The Massey Tunnel replacement continues to be stalled, which should anger tens of thousands of commuters at B.C.’s worst bottleneck,” Bateman said, noting the cancelled BC Liberal-started bridge would have been 60% complete today. “The NDP are running out of money after unnecessarily overspending by as much as a billion dollars on the Pattullo, Broadway subway, and Highway 1 expansion – just to give its building trades union supporters a monopoly on those projects. They’ve blown the money they should have put toward Massey, and commuters pay the price.” Read more
Jordan and Maclean break down all the players in this week’s historic (and shocking) Throne Speech protest.
Looking to take the next step on your career ladder and become an estimator? Check out our Construction Estimating workshop! Participants will learn skills and knowledge to estimate construction projects and prepare a successful bid. At the end of the course participants will be able to:
- Analyze projects and decide on which ones to bid
- Understand risk analysis and how to price this into a bid
- Do competitor analysis and understand how this impacts the bid
- Do client risk analysis and how to price this into bids
- Record material and other prices and maintain contact lists
- Formulate a bid strategy
- Understand how to prepare an estimate and the estimating process
- Use Construction Division Codes
- Understand how to present a bid
- Be familiar with how to use the bid depository
- Understand the requirements for bonding and insurance
- Understand the post-bidding process
- Work with project managers to pass on knowledge of the bid
Topics to be covered:
- Project analysis
- Risk analysis
- Competitor analysis
- Client risk analysis
- Record keeping
- Bid strategies
- Preparing estimates and the estimating process
- Construction Division Codes
- Presenting bids
- Bid depository
- Bonding and insurance
- Post-bidding process
Plus you’ll earn 5 Gold Seal Credits and 32 CPD Points from BC Housing.
Our next session is February 24-25 in Burnaby, followed by April 16-17 in Prince George, and April 20-21 in Kelowna. Visit www.icba.ca/courses to register for this or any of our other upcoming courses.
VANCOUVER – Even as the British Columbia construction industry plans to raise pay for its workers by 10% over the next two years, companies need more workers and there are concerns about where the NDP Government is taking B.C., according to the results of the Independent Contractors and Businesses Association’s (ICBA) 2020 Wage and Benefits Survey.
ICBA President Chris Gardner released the results of its annual survey of approximately 1,000 construction companies Wednesday morning at ICBA’s 23rd annual CEO Breakfast, kicking off the BUILDEX construction tradeshow at the Vancouver Convention Centre.
“It’s another strong year for the construction industry, with workers looking at substantial pay increases this year and next,” said Gardner. “Yet there are notes of caution being sounded by our members: the percentage of companies who expect more work this year than last is now at 40% – the lowest in several years.”
Construction in B.C. now employs nearly 250,000 people and contributes almost 9 per cent of the provincial GDP. This year, survey respondents said they expect to give their workers a 4.8% raise; in 2021, they expect another 5.2% increase. That’s more than double the rate of inflation, which is hovering at 2%.
The major concern of construction contractors remains finding enough workers to do the work, with 64% of companies reporting that the shortage of workers is their biggest challenge. “For young people making career choices, it’s never been a better time to consider learning a trade and planning a career in construction,” said Gardner.
- Interior: 40% of contractors expect more work in 2020 than last year; 60% say they are short of workers, especially labourers, carpenters and framers.
- North: 38% of contractors expect more work in 2020 than last year; 46% say they are short of workers, especially carpenters, labourers and welders.
- Vancouver Island: 24% of contractors expect more work in 2020 than last year; 64% say they are short of workers, especially carpenters, labourers and plumbers.
- Lower Mainland: 42% of contractors expect more work in 2020 than last year; 68% say they are short of workers, especially carpenters, labourers and plumbers.
“While still relatively healthy, all of those regional numbers are down substantially from last year, meaning construction businesses aren’t as bullish on the economy as they were 12 months ago,” said Gardner. “This is a troubling result.”
But construction company owners are worried about the direction the B.C. Government is taking the economy. Of those surveyed, only 8% said John Horgan’s NDP government was on the right track in dealing with businesses like theirs. More than half – 53% – said Horgan was on the wrong track, while another 39% were undecided.
“The Horgan NDP Government keeps hiking taxes on employers, making it more expensive to employ people. Add in their building trades union-only monopoly on major transportation projects – which excludes 85 per cent of workers and 82 per cent of apprentices from government funded infrastructure projects, and it’s no wonder the industry is unhappy with them,” said Gardner. “The vast majority of industry wants government to be fair, open and transparent when it comes to bidding projects.”
It’s a story that may have got lost in the buzz of celebrating a new year: the B.C. economy shed another 7,700 jobs in December. That was the sixth time in seven months that B.C. lost jobs.
There are plenty of NDP government policies that can be blamed. Adding nearly $6 billion in new taxes has made it more expensive for BC businesses to employ people and to compete. Throw in the NDP’s lukewarm (and often conflicting) stances on major resource development, freezing 85 per cent of construction workers out of the tendering of public construction projects, and adding more red tape and cost to employers – jobs are bound to be lost.
Unfortunately, City Halls are no slouches when it comes to squandering opportunities to build vibrant thriving communities, whether through glacially slow approval processes, suffocating bureaucracy, or outrageous business property tax rates. Vancouver City Council’s 7 percent tax increase is a slap in the face to residents working hard to get by in one of the most expensive cities in the country.
Another problem is the District of North Vancouver, which continues to defy common sense as it careens from one ridiculous decision to the next. Case in point: a 27-acre site on its waterfront currently houses a private marina, some self-storage, and a concrete plant. Combined, this activity generates less than one job per acre.
When the site went up for sale in 2017, Wesbild looked at the employment potential of the site, purchased it, and put together a visionary, modern, jobs-driven plan for it.
This is not a Coal Harbour situation where employment land has been converted to homes. Wesbild’s vision is to maximize jobs by building modern industrial sites. Wesbild proposed to keep the marina and self-storage, and then build for small and medium-sized businesses struggling to find local industrial properties where they can set up shop, grow, and create local jobs on the North Shore.
It’s desperately needed, with local industrial vacancy rates now below one percent. The resounding and discouraging ‘no’ from the District was bad enough. What was worse was dragging the process out for months and ignoring the timelines they promised.
No wonder local lease rates for small businesses are one-third higher in North Vancouver District than the Metro Vancouver average.
The Wesbild proposal would have created as many as 1,000 jobs on site, and generated a billion dollars in positive economic impact. One of the innovations Wesbild planned was an on-site daycare where children would be cared for near their parents’ workplace—a phenomenal worker recruitment and retention tool.
Here’s the kicker: the Wesbild proposal fits with the current zoning, so no rezoning was necessary. Still, the district said no. If a land owner cannot depend on cities sticking to their own plans, land rights are being taken away.
By dragging out the process, and then killing Wesbild’s proposal, district council are sending exactly the wrong message and managing to accomplish something rather rare – fail local small business, local investors, and local residents in one fell swoop.
No one should be surprised. After all, this is the same council that shot down an 80-unit affordable housing project proposed by Catalyst Community Developments Society and a 100-unit project planned by Hollyburn Family Services. All the units in both projects were to be offered at below market rates to provide desperately needed housing for low income seniors, families and youth.
A dysfunction has settled into our local governments that is leading to serious economic failures, stifling the creation of family supporting jobs and distorting our local housing market.
With taxes out of control, red tape growing faster than it can be printed, job numbers falling, affordability going in the wrong direction for young people, we need more ideas like Wesbild’s – not fewer – and more than ever, we need bold visionary leadership at City Hall.
If we do not get more responsible decision-making from local government, the risk of failing an entire generation of young people seeking local jobs and affordable housing will become a harsh reality.
Last chance to register for our Get the PST Right! PST Issues for the Construction Industry breakfast in Victoria on February 26! It will give you an understanding of how PST applies to your business, and you’ll learn about who pays PST and how to pay it, as well as:
- When to pay PST on your goods and supplies
- How PST applies to goods for resale vs. those you install
- How PST applies to goods used to fulfill a contract outside B.C.
- When you need to be registered to collect PST
- When to charge your customers PST
- How PST applies to goods bought outside B.C.
- When you may be eligible for a PST refund and how to apply
Plus, you’ll earn 2 CPD Points from BC Housing!
You can register for this or any of our other upcoming courses at www.icba.ca/courses.