The wellbeing of Canada’s national economy is largely determined by the state of its construction sector. Fortunately, despite the impact of COVID-19-related containment measures and a sharp decline in oil and gas investments, Canada’s construction input is still expected to contract only slightly before recovering and growing at a modest annual average rate of 1.1 percent over the remaining forecast period (2021-24). To help you enter the new year with confidence and refined knowledge of the trends impacting the future of the construction sector, this brief article will cover three main trends we expect to see from the Canadian construction industry going into 2021. For more information on how you can sustain and grow your construction business in these unprecedented times, consult with a Montreal construction attorney from Cotney Canada today.
Construction Activity Expected to Be Supported by Planned Investments in Infrastructure
The Investing in Canada plan, or the federal government’s long-term infrastructure plan to support local, provincial, and territorial infrastructure projects over the next 12 years, was first announced in Budget 2016 and expanded upon in Budget 2017. The plan itself serves as a consolidated, strategic framework for the delivery of all federal infrastructure funding programs with the focus of achieving the following objectives:
- Strengthen the economy and create jobs for the middle class
- Build inclusive communities where everyone has equal access to opportunities
- Support a low-carbon, green economy
- Provide sustainable and efficient transportation systems to unify the global markets
- Ensure access to safe water, clean air, and overall greener communities
Under this plan, the Canadian government seeks to invest a total of US$139B in key infrastructure sectors through 2028, including Public, Green, and Social Infrastructure. At a time when Canada is widely recognized as one of the world’s largest markets for commercial, residential, and infrastructure development, we can expect infrastructure to remain an important driver of the Canadian economy with the express support of the government.
Current infrastructure projects being supported included the US$105 million in support of VIA Rail Canada’s operations and capital projects and US$5.2 billion to refresh the Canadian Coast Guard fleet. As resources peak and retirements continue to soar across the country, we’re sure to see hundreds of thousands of new construction workers needed to fill the space in the mining, oil and gas, transportation, and construction sectors. If you are currently embroiled in a dispute due to a labor shortage, lack of resources, or another issue on your infrastructure project, reach out to a Montreal construction dispute lawyer.
Offsite Construction Will Fulfill the Need for Standardized Materials and Processes
Offsite construction, also referred to as prefabrication, refers to the planning, design, manufacturing, fabrication, and assembly of building elements at any other location other than their final installed location to support the rapid speed of efficient construction of the structure. The parts can be either precast (concrete) or created from compound materials (like sandwich panels) today. The offsite factors of today’s day and age may produce flat-pack components like walls and beams, volumetric modules, and entire buildings. While this practice of systematically constructing structures in this manner goes back to the 20th century, the practice is now gaining momentum across the Canadian construction industry and being adopted for projects as varied as high-end hotels, airport terminals, and condos.
More and more companies are moving their actual construction to factory-like, indoor environments where contractors and other tradespeople can build components or modules that can then be shipped and assembled on the building site. This transition can likely be attributed to today’s changing productivity needs forcing general contractors and developers alike to keep up with tight schedules, tighter budgets, and razor-thin margins. In contrast, offsite construction can take anywhere from 40 to 60 percent of labor off the job site, revealing a plethora of cost and time-saving opportunities for project managers looking to speed up their project schedules.
However, to truly succeed with offsite construction, you’re going to need to improve solid collaboration and communication on the front end of the project. This is because, as soon as the project starts and fabrication begins, it’s going to be increasingly difficult to make any changes with the rapid pace of construction. To solve this problem, many construction companies in Canada are working together through Building Information Modeling (BIM) in order to ensure the project kicks off as seamlessly and early as possible. By having an up-front design, contractors and developers are able to coordinate all components with the construction team, eliminate outside interferences, and model out exactly how the structure will be finished out. For more information on crafting the appropriate contract provisions to protect your business in the event of a dispute, get in touch with one of our Montreal construction dispute lawyers.
Companies May Finalize the Shift to Asset Lifecycle Service Provides
Last but not least, we can expect to see many construction companies throughout Canada finalize the transition from traditional construction companies to asset lifecycle service providers. Asset Lifecycle Management (ALM) is the process of optimizing the profit generated by assets throughout the lifecycle of a business, complete with asset portfolio management, effective project execution, and efficient asset management practices to address all stages of an asset’s life cycle. In terms of construction, it means that these companies are drawing upon their years of experience and multitude of skill sets in order to provide facilities management, maintenance, and through-life service to their clients.
Essentially, the industry itself is shifting to a more defined emphasis on total lifecycle cost rather than the traditional one-and-done build cost. The companies creating the assets, in turn, are going to be increasingly expected to assume beginning-to-end responsibility for each asset they build in terms of quality, longevity, and ease of maintenance. This is going to make more companies likely design these assets with the goal of making the process of repair and maintenance as efficient as simple and possible.
No longer are we expected to see the vast majority of two separate contracts being used in the construction and engineering space — one to build and one for service. Instead, it’s important to gear your company up for single contracts that span the entire lifecycle of the asset, regulate its output or availability, and serve as an all-encompassing construction and service offering.
Should you need any assistance adjusting your planning to ensure long-term profitability going into 2021 or are unsure how you can train your staff to adjust to these best-practice in service processes, don’t wait to reach out to a Montreal construction law attorney from Cotney Canada. More often than not, you may be able to seamlessly guide your business through this transition from construction-only to through-life service with the use of enterprise software, service-level agreements, and field service scheduling and optimization.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.