Building Canada’s infrastructure: A sector checkup

As the backbone of Canadian society, infrastructure plays a critical role in maintaining the quality of life that Canadians have come to enjoy. While, of late, there has been a spike in interest in constructing new roadways, mass transit systems, energy facilities, pipelines, and so forth, there’s also a baseline need to maintain, replace and repair the existing structures that we need to move people and goods, and to stay safe and healthy in our homes and businesses. And despite recent increases in project counts and spending, infrastructure needs seem to always outpace spending.

Government-driven projects, including key infrastructure projects, are providing stability and growth to Canada’s construction sector. To get a better picture of the state of Canada’s infrastructure sector, in February On-Site Magazine welcomed a panel of representatives from key construction organizations to a webinar exploring current infrastructure projects, upcoming projects, and the sector’s prospects going forward.

The panel, moderated by Adam Freill, editor of On-Site Magazine, included Chris Atchison, president of the B.C. Construction Association, John Casola, chief investment officer at Canada Infrastructure Bank (CIB), Angela Clayton, president of project delivery at Infrastructure Ontario (IO), and Mary Van Buren, president of the Canadian Construction Association (CCA).

“British Columbia’s infrastructure forms the backbone of our provincial economy,” explained Atchison as he introduced his organization and some of its activities. “We never take our eyes off the infrastructure ball. It’s embedded into our mission and our operations as it’s our members in our industry that are building this incredible array of infrastructure that we’re seeing come online.”

Casola explained that Canada Infrastructure Bank was created by the federal government with seed money of $35 billion and a focus on spending across five priority sectors. “Those are public transit, clean power, which involves generation transmission and storage, green infrastructure, which involves carbon capture and low carbon fuels, our building retrofits program, which is very popular and being taken advantage of, broadband, and trade and transportation, which includes airports, ports, critical minerals, and irrigation infrastructure,” he explained.

Unlike traditional lenders, CIB, he said, is an investor that can afford to take on levels of risk that other lenders would not. “We are a gap filler. We identify what gap is preventing a project from proceeding.” This allows projects to carry forward despite difficulties associated with securing traditional financing, including longer timeframes for investment returns. “We are patient capital; we are created to take more risk than is ordinarily out there.”

His company recently came to the aid of an airport project in Manitoba where the facility was sinking and needed a solution to save an important gateway to the North for many northern Indigenous communities. “Already other businesses are starting to form around that airport, knowing that it’s going to be built,” he said. “So that’s great.”

In Ontario, IO has completed over 100 projects since its inception in 2005, explained Clayton. “Our current program of work is just under $80 billion; 61 projects.”

With a focus on such concerns as risk, market constraints and cost escalations, she explained that the organization has its eyes on project models, the management of available labour, and project costs.

At the CCA, Van Buren says there is a strong desire to establish a national picture and plan for infrastructure.

“Two-thirds of the Canadian economy depends on trade; that trade depends on high quality trade-enabling infrastructure,” she stated. “One of the initiatives that we’re very proud of is the Canada Trade Infrastructure Plan.” That plan calls for a national perspective on infrastructure planning, taking a long-range approach, rather than basing decisions on election cycles. “This plan has received endorsement from premiers across Canada. So that’s something that we’re continuing to champion.”

The association is also focused on workforce capacity, to ensure that Canada has the workers needed, for today and into the future. “A big part of that is working on aligning immigration,” she said. “The way it is, it is not really working to bring in the people that we need.”

IN THE PIPELINE

All four panellists expressed optimism about upcoming and potential infrastructure projects in the pipeline, although concerns about geographic alignment of workers and staging of projects to match labour availability were raised.

“All across the country, we are seeing unprecedented levels of activity and deals,” said Casola. “We have closed on almost 60 infrastructure projects worth over $12 billion… along with private capital, we’re close to $35 billion across the country.”

He said that last year CIB closed 26 deals. “This year, we’re on pace to close over 30. And when I look at my pipeline next year, it just keeps growing.”

Infrastructure Ontario’s Clayton painted a robust picture of the segment in Ontario, where the provincial government has made a $185 billion commitment to infrastructure spending over the next decade.

“In terms of projects in construction, we have 29 projects that are in construction, with nine of them reaching substantial completion this year,” she stated, adding that they are among the 61 projects on the organization’s books. “On top of all of that, we have 19 projects that are in the planning stage,” she added. “This government is definitely all-in on infrastructure.”

Van Buren echoed the optimism, adding that government focus on infrastructure extends to other provinces as well. “Premier Kinew, for example, is also quite committed to investing in infrastructure for the Province of Manitoba,” she explained.

There are some concerns about the potential for some softening in the pipeline in British Columbia, however, which Atchison illustrated. “The LNG Canada project, of course, the complementary Coastal GasLink project, our Site C project up in the northeast and Trans Mountain pipeline: Those are four major projects that have been ongoing in British Columbia for some time, but they are all past peak construction,” he said. “There’s been some concern… as those projects mature and near completion, we need to backfill with new projects in order to retain that workforce.”

ADDRESSING THE EXISTING

Aging infrastructure is also a going concern.

“Unfortunately, we’re not keeping up,” said Van Buren. “We have a significant infrastructure deficit. If you look at the Canadian infrastructure report card, 40 per cent of our roads and bridges are in fair to poor or very poor condition.”

“We need to work on these new infrastructure projects and the existing infrastructure projects in tandem. They’re not mutually exclusive,” added Atchison.

MORE POSITIVE THAN NOT

When asked about their view of the next 12 to 24 months, the panel were unified with a significantly positive outlook, however. As Casola summed it up, he is “Very optimistic, despite some of the challenges.”

“We are very optimistic about the next 12 to 24 months,” echoed Atchison. “I think the federal government is listening, they’re paying attention. They’re not kicking the proverbial football down the field any further.”

To view the full webinar session, scan the QR Code, or visit On-Site’s YouTube channel.