Total is up $10.3 billion from last quarter
Derrick Penner
Sun
The value of large-scale construction plans hit a dizzying $102-billion on British Columbia’s latest major projects inventory, a $10.3-billion increase from the last quarterly tally of big building projects, Economic Development Minister Colin Hansen said Monday.
Hansen’s ministry uses the major projects inventory to track projects that exceed $20 million in the Lower Mainland and $15 million elsewhere in the province.
Hansen said the amount of construction activity planned for the next decade or so is double what it was just three years ago.
Projects added to the list between April and June of this year include:
– Pembina Pipeline Corp.’s proposed $1-billion condensate pipeline between Kitimat and Summit Lake north of Prince George.
– Parklane Homes’ proposed $400-million, 378-unit residential development in North Langley.
– Ridley Brothers Development Corp.’s $350-million, 660-unit residential development in Esquimalt.
However, with construction costs rising in the order of 10 per cent per year and the industry talking about labour shortages, the report raises questions about whether the construction sector is beginning to overheat within B.C.’s already hot economy.
“I think it’s fair to say that every construction project in the province is facing rising costs that I don’t think people would have anticipated four or five years ago,” he said to reporters.
Hansen said that builders try to anticipate inflation, and the current situation “is certainly something that is manageable today.”
He added that the public sector, just as the private sector does, will have to re-examine the scope of projects to find ways of bringing them in on budget.
For example, the Vancouver Organizing Committee for the 2010 Olympics, has had to re-consider whether it can trim costs and still deliver venue projects on budget, Hansen said.
Vanoc earlier this year asked the provincial and federal governments for an additional $110 million to cover construction cost inflation.
“In some cases, obviously, those budgets have had to increase, so I think that’s the dynamic we’re facing,” Hansen said.
Hansen added that the province is trying to alleviate other factors that are creating the construction crunch, such as increasing the number of apprentices in training programs. As of July, the province has some 28,700 apprentices in training compared with just 15,000 in April of 2004.
Philip Hochstein, president of the Independent Contractors and Business Association of B.C., said more apprentices will help B.C. “train our way out of this program.”
In the meantime, Hochstein said B.C. still needs an infusion of fully trained tradespeople to help mentor and train apprentices within the system now.
Those workers, he added will likely come from overseas and the federal government has to help by streamlining the immigration process for construction workers.
“Moving the federal government is almost like pushing water uphill,” Hochstein said. “But they’re inching forward.”
Hochstein said that so far, B.C.’s construction sector is managing, though there is no question that it is close to capacity.
He noted that several very large projects will reach completion in 2009, which will help ease the crunch in subsequent years, and the province is doing a good job of gradually phasing in public-sector projects, such as the Gateway transportation project.
Keith Sashaw, president of the Vancouver Regional Construction Association, said B.C.’s recruiting drives have attracted interest in countries such as Germany, which currently has a 12-per-cent unemployment rate in the construction sector.
Sashaw added that the major projects inventory itself is a good recruiting tool.
“With this volume of work, it also sends a strong message to workers that we’re in for a good long run of construction [activity].”
© The Vancouver Sun 2006