Construction Economist - Summer 2012

CONSTRUCTION ECONOMIST FALL 2012

PM 40065075

The Journal of the Canadian Institute of Quantity Surveyors Le Journal de l’Institut canadien des économistes en construction

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The mission of CIQS is to promote and advance professional quantity surveying and construction estimating; to establish and maintain national standards; to recruit, educate and support our members.

Canadian Institute of Quantity Surveyors 90 Nolan Court, Unit 19, Markham, ON L3R 4L9 t. 905/477.0008 f. 905/477.6774 toll free. +1 866/345.1168 e. info@ciqs.org www.ciqs.org

Executive Director Lois Metcalfe. ........................... . . . . . . execdir@ciqs.org Editor Joshua Mutize, PQS.................... . . conecon@ciqs.org Translation André Bernard, ECA Send Change of Address to: Canadian Institute of Quantity Surveyors 90 Nolan Court, Unit 19, Markham, Ontario L3R 4L9

The Journal of the Canadian Institute of Quantity Surveyors Le Journal de l’Institut canadien des économistes en construction

Features The evolution of construction cost estimating and project management technology . . . . . . . .

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Challenging yourself without changing jobs. . . . . . . . . . . . . 16 Two additional fully accredited programs for CIQS. . . . . . 19 2012 AGM presentations. . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Construction cost trends . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

CIQS Council President: Mark Russell, PQS(F) 1st Vice President & CIQS - Maritimes Rep: Mark Gardin, PQS Secretary/Treasurer & CIQS – British Columbia Rep: Roy Howes, PQS CIQS - Ontario Rep: Chris Court, PQS

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CIQS - Prairies and NWT Rep: Dave Burns, PQS CIQS - Québec Rep: Jean Paradis, ECA Past President & CIQS - Newfoundland and Labrador Rep: Roy Lewis, PQS(F) Education Administrator: David Lai, PQS(F)

Statements of fact and opinion expressed are those of the authors and CIQS assumes no responsibility for the content, nor do they represent official policy of CIQS. Published four times a year on behalf of the Canadian Institute of Quantity Surveyors by

Third Floor - 2020 Portage Avenue Winnipeg, Manitoba R3J 0K4 Tel: 866-985-9780 Fax: 866-985-9799 info@kelman.ca www.kelman.ca Managing Editor. ........................ Chris Kelman Art Design/Production. ............ Tracy Toutant Advertising Coordinator. ...... Stefanie Ingram Marketing Manager. .................. . . . Kris Fillion kfillion@kelman.ca 866-985-9798 Publication Mails Agreement #40065075 Send undeliverable addresses to: kelly@kelman.ca

On cover – 1st photo: L to R - Michael Bernier, CIQS – Prairies and NWT Vice President, Mark Gardin, CIQS Vice President, Nancy Wheatley, RRC Dean of School of Construction & Engineering Technology, Dave Burns, CIQS – Prairies and NWT President, Jerry Johnstone, RRC Chair Civil Engineering Technology, David Lai, CIQS Education Administrator and Roger Ward, CIQS – Prairies and NWT Director; 2nd photo: L to R – Mark Russell, CIQS President, Gord Nixon, SAIT’s Vice President, Academic,, David Lai, CIQS Education Administrator, Dave Burns, CIQS – Prairies and NWT President, Dr. Faisal Arian, Academic Chair, Bachelor of Science Construction Project Management at SAIT and Scott MacPherson, Dean, School of Construction at SAIT.

Departments

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Executive Director’s message. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Editor’s message . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Education updates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 CPD Corner/Congratulations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Welcome new members. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Industry news. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 President’s message. .

OUR CONCERN FOR THE ENVIRONMENT IS MORE THAN JUST TALK This magazine is printed on Forest Stewardship Council® (FSC®) certified paper with vegetable oil-based inks. Please do your part for the environment by reusing and recycling.

President’s Message

Our Council has wasted no time

C

ouncil started off the year with a list of goals to accomplish and they have wasted no time in getting down to work.

The September Council meeting has in recent years turned into the ‘Roadshow’ meeting for Council, whereby we visit an Affiliate for our Council meeting, as opposed to meeting at the CIQS Head Office. For the second year in a row we found ourselves in the West for yet another accreditation ceremony. This year it was CIQS Prairies and Northwest Territories’ turn to host CIQS Council, predominantly to partake in the celebrations surrounding the accreditation of the Construction Project Management degree course at the Southern Alberta Institute of Technology (SAIT).

The accreditation of any course takes an incredible amount of time, from the initial contact through to fostering relationships to course comparisons to analytical matrix and final evaluations. This work in the first instance is carried out by the volunteers at the Affiliate level, prior to approval by the CIQS Education Administrator and subsequent presentation to Council for final review and approval. The documentation provided is extensive and credit is due to the CIQS Prairies and Northwest Territories Board and volunteers who now have two accreditations in place (the other being Red River College in Winnipeg) and are working hard on their third – all within the space of a year.

The ceremony at SAIT was attended by 80 people consisting of a mix of students, faculty, Affiliate Board members and CIQS Council. SAIT also took the opportunity to proudly showcase their newly completed $400M Trades and Technology Complex, which spans 753,000 square feet over three buildings.

Mark Russell, PQS(F)

Volunteers are the lifeblood of the Institute and their time, efforts and input have helped the Institute flourish and grow.

Council then spent time on Friday afternoon with Red Door Media, the firm commissioned to update the website and new content management system. The evaluation process that last year’s Council undertook was very detailed and all-encompassing. The status report and overview provided by Red Door Media was professional and impressive and they are well on their way to having the new system ready for early 2013. Users of the old CIQS website and Members Only area will notice a huge change in the look, functionality and accessibility of the new website – all tied back to the new CIQS Brand Standards.

CIQS Prairies and Northwest Territories hosted a meet and greet with the local Calgary members and Council late Friday afternoon. These events are invaluable to all parties, as the members get the opportunity to engage with Council and, in turn, Council gets face time and a chance to meet more of the membership and Affiliate Board volunteers. This informal forum provides a good opportunity for dialogue on a variety of topics.

Before I move on, Council passes on our thanks to CIQS Prairies and Northwest Territories for hosting an enjoyable weekend which was also tremendously productive. The inimitable and effervescent CIQS Prairies and Northwest Territories President, Dave Burns PQS, was our main host and the enthusiasm that he has for his City, Affiliate and Profession is both palpable and infectious.

My last message touched on the need to maintain our International status. I had

4 | CONSTRUCTION ECONOMIST | www.ciqs.org | Fall 2012

the pleasure of meeting Mr. Pascal Asselin, President of Le Comité Européen des Economistes de la Construction (The European Council of Construction Economists - CEEC), during his recent vacation in Vancouver. We had a lengthy discussion on the attributes, strengths, issues and challenges of our respective organizations and found that we have more in common than we could have imagined. An invitation was extended to attend the next CEEC meeting in November, which was discussed and accepted by Council, so I will be representing CIQS at the meeting.

We are busy planning our attendance at the PAQS Congress in Xi’an, China next May. Readers of the last Construction Economist will note from Andrew Collins’ report that the CIQS representation, in terms of number of attendees, is contrary to our standing within the organization and our level of participation within various committees. In order to stay at the forefront of these organizations, we need to expand our registration numbers and Council is pursuing avenues that could allow this to happen.

As important as CIQS participation is at International events, we cannot lose sight of participation within our own country. Volunteers are the lifeblood of the Institute and their time, efforts and input have helped the Institute flourish and grow. For recent evidence of this you only need to look at what has been achieved with the increase in accreditations across the entire country.

If you are interested in getting involved, then I would encourage you to do so. Who knows, you may even like it.

Message du Président

Notre Conseil n’a pas perdu de temps

L

e Conseil a débuté l’année avec une liste de buts à atteindre et n’a pas perdu de temps à se mettre à la tâche.

La réunion du Conseil de septembre des dernières années tournait en «Roadshow» où nous visitions une Association affiliée pour notre réunion du Conseil, plutôt que de tenir la réunion au siège de l’ICÉC. Pour la deuxième année consécutive, nous nous sommes retrouvés dans l’ouest pour une nouvelle cérémonie d’accréditation. C’était cette année le tour du «CIQS Prairies and Northwest Territories» d’accueillir le Conseil de l’ICÉC, principalement pour partager les célébrations entourant l’accréditation du programme et diplôme en Gestion de la construction au «Southern Alberta Institute of Technology (SAIT)».

Peu importe le cours, son accréditation requiert un temps incroyable, du premier contact, à travers les démarches visant à développer les relations, aux comparaisons de cours, aux matrices analytiques jusqu’aux évaluations finales. Ce travail est d’abord entrepris par des bénévoles au niveau de l’Affiliée, avant d’être ensuite approuvé par l’Administrateur à l’éducation de l’ICÉC et ensuite présenté au Conseil pour revue et approbation finale. La documentation fournie est extensive et le crédit en revient au conseil du «CIQS Prairies and Northwest Territories» et ses bénévoles qui ont maintenant deux accréditations en place (la deuxième étant celle du «Red River College» à Winnipeg) et qui travaillent maintenant à leur troisième tout cela en l’espace d’un an.

La cérémonie au SAIT accueillait 80 personnes réparties en étudiants, enseignants, membres du conseil de l’Affiliée et membres du conseil de l’ICÉC. Le SAIT profita de l’occasion pour montrer avec fierté les nouvelles installations d’une valeur

de $400M du «Trades and Technology Complex», qui s’étend sur 753,000 pieds carrés répartis en trois bâtiments.

Le Conseil a passé du temps, le vendredi après midi, avec «Red Door Media», la firme mandatée pour rafraîchir notre site internet et système de gestion de contenu.

Le processus d’évaluation que le Conseil de l’an dernier avait entrepris était très détaillé et compréhensif. Le rapport d’étape et le sommaire présenté par «Red Door Media» était impressionnant et professionnel et ils sont en train de mettre en place un nouveau système qui sera opérationnel en début de 2013. Les utilisateurs de l’ancien site internet du CIQS/ICÉC et de la section Membres Seulement, verront un changement important dans l’apparence, la fonctionnalité et l’accessibilité du nouveau site internet - tout étant lié aux nouveaux standards de marque du CIQS/ICÉC. Le CIQS Prairies and Northwest Territories tint un «meet and greet» avec les membres locaux de Calgary et du Conseil vendredi en fin d’après-midi. Ces événements sont d’une grande valeur pour toutes les parties, puisque les membres y ont l’opportunité de rencontre avec le Conseil et en contrepartie le Conseil obtient du face à face et la chance de rencontrer davantage de membres et bénévoles du conseil de l’Affiliée. Ce forum informel procure une bonne occasion de dialogues sur une variété de sujets.

Et avant de passer à autre chose, je transmets les remerciements du Conseil au «CIQS Prairies and Northwest Territories» pour nous avoir procuré une fin de semaine aussi agréable et extraordinairement productive. L’inimitable et effervescent président du «CIQS Prairies and Northwest Territories», Dave Burns PQS, fut notre principal hôte et l’enthousiasme qu’il démontre pour sa Ville, son Associa-

tion Affiliée et sa Profession est à la fois palpable et contagieuse.

Mon précédent message traitait de la nécessité de maintenir notre statut International.

J’ai eu le plaisir de rencontrer Monsieur Pascal Asselin, président du Comité Européen des Économistes de la Construction (CEEC), durant ses récentes vacances à Vancouver.

Nous avons eu une longue discussion sur les attributs, les forces, les problèmes et défis de nos organisations respectives et avons trouvé que nous avons plus en commun que ce que nous pouvions imaginer. Une invitation nous été faite d’assister à la prochaine rencontre du CEEC en novembre, laquelle fut discutée et acceptée par le Conseil, aussi je vais représenter le CIQS/ICÉC à cette rencontre.

Nous nous activons à préparer notre participation au congrès du «PAQS» à Xi’an, en Chine en mai prochain. Les lecteurs du dernier «Construction Economist» noteront du rapport d’Andrew Collins que le CIQS, en termes du nombre de participants, y était sous représenté, ce qui est contraire à nos obligations au sein de l’organisation y compris le niveau de participation au sein des divers comités. Afin de rester aux premiers rangs de ces organisations, nous devons augmenter le nombre de nos membres participants et le Conseil étudie des manières de rendre cela possible.

Aussi importante que puisse-t-être la participation du CIQS à des événements internationaux, nous ne devons pas perdre de vue la participation à l’intérieur de notre propre pays. Les bénévoles sont le sang de l’Institut et leur temps, leurs efforts et apports ont contribué au développement et la croissance de l’Institut. À l’évidence, nous n’avons qu’à regarder ce qui a été accompli en termes du nombre d’accréditations à travers tout le pays.

Si vous êtes intéressé à vous impliquer, alors je vous encourage à le faire. Qui sait, vous pourriez même aimer ça...

Fall 2012 | www.ciqs.org | CONSTRUCTION ECONOMIST | 5

Executive Director’s Message

Canada Not-for-Profit Corporations Act

A

new Canada Not-for-Profit Corporations Act (CNCA) came into effect on October 17, 2011.

This means that corporations governed by the Canada Corporations Act will have three years (until October 17, 2014) to continue under the new Act. The new Act will not automatically apply. Every national not-for-profit association needs to take the necessary steps to transition to the new Act. This has been on CIQS Council’s radar for the last year.

We are currently reviewing our letters patent, supplementary letters patent and By-laws to determine what needs to

Lois Metcalfe

be changed to comply with CNCA, what is outdated, inapplicable, etc. and what needs to be changed. We are currently drafting articles for the Certificate of Continuance which will replace our Letters Patent. The next step will be to revise our By-laws. CIQS have retained legal counsel to ensure compliance and it is hoped that we will be in a position to present these documents for approval at the 2013 Annual General Meeting in Montreal.

If you would like more information on the new Canada Not-for Profit Corporations Act please visit www.ic.gc.ca or feel free to contact me.

The new Act will not automatically apply. Every national not-for-profit association needs to take the necessary steps to transition to the new Act. p-543_ai.pdf

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Editor’s Message

Cost trends, building permits and sustainability

I

n July, the total value of permits declined in six provinces, led

by Ontario and followed by Saskatchewan and Alberta. This decrease in July was 2.3% from June.

After two consecutive monthly gains, Ontario recorded the largest decrease, mainly as a result of lower construction intentions for multi-family dwellings, institutional and industrial buildings. In Canada, Toronto and Regina are the two cities that posted the largest permit decrease. Regina construction market is mostly dominated by multi-family dwellings and institutional buildings, the sudden cold feet on intended construction resulted in Regina’s decrease in permit value. Toronto, on the other hand, was impacted by sharp decrease in residential and educational institutional.

The decline in Saskatchewan, which was the second in a row, originated from residential and non-residential construction. The total value of permits in Saskatchewan was 10.3% higher than the monthly average in 2011.

The Alberta decrease was contributed to lower construction intentions in educational institutional and residential. In contrast, Alberta posted large increases in permit values for non-residential structures, such as manufacturing plants, utilities and transportation-related buildings.

Calgary Airport is a good example of a large scale transportation-related buildings investment. Alberta’s gain rose 6.4% to $1.7B. Although multifamily dwellings attributed to the decrease, the percentage contribution was lower than that experienced in Ontario and Saskatchewan.

For more details on building permits, see the related article in this issue.

Cost escalation 2012 Construction escalations in Canada are currently trending at 2.1%. Moderate escalation is expected throughout 2012 and is expected to sharply rise beginning in spring 2013. Material prices will continue to dominate cost escalations in most parts of Canada; however, labour will continue to dominate Alberta and Ontario. Due to China’s large scale investments in ultra-high voltage power transmission lines, Canada, like the rest of the Americas, will continue to see increases in the prices of copper and aluminum.

Other material price escalations are primarily due to added pressure on supplies due to emerging economies in countries such as India, Uruguay and Brazil. For more details on construction cost indices, see article in this issue on cost escalations.

Labour force Employment rose by 34,000 in August due to an increase in part-time work.

Overly, employment increased by 1.0% or 177,000 over last year. Part-time work represents 70% of this increase.

Employment opportunities were more favourable among people aged 55 and over, while the student employment rate actually dropped 2% compared to the same month last year.

Based on a Statistics Canada labour survey employment in Quebec increased by 33,000 jobs due to a major increase in part-time work.

This slightly improved the rate from the previous year. Employment rate for August was unchanged at 7.6%

8 | CONSTRUCTION ECONOMIST | www.ciqs.org | Fall 2012

Joshua Mutize, PQS

compared to previous month.

In August, employment rose by 15,000 in British Columbia, pushing the unemployment rate down 0.3 percentage points to 6.7%. Compared with 12 months earlier, employment increased 2.3% above the national growth rate of 1.0%.

In Saskatchewan, employment increased by 4,600, bringing gains over the past 12 months to 3.6%, the highest growth rate of all provinces. The increase in employment in August pushed the unemployment rate down 0.6 percentage points to 4.4%, tied with Alberta for the lowest rate among all provinces.

Employment increased by 3,400 in Manitoba in August and the unemployment rate fell by 0.3 percentage points to 5.4%. Compared with 12 months earlier, employment was up 0.9%.

Employment fell by 25,000 in Ontario leaving employment similar to its level in August 2011. The unemployment rate in the province was 8.0% in August 2012.

(Source – Statistics Canada) So, what are my construction opinions in the next 12 months?

Despite the drop in construction intentions in most of the provinces, my forecast is that, overly, on a year to year basis building permits value still points to a steady 2012 and probably starts a noticeable climb beginning spring 2013.

Employment will continue holding strong in Alberta, British Colombia and Quebec.

Despite spikes in materials as a result of strong infrastructure developments in China, India and Brazil, slow construction in Europe will provide a windfall to North America; holding material prices from spiking in double digits. Now, I would like to pen down and lead you into a discussion on future of sustainable

Editor’s Message

The connection between climate disruption and the built environment has emerged strongly in the public consciousness over the past decade. construction. At World Economic Forum 2012, sustainability was one of the topics that consumed world leaders’ discussions. Please read this not just for interest, but think about what we as an industry can do to take a strong leadership in our communities?

Future of sustainable construction (Source: World Economic Forum 2012) The connection between climate disruption and the built environment has emerged strongly in the public consciousness over the past decade.

Expectations are now great for an industry that historically has been among the slowest to change.

In order to respond effectively to these changes, all stakeholders benefit from envisioning a positive future in which environmental needs are reconciled with social and economic dimensions. This is the definition of sustainable development.

The environmental movement has traditionally emphasized limits, encouraging individuals and societies to be ‘less bad’ and reduce impact.

As an end in itself, this call to personal environmental and societal responsibility has not catalyzed change to the extent needed to achieve vaunted goals such as carbon neutrality. The emphasis is on current behavior and not on the goal of a safe and healthy world.

Nor are the sustainability perspectives of economic powers and developing nations easily reconciled when per capita consumptions are so dramatically different for each. However, if one can envision a world where energy generation is clean and renewable, where safe materials are designed with systems of reverse logistics and where

safe drinking water is ensured for all, the framework is clear and progress can be more rapid.

Sustainable construction is defined broadly as engaging all dimensions of human environment; building, infrastructure, materials, energy, landscapes and systems. The concept is also based on a clear understanding of the societal dimensions that support the building industry worldwide. This elevation of the social dimension of sustainability has emerged as a powerful trend in current sustainable or green initiatives.

Dimensions It has become clear that the structure of communities - cities, towns and villages – has a much more significant effect than the ‘greening’ of buildings alone.

Progress towards this vision will be far more effective when stakeholders focus on the accrual of positive effects rather than on the reduction of negative ones. Simply being ‘less bad’ is not good enough. What is needed is an ‘ecoeffective’ approach that enables us to envision solutions, create synergies among

disciplines and move beyond boundaries that are seen as impassable today.

The following topics will be explored in order to identify opportunities for stakeholders to catalyze sustainable construction, nurture collaboration between different sectors of the public and private realms and consider educational strategies: • Energy (sources, distribution, demand/ use) • Carbon (mitigation, metrics) • Materials (sources, use at various scales in construction, development of alternatives) • Logistics (structures of supply, assembly and distribution that support the culture of construction) • Water (sources, distribution, quality/ health, demand/use) • Society (the equitable reconciliation of environmental and economic dimensions that shape communities) • Metrics (how to define and quantify progress in all the above across scale and cultures) Look to the next issue for more sustainability articles as well as an article on International Construction Outlooks.

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Fall 2012 | www.ciqs.org | CONSTRUCTION ECONOMIST | 9

Education Updates

Congratulations on development of SAIT program

T

he first CIQS Council meeting for 2012/2013 took place in Calgary in September 2012. This meeting was planned to coincide with the accreditation ceremony of the Bachelor of Science degree program in Construction Project Management offered by the SAIT Polytechnic. Congratulations to those members of the Institute who were involved in the development of this program. Details of this event are published under separate articles in this edition of the Construction Economist. It is interesting to note that prior to 2011, all of the fully accredited programs were located in Ontario. Since March 2011, the CIQS has accredited three B.Sc. degree programs outside of Ontario. This is a great achievement for the Institute and it means that we now have fully accredited programs covering a wider geographical area of the country.

Other educational items discussed at the CIQS Council meeting were: • It was brought to Council`s attention that the current TPE diary process/requirements may need improvements since they create challenges during the assessment process.

Council decided that the mandatory areas of experience for CEC need to be identified separately from those of PQS. • The requirements for the Direct Finals Examination for CEC and PQS were discussed. Council decided that as of January 1, 2013, the following changes will become effective: • Subject C304 – Contract Administration will be added to the Direct Final Examinations for CEC; • Now that a new text has been identified, the addition of

David Lai, PQS (F)

Congratulations to those members of the Institute who were involved in the development of this program. subject C309 – Development Economics to the Direct Final Examinations for PQS will become effective in January 1, 2013; • The pass mark for the Direct Final Examinations will change to 60% instead of 70%; • There will be no limit on the number of times a candidate can attempt the examinations.

• Council decided that the rule that candidates attempting the CEC or PQS designation via the Direct Final Examinations must take the CIQS examinations will remain in effect.

• A new text book for subject C309 – Development Economics has been identified and will be published by CIQS. This book is written by one of our retired members, Mr. James Cuthbert, PQS (F).

• I put forward the suggestion that a National Education and Membership Committee be created. Council was in full agreement since there would be huge benefits arising from this committee. Each Affiliate will have representation on this committee and suggestions arising from this committee will be reflective of the wide spectrum of our membership.

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10 | CONSTRUCTION ECONOMIST | www.ciqs.org | Fall 2012

CPD Corner

Mark Gardin, PQS

To be or not to be...continuous

W

illiam Shakespeare was a bit of a genius when it came to profound quotes. Writing poetry and plays was to him what numbers are to a quantity surveyor. His works were filled with now famous quotes like the one I kind of borrowed for the title of my article from his masterpiece Hamlet. And in Henry IV, he gave us: “...When we mean to build, We first survey the plot, then draw the model; And when we see the figure of the house, Then must we rate the cost of the erection; Which if we find outweighs ability, What do we then but draw anew the model In fewer offices, or at last desist To build at all? Much more, in this great work, Which is almost to pluck a kingdom down And set another up, should we survey The plot of situation and the model, Consent upon a sure foundation, Question surveyors, know our own estate...”

This is a great interpretation of what a quantity surveyor is asked to do on a daily basis. We should be proud to be in a profession having such recognition and history that dates back over 400 years.

But enough with the history lesson; let us get to the good stuff: Continuous Professional Development. And my focus in this article is the word ‘Continuous.’

By now, we understand in our professional life, learning is not over when we leave school and begin working – it is life-long, and it is where the ‘continuous’ derives from in CPD. Why life-long learning? In our profession, is there not continuous change? Everything in the construction and infrastructure industry is constantly and rapidly evolving. Stop learning, and we will be left behind.

For the CIQS CPD program, there is no question, it absolutely must be administered annually and remain continuous. Otherwise, if we compared to other professional organizations, it is merely smoke and mirrors. This is the single greatest reason why we do not have ‘carrying over’ points for multiple years. I believe this practice will dilute the fundamental goals and principles of the program.

And our CPD program can focus the word ‘continuous’ – but in the context of change. At the last Council meeting held in September, Council voted in favour to remove the maximums in all the categories except Professional Activity.

This new change came about from discussions on the current CPD points system and whether a review is warranted. One example relates to members who sit on chapter, affiliate and national boards (or all three at the same time) who dedicate countless hours of personal time but would only receive the maximum 20 points under the Participation category.

This initial change to eliminate the maximums gives actively participating members more access to additional CPD points. And hopefully it may encourage other members to participate on boards.

The next step is to complete an overall review of the points awarded in each category and determine if further changes are warranted. Feedback from the membership is always welcomed and all suggestions will be reviewed.

So it appears CIQS will opt for the ‘to be’ part of Shakespeare’s question and be not only continuous in learning but also in change and evolution.

And why not leave you with one more quote from Shakespeare that I found very relevant and amusing to me as a quantity surveyor.

“I am not bound to please with my answers.” Sometimes quantity surveyors are the bearers of bad news when we are in a situation where the design (however wonderful it may be) exceeds the budget.

Congratulations to the following members who have qualified as a PQS or CEC CIQS – Ontario Amal Abdelsayed, CEC Solomon Agbede, CEC Mukhtar Almuflahi, CEC Innocent Ariajegbe, PQS Hafeez Azeez, CEC Nicholas Bowe, PQS

Robert M. Ennis, PQS Maha Farahat, PQS Mark Smith, CEC Feyza Tatar, CEC CIQS Members at Large Abiola Adebisi, CEC Olagundoye Akinlabi, PQS

CIQS – Prairies and NWT Vipulchandra Bakre, CEC Raymond Bott, PQS Joseph C. Coyne, PQS Alistair Dearie, PQS Arlo William Duffy, CEC Jessel Pineda Gonzales, CEC

(including reinstatements):

Faizur Khan, CEC Wayne Procter, PQS Dennis G. Sutherland, CEC

Fall 2012 | www.ciqs.org | CONSTRUCTION ECONOMIST | 11

The evolution of construction cost estimating and project management technology Introduction Accurate, timely and transparent cost estimating is critical to the success of any renovation, repair, sustainability or new construction project. An equally important consideration is the construction delivery method.

Most construction cost estimators continue to rely primarily upon hardcopy documents and electronic spreadsheets such as Microsoft ExcelTM. Relative to construction delivery methods, most Owners, Contractora and AE’s engage in a version of the outdated and adversarial design-bid-build process. (DBB).

Growing numbers of cost estimators, however, have the need to work with multiple projects and multiple estimates simultaneously, securely share information on active projects and better leverage localized cost information reuse historical data.

At the same time, Owners, Contractors and AEs are recognizing the need to work collaboratively as early in the construction process as possible.

As a result many are moving to advanced cost estimating and management systems and various forms of integrated project delivery (IPD) methods. Furthermore, these ‘innovators’ are discovering that significantly higher productivity (50%+) and cost savings (5%-20%+) may be attainable. The collaborative aspects of these advanced cost estimating and project management software systems are also better aligned with the process of life-cycle management supported by digtial technology, otherwise known as Building Information Modelling (BIM).

Spreadsheets Construction estimating involves the estimating of material, labor, equipment, overhead and contingencies. Spreadsheets, most commonly Mircrosoft Excel, are used by more estimators for this purpose than any other tool. Spreadsheets have significantly improved cost-estimation capabilities and accuracy since the 1980s.

Relatively easy to master, spreadsheets

provide a means to create and report a construction cost estimate. Cost construction models can also be built within speadsheets. Productivity improvements result from the ability of Excel to easily handle a lot of the more mundane calculations required.

One problem with spreadsheets, however, is their inherent vulnerability to errors due to data entry, a problem that only increases along with the complexity of an estimate. Also, as the formulae within the spreadsheets become more numerous and complex, errors became exponentially more frequent and costly. Spreadsheets also do not easily account for the use of dynamic vs. static cost information or suport the use of historical information. Both have proven to be important variables for many construction projects. Lastly, since spreadsheets are bascially single user applications, collaboration and reporting relative to roll-ups for example, are both problematic. Audit trails on a ‘cell’ level are also not possible, thus transparency and accuracy are negatively impacted.

Multiple people working on the same spreadsheet, or multiple spreadsheets, while on the same project is inefficient and risk prone. Thus estimates and associate information and reports created using spreadsheets tend to be created and stored in different locations, making information difficult to accurately retrieve.

As a result, changes extremely costly to execute, while old data errors are perpetuated, copied over and over again.

As it became apparent that more localized and historical data would be critical to improving the accuracy of construction cost estimates and cost models, organizations instituted a formal process for collecting and storing this information. Individual Owners, Contractors and AEs began to collect this information internally in databases. Third party cost organizations, such as RSMeans Company LLC, North America’s leading source for commercial construction cost data, also began to col-

12 | CONSTRUCTION ECONOMIST | www.ciqs.org | Fall 2012

By Peter Cholakis

lect, store and provide cost data in electronic format, including materials, equipment, labor line items, productivity factors, as well as assembly and square foot cost information and localized cost indices such as the City Cost Index (CCI).

Based upon the size and type of construction project, estimators soon found that they could improve their productivity and accuracy even further by sharing cost data and leveraging standardized reference cost information for specfic items/areas. Standardized cost data architectures also became important, such as the Construction Specifications Institute’s (CSI) Masterformat, Uniformat and even newer OMNICLASS. Collaborative, Integrated Project Delivery methods and Job Order Contracting As noted spreadsheets have proven value for single, ‘static,’ estimates of a certain project size, as well as a media to gather and transfer data sets. Similarly, the integration of electronic cost books with spreadsheets are equally valuable for individuals performing a small number of relatively straight forward construction, repair, or renovation estimates and projects, say three to five per year.

However, with greater productivity required, the need for collaboration, transparency and better information use and reuse became apparent. Thus, two signifincant developments came to be, (1) newer, collaborative construction delivery methods such as Integrated Project Delivery (IPD) and Job Order Contracting (JOC), and (2) construction cost estimating and project delivery software technology.

Job Order Contracting is a form of Integrated Project Delivery developed over 20 years ago and has a long, successful track record within certain institutional sectors in the United States, and is now moving into Canada. Collaborative cost estimating and project management solutions have been develop to support these and other constuction delivery methods. The result is a system of business processes and supporting technology to enables Owners, Contactors and AEs to modify

and constantly improve upon construction project delivery process to meet their individual and changing requirements, while all communicating with the same vocabulary, and sets of information.

For focus, let us talk a little more about Job Order Contracting as a process and how it is supported in cost estimating and project management software technology.

JOC provides a much needed solution for most public institutions attempting to deal with large building portfolios, including but not limited to, DOD and non-DOD Federal Government, State and Local Governments, K-12 and Higher Education, Healthcare and other public services.

Job Order Contracting is a competitively negotiated, fixed unit price, indefinite quantity contract construction project procurement method. Public agencies negotiate and enter into a competitively bid contract with a JOC contractor for an amount it could potentially spend over a certain time period.

Procurement processes are established when putting a JOC program in place.

Complete design and specifications may not be required; thus negotiations may be necessary to define processes required to accomplish a specific construction task.

A cost guide - a construction cost database of detailed priced tasks - includes a variety of facilities and physical infrastructure including construction, maintenance, repair and renovation work items. The priced tasks form the basis for defining and negotiating task orders and projects.

The duration and value of JOC’s vary from three to five years, with annual volumes from $1M to $100M. The following figure illustrated a typical JOC process:

Traditional Construction Procurement Process: 9 to 15 Months

JOC Construction Procurement Process: 3 to 5 Months

A properly designed and implemented Job Order Contractng can save time and money, as well as improve overall quality by encouraging collaborative communication, expediting procurement processes, and enabling higher visibility into costs.

A professionally developed and managed JOC program saves from 8% to 15% or more in time, design and procurement costs. The JOC process also allows public entities to begin construction projects in weeks rather than months. Project work orders can be assigned without bidding each project out. A higher percentage of construction funds are used for work projects vs. procurement costs. JOC requires less time to start a project than conventional methods.

Other JOC benefits can include: 1] Expedited facility management - the repair, renovation, maintenance, and renewal components of managing a facility portfolio represent a wide range and high frequency of construction projects. JOC expedites the facility management process by minimizing associated procurement costs and costly construction delays.

2] Green and sustainability projects - the need to address improved sustainability and high performance for Existing Buildings (EB) is well known. JOC can be readily applied to expedite the deployment of HVAC, exterior shell, lighting, building automation and similar construction projects needed to achieve high performance building targets or mandates per LEED EB and similar guidelines.

3] Support for Local Economies - JOC readily enables local minority and small subcontractors to perform construction work.

4] Performance Basis - on time and on budget performance can be more readily monitored and becomes the norm as contractors are motivated to meet and exceed owner expectations in order to receive additional task/delivery orders.

5] Higher Return on Investment (ROI) collaborative, predefined JOC processes and defined accountability better integrate all project participants and mitigate change orders and legal claims. A JOC contractor may assume full responsibility for errors, omissions, execution of the design, or the contractual relationship may be with an Architectural/Engineering firm.

Projects also can be started more quickly which can lead to dramatic cost savings. Lower administration and procurement costs enable owners to focus scarce resources on projects.

Design costs are also mitigated as the technical specifications are defined and included as part of the basic JOC contract, and a significant percentage of JOC projects can be scoped without full design documents. Economies of scale can also be achieved as grouping of multiple small or similar projects can spread out indirect costs, general conditions and overhead costs.

Cost estimating and project management software The evolution of technology that integrated business processes, specfically efficient project devlivery methods , was the next logical step. Thus cost estimating and project management software has evolved to support and manage multiple construction delivery methods, and there associated multiple

Fall 2012 | www.ciqs.org | CONSTRUCTION ECONOMIST | 13

projects and associated estimates. These newer systems, available over the past ten years, integrated contract, project, estimate and document management.

Tools include visual cost estimating, advanced search engines, and both custom and electronic standardized cost data.

These integreated software systems assure contract compliance by not simply having a cell in a spreadsheet with calculated totals, hidden formulas and lack of traceability. They also help to organize and standardize office, electronic files, emails, project documents and attachments. Sharing, updating, and reusing estimates and project information is enabled with internal and external partners.

Summary Over the past forty plus years, there have been many initiatives to improve cost estimating to facilitate the delivery

of construction projects on time and on budget. Owners, contractors and AEs now have multiple methods to select from based upon their needs.

Spreadsheets were a major improvement in the 1980s, followed by formal processes for collecting and harnessing historical information to more accurately project and control costs. Over the past decade, a powerful new capability has been added, collaborative cost estimating and project management software.

The evolution of transparent and collaborative cost estimating and project management software mitigates the unproductive aspects of creating estimates one at a time from scratch, and working ‘in a vacuum.’ Additional benefits include the reduction of data input and formulae errors, as well as costly ‘errors of omission,’ common with ‘ad hoc’ spreadsheet-centric approaches. The application of cloud computing to cost estimating and project

delivery and management software and the subsequent integration with Building Information Modelling will further enhance the ability to produce accurate cost estimates and control costs throughout a buildings life-cycle.

The author is the Chief Marketing Officer for 4Clicks Solutions (www.4clicks.com), a leading provider of cost estimating and project management software and solutions to the DOD Sector, and RSMeans Strategic Business Partner. Mr. Cholakis helped to define and established the concept of CPMS (Capital Planning and Management Solutions), and has domain knowledge and expertise in facilities lifecycle costs and total cost of ownership. You can contact him at pcholakis@4Clicks.com.

The 17th Pacific Association of Quantity Surveyors Congress Sofitel Xian on Renmin Square.

Xi’an China

18 - 21May 2013

Congress Theme Construction Information Cornerstone of the Valuation Management

Contract us www.paqs2013.cn

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Website:

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E-mail: organise@ceca.org.cn

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Tel:

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paper@ceca.org.cn

(0086-10) 5781 1845 Fax: (0086-10) 5781 1485

14 | CONSTRUCTION ECONOMIST | www.ciqs.org | Fall 2012

+ PAQS 2013

Congress Organizer: China Engineering Cost Association

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Fall 2012 | www.ciqs.org | CONSTRUCTION ECONOMIST | 15

Challenging

yourself without

changing jobs

By Patrick Cantin, PQS

Have you ever wanted to switch disciplines within the construction sector? Explore opportunities with friends or colleagues with ties to the mechanical, electrical, structural or civil side of the spectrum? Perhaps dabble in a field where you always wanted to explore yet were too busy working within your comfort zone.

Now take a moment to think about what events led you to the career path you are currently on. Are you challenged every day or is there something lingering within you screaming for more?

You need not change jobs to seek new adventures but rather, look at exploring the opportunities of expanding your interests on the same jobsite by opening your eyes to include other disciplines.

Take my experiences for example. When I graduated from Niagara College, my immediate focus and passion was within the civil construction side of things. Something about heavy equipment and being the first ones on the jobsite early every morning and the last ones to leave late at night were but some of the reasons why I chose this line of work. Be it a new building site where foundations needed to be dug, a new municipal infrastructure project where services needed to be surveyed and installed or the construction of a spur line in the dead of winter to a new remote mine in the middle of nowhere.

Somewhere early in my career, an opportunity presented itself to leave the crazy life of blistering cold winters and sizzling hot summers to the comforts of an office. The catch to this change was the change of disciplines. I decided to switch from my comfort zone of quantifying, pricing, ordering and managing from the civil field to the field of architecture.

College had prepared me with a baseline of knowledge in all disciplines however; I, like most of us, stuck to what I perceived to know best and feel the most comfortable with.

For me the switch was simple. Continue working outside in weather and in a job that was beginning to take its toll on my body or, switch to something that I knew I could do if I simply had the push and drive in the right direction.

The first day on the new job saw me asking myself the question: What am I doing here? Handed a specifications book for a new $10M school and advised to learn it well, my job was to assist the lead estimator. While he was busy being the Project Manager for the project, my job was simple. Find the errors and omissions within the prints and make sure we were one step ahead of any challenges that could negatively impact the schedule. I remember looking like what I thought was an idiot walking around the jobsite with a detail and specifications book in hand and comparing what was constructed versus what was designed on site. Asking the site supervisor question after question until he finally convinced the business owner to make me strap on a tool belt and spend the next two months on the jobsite. Eyes wide open and absorbing every opportunity, every waking hour, no two projects since that moment have ever been the same. Even similar future projects provided excitement as I would dwell (after hours of course) at examining the mechanical facet of the project; first with the drawings, then the specifications and shop drawings then the actual installation.

As a Project Manager for a General Contractor, I was always one to push the schedule knowing full well that time was money. What I failed to realize was that every trade on the job had a vested interest in the project. Getting to better understand how the trades completed their

16 | CONSTRUCTION ECONOMIST | www.ciqs.org | Fall 2012

scope of work helped me to better understand and respect the project from multiple levels and how each project required a team of professionals, not just one.

Today’s society is so pre-occupied with simply changing jobs every time we feel the need for change but in reality, opportunities exist to become an even greater asset to your company or organization by simply expanding your skills to disciplines that pose new challenges. The tools are right in front of you and exist at your fingertips.

The next time a new project appears in front of you, I challenge you all to take the opportunity and explore outside of your comfort zone. Take a look at the civil, mechanical, electrical or even structural drawings and specifications and make a conscious effort to better understand why the design team has chosen to implement a certain design, why a selective material type has been chosen or why a pre-determined piece of equipment has been specified. Continue to exercise this practice over several projects and trust me when I say this, such an exercise will truly make you a better professional and a well respected team member amongst your peers.

About the author – Patrick is the current Director of Building Installation for le Conseil scolaire public du Nord-Est de l’Ontario in North Bay. Past employments included several years with the Ministry of Natural Resources Northeast Regional Engineering Unit and prior to that, Project Manager and Quantity Surveyor for Cy Rheault Construction Ltd. of Timmins, Ontario.

L’AGA de l’ICÉC-National 2013 se tiendra du 13 au 15 juin 2012 à Montréal Lieu : À définir Programme préliminaire : Jeudi 13 juin 8h30 à 17h00

Réunion du Conseil (ICÉC national)

8h30 à 17h00

Conférences de 45 à 75 min en français, Dîner-causerie

18h00 à 19h30

Cocktail – Réception ICÉC pour tous les délégués

Vendredi 14 juin 8h30 à 11h45

2 conférences de 45 à 75 min en français

8h30 à 11h45

2 conférences de 45 à 75 min en anglais

12h00 à 15h00

Dîner-Conférence en anglais

15h00 à 16h30

Pause-réseautage

16h30 à 18h00

AGA de ICÉC-National

19h30 à 22h00

Souper du président

Samedi 15 juin 7h00 à 12h30

Tournoi de golf - Clive Evans

Des activités seront organisées pour les conjoints ou conjointes qui ne participeront pas aux conférences du vendredi ou au golf du samedi matin. Les précisions seront fournies ultérieurement.

Le programme des commandites sera disponible d’ici peu (mioctobre), votre encouragement est nécessaire pour le succès de l’événement. Merci d’y participer en grand nombre.

Le flamboyant Vieux-Montréal, la vie nocturne du secteur des rues Crescent et Ste-Catherine, une croisière sur le St-Laurent pour contempler Montréal de nuit.

Un rendez-vous à ne pas manquer!!

The 2013 CIQS AGM

will be held from June 13-15 in Montreal Venue: TBD Preliminary program: Thursday, June 13 8:30 a.m. to 5:00 p.m.

8:30 a.m. to 5:00 p.m.

6:00 p.m. to 7:30 p.m.

CIQS Council Meeting 45 to 75 min conferences in French, with luncheon Cocktail reception for all CIQS Delegates, Partners & Friends

Friday, June 14 8:30 a.m. to 11:45 a.m.

8:30 a.m. to 11:45 a.m.

12:00 p.m. to 3:00 p.m.

3:00 p.m. to 4:30 p.m.

4:30 p.m. to 6:00 p.m.

7:30 p.m. to 10:00 p.m.

Two - 45-75 minutes conferences in French Two - 45-75 minutes conferences in English Dinner Lecture in English Networking Break AGM ICEC-National President’s Dinner

Saturday, June 15 7:00 a.m. to 12:30 p.m.

Clive Evans Golf Tournament

A place to be, an event to attend!

Activities will be organized for people who do not participate in the conference on Friday or the golf on Saturday. Details will be provided later.

The Sponsorship Program will be available soon (mid-October). Your participation is encouraged for the success of the event. Thank you!

Tremendous Old Montreal, the nightlife in the Crescent Street area, a cruise on the St. Lawrence River to enjoy Montreal by night.

New Members

The CIQS would like to welcome the following new members (Including Reinstatements): A

E

Olagundoye Akinlabi, Yangtze Construction Company Limited, Victoria, Seychelles Alfred Akuamoah, Winnipeg, MB Michael Armero, The Home Depot Richmond, Richmond, BC

B

Robert Ennis, Remcor Project Services Inc., Newmarket, ON Armend Eshrefi, Ferizaj, Yugoslavia

F

Arulprasath Bakiyarajah, Jaffna, Sri Lanka Nicholas Bowe, Turner & Townsend CM2R, Toronto, ON Erin Brownlow, Bird Construction, Bedford, NS Marcelina Brual, Leighton Contracting (Qatar) W.L.L, Doha, Qatar

C

Angelo Castelli, On Center Software, Inc., The Woodlands, TX, USA Mario Cordina, Bold Engineering Inc., Toronto, ON

Maha Farahat, Ottawa, ON Lenna Farquhar, Turner & Townsend CM2R, Toronto, ON Renato Fontejon, Burnaby, BC

G

Leo Gutierrez, Layfield Environmental Systems, Vaughan, ON

H

Mohammed Haniffa, Colombo, Sri Lanka Jian Li (Jane) Hao, Ryerson University, Toronto, ON Jose Hernandez, Toronto, ON Joey Howe, Winnipeg, MB

D

K

Christopher Kelly, Kamloops, BC Simon Kelly, Altus Group, Vancouver, BC Ramesh Khadka, Rago Millwork and Supplies Co. Ltd., Edmonton, AB Mohamed Khalifa, Scarborough, ON Gil Kim, Edmonton, AB

L

Edwin Lau, Toronto, ON Muhammad Leghari, Abu Dhabi, United Arab Emirates Steven Luft, Calgary, AB

M

Jonathan Ma, Port Coquitlam, BC Andrew Maxwell, Cuthbert Smith Group, Calgary, AB Michael McCarthy, Clare Randall Smith Pendlebury Cost Consultants, Burlington, ON Greg Murphy, Clarksburg, ON

O

Matthew DeWeerd, RHC Design Build, Cambridge, ON Meerim Djunushalieva, Montréal, QC Michael DoBush, MK Group of Companies, St. Albert, AB

Kyriacos (Ken) Orphanides, Turner and Townsend cm2r, Toronto, ON Donal O’Shea, Bird Construction, Toronto, ON Shadrack Owusu, Accra, Ghana

InSite SiteWork

P

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Jamelda Reyes-Alino, Altus Group, Toronto, ON Matthew Rodger, London, ON Shawn Rose, Cornerstone Graphic Systems Inc., Okotoks, AB

PDF and CAD Dirt Take-Off

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Swaraj Pal, Brampton, ON Negar Panahi, Altus Group, Toronto, ON Karthikeyan Periakaruppan, Acumen Drafting Services Pvt Ltd, Bangalore, India Tiffany Peters, Toronto, ON Chris Politis, Bold Engineering, Toronto, ON Visvanathan Prasath, Wattala, Sri Lanka

R

S

Adrian Secu, Hanscomb Limited, Vancouver, BC Patrick Stepniewski, Woodbrridge, ON

T

Ross Templeton, BTY Group, Vancouver, BC Andy Tsang, 1450434 Ontario Inc. O/A Sheppard Pearl Waterproofing, Scarborough, ON

W

Rahanuma Wafa, Toronto, ON John Walsh, North American Construction Group, Edmonton, AB Brian Watson, Doran Contractors, Ottawa, ON Eric Watson, Mississauga, ON Mackenzie White, WorleyParsons Canada, Burnaby, BC

Z

Jordan Zekveld, London, ON Apostolo Zeno, Toronto, ON

18 | CONSTRUCTION ECONOMIST | www.ciqs.org | Fall 2012

Two additional fully accredited programs for CIQS The Canadian Institute of Quantity Surveyors celebrates the recognition of two fully accredited programs in CIQS – Prairies and NWT’s territory.

The four-year full time Construction Management Degree Program offered by Red River College in Winnipeg, Manitoba was recognized officially at a ceremony held at Red River College earlier this year.

CIQS Council were represented at the ceremony by 1st Vice President, Mark Gardin, PQS and Education Administrator, David Lai, PQS(F) and Dave Burns, PQS, CIQS – Prairies and NWT representative. CIQS Prairies and NWT Board members Michael Bernier and Roger Ward also attended the event along with staff and students from Red River College.

Dave Burns, President of CIQS – Prairies and NWT stated, “This degree for this institution addresses the requirements sought by our Institute through the creation of this ‘first-of-itskind’ degree.”

Dave Burns, President, CIQS – Prairies and NWT

The BSc Construction Program Management program at Southern Alberta Institute of Technology Polytechnic (SAIT) was also recognized at a ceremony held at SAIT in September of this year.

All members of CIQS Council were in attendance in addition to CIQS – Prairies and NWT Board members Roger Ward, Michael Bernier and Wendy Hobbs.

“As a new program, this accreditation of the Construction Project Management degree means a great deal to SAIT, to our students and ultimately, to industry,” said Gord Nixon, SAIT’s Vice President, Academic.

This program was first offered in the fall of 2011 and has an enrollment of 62 students (32 first year and 30

second year) who will benefit from CIQS’ accreditation.

These two fully accredited programs are the first for CIQS – Prairies and NWT making the total of fully accredited programs in Canada to nine. This is a dramatic change. Prior to 2010, the only fully accredited programs were in Ontario. ‘Fully accredited’ means the programs have met all the academic requirements of the CIQS syllabus for architectural and structural professional quantity surveyors. Graduates of these programs have only to complete Part B and C of the Test of Professional Experience.

Congratulations to all those involved for their hard work.

Mark Gardin, CIQS Vice President, presenting plaque to RRC’s Nancy Wheatley (Dean of School of Construction & Engineering Technology) and Jerry Johnstone (Chair Civil Engineering Technology)

CIQS President Mark Russell presenting SAIT representatives with their accreditation plaque

SAIT Accreditation Ceremony Delegates from SAIT, CIQS and CIQS – Prairies and NWT Fall 2012 | www.ciqs.org | CONSTRUCTION ECONOMIST | 19

2012CIQS AGM Presentations Construction projects’ risks – Achieving successful fiscal results in a stressed labour market

By Natalie Dione Alexander, PQS

The following is an excerpt from a presentation given at the 2012 CIQS AGM.

Negative impacts of a stressed labour market • Fast pace economic recovery can erode the pool of skilled workers • If the demographic trend is not increasing at the rate of the continuing demand • Increase in project delays due to shortage of skills to complete the works • A country failing to meet the global competitiveness of the market.

• Failing to meet the needs of investors • The rate of growth for labour and capital is the most important determinant of economic expansion.

What Is a Quantity Surveyor?

• A Quantity Surveyor is a professional person working within the construction industry. The role of the QS is to manage and control costs within construction projects and may involve the use of a range of management procedures and technical tools to achieve this goal. (Source: QS of BC Website) • A Quantity Surveyor is the person responsible for figuring out what a building is going to cost and in some cases making sure that construction costs and production are managed as efficiently as possible. A Quantity Surveyor identifies and collate the costs involved in order to develop an overall budget for any project. They can then undertake cost planning which aims to help members of the design team arrive at practical solutions to stay within the project’s budget. (Source: New Zealand Institute of QS Website) Taking a look at the areas Quantity Surveyors are involved in within the Construction Industry: Type of projects: • Commercial • Private • Government • Institutional

Services: • Estimating and Cost Planning • Contract Procurement • Project Monitoring • Contract Administration • Project Coordination and • Value Analysis/Value Management • Contract Management Understanding where the market is heading In March 2012, the Canadian Construction Association reported that Canada is projected to become the fifth largest construction market in the world by 2020.

By 2020, according to a recent PricewaterhouseCoopers report, Canada’s boom in infrastructure should make this country the fifth largest construction market in the world, up two spots from its current seventh place. Construction activity in Ontario will help drive that improvement. For example, the report cites construction related to the 2015 Pan Am games in southern Ontario, as well as major transit projects in Toronto and Ottawa.

Construction outlook 2011 – 2019 Newfoundland is driven by current and proposed major projects. The construction labour markets in Newfoundland and Labrador will encounter volatile cycles across the outlook scenario between 2011 and 2019.

Looking forward from 2011, the construction scenario consists of a dramatic ramping up of non- residential trades and occupations for major industrial and utility/resource projects.

Managing these labour markets will be complicated by limited population and labour force growth. In this environment, labour markets reach extreme high and low conditions. (Source: Construction Sector Council January 2011) Ontario: 120,000 new workers by 2020 In total, the Construction Sector Council reports that the province will need a total of 120,000 new construction workers between now and 2020. This figure

20 | CONSTRUCTION ECONOMIST | www.ciqs.org | Fall 2012

includes 43,000 new workers to meet growing demand and 77,000 more to replace existing workers who are expected to retire during that time.

Ontario’s northern region is expected to be a key driver of activity, with large mining and infrastructure projects in the pipeline, as well as mining construction projects scheduled underway in the Sudbury area and north eastern part of the province.

Greater Toronto Area (GTA) will also be a driver of construction growth, as activity ramps up on labour-intensive construction projects such as the Pan Am games and the Eglinton transit line. (Source: The Construction Sector Council February 2012) The bottom line It is worth looking at how Canada will strategically position itself to handle such a growth.

How will construction grow in Canada over the next decade?

Construction Employment by Trade: Construction Estimator/Quantity Surveyors Data Type 2006

2011

2012

2013

2020

Employment (Total) 9,470 10,643 10,795 10,857 11,655 (Source: Construction Forecasts website of the Construction Sector Council (CSC) (Feb. 2012)

Construction growth in Canada over the next decade (%) 2006 - 2011 > 11.02% 2011 - 2012 > 1.41% 2012 - 2013 > 0.57% 2013 – 2020 > 6.85% ____________________ 2012 - 2020 > 7.38% 2011 - 2020 > 8.68% Is Canada’s construction industry really experiencing stress on its labour market?

The BIG Question Answer ... YES In February 2012, The Canadian Chamber of Commerce has predicted that over the next decade, we would see shortfalls of 163,000 in construction ALONE.

Short-term The big challenge is that in three to five years, Canada’s economy will be at the peak of its global economic competitiveness, (much of which will be as a result of construction activities) that it will not have the ability to keep up with the global knowledge-base economy.

Long-term 2015, it is estimated that 35% of Canada’s population will be aged 55 years or older.

In the construction sector alone, 210,000 of the current 1.2 million workers are expected to retire over the next eight years.

Making plans according to that market growth Overview of suggestions • Opening up to cross-multi-disciplines • Postpone retirement • Governmental 2nd career programs • Immigration • Women in construction • Young adults • Break the stigma attached to construction • Manner of job advertising long-term Short-term • Opening up to cross-multi-disciplines 1. 1 PQS > 1 Cost Engineer + 1 Contract Engineer 2. 1 PQS > 1 Project Management + Construction Management 3. 1 Architect > Architectural Administration + Life Cycle Costing 4. CIQS continuing to build reciprocity agreements such as the pathways that have been built with RICS Short-term and long-term • Postpone retirement 1. Entice the more senior workers to remain employed longer (compensation packages, increase vacation, investment opportunities) 2. Create environments that keep senior workers interested and mentally stimulating 3. Allow veterans to feel highly valued and needed within the organization 4. Promote/establish employee loyalty (creating environments that will retain employees)

“The big challenge is that in three to five years, Canada’s economy will be at the peak of its global economic competitiveness.”

• Governmental 2nd career programs 1. Funding programs that allow people to go back to school to start a new career; freeing up industries that are experiencing a glut and massaging the shortage industries 2. Not just in Ontario but nationally • Immigration 1. Breakdown the barriers to allow international competitiveness 2. Create fast tracking programs that allow for satisfaction of ‘Canadian work experience’ • Breaking the ‘traditional’ barriers 1. Building environments that provide opportunities and encourage women to become a part of the industry 2. Although the number of women employed in construction has increased from the ‘50s, these numbers are still too low 3. In 2007, women constituted only 12.4% of the entire Canadian construction workforce. Yes, I wear rhinestones and pink flowers on my hard-hat!

• Young adults 1. Create environments that are fresh and forward thinking that will entice young adults 2. Do not shy away from social media, as it is the future generation • Manner of job advertising 1. More international – especially provinces that experience higher skill shortages 2. Comparing Social Media to Websites 3. Marketing the provinces – Make people want to live there • Break the stigma attached to construction!

1. Start promoting career options within the construction industry at elementary school levels

2. Encourage trade learning/developing skills from elementary school levels Challenges to Consider • Opening up to cross-multi-disciplines 1. Creating a strain on Quantity Surveyors of undertaking too many roles 2. Do not create ‘jack of all trades, master at none.’ Not allowing workers to master a set skill • Postpone retirement 1. There must be a balance.

2. Not pushing the age limit unnecessarily 3. Not creating road blocks for the younger generation Challenges to Consider • Governmental 2nd career programs | immigration 1. Employers must allow time for more on the job training 2. Government and employers may have to incur some cost for programs that aid Canadian experience • Women in construction 1. Developing gender sensitive training, modules and material 2. Creating guidelines and policies that have low tolerance levels of sexism, gender segregation 3. Women returning to work? Government and employer child care

Fall 2012

This article is an extract from a presentation by Natalie Dione Alexander at July 5-6, 2012 CIQS AGM at St. John’s, Newfoundland.

For a full version of this Article, please email Natalie at nattyalexx@gmail.com.

| www.ciqs.org | CONSTRUCTION ECONOMIST | 21

2012CIQS AGM Presentations Canadian macro-economic climate Many of the measures introduced in Budget 2012 are aimed squarely at improving the overall Canadian macroeconomic climate. As expected, the federal government introduced a series of reforms in Budget 2012 designed to put the Old Age Security (OAS) system on a more sustainable footing. Effective in 2023, the age for eligibility for OAS and the Guaranteed Income Supplement (GIS) will be raised to 67 from the current 65.

The federal government also introduced the much anticipated cuts to the federal public service, with the departments of National Defence, Public Safety and Health leading the pack in terms of net reductions to their overall budgets. In all, once the cuts are fully implemented, federal spending will be reduced by more than $9.6 billion annually and will account for job losses. The federal government will also balance its budget by fiscal 2015-16, though with revenues increasing above forecast levels, the deficit may well be eliminated as early as 2014-15.Budget 2012 introduces a number of substantive reforms to both programs and the regulations intended to improve the macro business climate of the country. These include: • Changes to research and development programs • Changes to the way environmental assessments are carried out • Improvement to the immigration system to make it more responsive to the needs of Canadian businesses Of the greatest interest to the construction sector are the following measures: • Support for infrastructure • Labour market reform • Environmental assessment • Research & development and innovation Support for infrastructure CCA and its partner associations have been at the forefront of lobbying the federal government to play a strong role in the modernization of Canada’s aging infrastructure. The federal government plays an important role in the provision of public infrastructure in Canada. It is the

custodian of an infrastructure portfolio with strategic national importance, including a wide range of transportationrelated assets such as airports and bridges. The Government also provides funding to support provincial, territorial and municipal infrastructure. The Government is taking concrete steps to deliver on its commitment to work with provinces, territories, the Federation of Canadian Municipalities and other stakeholders on the development of a long-term plan for public infrastructure that extends beyond the expiry of the Building Canada plan in 2014.

A new plan will be designed to leverage funding from all governments and the private sector and ensure affordability and sustainability over the long term.

While Budget 2012 did not contain any dramatic new spending initiatives to support infrastructure modernization, the government did reaffirm its desire to replace the Building Canada Plan, when it expires, with a successor program. This new program will include: • $150 million over two years for a new Community Infrastructure Improvement Fund to support repairs and improvements to existing community facilities • $275 million over three years for school construction on Aboriginal reserves • $330.8 million over two years to build and renovate water infrastructure on Aboriginal reserves and to support the development of a long-term strategy to improve water quality in First Nation communities 2012 budget Program Contents: • The federal government commits to the reform of Canada’s immigration system so as to ensure that it remains responsive to the needs of the Canadian Economy • The Government has placed top priority on attracting immigrants who have the skills and experience our economy needs • Eliminate the backlog of Federal Skilled Workers by refunding applicant fees

22 | CONSTRUCTION ECONOMIST | www.ciqs.org | Fall 2012

By Adriana Mema, PQS and encouraging them to reapply under the new system • Realign the Temporary Foreign Worker Program to better meet labour market demands • Support further improvement to foreign credential recognition and identify the next set of target occupations beyond 2012 • Move to an increasingly fast and flexible immigration system where priority focus is on meeting Canada’s labour market needs The federal government will work with the provinces, territories and employers to develop a pool of skilled workers who are ready to begin employment in Canada (i.e. credentials have been verified and all statutory requirements complied with, such as medicals, security and criminality checks). The Federal Skilled Worker point system will also be reformed to reflect the importance of younger immigrants with Canadian work experience and better language skills.

Other proposed changes include: • Improvement to the Canadian Experience Class and the creation of a new stream to facilitate the entry of skilled tradespersons • Changes to the Provincial Nominee Program so as to better focus the program on economic immigration streams in order to respond quicker to regional labour market demand • Improvements to the Temporary Foreign Worker Program to better meet the needs of employers by reducing the paper burden and shortening processing times In addition to the proposed changes begin made to immigration, the federal government is also setting aside $21.3 million over two years to help unemployed Canadians get back to work more quickly by enhancing the content and timeliness of labour market information that is provided to them.

Environmental assessment Another area of great importance to the construction sector is that of

environmental assessments.

The federal government estimates that there are more than 500 projects worth approximately $500 billion identified for development in Canada. In order for these projects to proceed, investors will require certainty that once the decision to proceed is made, projects will not become the unnecessarily delayed by the environmental assessment process.

To provide greater certainly, the federal government is committing to reform the Canadian Environmental Assessment Act: • “In the federal government alone, accountability for assessment rests with dozens of departments and agencies, each with its own mandate, processes, information needs and timelines” • “A further complication is overlapping federal and provincial regulatory requirements and processes that require a high degree of coordination” • “A modern regulatory system should support progress on economically viable major economic projects and sustain Canada’s reputation as an attractive place to invest, while contributing to

better environmental outcomes” In order to improve the regulatory process, the Government will: • Commit to the introduction of legislation to modernize the federal regulatory system that will achieve the goal of “one project, one review”, establish clear timeliness, reduce the regulatory burden, and focus resources on large projects where the potential environmental impacts are the greatest • Streamline the process for major economic projects, while committing $13.6 million over the next two years to support consultation with Aboriginal peoples • Support the Major Projects Management Office initiative, which has succeeded in shortening environmental reviews

• Doubling the budget (additional $110 million) of the current Industrial Research Assistance Program for small and medium-sized business research • Promoting collaboration and funding internships connecting private sector innovators to procurement opportunities with the federal government • Refocusing the National Research Council on research that supports Canadian businesses develop innovative products and services • Committing $500 million of venture capital funding for innovative firms Streamlining the Scientific Research and Experimental Development tax incentive program and shifting the incentive from an indirect to a more direct support program.

Research & development and innovation In response to the Jenkin’s Report, the federal government in Budget 2012 is introducing a series of changes to the way it supports Canadian R&D initiatives.

These include:

This article has been adopted from the presentation by Adriana Mema, Adriatica Construction Ltd. CIQS AGM, July 6, 2012, St. Johns, Newfoundland.

Cost Consultants, Project Monitors and Proud Supporters of the CIQS

100 York Blvd., Suite 608, Richmond Hill, ON L4B 1J8 Tel 905.889.9996 www.pelicanwoodcliff.com

Fall 2012

| www.ciqs.org | CONSTRUCTION ECONOMIST | 23

2012CIQS AGM Presentations Diversity in the workplace Hello everybody and welcome to the wonderful place called the Rock. Before I begin my presentation, I would like to thank the CIQS for giving me the opportunity to speak about diversity and recognize our sponsors who make this event possible: The Altus Group, Turner & Townsend, and the LEC Group.

My name is Justin Mercer and I am 22 years old. I come from a rural community called Upper Island Cove which has virtually no services for someone with Cerebral Palsy. When I was born, the doctors said I would never talk, walk, or put sentences together. However, with the support of my family, friends and others, I was able to attend regular school, participate in events, and live a normal life.

I did many things over the years that many others thought I could never do!

I played goalie in school hockey, played musical instruments and was active in many sports such as sledge hockey and rock-climbing. More recently, I obtained my driver’s license, advocated for disabled individuals and competed in South Korea as part of Team Canada.

In 2007, I started my studies in Architectural Technology at the College of the North Atlantic, Ridge Road Campus.

I have since graduated and am currently working with Service NL as a Design Approval Technician. I am also studying for the PQS designation which will expand my skillset and open the door to more opportunities in the future.

Canadian companies today face a looming labour shortage crisis. Many of us observe and are reminded of these challenges every day.

The first and most prevalent challenge is the changing demographics of our labour markets. Our baby-boomer generation in the labour force is rapidly reaching retirement age. In 2010, this age bracket made up approximately 17% of our entire labour force. 25% of our own public service workers will be eligible for retirement in the next five years. The loss of these workers coupled with our low fertility rates will exacerbate current labour shortages. Some analysts

see immigration as the solution to sustain our population. Statistics Canada projects that by 2031, one-third of all Canadians in the labour force will be either foreignborn or belong to a visible minority.

The second challenge is the increasing evidence of a global economy. Gone are the days of our economic activity driven by domestic production of goods and services and labour markets composed of locals. The economy is now largely global in nature, thanks to improved shipping, transportation and technology.

Although our service industry has grown, our domestic manufacturing base has been in decline ever since.

Globalization presents opportunities for Canadian companies to enter markets offshore but also presents challenges in that companies now must be more competitive overall. Our labour market has been affected likewise.

The third challenge is on-going technological change. Technological advances such as banking ATMs, computers and the internet play a part in our lives every day and also affect labour markets. For example, farming once was very physical and laborious work.

However, with the advent of mechanized equipment, some jobs became obsolete.

Technological advances, in general, heighten labour productivity, make jobs obsolete and shift demand for highly skilled workers.

Diversity can be defined as the acceptance, embracing and inclusion of differences among people. Differences include: age, ethnicity, race, sexual orientation, abilities, etc. I believe workplace diversity is a necessity in today’s world and should be part of every business model. Why? People are an asset to companies and it is an effective solution to the challenges facing our labour markets today. First of all, it combats our changing demographics problem by appealing and welcoming immigrants into our country. Secondly, diversity can assist companies wishing to establish operations in different countries overcome hurdles such as different languages, cultures, laws, or business

24 | CONSTRUCTION ECONOMIST | www.ciqs.org | Fall 2012

By Justin Mercer practices. Thirdly, diversity can help attract highly-skilled workers to work for our companies. This would keep us competitive in the ever-growing global economy.

The benefits of diversity, however, do not stop there. Others include: higher productivity, low employee turnover, innovation and increased customer service. Attitudes differ around the world about work. Recently, the OECD reported that Korean workers ranked 1st in average number of hours worked while Canada ranked 18th out of the 34 countries. Staff turnover is costly to companies with investment of time and money. An inclusive workplace helps retains workers as they feel valued and respected. The potential for increased innovation and customer services stem from new ideas workers bring with them and their ability to deal with foreign clients or partners.

Personally, I faced many challenges during my job search. The college prepared me for the workforce with a technical background in architecture, buildings and construction. Graduates could potentially find employment with consulting and construction firms, government departments, manufacturers and suppliers. However, nearly 50% of architectural and engineering firms in this city are inaccessible for me.

The vast majority of contractors with offices are also inaccessible. I applied with government departments as well.

Employers proposed the idea of working from home but due to my lack of experience, I rejected the notion. Months went by with no success and that is when I took my plight to the House of Assembly and the media to raise awareness about the issue. I believe this action helped me obtain employment.

Last October, I was selected for Team Canada to compete in architectural CADD at the 8th International Abilympics held in Seoul, South Korea. This was an event to showcase the vocational skills and talents of persons with disabilities.

Over 1,500 competitors from 57 nations around the globe competed in various

“Canadian companies today face a looming labour shortage crisis.” categories such as CADD, computer assembly and graphics design. The talents competitors showed throughout the week were awesome. I met one person from Hong Kong who was an artist and painted solely with his mouth.

I was honoured to have been given one of his works of the bustling Hong Kong Harbour.

Every one of these individuals and their skillsets would be a major asset to any firm that would hire them. Unfortunately, many of them will never find employment.

In the past, barriers such as inaccessibility, attitudes, and lack of workplace sup-

ports prevented disabled people from being productive citizens in our society. For the most part, they were inside looking out. While there have been improvements to break down barriers, many still exist.

Today, we are outside looking in. Everyone is quick to lay blame on the governments but until the attitudes of companies change, programs and regulations developed will do little good.

How do we integrate diversity in our workplaces? Companies first need to recognize the value in recruiting persons of visible minorities. Only then can guidelines, policies, HR practices,

etc. foster a workplace of inclusion.

Before I close, I would like to thank the CIQS, listening audience as well as the sponsors for giving me the opportunity to share this message. I hope that all of you will spread the message about diversity so that individuals like myself and the 1,500 participants who competed can become active and productive citizens across the country.

This article was presented at the 2012 AGM by Justin Mercer, Associate member of CIQS.

QUANTITY SURVEYORS, ESTIMATORS, PLANNERS A leading Cost Consulting and Project Management firm requires the following candidates for its Montreal and Ottawa offices: Junior, intermediate and senior level Q.S.’s, Estimators and Planners with experience on: • Commercial and institutional projects • Industrial projects (oil/gas, refineries, mining, metallurgical).

We offer competitive salaries, benefits, training and potential for growth. Relocation assistance will be provided.

We sincerely thank all applicants, but only those candidates which meet our requirements will be contacted.

Please send resume in strictest confidence to: LCO - Construction and Management Consultants Inc. Fax: 514-846-8913 | Phone: 514-846-8914 | E-Mail: MONTREAL@LCOGROUP.COM

Fall 2012

| www.ciqs.org | CONSTRUCTION ECONOMIST | 25

2012 congrès annuel de l’ICÉC –Québec

2012 CIQS-Quebec Annual Congress

Dans l’objectif d’initier des liens entre les étudiants et les membres actifs du marché de la construction, L’ICÉC –Québec a tenu son congrès annuel au Campus Notre-Dame de Foy à Québec, le 11 mai dernier. L’événement a atteint un record de participation (130 personnes) et fut un grand succès!

Le corps professoral et les responsables des programmes (MM. David Benazera et Jean-François Roméo) nous ont chaleureusement accueilli et félicité de cette initiative. La ministre du Travail du Québec, Madame Lise Thériault a aussi salué nos efforts et s’est réjouit de la participation étudiante, y voyant l’intérêt de nos jeunes et la création d’une relève dans cette discipline spécifique.

Lors de cet événement, M. Patrick Vallerand, ÉCA n’a pu se présenter pour recevoir son diplôme, L’ICÉC-Québec y a donc remis les diplômes suivants:

With the aim to initiate some connections between students and active members of the construction market, the CIQS-Quebec held its Annual Congress at the Campus Notre-Dame de Foy, Québec on May 11. The event reached a record attendance (130 peoples) and was a great success.

Teachers and Education Program Directors (Mr. David Benazera and Mr Jean-François Romeo) warmly greeted and welcomed this initiative. The Quebec Minister of Labor, Mrs. Lise Thériault also praised our efforts and was happy with the student participation, seeing the interest of our youth and the creation of a new generation in this specific discipline.

During this event, Mr. Patrick Vallerand, PQS could not attend to receive his diploma. CIQS-Quebec presented the following certificates:

1.

2.

3.

4.

5.

1. Madame Line Binet, ÉCA, de Planifika GDAI/Mrs. Line Binet, PQS, Planifika GDA 2. Madame Renu Mathiew, ECC, Ville de Montréal/Mrs. Renu Mathieu, CEC, City of Montreal 3. Monsieur Marc-André Croteau, ECC Planifika-GDAI/Marc-André Croteau, CEC-Planifika GDAI 4. Madame Lise Thériault, ministre du Travail et Monsieur Jean Paradis, ÉCA, président de l’ICÉC-Québec/ Lise Thériault, Minister of Labour and M Jean Paradis, PQS, President of CIQS-Quebec

5. Étudiants et

professionnels discutant lors du dîner-réseautage/Students and market professionals conversing during the networking-lunch

26 | CONSTRUCTION ECONOMIST | www.ciqs.org | Fall 2012

Construction cost trends Canada building permits trend Municipalities issued building permits worth just over $6.8 billion in July, down 2.3% from June. This followed a month of relative stability between May and June. The main factor in the decline was lower construction intentions for both residential and nonresidential buildings, particularly in Ontario.

Chart 1 - Total value of building permits

In the residential sector, the value of permits decreased 2.4% to $4.3 billion, following two consecutive monthly advances. The decline was attributable mainly to lower construction intentions in four provinces, led by Ontario, with Saskatchewan a distant second.

In the non-residential sector, the value of permits fell 2.1% to $2.5 billion after a 9.0% decrease in June. Non-residential permits declined in six provinces with Ontario and Saskatchewan accounting for most of the drop.

Residential sector: Construction intentions down for both multi-family and single-family dwellings The value of permits for multi-family dwellings decreased 4.3% to $1.9 billion, following two consecutive monthly increases.

Construction intentions were down in seven provinces, with Ontario posting the largest decline, followed by Saskatchewan and Alberta. The value of multi-family permits increased in British Columbia, Nova Scotia and Prince Edward Island.

Municipalities issued $2.5 billion worth of building permits for single-family dwellings in July, a 0.9% decline following two monthly advances. Most of the declines occurred in British Columbia, Ontario and Saskatchewan. The value of permits for single-family houses rose in five provinces, including Alberta, Manitoba and Quebec.

Nationally, municipalities authorized construction of 19,139 new dwellings, down 4.9% from June. The decrease was attributable to both multi-family dwellings, which fell 6.8% to 11,846 units, and single-family dwellings, which declined 1.6% to 7,293 units.

Non-residential sector: Declines in the institutional and industrial components In July, the value of permits for non-residential construction decreased for the second consecutive month; declines in the

institutional and industrial components more than offset gains in the commercial component.

In the institutional component, the value of permits fell 25.2% to $404 million, the second consecutive monthly decline and the lowest level since February 2012. The decrease was mainly the result of lower construction intentions for educational institutions in Ontario and British Columbia and government buildings in Saskatchewan and Alberta.

The value of permits for industrial buildings decreased 3.7% to $462 million, following a 0.5% advance in June. The decline was mostly the result of lower construction intentions for manufacturing plants in Ontario, the value of which had increased the previous month.

In contrast, Alberta and Quebec recorded the largest increases.

Alberta’s gain came from manufacturing plants, utilities and transportation-related buildings. Quebec’s advance was attributable to utilities and transportation-related buildings.

In the commercial component, the value of permits rose 6.4% to $1.7 billion, the fifth monthly increase since the beginning of the year. The advance was largely a result of higher construction intentions for a variety of commercial buildings. These included retail outlets and theatre and performing art centres in British Columbia, and recreational facilities in Newfoundland and Labrador, Saskatchewan and New Brunswick.

Chart 2 - Commercial value of building permits

Provinces: Construction intentions down significantly in Ontario In July, the total value of permits declined in six provinces, led by Ontario, followed by Saskatchewan and Alberta.

After two consecutive monthly gains, Ontario recorded the largest decrease, mainly as a result of lower construction intentions for multi-family dwellings, institutional and industrial buildings.

The decline in Saskatchewan, which was the second in a row, originated from residential, institutional and industrial buildings.

Even so, the total value of permits in Saskatchewan was 10.3% higher than the monthly average in 2011. Alberta’s drop was attributable to institutional and commercial buildings, as well as multi-family dwellings.

British Columbia posted the largest gain, a result of growth in the value of permits for commercial buildings and multi-family dwellings. The gain in Newfoundland and Labrador was mainly

Fall 2012 | www.ciqs.org | CONSTRUCTION ECONOMIST | 27

attributable to higher construction intentions for commercial buildings and single-family dwellings.

In Quebec, the value of permits for industrial and institutional buildings was behind the increase, while in New Brunswick, gains were reported in institutional and commercial buildings, and single-family dwellings.

Permits value down in most census metropolitan areas The total value of permits fell in 24 of the 34 census metropolitan areas.

Toronto and Regina registered the largest decreases. In Toronto, the decline was primarily attributable to lower construction intentions for residential and institutional buildings. Regina’s decrease originated from multi-family dwellings and institutional buildings.

The largest advance occurred in Vancouver and Montréal. In Vancouver, the gain was the result of growth in the value of permits for commercial buildings and multi-family dwellings. In Montréal, the advance was attributable to a large extent to multi-family dwellings and industrial buildings.

Note to readers - (Data Source: Modified from Statistics Canada catalogue no.

11-001-x) The Building Permits Survey covers 2,400 municipalities representing 95% of the population. It provides an early indication of building activity. The communities representing the other 5% of the population are very small, and their levels of building activity have little impact on the total.

The value of planned construction activities shown in this release excludes engineering projects (for example, waterworks, sewers or culverts) and land. For the purpose of this release, the census metropolitan area of Ottawa–Gatineau (Ontario/Quebec) is divided into two areas: Gatineau part and Ottawa part.

Canada Non-residential Building Construction Price Index, second quarter 2012 The composite price index for non-residential building construction rose 0.6% in the second quarter compared with the previous quarter. The quarterly increase was mainly a result of higher labour costs as a result of strong the energy industry, mining, private infrastructure investments and rail projects.

All of the seven census metropolitan areas (CMAs) surveyed reported quarterly increases, ranging from 0.3% in Montréal to 0.8% in both Edmonton and Calgary.

For the year, the composite price index for non-residential building construction rose 3.1%. Of the CMAs surveyed, Edmonton (+4.2%) and Calgary (+4.0%) posted the largest year-over-year increases, while Halifax (+1.9%) recorded the smallest gain.

28 | CONSTRUCTION ECONOMIST | www.ciqs.org | Fall 2012

International markets Construction costs continue to trend down in most parts of the world as the impact of global economy is not yet fully recovered. European markets show the most decline compared to the Americas. Brazil, Uruguay, India and China continue to take the lead as strong emerging markets. The emerging markets continue to constrain the overall resources such as scarce crude oil, building materials, equipment and specialist professionals.

Material prices will continue to drive construction costs upward. With Australian natural disasters and South African mining operation instabilities, growth in China, India and Brazil is exaggerating demand for most types of building commodities such as copper, steel and oil.

European economic issues are slowing down raw material operations that produce concrete, data cabling and furniture.

The chart below shows the construction cost in India escalating at 8.2% in 2012, up by 10% from 2011. Costs in India lead China and Uruguay with both Brazil and Malaysia tailing closely behind. Demand for construction in India is driven by its 14.7% strong economic growth rate fueling infrastructure construction such as roads, marine ports, airport, electrical power stations and railways. In 2011, the total investment was close to 8.5% of India’s GDP. China is embarking more in high voltage power transmission lines, electrical power stations, industrial and retail infrastructure.

Global Construction Trends Construction Cost Escalation 2012 Q4 2011

Q1 2012

Q2 2012

Q3 2012

USA

2.8

3.7

3.7

3.8

Canada

2.5

2.2

2.2

3.1

China

4.9

5.2

5.2

5.1

India

7.5

8.2

8.2

8.2

Ireland

2.8

2.0

2.0

2.0

Malaysia

4.1

4.0

4.0

4.0

Brazil

4.2

4.5

4.5

4.8

Uruguay

4.2

4.5

4.5

5.2

UAE

3.2

3.2

2.8

2.3

UK

3.1

2.8

2.5

2.5

Industry News

Winnipeggers debate second phase of the city’s rapid transit system On Thursday, September 20, residents of the City of Winnipeg attended an open house hosted by the city to weigh in on the proposed ‘Hydro Corridor’ rapid transit system. The impacted industrial area currently has no residential housing, but the city is anticipating a future neighbourhood in this industrial area.

The City invited local residents to provide their input on the second phase infrastructure. The proposed route rapid expansion will impact also the CN Letellier route that currently runs along the west side of Pembina highway. The Hydro Corridor is proposed to cut through the Fort Garry Industrial area between the Maybank and Beaumont neighbourhoods.

Early comments from Winnipeggers seem to embrace this new proposal. Some residents said that this proposed route makes more sense as it runs through highly populated neighbourhoods that are currently experiencing bus overcrowding. Some are anxious to see the construction phase shortened for an early opening.

Nova Scotia to begin work on dike The Nova Scotia government says work on a crumbling dike that was breached by flood waters in the Truro area will begin as soon as conditions are safe.

There are hundreds of kilometres of dikes in Nova Scotia

Provincial engineers and staff from Emergency Management, Transportation and Infrastructure Renewal and Agriculture are working with municipal officials in Truro assessing the raised barrier, called a berm. The province is also making TIR staff and equipment available.

Provincial and municipal experts are gathering information next week in preparation for a meeting with Premier Darrell Dexter, municipal leaders and other officials. Premier Dexter called for that meeting, in the wake of the last storm, to develop an action plan that protects families and businesses from flooding in central Nova Scotia. Media Contact: Nicole Watkins-Campbell, e-mail: watkinni@gov.ns.ca.

Ottawa Mayor wants a new casino

The province announced it will take measures to repair a Truro-area berm that was breached, just one day after the agriculture minister said it was not his department’s responsibility (photo by Jean Laroche/CBC)

The province is helping protect residents and businesses in the Truro area from flood damage by repairing and reinforcing a barrier in the North River area.

Truro-Bible Hill MLA Lenore Zann says the safety of the residents of Truro is the province’s top priority right now and that the province will work with partners to ensure all possible measures are taken to protect the community from further flood damage.

Ottawa mayor Jim Watson said he’ll ask city council to signal interest in a new gaming facility, a move that would allow the Ontario Lottery and Gaming Corporation to seek proposals from potential operators.

Watson, who made the announcement through Twitter, said OLG has not proposed or short-listed a location and said council holds final approval on zoning, which would come after the request-for-proposals process.

A staff report will be discussed at the next finance and economic development committee meeting, which will include public delegations and be held in the evening to allow residents to attend.

If council approves the report on Oct. 10, Watson said he will write a letter to OLG to signal the city would be supportive of a gaming facility in principle. While not committing the city, it would allow the OLG to issue a request for proposals from potential operators.

After a preferred proponent has been selected, there will be additional public delegations at a future FEDCO meeting some time in 2013.

The city would still hold the final approval on zoning for a gaming facility.

Fall 2012 | www.ciqs.org | CONSTRUCTION ECONOMIST | 29

Industry News

PST re-implementation timeline The government’s action plan remains on track to return to the PST with all permanent exemptions on April 1, 2013.

The return to a PST and federal goods and services tax (GST) system in British Columbia is complex and requires careful planning, coordination and implementation throughout the various stages to help ensure an orderly, responsible transition.

Businesses will need to adapt their systems for the implementation of the PST on April 1, 2013. Initial outreach will focus on the general tax application of the PST Act, with more detailed information being released as the regulations and legislative amendments are announced.

A new e-service called eTaxBC is being developed that will benefit businesses by allowing online PST registration, tax return filing and payment and self-service options.

The Ministry of Finance is also acquiring new telephone technology that will support multi-location call centres in both Victoria and Vancouver. The ministry’s information and services on the main government webpage at www.gov.bc.ca are being redesigned and updated to improve access to information,

based on consultations with businesses, individuals and tax professionals. Implementation is expected this fall.

Hiring is underway for tax administration positions required for the return of the PST. Government is finalizing its arrangements with the Canada Revenue Agency on returning staff to administer the PST.

Connect with our advertisers Company

Page

Phone #

Website/E-mail

Altus Group

2

905-953-9948

www.altusgroup.com

BTY Group

7

416-596-9339

www.bty.com

George Brown College

10

800-265-2002

coned.georgebrown.ca

Insite SiteWork

18

877-746-7483

www.insitesoftware.com

LCO Construction & Management Consultants Inc.

25

514-846-8914

www.lcogroup.com

LEC Quantity Surveying Inc.

15

604-568-3711

www.lec.bc.ca

Ontario General Contractors Association

6

905-671-3969

www.ogca.ca

Pelican Woodcliff Inc.

23

905-889-9996

www.pelicanwoodcliff.com

PlanSwift Takeoff & Estimating Software

6

888-752-6794

www.planswift.com

SMARTBIDNET

32

866-888-8538

www.smartbidnet.com

TD Insurance Meloche Monnex

15

866-296-0888

CIQS.Tdinsurance.com

TTcm2r Inc.

31

416-925-1424

www.ttcm2r.com

Vertigraph, Inc./Interworld

28

800-663-6001

http://www.interworldna.com/vertigraph/siteworx_os.php

Walcon

9

866-392-5547

www.walcon.ca

Please support these advertisers who help make Construction Economist possible.

30 | CONSTRUCTION ECONOMIST | www.ciqs.org | Fall 2012

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