On-Site February 2015

FEBRUARY 2015

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THE DUTY OF HONESTY PG.62

Hwy 407 drives east

NEW CRUSHERS punch above their weight

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Billion-dollar Phase 1 extension will be complete this year PG.20

RISK

THE IDEAL PROCUREMENT MODEL PG.56

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VOLUME 59, NO.1 / FEBRUARY 2015

COVER STORY 20 Hwy 407 drives east Phase 1 of the plan to extend Hwy 407 east will be complete this year, showing leadership in traffic management and environmental stewardship as well as resilience in the face of bad weather.

DEPARTMENTS 7 Comment

37

Consistent inconsistency in infrastructure spending

11 News Industry news

16 Construction stats Important data on building permits and the labour force.

COLUMNS 56 Risk

29

What is the ideal procurement model?

62 Contractors and the Law The duty of honesty

50

59

Index of Advertisers

features 18

Asphalt paving Asphalt mixes made easy

29

37

58

New crushers offer power, durability in tough jobs.

Major new features expand the capability of the 2015 MercedesBenz Sprinter cargo van.

The 2015 National Heavy Equipment Show features innovative products, thoughtprovoking seminars

Punching above your weight

Big van gets boost in worksite prowess

Innovation is centre-stage at NHES

43 C ONCRETE ON-SITE

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COMMENT

Consistent inconsistency

G

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overnment’s hot-and-cold relationship with infrastructure is a topic that makes many in our industry groan. Infrastructure spending has always been a political football in Canada and it has usually been difficult to tell which way it is going to bounce when it hits the ground. That inconsistency has been consistent over the years.

That’s doing Canadians a major disservice.

The feast-and-famine approach pretty much guarantees that taxpayers pay maximum dollar for infrastructure by making it difficult for both local government and contractors to plan ahead and invest appropriately. Even when the federal government does decide to make the big spend, regulation and red tape sometimes forestall any real momentum.

Despite many impressive projects completed since the last recession, Canada’s infrastructure deficit remains a problem. Enormous numbers are tossed around. For one example, the Federation of Canadian Municipalities has estimated that Canada’s municipal infrastructure deficit recently stood at about $123 billion and is growing by some $2 billion a year.

The federal government seems to be feeling a little underappreciated in this infrastructure discussion. In response to comments made at the recent Canada 2020 conference, federal Finance Minister Joe Oliver noted that “In 2013 we created the longest and largest infrastructure fund in Canadian history, dedicating over $70 billion over 10 years for public projects.”

Historically, that’s a significant number— but it isn’t enough, as provincial and municipal governments have been pointing out.

Economic uncertainty is a concern with the federal government, keyed into its worries about deficits, the price of oil and general economic instability. However, we should remember that interest rates are extremely low at present, and infrastructure investment can’t be deferred indefinitely.

Few have been more vocal than Ontario Premier Kathleen Wynne.

The premier has been calling for “a Canadian infrastructure partnership — a collaboration that has an explicit objective of investing five per cent of our GDP in infrastructure renewal” annually.

That would represent a significant increase from our current three to 3.5 per cent, and represent about $100 billion a year.

Among other proposals, Wynne suggested “a new and dedicated infrastructure transfer—like the transfers for health, education and social services.”

Such a transfer would support sustained infrastructure investment that would enhance competitiveness for years to come, she notes.

Provincial and municipal investments have outstripped federal investments in many cases.

It is worth noting that the federal investment in infrastructure tends to get them a good return.

The mayors of Canada’s biggest cities are on the same path, promising the federal political parties to hold their feet to the fire on infrastructure during the coming election. At the Big Cities summit organized by the Federation of Canadian Municipalities in Toronto in February, 18 mayors called for commitments to protect current allocations and disburse allocated infrastructure money faster. “... We are saying, let’s talk about creating predictable, stable forms of income,” noted Calgary Mayor Naheed Nenshi.

Beyond the raw numbers involved, building certainty about infrastructure investment would go a long way to make the industry more efficient and competitive.

By the way, if you are feeling a sense of déjà vu at seeing my byline again, let me reassure you: Editor Corinne Lynds is on maternity leave and I’m just filling in until she gets back in a few months. In the meantime, I am looking forward to hearing from many of my old friends in the industry.

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CONTRIBUTORS

MEET OUR CONTRIBUTORS FOR THIS ISSUE

PUBLISHER | Peter Leonard (416) 510-6847 PLeonard@on-sitemag.com

JIM BARNES / Contributing Editor, On-Site

EDITOR/EDITORIAL DIRECTOR | Corinne Lynds (416) 510-6821 CLynds@on-sitemag.com (on mat-leave)

On 407 drives east “The big impacts are over. The closures have happened, you have impacted the people you have to impact as much as you’re going to. That is all behind us now, and this will be the year of opening things back up again. That’s an exciting time in a project.

CONTRIBUTING EDITOR | James A. Barnes ART DIRECTOR | Melissa Crook (416) 442-5600 x3260 MCrook@bizinfogroup.ca ASSOCIATE PUBLISHER | David Skene (416) 510-6884 DSkene@on-sitemag.com

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DAVID BOWCOTT / Senior vice-president, national director large/strategic accounts, construction and infrastructure services, Aon On What is the ideal procurement model?

There are several initiatives underway globally to standardize the measurement of asset management performance in all phases of the asset’s life.

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KRISTA JOHANSON / Associate with Borden Ladner Gervais L.L.P. On Duty of honesty The Duty of Honesty in contractual performance requires parties not to lie or otherwise knowingly mislead about matters directly linked to the performance of the contract.

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MICK PRIEUR / Senior pavements engineer, Ready Mixed Concrete Association of Ontario On A hard road The recognition by MTO and some of the forward-thinking municipalities demonstrates that the movement toward the use of concrete roads is not just a blip in the construction field.”

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DAVID GODKIN / Contributing freelance writer & editor On Crushers: punching above your weight A jaw crusher is only as good as its ability to take repeated blows.

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PATRICK CALLAN / Contributing editor On Asphalt mixes made easy The Ontario Hot Mix Producers Association liason comittee has created a spreadsheet to simplify measuring asphalt mixes to ensure they meet Ontario Provincial Standard Specification 310.

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SALES & MARKETING COORDINATOR | Kim Rossiter (416) 510-6794 KRossiter@bizinfogroup.ca PRODUCTION MANAGER | Barb Vowles 416-510-5103 BVowles@bizinfogroup.ca CIRCULATION MANAGER | Selina Rahaman (416) 442-5600 x3528 SRahaman@bizinfogroup.ca Published by Annex Business Media 80 Valleybrook Drive, North York, ON M3B 2S9 Vice President Annex Business Media East | Tim Dimopoulos (416) 510-5100 tdimopoulos@canadianmanufacturing.com President & CEO Mike Fredericks mfredericks@annexweb.com

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INDUSTRY NEWS

INDUSTRY>NEWS

Prime Minister Harper greets BCIT students in Delta, B.C.

Apprenticeship loan program open for business The Canada Apprentice Loan initiative is now open for business and accepting applications.

“Apprenticeships play an important role in Canada’s postsecondary education system and are a key provider of the vital skills and knowledge necessary to power and grow the Canadian economy,” said Prime Minister Stephen Harper when announcing the new federal program.

“The Canada Apprentice Loan initiative will allow young people from across the country to access jobs in the skilled trades that are in demand in different sectors and regions­­—from shipbuilding in the East, to mining in the North, to oil and gas projects in the West.”

The initiative, which was introduced in Economic Action Plan 2014, will provide apprentices in Red Seal trades across Canada with access to interest-free loans. These loans will help apprentices address the costs they encounter during technical training, including educational fees, tools and equipment, living expenses and forgone wages. It will be managed by the Canada Student Loans Program within Employment and Social Development Canada.

Apprentices registered in a Red Seal trade apprenticeship will be able to apply for loans of up to $4,000 per period of technical training. The loans are interest-free until after loan recipients complete or leave their apprenticeship training program, up to a maximum of six years.

“The Canada Apprentice Loan is a welcome new initiative that will help address significant labour shortages in the skilled trades by removing financial barriers to entry into apprenticeships,” said Sean Reid, Progressive Contractors Association of Canada. “As Canada’s construction industry works to encourage more Canadians to enter the trades, the Canada Apprentice Loan will have a strong impact on elevating the inherent dignity and status of the skilled trades relative to other academic pursuits.”

It is estimated that at least 26,000 apprentices a year will apply for over $100 million in Canada Apprentice Loans. Red Seal trades include 57 skilled trades, including bakers, bricklayers, carpenters, electricians, gasfitters, heavy equipment operators, ironworkers, machinists, painters, plumbers, sheet metal workers, and truck mechanics, to name a few. According to Statistics Canada, almost 360,000 people are enrolled in over 400 apprenticeship and skilled trades programs. However, only half of apprentices are completing their programs.

“These loans demonstrate the government’s strong commitment to apprentices and the importance of colleges as a driver of economic growth,” said Anne Sado, president, George Brown College. “Thanks to the loans and other financial supports provided by both the government and through (the college system), we will be able to educate more students with the necessary skills to fill critical vacancies across our city, our province and spanning the entire country.”

Applications and eligibility criteria are available through the Canada Apprentice Loan Online Service at Canada.ca/apprentice.

Applicants that submit all the necessary information can expect to receive their loan within seven to ten business days from the time the application is received.

Guide to Public Private Partnerships provides framework for leaders considering P3s

A report from the Brooking Institution’s Metropolitan Policy Program presents nine recommendations for public leaders considering infrastructure public private partnerships (PPPs).

The report, “Private Capital, Public Good: Drivers of Successful Infrastructure Public Private Partnerships,” is intended to serve as a guide to executing PPPs in the public interest.

“PPPs are neither a solution to all infrastructure challenges nor are they a corporate takeover of public assets,” says Senior Policy and Research Assistant Patrick Sabol. “Instead, a well-executed PPP is simply a tool for procuring or managing infrastructure.”

This paper addresses gaps in public knowledge of the PPP funding model by explaining: basic PPP structure; how to

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INDUSTRY NEWS

properly weight risks and rewards; and the purpose and rationale behind these arrangements.

Through extensive background research and direct interviews with leaders in the public and private sector, the paper presents nine recommendations for public leaders considering PPPs: 1. Create a strong legal framework at the regional level. PPPs require a sound legal basis to ensure that the public sector has the authority to pursue a deal and allows the private sector to mitigate unnecessary political risk.

2. Prioritize projects based on quantifiable data. Not every infrastructure project is suitable for a PPP, so it is essential for policymakers to base their procurement decisions on robust economic and financial analysis.

3. Pick politically smart projects. A successful PPP requires a pragmatic understanding of what is feasible in a constantly evolving political environment.

4. Understand what the private sector needs. Strong partnerships are based on finding the right alignment of interests, which is why it is essential to understand what makes a project appealing to private investors.

5. Find the right revenue stream. PPPs are not free money; they require localities to find durable and resilient revenue sources that will pay for the investment over the long-term.

6. Create a clear and transparent process. ‘Routinization’ and standardization will create a market for PPPs that provides the public sector with a clear road map for success.

7. Build an empowered team. Assembling a professional and empowered public sector team is essential to executing a successful deal.

8. Actively engage with stakeholders. PPPs are inherently complex deals that require significant public engagement to ensure that the deal is in the interest of the community and is executed at the highest standards possible.

9. Monitor and learn from the partnership. PPPs involve decades of dedicated attention that requires thoughtful monitoring, flexibility in the face of a changing world and a willingness to learn from mistakes.

BC approves $8.3B Site C hydro development The green light has been given to the $8.335 billion Site C Clean Energy Project in northern British Columbia.

The Site C Clean Energy Project is a third dam, reservoir and hydroelectric generating station on the Peace River, approximately seven km southwest of Fort St. John in northeast B.C. Part of the project includes

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Province of British Columbia on December 16, 2014, construction of the project is expected to begin in the summer of 2015 with completion estimated to be in 2024.

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BC Hydro’s labour strategy for Site C will promote local and aboriginal hiring. It has supported opportunities for skills training through funding to: Northern Lights College Foundation, Northeast Native Advancing Society, Northern Opportunities Apprenticeship Program, School District No.60, and the College of New Caledonia.

Site C will provide 1,100 MW of capacity and produce

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INDUSTRY NEWS

CRH acquires Holcim, Lafarge assets in massive deal CRH is spending $7.3 billion on assets from rivals Lafarge and Holcim in a deal that will transform the Irish company into the world’s third-largest building materials supplier, according to a company release.

The deal is part of the regulatory requirements for asset disposal for the merger of Holcim and Lafarge, to be finalized later this year.

“The projected transaction is a key step towards the creation of LafargeHolcim, and the value offered reflects the strong quality of the selected assets,” said Wolfgang Reitzle, designated chair of the Board of Directors of LafargeHolcim. “With this announcement, we remain firmly on track to complete our proposed merger in the first half of 2015,” added Bruno Lafont, designated CEO of the future combined company.

In Canada, all of Holcim’s solely-owned assets will be part of the transaction, including Ontario-based Dufferin Construction and Quebec-based Demix Béton.

Dufferin, with 35 plants in Ontario, and Demix Béton ,operating 15 plants in Quebec, produce a variety of concrete mixes.

Holcim Canada’s aggregate divisions operate as Dufferin Aggregates in Ontario and Demix Agrégats in Quebec. They include 10 quarries and 15 sand and gravel pits.

Holcim Canada aggregates divisions produce more than 18 million tonnes per year of crushed stone, gravel and sand for the

Aecon rebrands South Rock Aecon Group Inc. has formally rebranded South Rock Ltd., Calgary, AB, which will now be known as Aecon Transportation West (ATW). The rebranding follows Aecon’s purchase of South Rock five years ago.

At the time, the acquisition enhanced Aecon’s ability to deliver large, complex highway and municipal infrastructure and

commercial, industrial, residential and civil engineering sector.

Dublin-based CRH operates in 35 countries with about 76,000 people and 18 billion euros in annual sales. The deal is international in scope and includes U.S., South American, European and Pacific businesses.

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INDUSTRY NEWS

Kobelco to build new excavator facility Kobelco Construction Machinery plans to build a hydraulic excavator production facility in

Spartanburg, S.C., potentially reducing the production lead time of machines for its North American customers and improving its capabilities for meeting market needs.

Site preparation will begin in April 2015 and is expected to be completed in December 2015. The $41-million (US) investment will involve the development of a 156,000 sq.-ft. production factory, 17,000 sq. ft. office building, machinery parking and a testing area. The facility will sit on approximately 85 acres of land with space for future production capacity expansion,

with access to major domestic ports, including Charleston, S.C. and Savannah, Ga. With an estimated annual capacity of 1,800 units, the factory will begin production in January, 2016. Kobelco plans to begin its production with standard machines weighing 20 tons and larger and increase the product line offerings and capacity in accordance with market development. Future production at the facility is expected to include most of Kobelco’s excavator models.

“We are very excited to begin a new phase of our growth in North America,” states Pete Morita, president and CEO of Kobelco Construction Machinery USA. “The announcement of our new manufacturing facility follows the move last fall into our much larger and enhanced new North American Headquarters and Parts Distribution facility in Katy, Tex.”

Saskatchewan implements new OHS regulations As of Jan. 1, new OHS regulations affecting prime contractors are in force in Saskatchewan.

According to information published by Jennifer A. Miller, Tari M. Hiebert and Erinn O’Brien of law firm Bennett Jones LLP, The Occupational Health and Safety (Prime Contractor) Regulations affect many construction contractors in the province.

In cases where “10 or more self-employed persons or workers under the direction of two or more employers are engaged at the worksite,” it is necessary to designate a prime contractor. Where the role of prime is not assigned, the owner becomes the prime by default.

When the owner assigns the prime contractor role to another party, there are certain obligations. For example, the law firm notes that the owner must provide the prime with the policies, procedures and safe work procedures that the employers and self-employed persons have in writing as soon as possible after the prime has been designated.

“In this regard,” note the publication’s authors, “Saskatchewan’s law will be significantly different from other comparable provincial laws, such as Alberta’s Occupational Health and Safety Act.” Owners should consider whether they want to delegate the prime contractor role, how these legal changes impact existing OHS management plans and whether contracts will require amendments.

The regulations assign most responsibility for health and safety activities, policies and practices for workers to the prime contractor.

According to the law firm, the prime contractor must prepare a written plan addressing how the requirements will be met and identify a competent individual to oversee and direct persons at the worksite, among other duties.

Port of Montreal set for $132M upgrade Ottawa will provide $43.7 million to the project. The remainder of the money will come from the port itself, which is expecting more business as a result of the recently signed free trade deal between Canada and the European Union.

The Port of Montreal will get a

The Port of Montreal is the country’s

$132-million makeover to handle

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the fifth-largest along the eastern

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North American coastline. The money

Federal Infrastructure Minister Denis Lebel announced today that

will go toward deepening mooring posts, facilitating the circulation

of trucks and increasing the port’s capacity to handle containers.

This is the first announcement of funding under the National Infrastructure component and the first project to be funded in Quebec under this program.

“We are committed to investing in priority infrastructure projects that focus on creating jobs and promoting long-term prosperity across Canada,” said Lebel.

Renovations are scheduled to be completed by 2018.

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CONSTRUCTION STATS A selection of data reflecting trends in the Canadian construction industry

Total value of permits $ billions 9.5 9.0 8.5

Building permits finish 2014 strong Building permits rebounded in December as contractors registered $7.1 billion worth of work, up 7.7 per cent from the previous month’s double-digit decline, according to Statistics Canada.

This pushed the total value of permits in 2014 to $85.1 billion, up 5.2 per cent over 2013. Between January and December 2014, municipalities issued non-residential building permits worth $34.2 billion, an increase of 5.4 per cent from 2013.

The total value of permits was up in seven provinces in December, led by Alberta ($1.7 billion) and B.C. ($989 million).

8.0 7.5 7.0 6.5 6.0 5.5 5.0 Dec. 2009

2010

2011

2012

Seasonally adjusted

Dec. 2014

2013 Trend

Note(s): The higher variability associated with the trend-cycle estimates is indicated with a dotted line on the current reference month and the three previous months.

Employment

Housing market to moderate, says CMHC

thousands

Canadian housing starts in 2015 are going to look a lot like those in 2014, according to Canada Housing and Mortgage Corp.

“Our market outlook calls for gradual moderation in the pace of new home construction over the next couple of years, as employment, disposable income and high net migration continue to support the market,” said Bob Dugan, chief economist for the Ottawa-based organization. The data appears in CMHC’s first-quarter, 2015, Housing Market Outlook, Canada Edition.

Dugan acknowledges downside risk resulting from the drop in oil prices. “We have widened the forecast ranges for housing starts, MLS sales and average MLS prices to reflect these risks,” he says.

18,000 17,800 17,600 17,400 17,200 17,000 16,800 16,600 16,400

Jan. 2010

2011

2012

2013

2014

Jan. 2015

Employment grows in January Employment increased in January by 35,000 while the unemployment rate dropped to 6.6 per cent, according to the Labour Force Survey, January 2015, published by Statistics Canada. Part-time employment increased by 47,000, while full-time changed little.

“In the 12 months to January, employment increased by 128,000 (+0.7 per cent) with most of the growth in the second half of the period,” according to the report.

Quebec, Alberta, New Brunswick and Prince Edward Island led in employment growth.

The construction sector recorded employment of 1,393,200 in Jan., a 4.7 per cent increase over December’s 1,388,500. From Jan. 2014 to Jan. 2015, employment growth in construction was 2.2 per cent.

Housing Starts Canada Starts (000s) 250 Singles

Multiples

200

150

100

50

0

2011

2012

2013

2014

2015(F)*

2016(F)* (F): Forecast

Source: Statistics Canada

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ASPHALT PAVING

Asphalt mixes made easy

BY PATRICK CALLAN

T

he Ontario Hot Mix Producers Association (OHMPA) liaison committee has created a spreadsheet to simplify measuring asphalt mixes to ensure they meet Ontario Provincial Standard Specification (OPSS) 310.

The OHMPA says current testing processes can be cumbersome and result in the removal of acceptable mix. In addition, not all municipalities have qualified staff that understand how to interpret quality-assurance test results.

Enter the spreadsheet. It is designed to allow municipalities to easily test asphalt to find out which mixes are acceptable, borderline and rejectable. It also calculates a payment for that asphalt based on the quality that was actually produced.

To determine the quality of the asphalt, samples are taken from different lots and sub-lots of the paving project. For example, if you were paving 2,000 tons in one day, you should have four sub-lots of up to 500 tons. Once you have the samples, you test them and then run the numbers into the spreadsheet to see how well the asphalt sample compares to the original job mix formula submitted by the contractor.

The tolerances for the job mix formulas are based on OPSS310 and variation between the job mix formula and the actual samples will determine if the asphalt is acceptable, borderline or rejectable.

To make sure the testing is done fairly, three samples are taken from each lot. The municipality tests the quality-assurance sample, the quality-control sample goes to the contractor to do their own in-house sampling, and a reference sample is kept in case there are any disputes between the first two.

Sub-par mixes will result in deductions from the “payment factor,” meaning the contractor will not receive full payment for asphalt that is not up to standard.

“If you’re supposed to pay them $100 for all their work, but they only have a payment factor of 98.3, you’d only pay them $98.30,” explains Mark Eby, construction manager for the County of Wellington and member of the OHMPA’s liaison committee.

“We’re still working on actually making sure the reduction is appropriate for what is going wrong. We need more sampling out in the field to get the results to adjust it,” he says. “We really do want to ensure that the payment adjustment factor is appropriate for how much they’re going to lose.”

Since the spreadsheet was introduced in November, 2013, a total of 32 lots results have been reviewed (mainly from the County of Wellington). Fifteen received 100 percent payment, 12 between 90 and 100 percent, one between 60 and 90 percent and four were considered rejectable (less than 60 percent payment factor).

“Thirty-two lots is a very small sample size, considering how much paving occurred within the province last year…But it’s a starting point,” says Eby.

supposed to pay them $100 “for“Ifallyou’re their work, but they only have a payment factor of 98.3, you’d only pay them $98.30.

”

One of the problems that arises with testing asphalt is that the results often take a couple of weeks to come back and the testing only takes place once the paving has already been completed.

“The entire job could be done and all of a sudden you find out that you’ve got bad asphalt,” says Eby. “Municipalities don’t want to pay full price for something that’s not full-price material.”

But it’s not only municipalities who are concerned about asphalt quality.

“Contractors want to ensure that the payment reduction meets what the outcome of the asphalt is. Typically, a contractor only has between three to 10 percent profit on a job. If they just lose profit that’s one thing—but if you start digging into their overhead, they’re starting to lose money.

“What we’re trying to do is have the contractor be more diligent in his testing and in his mix,” he says. Ultimately, the goal is to produce higher quality pavement across Ontario and to get more municipalitities and contractors on board with using this spreadsheet.

“Paving costs a lot of money, and if you’re hoping your pavement will last 20 years but you’re getting pavements that are routinely only performing to 14 or 15 years, you’re losing time and it’s costing you more money,” explains Eby.

Hy Th yo

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COVER STORY

Hwy 407 drives east Billion-dollar Phase 1 extension will be complete this year

BY JIM BARNES

E

ven among huge highway developments, Phase 1 of the plan to extend Ontario Hwy 407 eastwards is remarkable. The massive design/build/finance/maintain public-private partnership project near Toronto is a showcase for leadership in construction, planning and the environment. Itâ&#x20AC;&#x2122;s also a project that has faced its challenges.

Studies on the extension began in 2005. In May, 2012, the Ontario Ministry of Transportation and Infrastructure Ontario awarded the billion-dollar DBFM contract to the 407 East Development

Group (407 EDG), with a deadline in 2015.

There are two equal equity partners in 407 EDG: Cintra Infraestructuras S.A. and SNC-Lavalin Inc., through its SNC-Lavalin Capital division. The partnership is responsible for financing and project direction.

The design-build team contracted by 407 EDG is the 407 East Construction General Partnership. 407 ECGP has two equal equity partners, SNC-Lavalin Inc. (through its SNC-Lavalin Construction Div.) and Ferrovial Agroman S.A., each with a 50 per cent share. This group is responsible for design engineering, project

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1.

2.

3.

SUBCONTRACTORS

1. Girders are erected at Structure W3 over Hwy 401.

2. Crew pours deck at Structure W3.

3. 407 ECGP cooperates with railways in managing traffic flow.

The major subcontractors involved in the 407 extension project are: > Belor Construction Ltd., Mississauga, Ont. > Bot Construction Group, Oakville, Ont. > Brennan Paving & Construction, Markham, Ont. > Coco Paving Inc., Concord, Ont. > Dufferin Aggregates, Concord, Ont. > Lafarge Canada Inc., Mississauga, Ont. > Metric Contracting Services Corp., Brampton, Ont. > Miller Paving Ltd., Markham, Ont.

management, procurement and construction. The design was developed by Jansen & Spaans Engineering Inc. and AIA Engineers Ltd. During the 30-year operational term of the contract, operations, maintenance and rehabilitation services will be provided by Cintra and SNC-Lavalin Operation & Maintenance.

Hwy 407 will be a publicly owned, tolled highway. The provincial government will own the facility and control tolling rates and revenue. â&#x20AC;&#x153;There was a desire by the province to retain the toll revenue from these new facilities. That is a distinction from the existing 407 ETR and that was a decision made by the province

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407

of Ontario prior to tendering or awarding this contract,” says Jeff Stapleton, project manager, Infrastructure Ontario.

It’s a matter of balancing risk, says Steven Hankins, chief executive officer, 407 EDG. “They transferred the project risk to the private side in terms of putting the project on the ground and arranging the financing—doing the design, construction, operations and maintenance.” The revenue risk, on the other hand, has been assumed by the Ontario government.

MASSIVE PROJECT It’s a massive project that includes: »» extending Hwy 407 from the Brock Rd. Interchange Eastern Limit in Pickering to the Harmony Rd. Interchange Eastern Limit in Oshawa (approximately 20.3 km.) »» building the West Durham Link (which will become Hwy 412) east of Lake Ridge Rd., a north/south freeway connector to Hwy 401 (approximately ten km.) »» realigning part of Highway 401 (approximately five km.)

There will be six lanes on Highway 407 from Brock Rd. to the West Durham Link; four lanes from West Durham Link to Harmony

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Coco Paving at work Oct., 2014.

Rd., and four lanes on West Durham Link. That totals some 148 new lane-km., with up to 10 interchanges including two highway-to-highway interchanges, 31 major water-crossing structures and 16 road crossings.

The Phase 1 interchanges included in the project are: »» 407/Brock Rd. (being built by 407 ETR) » » 407/Lake Ridge Rd. » » 407/Baldwin St. » » 407/Thickson Rd. » » 407/Simcoe St. » » 407/Harmony Rd. » » West Durham Link/Dundas St. » » West Durham Link/Taunton Rd. » » West Durham Link/Hwy. 7 » » Hwy. 401/Lake Ridge Rd. » » Freeway-to-freeway interchanges at West Durham Link/Hwy. 401 and West Durham Link/Hwy. 407

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CHALLENGING SCOPE The scope is massive, but the technical details such as paving design are spelled out according to established provincial regulations. Qualitas, a subsidiary of SNC-Lavalin, is the pavement designer. There was nothing unusual about the paving design—it was pretty much a straightup Superpave mix, meeting standard provincial paving requirements, says Miguel Angel Alonso, construction manager, 407ECGP. It’s a huge job and the sheer quantity of fill needed for it is a challenge, notes Alonso. Fortunately, the soil in the area is very suitable for this kind of work. “In general, we are able to use 75 to 80 per cent of the soils in the fill,” he says.

While reusing the local soil helps, “The quantities for the granular and asphalt are huge. We

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have to move these quantities over a very short time,” he adds.

Most of the aggregate comes from quarries within 80 km of the jobsite, but the roadbuilders have to manage a fleet of more than 100 large trucks, a logistical challenge in itself.

Another challenge comes from the need to minimize impacts on highway traffic.

“There is a lot of traffic in this area, and every single movement—every single activity—can affect the traffic. We are very concerned about that,” says Alonso.”As part of the agreement, we cannot close a single lane of the highway during the day. We only have night-time closures, and this also applies to roads that connect with the highway.”

A number of traffic studies were done to plan the detours and assess the effects of redistributing the traffic on the area roadways.

The roadbuilders reached out to the municipalities affected—Pickering, Whitby, Oshawa and the region of Durham—and worked with them on scheduling to minimize traffic problems. For example, they made sure that two closures would not occur next to each other at the same time, says Hankins.

“We also have to deal with the railways—and that involves more restrictions than the roads,” Alonso adds. “It’s a very challenging part of the project.”

WATCHING THE WEATHER The weather has been another challenge. It has been a harsh winter in the area, and that limits the work that can be done,

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407

Deck is poured at Structure M12.

according to Alonso. They will work on laying the base down until the weather gets a little warmer and then they’ll finish up with the asphalt paving.

“Right now, we’re cutting and hauling the material for disposal when we don’t need the dirt to balance the cut-and-fill,” says Alonso.

Cut-and-fill won’t be done until spring at the earliest, due to compaction requirements.

ENVIRONMENTAL PLANNING

In winter, they are mainly doing cut-to-waste. They can continue work on the substructures but they can’t pour concrete for the decks or superstructure. They are able to place foundation and substructure concrete, erect girders and set precast deck panels. Most of the work needed to allow for placement of deck concrete will follow in the spring, says Alonso.

They have to consider not only the cold but the thaw. “We have a restriction from March until May, when most of the roads have load restrictions. We won’t be able to haul full loads,” he adds.

During the thaw, the restriction will affect hauling concrete, rebar, granular and precast pieces and placing cranes. “We have to concentrate 80 per cent of the activity in summer,” says Alonso.

But summer, too, can pose problems. Last summer was marked by a series of hard rains that impacted schedules.

Hankins has considerable experience working in the southern U.S.A. “In Texas, you can work 12 months a year, maintaining high degrees of productivity. That was eye-opening for me, to see the winter side of things and how that shortens your season and makes it more challenging,” he says.

Nevertheless, says Gabriel Medel-Carratala, construction manager & deputy D&B director, 407 ECGP, “We have achieved all of our critical milestones.”

Some 35 wet/dry passage structures

date Rossland Rd. crossing the West

course crossing sites such as culverts

Durham Link. The channel design

The project predominantly falls

and bridges. There will be two dry

will mimic the existing watercourse

south of the Oak Ridges Moraine

culvert structures for wildlife.

channel in terms of size, slope and

Fencing will be installed to guide wildlife to the passage structures and

enhance cover, and natural sub-

south-flowing rivers and creeks,

plantings at wildlife crossings will

strates, riffles, pools and in-stream

says Calvin Curtis, head, Planning and

provide cover.

cover will enhance fish habitat.

of Transportation.

Provincial approval was obtained in June 2010 and the federal Minister

In addition, escape ramps that

and landscaping to promote shade

transportation corridor will be built.

and help regulate water temperatures will mitigate storm water runoff.

of the Environment permitted the

“For the structures, we’re building

project to proceed in July, 2011.

new, longer alignments between the

ecologically integrated approach

The area is home to several

The landscape plan is an

piers, and the environmental people

that merges landscaping with

endangered species and permits were

are concerned with the effects on

ecological restoration and reflects

obtained under the Ontario Endan-

the fish during construction,” says

the character of local ecosystems.

gered Species Act. There are plans to

Alonso. The response will be to

The landscaping will visually

assist in the recovery of several spe-

shorten the construction time on the

mitigate the project and buffer

cies at risk. These include construct-

alignments.

residential areas from the highway,

ing nesting sites for barn swallows.

A 205-m. realignment of part of

among other things.

*S i c v r

24 / FEBRUARY 2015

20-28_Hwy407.indd 24

•

Storm water management ponds

enable trapped wildlife to escape the Aquatic life was another concern.

•

depth. New planting will restore and

tive area and the source of several

Engineering, Ontario Ministry

•

Lynde Creek is needed to accommo-

for wildlife will be built at water-

plan area, an environmentally sensi-

T

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407

that can be a challenge... We have done well to put a good team together that’s focused on successfully delivering the project… The project will open this year. We’re less than 12 months away from our contract date.”

“This is the best time in a project for me,” says Hankins. “The big impacts are over. The closures have happened, you have impacted the people you have to impact as much as you’re going to. That is all behind us now, and this will be the year of opening things back up again. That’s an exciting time in a project.”

Public Information Centres supported community consultation.

BEST PRACTICES Safety is fundamental to this job. “We have our own health and safety program. We oblige all the contractors to follow it. Training is a key component and we have training rooms. Everybody who comes to the site has to take training before they are admitted to the project,” says Alonso.

It’s a system they’ve used on other projects, and they did not have to modify it significantly in order to use it successfully in the Ontario jurisdiction. Several 407 ECGP safety managers and inspectors are involved.

“All workers need to be trained, as required by the H&S rules, for their position in the project. Every worker is trained about the special risks in this kind of project,” says Medel-Carratala.

Working with the community was another important initiative.

Public consultation through a series of meetings at Public Information Centres helped ensure community buy-in. Those meetings addressed the requirements of the Community Value Plan (CVP), developed by MTO as part of the Environmental Assessment process. The plan focused on a range of features of historical, social and natural environmental interest that reflect the values and interests of communities affected by the project and other stakeholders, including First Nations communities.

The plan includes elements like vegetation screening, general restoration/enhancement of natural areas, gateway features at the entrance to local communities, commemoration of local and aboriginal heritage and the establishment of special commemorative sites, trails and wildlife crossings.

THE BEST TIME IN A PROJECT “These kinds of projects are not that different. You always have a lot of stakeholders on a project this big—everyone from your client to your contractors to your municipalities,” says Hankins.

“Every project on this scale brings a lot of challenges,” he adds. “It’s a team effort. You have to coordinate your actions, and

Jim Barnes is contributing editor of On-Site magazine.

Please send comments to editor@on-sitemag.com

PHASE 2 ANNOUNCED Infrastructure Ontario recently named the Blackbird Infrastructure Group as the preferred bidder for Phase Two of the 407 East Extension as a DBFM contract.

As of press time, final financial details are still to be worked out.

Blackbird Infrastructure includes: Developers: Holcim (Canada) Inc. and Cintra Infraestructuras Constructors: Dufferin Construction Co. and Ferrovial Agroman Canada Designers: Urban Systems, AIA Engineers and Louis Berger Group Maintainers: Holcim (Canada) Inc. and Cintra Infraestructuras The Highway 407 East Phase 2 project includes: > extending Hwy 407 about 22 km from Harmony Rd. in Oshawa to Hwy 35/115 in Clarington > connecting Highways 401 and 407 with a 10-km East Durham Link that will serve as a northsouth freeway > eight new interchanges, including freeway-tofreeway connections at Hwy 407 to the East Durham Link and Hwy 35/115, and at the East Durham Link to Hwy 401.

The cost of the project will be announced in the next few months following financial close procedures.

Construction work is expected to begin in fall, 2015.

Phase 2, like Phase 1, will be publicly owned and controlled.

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RECYCLING Metso Lokotrack LT106 has 450 mtph throughput.

Punching above your weight

New crushers offer power, durability

G

DAVID GODKIN

reat hands, but can’t move his feet. Big and slow.

And that jaw? Nothin’ but glass.

That last word is about the worst thing you can say about a professional boxer. But strength, mobility and durability are just as important in the demolition and recycling business. Just how tough are the crushers being pitched to demolition and recycling contractors out there? In this issue we find out.

When you’re considered an industry heavyweight, you have to be able to take on all comers, i.e. rock, iron, steel­—anything that gets

in your way. At 14,350 kg and an hourly throughput of up to 450 mtph the Nordberg C106 jaw crusher isn’t Metso’s biggest primary crusher: Central Canadian distribution manager Steve Craig says that distinction goes “to our C200 with a production rate of 1,100 metric tons an hour.” But together the C106 and LT106 mobile unit, he says “remain one of our hardest-working, most competitive machines.”

Metso’s other boast: the C106 aboard the LT106 mobile unit not only takes apart the hardest materials, its modular structure enables it to adapt to several configurations. “It’s the same

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RECYCLING

Y FT2650 jaw crusher has 256 mtph capacity.

crusher that would go on a stationary unit, but it’s been modified in terms of overall height,” says Craig, “and that’s important. When you go to a portable application, you need to make sure it can travel down the road legally.”

This is a piece of equipment you “ want to install and keep for 20 or 25 years before you replace it. ” A jaw crusher is only as good as its ability to take repeated blows, of course. Craig says what keeps the C series jaw from breaking is the Nordberg’s bolted construction, “which has allowed us to get higher internal forces to crush material inside the chamber.”

The only way the jaw frame’s high-torqued bolts can come loose “is with a torque gun.” The welding points on a welded frame, by comparison, are subject to stress and fatigue and become your weak points, according to Craig.

Sandvik’s Stationary Crushing & Screening Business line manager Stephen Dobler begs to differ. Sandvik boasts a singletoggle jaw crusher consisting of two side plates of rolled steel, plus hollow castings at the end of the front frame, to provide a very

high rigidity/weight ratio. However, unlike the Nordberg jaw, Sandvik’s CJ series jaw crusher relies on a uniform welded construction—“equally strong in all directions and ensuring excellent durability against shock loads.” And that’s important, Dobler explains, because loading and unloading a jaw crusher while it’s crushing has a “bending” effect on the machine.

“Welding is an advantage, in that the frame remains rigid while crushing compared to a bolt design that can come loose where the part starts moving and cracks propagate at the bolt-hole location.

Welding provides a much stronger design.”

Not that a bolted design isn’t strong, Dobler hastens to add.

It just isn’t as strong or as durable as a welded frame. “This is a piece of equipment you want to install and keep for 20 or 25 years before you replace it.”

In fact, Dobler maintains that designing a single-toggle jaw crusher requires all the attention to detail that design engineers apply to a jet engine. That includes finite-element analysis to determine stress “at every location within the machine and how the components are integrated into the box to make it stronger and lighter. It’s pretty high-tech.”

Product manager Ron Kriess says that management at KPI-JCI and Astec Mobile Screens couldn’t be happier with their latest

30 / FEBRUARY 2015

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RECYCLING

Grizzly pre-screen: modules are easily interchangeable.

product launch—the track-mounted FT2650 jaw crusher. This is a 14,528 kg machine with a 256 mtph capacity. One highlight is a grizzly finger pre-screener designed in step decks “one underneath the other,” says Kriess. This is to allow the screen to adapt the

crushing unit to multiple configurations, “to make them adaptable to the situation that you’re in.” Were there any bumps along the way in the design phase? Sure, says Kriess.

“Putting a screen under a grizzly module was always a problem, because the screen was just a wire mesh and would always end up plugging up.” By converting it to a high stroke/low speed prescreener, the grizzly fingers, or tines, vibrate at a different rate than the pan, making it much less likely to plug from the excess -20-mm dirt that contractors are anxious to be rid of during recycling.

The other feature of KPI’s jaw crushers is a reduction in the number of processing attachments required to feed the crusher.

“The wider the crusher,” says Kriess, “the less you have to do on the front end.” Kriess estimate the average jaw crusher width to be 42 to 44 in. The FT2650’s feed opening is 26 by 55 in., with production rates through the plant of up to 500 tons per hour.

According to company literature, increased stroke provides up to 25 per cent more capacity, more compression, more relief and faster throughput.

But it’s claims about the importance of increased width which sparked debate among other crusher manufacturers. “Width is one thing, says Voghel Inc.’s general manager Jean-Sébastien Voghel.

O

C

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15-02-11 1:27 PM

Width is one thing, but a block of “stone from a quarry normally has a cubic shape, so if you have a 55-in. width but only have 25 in. of depth it’s useless.

”

But a block of stone from a quarry normally has a cubic shape, so if you have a 55-in. width but only have 25 in. of depth it’s useless.”

A wider jaw works well in some applications like demolition where you’re “trying to put ‘slabbier’ stuff into the crusher,” agrees Steve Craig. But don’t focus on width at the expense of depth.

“Slabbier material is going to vary widely in size distribution, so that it forms a bridge as it goes towards the crusher. You don’t want things to bridge or plug up your crusher’s feed opening.”

“A lot of our competitors’ jaws will have a very wide opening but a very shallow chamber,” Dobler adds. “The advantage our much-deeper chamber has is that we can actually have the same opening at the top and bottom, but the angle of the plate is much more vertical.”

Dobler is talking about the Sandvik deep crushing symmetrical chamber. A much more vertical nip angle allows you to get a firmer grip on the material and pull it up, which in turn eliminates bridging of material at the opening. There’s another consideration, too, Dobler says.

“The wider your jaw is, the more tonnes per hour you’ll be able to push through it. But the wider the jaw, the more horsepower you’ll need to do the same amount of work.”

Professional boxing is about defense, not just offense. The same is true when you’re designing a crushing machine. Lighter-division mobile impact crushers like Rubble Master’s compact RM 100 really require protection, says Voghel. “A wear plate at the top of the moving jaw is positioned at an angle and leads the material into the chamber,” says Voghel, but it also protects the machine.

Meantime, a deflector plate at the bottom of the crushing chamber protects the discharge conveyor from falling crushed materials.

Sandvik’s CJ series has a deflector plate protecting the moving jaw, too. But at five in., the plate is “extremely thick compared to anyone else in the market,” Dobler says. That extra thick plate means the back wall of the rock box taking materials off the conveyor “can be located higher up and further back, which

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RECYCLING

Sonduik CJ series singletoggle jaw crusher has high rigidity-to-weight ratio.

gives you a larger actual opening.” Because some other OEMs’ jaw crushers are “extremely thin, if non-existent,” he says they require a stationary cross-wall on the back on the rock box to protect the top of the moving jaw, he says.

Problem: this reduces effective feed opening. Material cannot be crushed until it has dropped deep into the crushing chamber.

In other words, your effective feed opening is less than a nominal feed opening.

ABOVE ALL, KEEP YOUR FEET MOVING… “Our RM crushers as a whole are an innovation,” says Voghel.

Instead of building very large rock crushers and reducing the design to crush asphalt and concrete, Rubble Master went in the opposite direction—it designed the RM 50 to about the size of a small container bin to crush about 20 tonnes of concrete per hour, he estimates. This unit was soon joined by larger versions to crush larger and larger amounts of concrete.

“The crushing chamber is unique in the way it’s designed, too.

It’s only got one crushing wall, so that makes more room inside the chamber to accelerate the material and provide a greater impact when the material is being hit by the rotor,” says Voghel.

Steve Craig is clear about what makes his product popular.

The C series jaw crusher aboard the LT106 mobile unit provides a single move on a track-mounted unit. “You don’t have to disassemble the track unit, like taking heaters off, to make it go down the road legally.” Three different speeds—walking, loading and offloading from trailers­—enable you to move efficiently on and off inclined demolition sites, for example.

Like Metso’s LT106, KPI’s FT2650 travels down the road at a low-height profile with its under-crusher conveyors, Kriess says. It has “three different positions to go under the jaw, so that it can travel at a tucked up height and be easily lowered into position.” In addition, disassembled feeders “sometimes require support equipment to put back on, and aligning that support equipment also takes time and money.”

That’s something that is a little easier in Canada than the U.S., with 52 regulatory agencies to worry about. But wherever you are, at the end of the day, Kriess concludes, “it’s all about getting your equipment into the site, getting the work done and getting out of there as quickly as possible.”

David Godkin is a B.C.-based freelance writer and editor.

Send comments to editor@on-sitemag.com

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2015 MERCEDESBENZ SPRINTER

BIG VAN GETS BOOST IN WORKSITE PROWESS

Major new features expand the capability of the 2015 Mercedes-Benz Sprinter cargo van.

M

BY BILL ROEBUCK

ercedes-Benz is upping its game in the fullsize cargo van market with its 2015 Sprinter, which offers two significant improvements: Crosswind Assist and a four-wheel-drive option.

In addition, there's a new standard four-cylinder diesel engine that's smaller and more fuel efficient than before, and an increase in the van's maintenance interval from 20,000 km to 30,000 km.

Crosswind Assist is now standard on all 2500 model variants to help keep the big vehicle on course in strong crosswinds. To prove its point at a recent demonstration to the media, MercedesBenz went to its US Sprinter reassembly plant in Charleston, S.C., where it had hired three V8-powered swamp boats, each with giant fans, and set them up side by side on their trailers in a parking lot beside the plant.

The plan was to drive past the running fans, which together generated a 145 km/h crosswind, first in a Sprinter without Crosswind Assist, and then with the model featuring it. The system activates at speeds of 80 km/h and over, so for the tests, we were travelling at about 100 km/h. In the first run, no matter how hard the driver tried to hold a straight line, the big Sprinter was pushed sideways by the wind several inchesâ&#x20AC;&#x201D;maybe more than a foot.

Then we tried again using the Crosswind Assist. While you could still feel the push, the van was moved only a couple of inches by the powerful blast of air. This is an impressive and significant technology for a vehicle with such a large side surface. It's activated by the vehicle's Adaptive ESP electronic stability program, which uses Brake Assist on the windward wheels to help stay the course when a certain speed of crosswind is detected. The system isn't available on cab chassis, super-high roof or 3500 models.

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2015 MERCEDESBENZ SPRINTER

Adaptive ESP electronic stability program uses brake assist on the windward wheels.

Other available safety features on the van include Blind Spot Assist, Collision Prevention Assist, Trailer Stability Assist and tire pressure monitors.

The Sprinter Cargo's base model engine is now a 2.1-litre inline four-cylinder diesel producing 161 hp and 266 lb.-ft. of torque, mated to a seven-speed automatic transmission. For more cargocarrying and towing capability, a 188-hp, 325-lb.-ft., 3.0-litre V6 diesel using a five-speed automatic is available as an option.

For contractors who want to be sure they never are stuck in mucky jobsites, there's a new four-wheel-drive option, scheduled to arrive in Canadian dealerships in March 2015. The 4x4 comes only with the V6 diesel powertrain.

Normally, the 4x4 Sprinter runs in rear-wheel drive mode. Just push a button on the dash at less than 10 km/h to manually turn on the four-wheel drive when needed. Power is sent to all four wheels, split 35:65 between front and real axles. A low-range transfer case is available as an option, as is Downhill Speed Regulation.

Mercedes-Benz constructed a small but very rugged off-road course on its property beside the Charleston plant so we could test the off-road capabilities. When driving, you are tossed around significantly because of the deep ruts, cutouts and dropoffs.

Observing from the outside, you get to view the underside of the Sprinter as it sometimes tilts up with one wheel high in the air, like a dog in desperate need of a fire hydrant. The system, based on the 4Matic transmissions used in the company's luxury cars, automatically sends power to the wheels that have the best traction.

The 4x4 Sprinter, which has an extra four inches of ground clearance over the 4x2 model, can be ordered with the 144-in. or 170-in. wheelbase in both low- and high-roof configurations.

Mercedes also showed off the capability of its Adaptive ESP system using a Sprinter loaded with about 680 kg of water in three big containers mounted in racks in the cargo compartment. We got to go along for a fun ride at about 50-60 km/h, strapped tightly into bucket seats with harnesses, as a professional driver made emergency manoeuvres, first with the ESP off, then with it on.

60 per cent of Sprinters â&#x20AC;&#x153;areIn Canada, sold to the construction trades, with 60 per cent of those going to owner/operators and 40 per cent going to fleets.

â&#x20AC;?

Steel outriggers mounted on both sides of the vehicle prevented a rollover with the system off. It was a crazy experience! With ESP activated, there was no need for the outriggers as the system significantly stabilized the van.

The Sprinter Cargo is offered in 2500 and 3500 models, with three roof heights (Standard at 65.0 in., High at 76.4 in. and Super High at 84.3 in.), two wheelbase lengths (144 in. and 170 in.), three cargo bed lengths (Standard at 128.5 in., Long at 169.3 in. and Extra Long 185.0 in.) and three GVWRs (8,550 lb., 9,900 lb. and 11,030 lb.). It also can be ordered as a crew van with a three-seater bench in the front row.

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2015 MERCEDESBENZ SPRINTER

Four-wheel drive can be selected manually as required.

A maximum payload for the 2500 cargo van of 3,513 lb. is achieved in the Standard roof model with the four-cylinder engine.

For the 3500 vans, it's 5,508 lb. for the same version. Maximum towing rating for the 2500 is 5,000 lb. and for the 3500 it is 7,500 lb.

The width at the floor in all models is 70 in. Cargo volume ranges

from 319 cu. ft. all the way up to 586 cu. ft. The Super High model is 24 in. taller from road to roof than the Standard version, which is 96 in. tall, something to keep in mind on some jobsites.

Canadian pricing for the Sprinter 2500 144-in. cargo van starts at $41,300 and goes up to $49,900 for the 2500 4Ă&#x2014;4. The V6 adds $2,500.

In Canada, 60 per cent of Sprinters are sold to the construction trades, with 60per cent of those going to owner/operators and 40per cent going to fleets. "In all, 80per cent to 90per cent of these cargo vans are being upfitted with racks, shelving and other storage options," according to Miki Velemirovich, National Manager, Mercedes-Benz Vans Canada, Toronto. He says there are 16 Canadianbased Sprinter upfitters, plus an additional dozen that are U.S.-based but which have installation locations in Canada.

The Sprinter has received many accolades since being introduced to Canada in 2001, most recently the Vincentric Best Fleet Value in Canada award for 2012, 2013 and 2014, as well as the Canadian Black Book Best Retained Value award for 2014. With its newest attributes, it's likely this big cargo van will continue that trend.

Bill Roebuck is a member of the Automobile Journalists Association of Canada (AJAC), which produces the annual Canadian Car of the Year and Utility Vehicle of the Year awards.

Get the latest construction news!

Follow us on Twitter @OnSiteMag

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FEBRUARY 2015

WORLD OF CONCRETE heralds return to normal for U.S. industry

PCA RESEARCH POSITS STEADY CONCRETE GROWTH + WALKING THE WOC PG.50

IN THIS ISSUE: www.on-sitemag.com 44 CRMCA:

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Green Labeling | 47 Concrete Roadbuilding

15-02-11 11:05 AM

Many contractors will expect the EPDs to be the manufacturer’s responsibility for products or systems used in projects applying for LEED certification. The concrete industry must be ready to face this challenge, or it will be caught playing catch-up in the environmental assessment world.

The Cement Association of Canada has developed a PCR for cement, which one member has already taken advantage of to provide EPDs for its production.

The National Ready Mixed Concrete Association is also recognized as able to verify a manufacturer’s EPD. Concrete products may require individual EPDs on each mix design, but the NRMCA has developed an industry wide EPD for a specific range of products.

Companies that participated in the development and operate under the conditions of this EPD are qualified to use it.

The British Columbia Ready Mixed Concrete Association is proceeding with a generic EPD for concrete products in B.C. They will be fully prepared to support their members when the LEED version comes into play in October 2016.

The concrete industry needs to recognize the future initiatives challenging the industry and meet them. EPDs, in whatever form they may finally arrive, will provide the industry with the opportunity to lead, follow or get out of the way. The industry will have to decide how best to protect its existing and future market growth.

Provided by the Canadian Ready-Mixed Concrete Association.

Send comments to editor@on-sitemag.com.

Well equipped – to Move the Biggest NeWs. On-Site weekly has been optimized for your hand-held device!

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To make sure that you don’t miss a single news item we have redesigned our e-newsletters so that you can stay up-to-date in the office and on the job site.

In addition to the most current construction news, On-Site weekly features products and video interviews.

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ROADBUILDING

A Hard Road Concrete paving wins converts

C

BY MICK PRIEUR

oncrete paving has long been the method of choice in road construction in many areas of North America.

The reasons vary from region to region, but include life-cycle cost, initial cost, durability and many environmental factors.

In the southern U.S., many of the roads are concrete due to requirements for performance and durability related to the temperate climates. However, moving further north in the US and into Canada, it becomes more difficult to rationalize a concrete road simply on long-term performance and durability.

The reality is that road paving in these regions is determined more by initial cost alone than by regard for the long-term benefit to the taxpayer. The dynamics of this thinking are slowly changing.

Social, environmental and economic pressures on infrastructure development and rehabilitation are driven by the need to maintain healthy economic growth.

The economics have substantially changed. Fluctuations in the price of oil and increasing aggregate costs are pushing the cost of asphalt cement upwards. Today, concrete paving can compete effectively on first cost. The aggregate factor is a combination of both costsâ&#x20AC;&#x201D;from the reduced need for use under a structural pavement to the reduction on environmental footprint of acquiring new aggregate sources.

The use of concrete pavements is slowly growing in Ontario, and municipalities are taking notice. In the last several years, the Ministry of Transport in Ontario has tendered 10 alternative bid projects (based on a limitation of traffic volume of one million ESALs (Equivalent Single-Axle Loads). All of these projects have gone

Today, concrete paving can compete effectively on first cost.

to the concrete option based on initial cost. In 2012, under the direction of Minister Bob Chiarelli, the Ministry of Transportation has reduced the limit for alternative bid contracts from one million ESALs down to 500,000 ESALs. This reduction in limits has allowed MTO to start evaluating the use of concrete roads on more of its network.

Municipalities are also starting to use more concrete. While cities like Toronto and Windsor have been using concrete for many years, other cities are still getting their feet wet. The city of Hamilton has many concrete roads around its industrial areas that were built 15-20 years ago, but now they are paving more roads with composite pavements as well as some conventional concrete. Other counties and regions around the province are looking at concrete as well. In 2015, there are already four projects on the books, with potential for others.

The city of Toronto has been using concrete pavements for many years. It is estimated that 80 percent of Toronto is composite pavement. The city uses a composite pavement system to get the long-term durability of concrete while using asphalt as a sacrificial

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ROADBUILDING

surface that can be easily repaired once the skid resistance has deteriorated. In recent years, the advancement of diamond grinding and diamond grooving of concrete pavements has provided an alternative to the traditional sacrificial asphalt layer that eliminates the risk of potholes and rutting from the asphalt.

The city of Hamilton has also started to use concrete a lot more. In the heavy industrial area around the old Stelco and Dofasco plants, there have been concrete pavements for more than 15 years. Most recently in 2013, the city of Hamilton has reconstructed a portion of Burlington Street East. This section of road was a composite pavement that was near the end of its life. The city decided to reconstruct it as an exposed concrete pavement.

Since 2009, the city of Hamilton has used an alternative bid program where a portion of their projects have both concrete and asphalt in the tender. The market can then price whichever option they prefer. In 2011 and 2012, approximately 50 per cent of their reconstruction projects have gone concrete, usually as a composite pavement. The city is seeing savings with the concrete due to needing less pit-run granular materials. Another savings is in the bid cash allowance. Since the price of concrete is fixed, with

Growing recognition by MTO and the municipalities augurs well for concrete paving.

The city uses a composite pavement â&#x20AC;&#x153;system to get the long-term durability of concrete while using asphalt as a sacrificial surface

â&#x20AC;?

no escalator clause, the city does not need to have such a large contingency fund.

In 2014, the Region of Waterloo tendered an unbonded concrete overlay. The project is a 1.2-km. section of Spragues Road just south of Cambridge. This is a two-lane section with residential and commercial businesses on it. It is an old MTO road that had asphalt overlaid onto a concrete base.

The asphalt is in poor condition and the region has decided to reconstruct the road. The original plan was to remove the asphalt and maybe the concrete, backfill with granulars and then cap it with hot mix asphalt. The original plan would have raised the road profile by 100 mm or more.

The project was reviewed by Ready Mixed Concrete Association of Ontario and an alternative was suggested. By removing the poor quality asphalt, repairing any shattered concrete slabs and then placing a 25-mm asphalt overlay with an exposed concrete pavement on top, there would be only slight changes to the road profile.

By using the existing concrete base the project was expected to save the region money not only for the pavement but also by removing the need to increase the width of the platform.

The project was tendered at the end of July, with three qualified bidders. Capital Paving was the lowest bidder at $1,475,000 and

was awarded the project. Miller Paving has been subcontracted for the concrete work which will start in the spring of 2015, and should take approximately four days to complete.

The City of Windsor has been constructing concrete pavements for years, with the recent Parkway project being constructed from concrete pavements. The County of Essex has been tendering sections of County Road 22 for several years. In 2015, they will be constructing a concrete roundabout. The project was tendered in September of 2014, with Coco Paving being awarded the $3.3 million project.

In 2015, expect to see more concrete pavement tenders coming out. Some regions are commenting that their intersections are not lasting as long as they should. At least one municipality has stated that they will be tendering a concrete intersection in one of their high-traffic areas. If the trial project goes well, they will be replacing many more.

The recognition by MTO and some of the forward-thinking municipalities demonstrates that the movement toward the use of concrete roads is not just a blip in the construction field. Instead, it is a smarter approach in the use of infrastructure dollars based on life cycle costs, durability and long-term performance. More importantly, concrete roads compete well on initial cost.

F s p n m

Mick Prieur is senior pavements engineer, Ready Mixed Concrete Association of Ontario, Mississauga Ont.

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WOC

S

Fo m tu th tr 60 ca

WoC 2015 heralds return to normal

No th

for U.S. industry

1.

PCA research posits steady concrete growth

T

BY JIM BARNES

he U.S. concrete industry is in for robust growth over the next few years. The good news came from Ed Sullivan, chief economist and group vice president, Portland Cement Association, in remarks to a press conference at the World of Concrete tradeshow in Las Vegas, Nev., held in February.

In a presentation titled PCA Outlook: 2015-2019, he called for a seasonally adjusted annual rate of consumption of a hundred million metric tons next year, the highest SAAR since Jan., 2008.

He considers that number to be fairly normal for the industry, reflecting a return to healthy levels of consumption after the recent decline. He called for fairly consistent growth, at roughly eight per cent last year, this year and next year.

Steady growth can be expected for the industry over the short term, driven by a strengthening economy and substantial

Portland Cement Consumption

PORTLAND CEMENT CONSUMPTION, U.S. Metric Tons Thousand MetricThousand Tons 140,000

2014 = 8.2% 2015 = 8.0%

120,000 100,000 80,000 60,000 40,000 20,000 0

1998

2000

2002

2004

2006

Current Forecast

2008

2010

2012

2014

2016

2018

Spring Forecast

improvement in the labour market. He called for economic growth of about three per cent on a sustained basis. At the same time, he said, declines in the price of oil should be a net positive for the U.S. industry.

Low oil prices should add 20 to 30 basis points to real GDP growth rates in the U.S. during 2015-2016. “Gasoline is cheaper.

Heating fuel is cheaper. It is a net positive for the country,” said Sullivan.

He noted that the pace of improvement will differ from consumers to construction. “Unfortunately, the transmission process from oil price declines to construction activity contains timing lags,” said Sullivan. “The time it takes for oil prices to impact consumer/business behavior is short, but impacting the decisions to build is a longer process.”

There is little potential for positive impacts from lower oil prices for construction activity in 2015 or the first half of 2016. Where the energy market is concerned, it will have a negative impact. Nevertheless, job growth and a strengthening economy will boost cement consumption this year. PCA foresees small increases in cement consumption resulting from low oil prices in 2015 and after.

Concrete’s traditional competitor in paving, asphalt, will not benefit as much from the decline in oil prices as the rest of industry, according to PCA. Declines in the price of oil do not correlate directly to the cost of asphalt for a number of reasons. For one, refiners tend to adapt production in favour of oil over heavier products at times like these, he said.

Job and economic growth will in turn drive the housing market, Sullivan said. A 22 per cent increase to 1.2 million units this year is possible. Strong gains are also foreseen for 2016.

Sullivan was particularly upbeat on multifamily starts, as

50 / FEBRUARY 2015

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demographic trends and strict mortgage standards push potential homebuyers into rental units. Inflation remains low, interest rates are expected to increase only gradually, home price increases are slowing and rents are strong. Lending risks are subsiding and lending standards are beginning to ease, according to Sullivan’s research.

About 70 per cent of building is taking place in areas described as high-wind, including regions subject to tornadoes and hurricanes. Concrete is a natural fit for these areas. “We’re trying to make sure that homes are safe,” says Sullivan. PCA is working with other industry organizations on the issue of high-wind construction.

Sullivan expects some three million net new jobs to be created in both 2015 and

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2016. At the same time, as unemployment drops below six per cent, increases in wages, job quality and security are to be expected.

Consumer confidence also is on the upswing. Debt-to-household income is at an 18-year low, and some pent-up demand exists. As job numbers and quality increase, lending should strengthen at the same time.

Consumers are again becoming optimistic.

“They see a strengthening labor market.

They see the potential for wage growth.

They see interest rates being low and inflation is under control. The stock market is performing well,” said Sullivan. “We are now achieving remarkable and sustained gains.”

Going forward, Sullivan noted that the underlying economic fundamentals are strengthening and are reflected in the labor market. Sustained gains in monthly job creation, stronger state and local tax receipts, more favorable return on investments for commercial building and stronger household formation should lead to stronger construction spending this year.

“The wounds have healed,” he said.

Jim Barnes is a contributing editor to On-Site magazine.

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CEMENT SALES STEADY IN CANADA While the situation in Canada is not as robust as it is in the U.S., growth in cement consumption is expected, according to the Cement Association of Canada.

The decline in the price of oil will put about a thousand dollars in the wallet of the typical Canadian consumer, but that won’t be enough to offset the corporate pain, according to a Conference Board of Canada quarterly outlook. Economic growth will slow by 0.5 percentage points to

1.9 per cent in 2015, a decline from

economic trends related to cement

its November forecast of 2.4 per cent.

consumption.

“We generally expect slow-to-

A Nanos Research survey in February revealed declines in consumer

modest growth through 2018, though

confidence. The research showed that

the oil price volatility has scaled back

45.5 per cent of Canadians predict

some construction plans this year

the economy will fade over the next

and next – particularly in Alberta,”

six months, the highest level since

notes Lyse Teasdale, director,

the first quarter of 2009. Only 15

Communications of CAC. “Ontario and Quebec, our largest

per cent said it would strengthen, the lowest level since 2008.

Nevertheless, CAC calls for fairly

provincial markets, will benefit from modest growth in overall

steady near-term sales of cement in

construction. From roughly 9.3

Canada. The organization performs

million tonnes of consumption nation-

a comparable role in Canada to

ally last year, we expect to be close to

that of PCA in the U.S. in assessing

10 million tonnes in 2018,” she adds.

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WOC

Walking the WoC World of Concrete reflects industry confidence

W

orld of Concrete 2015 in Las Vegas, Nev. was a dramatic success, reflecting strong optimism in the industry. Nearly 56,000 professionals attended, compared to last year’s 48,000. Some 1,500 companies showed their wares across more than 675,000 net sq. ft. of space, 100,000 net sq. ft. more than 2014. This was the largest World of Concrete in six years.

“These increases show not only the value that World of Concrete brings to the concrete and masonry industries but also shows that the industry is getting stronger and poised for much success in 2015,” said Tom Cindric, vice president, Informa Exhibitions U.S., Construction & Real Estate.

High levels of participation in the education sessions and renewed international attendance were other hallmarks of the event, according to Jackie James, show director.

Highlights of the 2015 edition included the opening ceremony, where the World of Concrete Legacy Award was presented to recipient

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Equipment demos are a highlight of WoC.

Ed Sauter, executive director, Tilt-Up Concrete Association and executive director, Concrete Foundations Association.

As a launch pad for new technology, a demonstration site for current equipment, services and software, a forum for ideas and a venue for many important association meetings and conferences, there was a considerable buzz at the show.

There was something for all aspects of the concrete industry: training, masonry, new technology, material handling, repair and demolition, decorative concrete and more.

Too many new products were introduced to cover them here— you’ll be seeing some of them over the next few weeks in our online edition. Almost all the major construction equipment OEMs were on hand to show new concrete and construction gear.

F p p a a a *

54 / FEBRUARY 2015

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ogy.

STIHL TSA 230 BATTERY CUT-OFF SAW

Voltage 36 V Weight* 3.9 kg/8.6 lb Cutting Wheel Diameter 230 mm/9” Maximum Cutting Depth 70 mm/2 ¾” AP 180 Battery Running Time 15 mins AP 180 Battery Charging Time with AL 500 Quick Charger: 100% 25 mins *Excluding cutting wheel and battery † See dealer for battery and charger options

STIHL is the world’s best-selling brand of cut-off machines. And for good reason these professional and powerful tools are built specifically to meet the challenges of construction work. Reliable, low-maintenance and sturdy, they are full of useful innovations to make your work easier. Every inch of these handheld machines is designed for ultimate performance. Whether your day calls for trimming metal pipes down to size or cutting curbs and expansion joints, we’re “reinventing the wheel” to get it done better.

• Unrestricted mobility

Small in size, big in action. The STIHL TSA 230 is the first battery-powered cut-off machine with a 230 mm/9” cutting wheel, and it is light at only 3.9 kg/8.6 lb (without battery).

Emission-free cordless technology ensures clean work, both indoors and outdoors.

The standard-fitted water connection and optimal accessories for attaching to a vacuum cleaner ensure effective dust control when cutting. With a cutting depth of up to 70 mm/2 ¾”, the TSA 230 is equipped for a variety of applications.

• Dust-free and clean cutting

• Emission-free power tool • Starts quickly and easily • Ease of handling in tight spaces • Secure grip with an ergonomic curved handle • Equipped with a spindle lock - easily change cutting wheels • Low-maintenance and efficient EC motor

QUALITY AT WORK. For 89 years, STIHL has been a world-class innovator in outdoor power equipment. German engineered products featuring the latest pioneering technologies make STIHL the market leader. STIHL products are only available at independent STIHL Dealers who provide expert advice and on-site service. Thank you for supporting the leading team and for making STIHL the Number 1 Selling Brand in Canada.

*

* “#1 Selling Brand in Canada” is based on an independent market share analysis of gasoline-powered handheld outdoor power equipment from 2014. Source: TraQline Canada.

STIHLCanada

JOIN THE CLUB that everyone is talking about! www.STIHLCLUB.ca

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RISK

By David Bowcott

What is the ideal procurement model?

The debate continues…

R

ight across the country and throughout the world, the debate over the “right” way to procure and operate assets continues to rage on. Owners have a myriad of options when it comes to financing, designing, building, operating and maintaining their assets as illustrated in the diagram below.

So which one is the best? The answer continues to be elusive, as special interests behind every delivery model often cloud the truth in this debate to better serve their own selfish motivations. Owners, design firms, and contractors deserve better.

And more importantly the project and all touched by the project deserve better.

In December of 2014, the national media covered two major stories related to two of the most popular construction delivery models in today’s marketplace.

One story was focused on the so-called excessive debt costs associated with public-private partnership delivery models (P3s, or as we call them in Ontario AFPs —Alternative Financing and Procurement), where the private sector is responsible for

raising financing. The other story focused on the traditional design-bid-build delivery model and apparent massive cost overruns associated with one high-profile project that used this model. The media slammed both delivery models equally strongly, vilifying both and leaving the reader with the impression that each model should be immediately halted in order to “make better use of taxpayer money.”

After reading and viewing much of the coverage associated with both stories, it became apparent that the real story wasn’t “Why P3s might cost more because they are using private debt,” or “Why the design-bid-build work done in Toronto was 40 per cent over budget.” Rather, the real story was about the lack of detail and fact around each individual story, and more importantly, around the pros and cons of each delivery model used.

These were stories intended to attract readers and viewers, and as is often the case with today’s media, the facts were secondary to the fiction that attracts media consumers… The “If it bleeds, it leads”

mentality. That mentality really gets in the way of the unbiased reporting that could spur real debate and—who knows —maybe actually uncover the truth about which delivery model is best for which type of project, helping owners spend their stakeholders’ money more efficiently.

So if “real debate” is our destination, then how do we get there? Well, rather than coming up with a ten-point plan on how to get truth and transparency back onto the table when it comes to debating the ‘ideal” delivery model for various asset types, I’m going to focus on one key point in how to get there: developing a standard approach to measure asset procurement performance and asset operational performance. Once we have a standardized way to measure success and failure, we can then have real debate around which model is ideally suited to which asset type.

Governments and corporations should be investing their money, time and energy into developing such standards in order to provide their taxpayers and shareholders with the highest levels of transparency and accountability when it comes to providing a rationale for their decisions.

There are several initiatives under way globally to standardize the measurement of asset management performance in all phases of the asset’s life. We should be paying close attention to these initiatives in order to develop national and global standards which could act as the foundation for sound decision-making.

David Bowcott is senior vice-president, national director of large/strategic accounts at AON Reed Stenhouse Inc. Send comments to editor@on-sitemag.com Source: Aon’s Construction Services Group

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NHES

Innovation is centre-stage at NHES The 2015 National Heavy Equipment Show features innovative products, thought-provoking seminars

T

he National Heavy Equipment Show returns to Mississauga March 5-6, 2015. It will take over Halls 1, 2 and 5 of the International Centre. Mammoth space for a mammoth show!

This key industry event will focus on construction, roadbuilding, land improvement and infrastructure. The leaders of the heavy equipment and construction industries will be there with cutting-edge equipment and huge displays.

Among other attractions, this year’s edition will offer visitors an opportunity to attend a variety of educational and informative seminars. “Heavy Education” is a series of four informative seminars. The sessions will provide practical information to save contractors money in the workplace, including: »» preventative maintenance for OEMs »» the value of buying, renting, leasing and financing major equipment purchases; and »» best practices for financial planning in the construction industry.

The entire seminar program takes place on Day One of the show—Thursday, March 5th— and is free of charge to registered visitors to the National Heavy Equipment Show.

As seating is limited, attendees are asked to register in advance.

Visit www.NHES.ca for more information and to quickly and easily

Show hours Thursday, March 5, 2015: 9:00 a.m. to 6:00 p.m.

Friday, March 6, 2015: 9:00 a.m. to 5:00 p.m.

Online registration for the National Heavy Equipment Show is available now. Visitors who pre-register save 50 per cent and fast-track their entrance into the show. Visit www.NHES.ca for additional information and to pre-register for the show. register for one or more of the sessions, which are outlined below.

Additional features of the 2015 National Heavy Equipment Show include: Show Specials—Attendees are invited to “Shop the Show”, as many exhibitors will be offering special promotions and discounts exclusive to the National Heavy Equipment Show. A sneak preview is available now on the show website.

The Gravel Pit— Once again, part of Hall 5 will be transformed into the “Pit”. This area will treat visitors to the largest and most complete display of aggregate machinery—including huge equipment like 40-ton crushing and screening machines—along with conveyors, scales, recyclers, front-end loaders, hammers, drives/ motors and much more.

Snow & Ice Removal Area—This area will showcase the products, services, equipment and technology used in snow and ice removal and winter operations—big business when it comes to life in Canada. Network with the top manufacturers, distributors and dealers from the leading snow and ice management companies.

Don’t miss it if you’re in the business of snow plows, attachments, sanders, deicers/anti-icers, spreaders, trucks, salt storage, professional services and other solutions for Canada’s multibillion-dollar snow and ice removal industry.

Rental Pavilion—Housed in Hall 1, the Rental Pavilion will showcase the latest equipment, tools and products for sale or rent to the tens of thousands of contractors and roadbuilding professionals who attend the show. It offers exhibitors a unique opportunity to influence the rental frequency and volume of both large and small contractors.

Recruiting Here—Companies hunting for new talent, including some of the leading Canadian equipment manufacturers, are part of Recruiting Here—sponsored by Maizis & Miller. This program gives exhibitors an opportunity to promote that they’re looking for

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Safety Products—Watch for our focus on employee safety and worksite security throughout the show. This rapidly growing market caters to the needs of safety, health and environmental professionals from across Canada. Get up to speed on important industry challenges, such as roadside safety for workers.

Seminar Schedule

new recruits to join their team, and encourages job seekers to come with resumes in hand to connect with the employers who need them. A current list of companies who are recruiting is available on the show website, and signage will indicate participating exhibitors at the show.

Thursday, May 5, 9:30-10:15 a.m: Inside Maintenance Learn best practices for keeping heavy equipment running effectively and efficiently, no matter the working conditions, temperature or operator.

10:45-11:30 a.m: Outside Maintenance Keeping the exterior components of the machine safe and clean can help improve the efficiency of the job site.

1:30-2:15 p.m: Owning the Machine Our expert discusses the values of purchasing, renting and leasing machinery for different construction operations.

2:45-3:30p.m: Purchasing Power We discuss the options for financing your equipment and the institutions that can provide the smartest financing options.

ADVERTISERS’ INDEX & WEBSITES ADRIAN STEEL............... www.adriansteel.com................................................... 40

KOMATSU........................ www.komatsuamerica.com......................................... 36

BOBCAT............................ www.BobcatAdvantage.com/CTLFaceOff1.... 32,33

KPI/JCI.............................. www.kpijci.com.............................................................. 28

BRUTE............................... www.rubbermaidcommercial.com............................ 57

KUBOTA............................ www.kubota.ca............................................................... 64

CASE.................................. www.CaseCE.com/MDozers.........................................4

MACK................................ www.MackTrucks.com/mDRIVEHD......................... 39

DETROIT DIESEL............ www.demanddetroit.com...............................................6

MAPEI............................... www.mapei.com............................................................. 46

DEXTER & CHANEY...... www.dexterchaney.com/today.....................................9

NAVISTAR....................... http://ca.internationaltrucks.com............................. 34

DOOSAN INFRACORE....www.DoosanEquipment.com/RunStrong2............... 31 ERSKINE ATTACHMENTS............. www.erskineattachments.com...................................61

POWER CURBERS......... www.powercurbers.com............................................. 53 PUTZMEISTER............... www.PutzmeisterAmerica.com..................................51

FREIGHTLINER............... www.FreightlinerTrucks.com/Tex-Mix.......................2

QUIKRETE........................ www.quikrete.com......................................................... 49

GEITH................................ www.geith.com................................................................13

STIHL................................. www.stihl.ca.................................................................... 55

GM...................................... www.gm.ca...................................................................... 25

TD..........................................www.tdcommercialbanking.com/representative... 27

HCSS................................. www.HCSS.com............................................................. 22

TOPCON............................ www.topconpositioning.com.......................................15

HUSQVARNA.................. www.husqvarnacp.ca................................................... 52

TOWMASTER TRAILERS......................... www.towmaster.com.................................................... 23

HYUNDAI......................... www.hceamericas.com.................................................19 IRONPLANET.................. www.ironplanet.com......................................................12

VIEWPOINT..................... www.info.viewpoint.com/onsite................................17

JOHN DEERE................... www.JohnDeere.ca/PushBack..................................10

WACKER NEUSON........ www.wackerneuson.com.............................................42

KOBELCO.......................... www.kobelco-usa.com..................................................41

WORLD OF ASPHALT... www.worldofasphalt.com.......................................... 63

on-sitemag.com / 59

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15-02-11 1:41 PM

CONTRACTORS & THE LAW

By Krista Johanson

Duty of Honesty

Principle underlies every commercial contract

I

n the recent case of Bhasin v. Hrynew, the Supreme Court of Canada found that the concept of good faith is an “organizing principle” underlying Canadian contract law, and that according to this organizing principle, a duty of honesty exists between parties to all commercial contracts.

While an implied term of good faith performance of contracts is a concept wellestablished in American law, this is the first time Canada’s top Court has imposed a duty arising out of good faith on parties to a commercial contract.

The case involved Can-Am, a company that marketed education savings plans through retail dealers who were small business owners responsible for building their own sales forces. The plaintiff, Mr. Bhasin, an enrollment director, had a commercial dealership agreement with Can-Am, which owned client lists and implemented branding and other central policies. The agreement allowed Mr. Bhasin to sell or merge his operation only with Can-Am’s consent, and the agreement renewed automatically unless either party gave six months’ notice of termination.

Can-Am appointed a “provincial trading officer” to review its enrollment directors for compliance with securities laws. The appointee was Mr. Hyrnew, a competitor of Mr. Bhasin.

Mr. Bhasin objected to a competitor auditing his confidential records. Can-Am promised—falsely—that Mr. Hyrnew was required to keep such information confidential. In the meantime, unbeknownst to Mr. Bhasin, Mr. Hyrnew pressured Can-Am to merge the two businesses, and Can-Am took steps to arrange the merger.

Mr. Bhasin asked whether any merger was

planned, but Can-Am advised that it had made no decision to merge. Can-Am subequently terminated its agreement with Mr. Bhasin, in compliance with the notice requirement. As a result, Mr. Bhasin’s business lost its value, his sales agents were recruited by Mr. Hyrnew’s agency, and he was forced to find lower-paid work.

He sued Can-Am and Hyrnew.

The trial judge found an implied contract term that Can-Am would decide to renew or terminate the contract in good faith, which it breached by misleading Mr. Bhasin about the merger and the lack of confidentiality associated with Mr. Hyrnew’s audits. Had he not been misled, he could have protected his business’s value.

The Alberta Court of Appeal overturned this decision, finding that there is no general implied term of good faith in commercial agreements and an “entire agreement” clause prevented the implication of such a term in this particular case.

The Supreme Court held that two incremental steps would make contract law more coherent and just: First, “to acknowledge that good faith contractual performance is a general organizing principle of the common law of contract,” and second, to recognize under this principle a “ common law duty which applies to all contracts to act honestly in the performance of contractual obligations.”

The organizing principle is a standard underpinning more specific legal doctrines.

It means that “parties generally must perform their contractual duties honestly and reasonably and not capriciously or arbitrarily.”

This does not require loyalty or putting the other party’s interests ahead of one’s

own. In some circumstances, a contracting party may intentionally cause loss to another party in the legitimate pursuit of economic self-interest, without breaching the good faith principle. However, one must give “appropriate regard to the legitimate contractual interests of the contracting partner” and “not seek to undermine those interests in bad faith.”

The duty of honesty in contractual performance requires parties not to lie or otherwise knowingly mislead about matters directly linked to the performance of the contract.

The Court distinguished between failure to disclose a material fact and “active dishonesty.” For example, if a party to a contract is required to give notice of termination and makes a firm decision to terminate several months before the notice period begins, there is no duty to disclose that decision before the notice period.

The Court found that Can-Am breached the duty of honesty by failing to act honestly in exercising the termination clause. Mr. Bhasin was awarded $87,000, the value of the business that he could have preserved absent Can-Am’s dishonesty.

The Court found that parties are not free to draft contracts that exclude the duty of honesty, because the duty is not an implied contract term but a legal doctrine.

As a result, “no representation” or “entire agreement” clauses will not exclude liability for dishonesty.

In this case, the defendant told two direct lies, and the Court cautioned that mere non-disclosure, without more, is not breach of the duty of honesty. However, the scope of the duty is not yet clearly defined and will likely depend heavily on the facts of each case.

Krista Johanson is an associate with Borden Ladner Gervais LLP. Send comments to editor@on-sitemag.com

62 / FEBRUARY 2015

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