On-Site February 2019

FEBRUARY 2019

THE ROAD NORTH

BLAZING A NEW TRAIL PG. 20

A LEG UP

TAX INCENTIVE A BIG CHANCE FOR CONTRACTORS PG. 29

STRAPPING IN

STAYING SAFE AT HEIGHTS PG. 37

GOING ROBOTIC AUTOMATION BUILDS MOMENTUM PG. 53

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VOLUME 64, NO.1/ FEBRUARY 2019

COVER STORY 20 The road north

Building in Canada’s harshest conditions

IN THIS ISSUE 7 Comment

20

The hard hat – 100 years on

10 News

The major developments

18 Construction stats The key figures

29

44 Readying the big iron NHES returns to Toronto

47 Modular momentum Industry embraces an unlikely source of growth

COLUMNS 60 Expanding your horizon

37

Taking a total cost of ownership approach

62 Are you insured?

Hidden parties in Builders’ risk policies

59 Index of Advertisers

29

37

53

Temporary tax incentive offers contractors a leg up

Rethinking working from heights

The steady rise of job site robotics

A buying opportunity

Bird’s eye view

Assessing the future

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COMMENT

The hard hat – 100 years on Sturdy, life-saving and ubiquitous, there’s nothing in construction quite like it

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Even if there’s little else in common between a compact work site in downtown Montreal and an expansive paving job in rural Alberta, workers are guaranteed to share at least one important piece of attire. The sentiment rings true from parka-clad workers in the Siberian taiga to short-sleeved crews in balmy Suriname, a few degrees of latitude north of the equator.

The hard hat unifies the construction industry the world over, and in 2019, the humble piece of headgear celebrates 100 years.

Now, it’s a little disconcerting to know that pneumatic drills, tunnel boring machines and dynamite – all products of the 1800s – hit the market well before head protection. Still, five generations of workers, some of which inarguably owe their lives to the toughened chapeau, can be thankful we got there eventually.

To be fair, workers have donned various types of helmets and strapped an array of makeshift protectors to their heads since antiquity, but hard hats in their modern incarnation date to a Kentucky manufacturing firm in the early 20th century. The E.D. Bullard Co. – better known simply as Bullard today – was founded in 1898 and originally produced equipment such as carbide lamps to support the turn of the century mining boom.

20 years later, some wartime inspiration and a little ingenuity would transform the business, and job sites everywhere.

As the First World War came to an end and America’s doughboys returned home from Europe, E.W. Bullard, the son of founder E.D. Bullard, modeled a new piece of headgear on the helmet he’d worn fighting overseas. The product, which hit the market in 1919, was a

mash up of steamed canvas, glue, paint and a leather brim. The “Hard Boiled hat” is recognized as the world’s first commercially available head protection device. It wouldn’t be the last, as workers, companies and regulators slowly embraced the concept of shielding workers’ noggins.

Just 10 years after their introduction, hard hats were mandatory for crews building two of the world’s most iconic pieces of infrastructure. In what’s believed to be an industry first, construction workers at the Hoover Dam were forced to don the head protectors. Shortly after, the first hard hat “zone” was set up at the sprawling Golden Gate Bridge work site. Other jobs across the U.S., Canada and the world soon followed suit.

As time went on, designers refined the early steam-heated canvas shell. Enlisting materials such as aluminum, fibreglass and thermoplastics, innovators eventually ushered in the familiar era of (often yellow) hard hats we know today.

Hard hats certainly didn’t perfect job site safety, but the now-standard piece of gear was a major step in the right direction. A century after hard hats first hit the market, more life-saving equipment is required on job sites than ever before and the situation should only continue to improve. For an in-depth look at one of today’s big safety challenges, check out pg. 37 where Jillian Morgan assesses the challenge of working at heights.

David Kennedy / Editor dkennedy@on-sitemag.com

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CONTRIBUTORS www.on-sitemag.com / Fax: 416-442-2230

MEET OUR CONTRIBUTORS FOR THIS ISSUE

PUBLISHER | Peter Leonard (416) 510-6847 pLeonard@on-sitemag.com EDITOR | David Kennedy (416) 510-6821 dkennedy@on-sitemag.com

JACOB STOLLER / Principal, StollerStrategies

ASSISTANT EDITOR | Jillian Morgan (416) 510-5201 jmorgan@annexbusinessmedia.com

On the future of robotics in construction: “The idea of combining human brainpower with robotic capabilities makes a lot of sense in construction, where it’s proven difficult to automate many of the tasks that are commonly executed by robots in controlled factory environments.”

MEDIA DESIGNER - TEAM LEAD | Lisa Zambri lzambri@annexbusinessmedia.com

SAUL CHERNOS/ Freelance Writer On the ambitious project to build an all-season highway to the Arctic Ocean: “Now in its second year of operation, the 138-kilometre two-lane route serves as a marker for the many challenges road projects face in Canada’s expansive north.”

DAVID BOWCOTT / Global Director – Growth, Innovation & Insight, Global Construction and Infrastructure Group at Aon Risk Solutions On leveraging a Total Cost of Ownership approach from procurement onward: “To reprioritize and begin working together toward achieving improved long-term operational performance, we need a collective ‘North Star…’ Total Cost of Ownership could provide this guiding light.”

SIOBHAN SMALL / Borden Ladner Gervais LLP On the value of understanding Course of Construction policy: “Knowing who is covered by the policy can significantly alter your approach to any losses and prevent you from unnecessarily shouldering those costs.”

ASSOCIATE PUBLISHER | David Skene (416) 510-6884 dskene@on-sitemag.com ACCOUNT COORDINATOR | Kim Rossiter (416) 510-6794 krossiter@annexbusinessmedia.com CIRCULATION MANAGER | Urszula Grzyb (416) 442-5600 x3537 ugrzyb@annexbusinessmedia.com Vice President | Tim Dimopoulos (416) 510-5100 tdimopoulos@annexbusinessmedia.com President & CEO | Mike Fredericks Established in 1957, On-Site is published

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INDUSTRY NEWS

INDUSTRY>NEWS Proposed Ontario bill aims to open tendering process to non-union construction firms TORONTO—In its latest drive to “cut red tape” the Ontario government has introduced a bill that would rewrite a more than 30-year-old stipulation that restricts certain cities, schools and hospitals to hiring only unionized construction firms for infrastructure work.

The government, led by Premier Doug Ford, said passing Bill 66 would increase competition for public sector construction work by amending the province’s Labour Relations Act of 1995. The proposed legislation would explicitly deem public bodies, such as municipalities, school boards, hospitals and universities, “non-construction employers,” effectively opening up public jobs to non-union shops.

While the changes would likely increase the pool of bidders for public infrastructure work in cities such as Toronto, Hamilton, Sault Ste. Marie and Waterloo, the Ontario Federation of Labour said the amendment would put lives at risk.

“Unionized construction trades are leaders in health and safety,” Chris Buckley, the OFL’s president, said. “By opening public construction projects to non-union shops, Ford is putting worker safety at greater risk and trampling collective bargaining agreements.”

Buckley added that the move would put “big business” ahead of workers’ lives.

The Progressive Contractors Association of Canada (PCA), on the other hand, applauded the move by the Progressive Conservative government, which swept to power last June.

“This groundbreaking legislation is a

Toronto, Hamilton, Sault Ste. Marie and Waterloo are among the major Ontario cities that would be impacted by the legislation.

giant step forward in treating taxpayers, workers and employers fairly,” Sean Reid, PCA vice-president and regional director for Ontario, said. “Competitive bidding will ensure taxpayers are getting the best possible value on construction work and qualified contractors and workers are no longer shut out of the process.”

Reid noted the current bidding process has made more than 83 per cent of qualified firms in Waterloo ineligible for public infrastructure work, a figure from a March report by Hamilton-based think tank Cardus.

The Cardus study has faced criticism, however. At the time the report was released, the Carpenters’ District Council of Ontario claimed the study used figures it said were “statistically invalid.” The group representing 16 different Ontario carpenters’ unions also slammed the proposed Ontario legislation tabled Dec. 6, calling it an assault on bargaining rights

and existing collective agreements.

“Our union has had productive relationships with these types of employers, such as the City of Toronto, which in many cases go back decades, and which are designed to ensure that the employers get real value for money while construction workers can make a fair and honest living,” said Mike Yorke, the president and director of Public Affairs at the CDCO. “Apparently, those types of relationships are not something that this premier wants to see continue.”

Tony Iannuzzi, head of the Carpenters’ Union in Ontario, added that the union intends to fight the move, in court, if necessary.

Bill 66 was carried through its first reading at Queen’s Park late last year.

MPPs will debate the omnibus bill, which also includes a number of other actions the government says will reduce regulatory burdens, during a second reading.

10 / FEBRUARY 2019

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INDUSTRY NEWS

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PHOTO: GOVERNMENT OF ALBERTA

The enhanced 4700 offers a number of new features to make getting a hard job done even easier.

BE LIGHTER In addition to its other lightweight options, the 4700 is now available with the Cummins X12, which is up to 600 pounds lighter than other medium-bore engines.

Alberta Premier Rachel Notley and Infrastructure Minister Sandra Jansen toured the site at the Foothills Medical Centre Jan. 14.

BE SAFER Along with great handling and visibility, the 4700 now comes with Collision Mitigation, Adaptive Cruise Control and Lane Departure Warning for greater safety and uptime.

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the underground parking levels is expected to continue through 2019 before work begins above ground. The development of the hospital’s radiation therapy department is also expected this year. Workers will need to install 12 steel and concrete vaults, which are designed to shield patients and staff from unwanted radiation exposure. Plans call for walls 1.8-metres thick and more than 10,000 cubic metres of concrete.

So far, the on-schedule Calgary job stands in contrast to another hospital build in Grande Prairie, Alta. that has faced budget and timeline issues. The former contractor for the project, Graham Construction, has blamed the province for poor planning and numerous scope changes, while Alberta Infrastructure pointed the finger at the contractor. The two parties went their separate ways in September and Clark Builders took over the $763 million project in November.

In Calgary, the new facility is expected to be the largest standalone cancer centre in the country once work wraps up in 2022.

File Name: Client: Job #: App: Colors:

CALGARY—With four cranes overhead and 300 workers on-site, the largest infrastructure project in Alberta has begun taking shape.

PCL Constructors Inc., which is overseeing the build, remains on time and on budget, according to the province’s Infrastructure ministry.

Work began on the $1.4 billion Calgary Cancer Centre in late 2017 and has focused so far on below-grade activities. Since breaking ground, crews have removed 450,000 square metres of material for the building’s foundation and its five underground levels. Eventually, the new hospital will stand 13 stories above grade and include approximately 127,000 square feet of floor space.

Alberta Premier Rachel Notley and Infrastructure Minister Sandra Jansen toured the site at the Foothills Medical Centre in Calgary Jan. 14, noting the project is expected to create 1,500 jobs over its six-year construction period.

Crews have poured 37,000 cubic metres of concrete so far – about 30 per cent of the total required. Construction on

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INDUSTRY NEWS B.C. ditches plan for $3.5B Massey Bridge, stays mum on timeline, cost of alternatives The 10-lane bridge was designed to alleviate gridlock through the 59-year-old tunnel that links Delta and Richmond, B.C. The current government, however, said the project had been pushed through without considering cost and community concerns, among other oversights.

B.C. has begun engaging stakeholders, including First Nations on an alternative design. It noted a smaller six- or eight-lane bridge would accommodate the majority of traffic predicted through 2045. The review showed a tunnel of up to eight lanes, meanwhile, could prove cheaper and have fewer negative effects. The province is also looking at retrofitting the existing tunnel to use in tandem with a new bridge or tunnel.

Trevena blamed the previous government for the ongoing traffic trouble.

“People are understandably frustrated with the gridlock along the Highway 99 corridor,” she said. “Had the options been carefully and objectively considered before the 10-lane bridge project, we would be much closer to solving the congestion in a way that works for everyone who lives, works and travels in the region.”

In a major delay to the original construction timeline, the province expects to have a new business case for the crossing by fall 2020.

PHOTO: PROVINCE OF B.C.

VANCOUVER—The British Columbia government has officially torpedoed a multibillion-dollar Metro Vancouver bridge that’s been on hold for more than a year.

The high-profile project to replace the George Massey Tunnel broke ground in April 2017 before being halted for review several months later following a turnover in provincial government. The province announced Dec. 17 that the hold on construction is now permanent.

Claire Trevena, B.C.’s minister of Transportation and Infrastructure, said an in-depth independent analysis found the earlier decision to build a 10-lane bridge missed the mark on a number of considerations.

“The technical review of the project has confirmed this was the wrong project for the region,” she said. “We need a better solution for this crossing to get people out of traffic and home with their families.”

The previous Liberal government approved the $3.5 billion bridge before being ousted by an NDP and Green Party coalition. Several multimillion-dollar contracts for site preparation had been handed out before the 2017 election, but the tendering process had not advanced beyond the RFP stage.

A rendering of the 10-lane bridge originally planned to replace the aging George Massey Tunnel.

Nova Scotia begins search for teams to spearhead two hospital projects worth $2B HALIFAX—The government of Nova Scotia has issued a long-awaited request for qualifications for a major hospital redevelopment project in Halifax.

Divided into two separate RFQs, the overall QEII New Generation project is worth approximately $2 billion and is the largest health care job ever undertaken in the province.

One RFQ includes work at the Halifax Infirmary site, where a new cancer centre, as well as a new inpatient and outpatient centre, is planned. The second includes construction of a new outpatient centre at Bayers Lake, outside downtown. Under each contract, consortia will be responsible for designing, constructing, financing and maintaining the assets.

The province said it divided the hospital modernization effort into separate 30-year P3 contracts because of the differences in scope and complexity between the two jobs.

The Infirmary project, for instance, includes the addition of more than 600 patient beds, 28 operating rooms and dozens of intensive care beds. Several aging buildings will also be torn down following the new construction and renovations.

Bayers Lake, on the other hand, will house 17 examination rooms, two dozen dialysis stations, as well as physio and occupational therapy clinics.

Build teams bidding on the Bayers Lake project must have submissions to the province by March 22, while those aiming to win the larger downtown hospital redevelopment must present their credentials

by April 26.

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INDUSTRY NEWS

PHOTO: DEEP

Feds fund country’s first geothermal electricity plant; $51.3M project will create 100 construction jobs REGINA—Thousands of small-scale geothermal boreholes have been drilled across Canada over the past several years for home heating, but until now, the country has not tapped into the clean source of energy to produce power.

That’s set to change as Prime Minister Justin Trudeau announced $25.6 million in funding for Deep Earth Energy Production Corp. (DEEP) on his swing through Saskatchewan Jan. 11.

Work on the project near Estevan, Sask. – the first of its kind in Canada – is already well underway.

DEEP spearheaded a feasibility study in 2014 and signed a power purchase agreement last November with provincial utility SaskPower that will allow the project to move forward. Natural Resources Canada will pay half the total project costs, which are expected to tally $51.3 million.

The funding will assist the company in building a facility with capacity to produce five megawatts of power, or enough to power about 5,000 homes. Like other such projects worldwide, the geothermal firm plans to harvest heat energy from reservoirs trapped well beneath the Earth’s surface and convert that heat to electricity. The scope of the project remains at a modest five MW initially, but DEEP said it could be expanded in the future to generate more power.

Coinciding with Trudeau’s announcement, the Saskatoon-based company said in early January that it had completed drilling its first geothermal test well. At 3,530 metres, the company said the well extends into the Precambrian bedrock and is the deepest well ever drilled in the province.

Ottawa said the project will create about 100 jobs during the construction phase.

Brampton, Ont. rethinks LRT route, looks at tunnel in major expansion of scope BRAMPTON, Ont.—The recently turned over city council in one of Toronto’s largest suburbs has passed a motion to revisit a 2015 decision that stopped a yet-to-be-built light rail transit line from entering the city’s downtown.

The Hurontario LRT project is being spearheaded by Infrastructure Ontario and provincial transit agency Metrolinx. It’s currently at the request for proposals stage. Under the initial timeline, the province said it would decide which of three shortlisted construction teams would build the project last year, but an announcement has not yet been made.

After the 2015 Brampton decision – a move that was harshly criticized due to the provincial funding attached to the project – planners moved ahead with a 20-kilometre route that ran mainly through Mississauga. The early cost estimate sat at $1.4 billion for 22 stops. Earlier plans included four more northern stops that would have extended the line into downtown Brampton, ultimately linking up with the Brampton GO Station. The most recent council decision appears to have put that possibility back on the table, though very late in the tendering process.

Along with the lengthier route and extra stops, the Brampton City Council motion called for further study into an option to bury the final leg of the LRT. The underground tunnel would carry light rail vehicles approximately two kilometres into downtown Brampton, as well as greatly expand the scope of the project.

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

CRANE COUNT

TORONTO ON TOP IN NORTH AMERICAN CONSTRUCTION CRANE COUNT A voracious appetite for new residential, office and mixed-use towers has allowed Toronto to extend its considerable lead over its North American rivals in a key construction indicator.

104 cranes are at work throughout the city, according to Rider Levett Bucknall Ltd.’s January, 2019 North American Crane Index. The count is seven higher than the consulting firm tallied last August and places Toronto far above the dozen other cities included in the study.

Seattle sits is second place in the crane rankings, while Los Angeles rounds out the top three. Calgary, meanwhile, the only other Canadian city included, ranks fourth in the January 2019 index with 33 cranes.

The index tracks building in 13 North American cities, but does leave out several sizeable urban centres, most notably Mexico City, Houston, Montreal and Vancouver.

Workers Employed in Construction by Month

2018 December 1,455.80 November 1,458.20 October 1,443.40

September 1,446.80 August 1,418.80 July 1,435.20 June 1,447.50 May 1,420.30 April 1,433.30 2017 March 1,452.20

February 1,433.90

January 1,433.90

In thousands of workers, seasonally adjusted

SOURCE: STATISTICS CANADA

es Number of cran City 104 Toronto 59 Seattle 44 Los Angeles 33 Calgary 30 Portland 29 San Francisco 28 New York 28

Washington DC 26 Chicago 17 Denver 14 Boston 6 Honolulu 5 Phoenix

cities North American Several major x de in in the are not included CKNALL R LEVETT BU SOURCE: RIDE

CONSTRUCTION INDUSTRY ENDS 2018 WITH SLIGHTLY LARGER WORKFORCE A construction hiring surge in November that saw the industry add nearly 15,000 jobs did not carry into December.

According to Statistics Canada’s latest labour force survey, the construction industry shed 2,400 jobs, seasonally adjusted, in the final month of 2018. The figure translates to a 0.2 per cent decline for the building sector, which fell short against the overall economy that eked out a small, though statistically insignificantly gain, of 9,300 jobs from a month earlier.

On a year-over-year basis, the construction industry also trails Canada as a whole, though each is in better shape than at the start of 2018. Canada overall added 163,300 jobs last year, or 0.9 per cent, while the construction sector grew by 7,000 positions, or 0.5 per cent.

Canada’s unemployment rate remains at its 43-year low of 5.6 per cent, achieved in part because of the strong November gains in construction.

CANADA’S ROAD, WATER AND SEWAGE INFRASTRUCTURE GROWS OLDER The remaining useful life of Canada’s key infrastructure continues to decline, according to the latest Statistics Canada assessment.

The ratios that reflects the remaining useful lives of the country’s road, water and sewage infrastructure declined for each asset class in 2016 – the most recent year for which data is available.

The useful life ratio for roads, including highways, bridges and overpasses, dropped to 65 per cent from 65.5 per cent a year earlier. Waterworks engineering assets across Canada, meanwhile, slipped for the third consecutive year to 71.4 per cent. Sewage infrastructure remains in the worst shape. With every region except Yukon posting a decline in 2016, the overall ratio sits at 63 per cent.

While it’s bad news from a government budgeting standpoint, the aging assets could mean more work for builders in the coming years and decades.

Canadian road assets have only 65% of their useful lives remaining The useful life ratio for Canada’s water infrastructure sits at 71.4%

With a useful life ratio of 63%, much of Canada’s sewage infrastructure is past its prime

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OnSite_

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ROADBUILDING

Northern exposure Building through the most inhospitable terrain and the harshest conditions Canada has to offer

BY SAUL CHERNOS

F

requent blizzards and blistering cold. Unreliable access to basic materials. Cellphone service lost in seemingly endless tundra. Conditions like these might seem like a nightmare to roadbuilders in Canada’s more temperate climes, where the occasional blast of Arctic air can bring out balaclavas and briefly put projects on ice. For crews

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Infrastructure, tells On-Site. “It connected Canada to the Arctic coast with an all-weather road system for sovereignty purposes. It connected Tuktoyaktuk and other communities to the rest of Canada, improving morale, the quality of life, and the cost of living for people in the North.

In its first year of operation we saw close to 16,000 visitors, so it’s obviously opened the North to tourists and travellers who want to experience the depth and breadth of Canada.”

Commissioned in 2013, the Inuvik Tuktoyaktuk Highway officially opened to traffic in November 2017. The $299 million price tag included meticulous geotechnical studies and concerted project

management, monitoring and quality control.

“We have a different set of challenges from our southern counterparts,” McLeod says. “While we follow the same principles of road construction in terms of base, sub-base and running surface, we have a complex environment in terms of regulatory regime and adapting to climate change. We used the same engineering and construction principles but layered these over-top our challenges, so we needed experts on permafrost, thermal analysis, and hydrology.”

ALL POINTS NORTH Proponents took a design-construction

PHOTOS: GOVERNMENT OF NORTHWEST TERRITORIES

building the first all-season highway to the Arctic Ocean though, these were all in a day’s work – and night’s work when darkness prevailed.

The year-round gravel road from Inuvik to Tuktoyaktuk, Northwest Territories linked Canada’s three coastlines 150 years after Confederation, a well-earned reward for crews that toiled through some of the planet’s harshest conditions. Now in its second year of operation, the 138-kilometre two-lane route serves as a marker for the many challenges road projects face in Canada’s expansive north.

“This was a nation-building exercise,” Kevin McLeod, an assistant deputy minister with the N.W.T.’s Department of

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ROADBUILDING

approach, with detailed pre-planning to preserve and work with the permafrost – the delicate layer of soil, rock and sediment that lies underneath the surface and remains frozen year-round. A gradually warming climate has begun thawing permafrost in some places and human activities risk furthering the damage.

“We did lots of lots of experimentation before we put the heavy iron to the work,” McLeod says. “Preliminary engineering and design steps incorporated ground temperature monitoring for baseline conditions, we used ground-penetrating radar at select locations to confirm the presence of massive ice, and we used ground thermal analysis to predict freeze and thaw in the embankment structure.” Project engineers went so far as to replicate and test soil conditions in a special sub-freezing laboratory at the University of Calgary.

On-site, crews installed thermistors to monitor permafrost temperatures and limited heavy construction to wintertime.

During the warmer seasons, when the permafrost is particularly delicate, crews remained right on the roadbed, avoiding adjacent areas and finishing work done the

previous winter.

The project team had to be judicious with nearby sources of granite-based gravel, generally opting for scarce rock outcrops that could be mined with relatively minimal disturbance. Environmental protection requirements limited extraction to wintertime and specified actions to prevent leaching. Eight concrete girder bridges, prefabricated in British Columbia, were built on adfreeze piles driven and literally frozen into the ground – another reason to preserve the permafrost.

“The contractor performed extremely well in terms of procedures and training

folks not to take dozers or other vehicles off the road itself,” McLeod says. With some land owned by the Inuvialuit Land Administration, an agreement reached early on engaged them in planning and implementing land protections.

Safety and comfort also proved challenging. Extended darkness and temperatures exceeding -40, where Celsius and Fahrenheit meet, added layers of clothing and complexity. “We spent a lot of time and effort doing safety briefings and making sure everyone had gone through formal training,” McLeod says. “All our machines were rated for Arctic operations

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ROADBUILDING

and had to be inspected more often [than usual] because we didn’t want any breakdowns.” Warming huts, night-time lighting and high-visibility clothing helped make the job bearable.

With area residents now enjoying improved access to goods and services, as well as the ability to consistently visit neighbouring communities, the Inuvik Tuktoyaktuk Highway carries a “Last Spike” resonance into the heart of Canada’s north.

THE NEXT LINK But even while the new route’s ribbon was being cut, N.W.T. planners were poring over plans for the Mackenzie Valley Highway. As the name suggests, the road would follow the Mackenzie River as it flows north.

The southern section of this new route is expected to overlay an existing winter road, but nothing exists besides hundreds of kilometres of snaking river valley on the northernmost section between Fort Good Hope and the Inuvik region. While the permafrost is less extensive, and a nearby mountain range is like an aggregate candy shop, there are major challenges.

The proximity of mountains, for instance, mandates plans to manage runoff from sudden rainstorms and melting snowpacks.

“We need to make sure our bridges and culverts are designed to take the huge amount of water pouring off the watershed,” McLeod says.

With environmental assessments underway, planners haven’t considered potential contractors for what could be seven years of work. Projected costs of $2 million to $2.4 million per kilometre, depending on the level of difficulty, remain speculative. “We don’t want to jump out too far out the gate with numbers,” McLeod says. “We have a lot more work to do in terms of how thick the road has to be, our analysis of the permafrost, how big the bridges will be – factors like these.”

A 16-kilometre stretch of all-weather road built between Norman Wells and Canyon Creek as a pilot project opened

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“It seemed like it was 24 hours a day, seven days a week for four years to keep the project moving.”

– Russell Newmark, EGT Northwind last November and has fared well thus far. “We’re going to be developing lessons learned from there and then look to do the rest,” McLeod says.

BELOW THE ARCTIC CIRCLE The northern edge of Canada’s larger provinces lay well below 66 degrees north and lack the continuous permafrost found in the three territories. Still, these regions contain sporadic permafrost and offer some of the same climactic conditions that impact roadbuilding further north. While many of the roads in northwestern Ontario are ice roads, intended for wintertime-only access to work sites and isolated fly-in communities, Villeneuve Construction has

built several all-season roads, adopting techniques suited to the region’s climate and terrain.

The Hearst, Ont.-based contractor has been helping with Thunder Road, which runs deep into the heart of northern Ontario’s muskeg, a vast expanse of moss-covered bog. Literally a dead-end, Thunder Road’s sole purpose is to enable forestry.

Currently 80 kilometres long, the gravel road remains an ongoing project as logging edges northwards.

Access to aggregate is a major challenge, and crews rely mainly on rock outcrops within a 40 kilometres radius, as it’s impractical and cost-prohibitive to haul from afar. Supplies are limited, so crews

can’t always produce the desired grades of gravel. Sometimes they even resort to sand. “Sand requires more maintenance, but if that’s all you have that’s all you have,” says Mario Villeneuve, the company’s vice-president.

An even greater challenge is building on top of the saturated muskeg. The project team works with what’s at hand, laying down balsam, spruce and tamarack trees to form a supporting mat for what’s known as a corduroy bush road. After capping the trees with thick local clay and letting it dry, crews add layers of gravel. To cope with swampy conditions, construction is largely reserved to the winter and the dry summer months.

Just as the terrain varies across Canada, so do roadbuilding methodologies.

Instead of building corduroy roads with trees, northern Alberta proponents sometimes use synthetic geotextiles for permeable, structural support, and add clay on top. “You build up the clay to a certain depth, then wait for a week, let that settle out, and continue building up,” says Dana Archibald, formerly a senior project manager with Dechant Construction in northern Alberta. Liquid or powdered lime is often applied to help reduce moisture in the clay, though the air can also dry it out.

“Sometimes they’ll use it during the transition season from summer to winter, or if we’ve had a summer where there’s been a lot of moisture,” Archibald explains.

Geography also presents a challenge.

Gaps in cell coverage, for instance, are minimized using boosters. “There was a time where there was no cell service, but it’s amazing how we’ve become very

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dependent on communication as an industry,” Archibald says. Some sites maintain a full-time mechanic, but as cell service improves teams rely on dispatchers.

Access to aggregate also ranks quite high on Archibald’s list, as does the availability of skilled workers. “It’s a seasonal industry,” he says. “There’s only so many folks out there who have the experience and are willing to take on project-oriented jobs that might last only a few months or

maybe a year if they’re lucky.”

Projects can be far from where workers live, so proponents sometimes establish temporary camps with housing and other basic amenities.

“We had one job this year by Meander River where we had one-hour round trips back and forth from High Level,” Archibald says.

Eastwards, paving of the Trans-Labrador Highway has presented comparable challenges. Rodney Drover, a spokesperson with the Newfoundland and Labrador Department of Transportation and Works, says camps for workers and storage facilities for construction materials have been vital. But, for northern inhabitants and industry sectors as varied as mining, oil and gas, retail and tourism, the efforts have been worthwhile. “We are maintaining our pledge to foster growth and long-

term prosperity,” Drover explains.

With road projects ongoing across Canada’s North, all of them point, at least symbolically, to the northernmost of them all. EGT Northwind served as the main contractor for the Inuvik Tuktoyaktuk Highway, and CEO Russell Newmark reflects on the moment the Arctic Ocean became accessible by car and truck. “It was an incredibly demanding undertaking,” Newmark he says.

“With the amount of oversight, regulation, monitoring and auditing, it seemed like it was 24 hours a day, seven days a week for four years to keep the project moving. And rightly so, seeing that this was the first time a highway was built in the region. There was a mixture of relief that it was over, but there was also a lot of satisfaction in doing something that really was historic and over the years will be proven to have really changed Canada in the North.”

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PROCUREMENT

FEDERAL TAX INCENTIVE CREATES BIG OPPORTUNITY FOR FIRMS PURCHASING

NEW EQUIPMENT Buyers get temporary edge on equipment depreciation

BY DAVID KENNEDY

C

anadian construction companies have at least one reason to thank U.S. President Donald Trump.

He may have started the ongoing trade spat that’s caused havoc in the markets for construction steel and aluminum, but the recent American tax reforms he championed have prompted Ottawa to respond in kind, pushing forward changes designed to aid Canadian busi-

nesses, contractors included.

For builders, the leg up will come in the form of faster tax depreciation for new equipment. That may not sound like much to those outside accounting departments, but the federal incentive will help firms that have purchased new equipment defray upfront capital costs by entitling them to significantly larger tax deductions in yearone.

Under the previous tax regime, allowable depreciation amounted to 15 per cent on a new or used excavator, dozer or other earthmover (Class 38 assets) during the machine’s first year in the dirt. The change will temporarily boost that rate to 45 per cent, meaning companies can deduct a portion of the upfront cost of a machine at triple the ordinary rate. On a typical piece of equipment, the incentive will translate on-sitemag.com / 29

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PROCUREMENT

to thousands, if not tens of thousands, in tax savings in year-one – though there are several important caveats discussed below.

The Canadian adjustment counters the major U.S. tax reforms passed at the end of 2017 that were widely seen as a threat to businesses north of the border.

Finance Minister Bill Morneau introduced the incentive, among other measures, on Parliament Hill in November. As is standard procedure, Ottawa has already begun operating as if the tax rules had been altered, though it’s still working to formally enact the incentive.

The industry has quickly climbed aboard, with the Canadian Construction Association (CCA) and Associated Equipment Distributors, for instance, each applauding the change.

Steve Nielsen, CFO of Finning International Inc., the largest dealer of Caterpillar equipment, says his team was initially quite concerned by the impact the U.S. changes may have on Canadian businesses.

“As we watched our economists and politicians wrestle with it, we thought it was important that we not get into a rate war with the United States, but we feel that [the new incentive] is a very thoughtful and intelligent way of applying policy that lowers the cost of doing business for Canadian business in a way that stimulates the economy and creates demand for our customers,” he says.

Nielsen expects bumping up allowable first-year depreciation by 30 percentage points will encourage builders to continue to invest in their fleets. “What that does is of course reduce the cash taxes in the same year, which reduces the upfront cost of a machine, and therefore improves the contractor’s return on investment,” he says.

THE FINER PRINT The change, which Ottawa has dubbed the Accelerated Investment Incentive, offers contractors a promising opportunity, but it isn’t a handout.

Brad Scott, who sits on the CCA’s board of directors and is vice-president of Finance at Nova Scotia-based Basin Contracting Ltd., says the incentive will be great for

many contractors, but warns the assistance comes with a couple of strings attached.

“This is a win,” he says, “but people should understand that this isn’t a tax reduction, this isn’t a tax credit, this is a short-term ability to potentially spend some money and get some tax flow reductions.”

The incentive doesn’t translate to cash-

The change also won’t increase how much companies can write off for depreciation over a piece of equipment’s entire lifetime. The incentive boosts the first-year depreciation level on equipment to 45 per cent from 15, but it offsets this with smaller deductions in future years (refer to the chart on the following page for a detailed break-

“This is a win, but people should understand that this isn’t a tax reduction, this isn’t a tax credit, this is a short-term ability to potentially spend some money and get some tax flow reductions.”

– Brad Scott, CCA in-hand, but can be applied against earnings on a company’s taxes. It’s important to note that if a company has a poor year and doesn’t have adequate earnings against which to apply the cost of a new machine, it won’t benefit.

“Your average company can’t say great, ‘I’m going to go buy a new crusher tomorrow because I’m going to be able to write the whole thing off,’” Scott says. “You still have to have positive cash flow to pay for it, you still have to have taxable income to offset against it.”

down). In short, the incentive frontloads the benefits, but does not alter the long-term tax implications of buying a new machine.

Still, Ottawa anticipates the allure of larger deductions in year-one will prompt companies to spend now.

“Because of the value of time, allowing businesses to deduct a larger share of the cost of newly acquired assets in the year the investment is made accelerates cash flows and improves returns on investment,” says Finance Canada spokesperson Anna Arneson.

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PROCUREMENT

It’s also worth pointing out that the incentive applies to capital purchases, so contractors buying both new and used equipment can take advantage of the faster depreciation.

The incentive is not a permanent change, however. It will apply to eligible equipment bought between Nov. 20 of last year and the end of 2023. The government then plans to phase the program out between 2024 and 2028.

MORE THAN A WRITE-OFF The benefits of a new machine extend beyond tax savings.

“As we continue to evolve the technology and the quality of the machines, there are benefits beyond just the day-to-day productive use,” Nielsen says. Pointing to lower fuel costs, reduced emissions, cheaper maintenance and better in-cab technology to assist operators, he expects the incentive to shake up the typical procurement cycle.

“Just like your automobile, between

“Just like your automobile, between five and seven years, you start evaluating whether to pay maintenance or buy new.”

– Steve Nielsen, Finning five and seven years, you start evaluating whether to pay maintenance or buy new,” he says. “So as you consider all the factors through the lifecycle the incentive definitely lowers the entry point.”

Nielsen expects contractors will still measure out the typical benchmarks, such as current age, maintenance costs and possible rebuilds, but adds that the lower upfront capital costs created by the incentive should prompt buyers to consider purchasing earlier than planned.

It could also tip the scales toward premium equipment versus stripped down models or brands, he says.

“This definitely will stimulate large and small contractors to reconsider, or accelerate the timing of their fleet modern-

ization and turnover and/or expansion,” he says. “If they think they’re going to need equipment in the coming year or even two years, they’ll factor that into whether it is worthwhile buying now.”

Scott, on the other hand, is more cautious about how much the changes to depreciation will alter typical procurement timelines.

“This is a great incentive, but you can’t take the operational side away in deciding whether to buy gear,” he says. “We all have milestones on equipment. You get to so many hours, years, or kilometres and you should roll them over before any critical failures. I don’t think that decision tree is going to completely change.”

Particularly for smaller contractors, which make up a large portion of the

A a

5

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PROCUREMENT

EXAMPLE OF $100,000 INVESTMENT IN CLASS 38 (EARTHMOVING EQUIPMENT) OVER A FIVE-YEAR PERIOD

NORMAL SYSTEM

Deduction

Undepreciated Capital Cost

Cumulative

Tax Savings (26.5% tax rate)

Investment

$100,000

Year 1

$15,000

$85,000

$15,000 $3,975

Year 2

$25,500

$59,500

$40,500 $6,758

Year 3

$17,850

$41,650

$58,350 $4,730

Year 4

$12,495

$29,155

$70,845 $3,311

Year 5

$8,747

$20,409

$79,592 $2,318

NOTES: • Deduction is calculated as 30% of previous-year undepreciated capital cost except in Year 1

• In Year 1, deduction is calculated as 15% of initial investment under normal system and 45% of initial investment under the incentive

• Tax savings are federal-provincial tax savings assuming the investment took place in Ontario and the taxpayer is in a taxable position

industry, Scott says the incentive may not push them over the edge on a purchase they wouldn’t otherwise have made. He points to capital limitations and cash flow as two of the major reasons. To take full advantage of the incentive, companies need to have either the money or credit to buy a machine, and enough taxable income

to apply against the purchase.

Scott says larger contractors with more financial flexibility are in a better position to benefit from the change.

Meanwhile, construction companies with a hand in manufacturing – roadbuilders that produce sand and gravel for their paving jobs, for instance – have an even

greater opportunity than those buying solely earthmoving machines. For equipment in the manufacturing and processing machinery category, the incentive quadruples the depreciation rate from 25 per cent to 100.

So long as a contractor has their aggregate assets optimally tax structured, the change means they can fully expense these types of

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ACCELERATED INVESTMENT INCENTIVE Deduction

Undepreciated Capital Cost

Cumulative

Tax Savings (26.5% tax rate)

$100,000

$45,000

$55,000

$45,000

$11,925

$16,500

$38,500

$61,500

$4,373

$11,550

$26,950

$73,050

$3,061

$8,085

$18,865

$81,135

$2,143

$5,660

$13,206

$86,795

$1,500

SOURCE: FINANCE CANADA

purchases in the first year. “There’s going to be some wins in the heavy civil side,� Scott says.

Buying equipment is a major business decision. Companies should consult a tax expert who can assess their individual circumstances before making any purchasing decision.

RIPPLE EFFECTS Job sites with brand new equipment will likely see the biggest changes, but the incentive will also have an impact on many areas downstream.

If the federal changes spur buying as expected, equipment fleets – some of which have likely not reached their typical end-of-life – will go up for sale. “When that occurs, it also creates very high quality, low-use used equipment that is then more affordable down the hierarchy,� Nielsen says, adding that conventionally, pieces of equipment move from larger contractors down to smaller construction firms and other small businesses.

Rental companies will also have the opportunity to overhaul their fleets, meaning contractors will likely be able to acquire used rental equipment for more competitive prices. When adding a rental machine during peak season, builders will also get access to newer technology.

Equipment that goes unsold within Canada will find its way around the world.

Unsurprisingly, much of the Canadian construction industry’s used equipment heads south of the border. Other machines are solid internationally, often to emerging markets.

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WORKER SAFETY

Bird’s eye VIEW

The costly consequences of falls from heights demand a culture shift

BY JILLIAN MORGAN

I

t may be time to rethink working at heights from the ground up.

Though some provinces have welcomed a marginal decline in accidents, falls remain a leading cause of injury for tradespeople of all stripes across the country.

The most recent data from workers compensation boards tally the unfavourable numbers for 2017. In Saskatchewan and Ontario, for example, falls were the third leading cause of injury for the trades. For Alberta and Newfoundland and Labrador, the outlook is even gloomier, with falls

taking the top spot.

According to WorkSafeBC, falls were the third most common cause of injury for the province’s construction sector between 2013 and 2017, but represented the most significant claim cost, totalling more than $260 million.

Injured construction workers hoping to get back on the job face a unique set of barriers, typically staying on the bench for long periods of time – or not returning to work at all, according to Chris McLeod, co-director of the University of British Columbia and WorkSafeBC Partnership for

Work, Health and Safety.

McLeod has undertaken a two-year research project on return-to-work outcomes for the sector in Alberta, B.C., Manitoba and Ontario, with the goal of understanding the little-researched challenges injured construction workers face, and uncovering potential solutions.

“If you have a highly skilled worker who’s injured, and you’re a small- or medium-sized employer, it can have a massive effect on your ability to meet the terms of your contract,” McLeod says. “What that brings into focus is not only the focus on-sitemag.com / 37

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on return to work but also the focus on prevention.”

For an industry facing increasingly demanding expectations and a serious labour crunch, fall prevention will be essential to keeping workers on the job – and keeping businesses afloat.

SAFETY CULTURE Laying the foundations for a safety-first culture on-site needs to happen before shovels get in the ground, advises Scott Duncan, director of Health and Safety at National contractor Chandos Construction.

“How you start a job is going to dictate the next year or however long the job runs,” he says. “I want safe operation. Not operation and safety.”

Top management isn’t typically in charge of day-to-day enforcement, however.

That responsibility falls to on-site supervisors. Even in a single jurisdiction, under

a single company, the buy-in can vary drastically.

“I was facilitating a presentation to a group of senior leaders,” Duncan recounts.

“I said, ‘Each of you insist our sites are all equal. You all have children of working age.’

I looked at one VP and said, ‘Which site would you put your son on today?’ He had to stop and think about it.”

For Duncan, the key to success falls on site supervision.

“Every site, even though they’re following the same book, will be run differently,” he says. “They’ll have a different culture, they’ll have a different way of doing things, and that’s where we run into our challenges.”

Safety standards can quickly get shelved in favour of accelerated timelines or reduced costs. Old-school thinking can influence younger workers who are encouraged to take risks in a misguided effort to

impress the experienced boss.

“Experienced supervision on-site will make it very clear to young workers that they’re not impressing us taking unnecessary risks,” Duncan says. “No one at the end of the job is going to thank you for taking unnecessary risks.”

The duty doesn’t end there. A faulty ability to assess risk should be clocked by supervisors. They should also be watching for untrained workers improperly using fall arrest systems, ladders, scissor lifts or other equipment.

Businesses and supervisors that fail to meet those general duty requirements could be handed a hefty fine, according to Roger Tickner, president of Richmond Hill, Ont.-based safety consultancy Tickner & Associates.

“It’s not enough and if somebody’s been injured and you’re not taking the necessary precautions, nowadays [corpo-

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WORKER SAFETY

Vertemax catchfans, designed to absorb the energy of falling objects, are offered in three models: The standard Catchfan, the Catchfan Mini and the Catchfan Maxi.

PHOTO: VERTEMAX

rations] can pay a million for the fine,” he says. “So, a supervisor could face charges of up to $100,000 per count if they’re making incorrect calls or turning a blind eye to safety.”

Filtering safety standards down to the sub trades adds more complexity, making safety offenses difficult to catch.

“You’ll get a top tier sub trade bid the job. They get the job, but then they sub it to a sub who subs it to another sub,” Duncan says. “In some cases, this waters down the quality of the safety performance… If we don’t manage that, we’re fighting an uphill battle.”

Richard Blais, director of compliance and regulatory review at WorkSafeNB, echoes Duncan. He says laying out expectations will ensure a safety program doesn’t suffer.

“The subs, of course, supervise a lot of the workers that might be working from heights” he says. “Whenever you contract out work, you can’t contract out responsibility.”

GEARED UP Safety gear has come a long way since the days of harness-free lunch breaks atop the Rockefeller Center.

John Fuke, technical services manager at 3M Fall Protection, says those advancements have been primarily driven by regulations.

Most notably, he says the move from lanyards to personal self-retracting lifelines, or SRLs, represents a significant shift over the past number of years.

“The technology’s gotten better to where we’re now able to do leading edge [work], to do tie off at your feet or below the D-ring,” he says. “Just in the last two to three years this has really become popular, and a requirement, in the personal SRL segment.”

3M upgraded its harnesses, too, to improve the compatibility of SRLs and harnesses, and to alleviate the weight of wearing SRLs. The company’s Smart Lock LE SRLs, designed to prevent unintentional lockups, take the gear one step further.

Other providers, such as Oakville, Ont.-based Vertemax, have also taken fall protection to new heights.

“We’re trying to implement fall arrest systems, we’re trying to implement edge protection systems, we got also catchfan nets around the building so in-case something happens, in-case any single piece or any single person falls from height, you will be catched and we will be able to avoid any kind of problem,” Jesus Munoz, the company’s Canadian managing director, says.

With customers such as PCL Construction, EllisDon and Ledcor Group, Vertemax is plotting to expand its product line and currently developing a self-contained building system to keep workers safe on high-rise construction projects.

Increasingly, manufacturers are also hoping to provide solutions that meet the unique needs of mechanical and electrical trades working at heights, whether from the third rung of a stepladder or the 30th storey of a building.

3M offers a variety of anchors to

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WORKER SAFETY much trouble as you were before you fell because there’s a problem with orthostatic intolerance.”

Over time, he says, blood can pool in the legs, slowing down the flow to the upper body. The worker can grey out and pass out, eventually starving the brain of oxygen.

Job sites should not only develop a rescue strategy but also practice it, he adds.

Using tools such as suspension trauma straps are also important, which Fuke says could prolong the rescue period for a short period of time.

“Rescue is the most overlooked topic with respect to fall arrest and fall protection. Even though the provinces mandate it in most of the regulations, people overlook it,” Fuke says.

LIVING SAFETY

The Vertemax Alsipercha system covers an area of 125 square metres, allowing the worker to move within a radius of 6.5 metres around the column PHOTO: VERTEMAX

address those needs, such as doorjamb anchors, which are of particular benefit to mechanical contractors, Fuke says.

“You can situate an anchor in the doorway to provide anchors further out along an HVAC channel,” he says. “So if you’re working in a penthouse and the HVAC units are outside the penthouse, you can anchor yourself back to the doorway in the penthouse and go out and work on the project as required.”

Overhead fall arrest systems are ideal for mechanical and electrical contractors, according to Munoz, since the work is typically in confined spaces.

Electrical contractors generally face the same issues as industrial workers at heights, Fuke says. Though, the equipment should be able to withstand high voltages.

“We have a variety of products that work through or are tested to arc flash so that they have the capacity or the propensity to withstand a 40 cal/cm2 hit and still allow the person to survive in a fall,” he adds.

Using the right equipment is just one

piece of the equation, though. Improper use can lead to serious injury or, worse, a fatality.

Neglecting to store and care for gear properly is a common mistake, Fuke says, in addition to failing to tie off or perform a clearance calculation when wearing an SRL. “Another scary one is that people wear harnesses extremely loosely,” he says.

“You have a tendency when you fall in that scenario to squeeze through the harness if you’re falling headfirst. If you’re not falling headfirst, then it’s going to be so loose that once it tightens up there are a variety of different other situations that you get into, like the harness chest strap making contact beneath the user’s chin on impact.”

For Fuke, the most common – and potentially dangerous – oversight is an effective rescue plan.

“Everybody thinks that if they fall, they’re okay,” he says. “Well, if you’ve fallen and you’re hanging around for a long period of time, you could be in just as

Despite a tick downward in some jurisdictions, fall statistics across the country paint a less than ideal picture of the dangers workers face at any height.

Paperwork and safety committees imposed on the construction industry by regulators aim to fix the problem. In practice, they fail to account for the dynamic environment of a job site, Duncan says, adding that the issue demands a fresh approach.

“You have to look at things totally different,” he says. “I think we’ve generalized safety to a point where we’re not providing the right information and equipment to the workers.”

Enforcement on-site will continue to play a crucial role in keeping workers safe at heights, along with proper equipment use.

A shift in culture across job sites presents a bigger challenge – though the pay-off, both the livelihood of workers and the bottom line of construction businesses, could prove substantial.

“You have to make [safety] part of your corporate culture,” Fuke says. “If it’s not part of your corporate culture – if senior management doesn’t practice it, if the people who supervise other people don’t practice it – then it’s of reduced value.”

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NHES PREVIEW

READYING THE BIG IRON:

NATIONAL HEAVY EQUIPMENT SHOW RETURNS TO TORONTO Thousands of attendees are expected at the busy biennial show, where On-Site will present an expert panel addressing how contractors can best tackle the legal and labour challenges created by recreational marijuana

M

uch of the heaviest equipment in use on Canada’s major road and infrastructure projects is en route to the Toronto area.

The 2019 National Heavy Equipment Show is poised to return to the International Centre in Mississauga, Ont. for its 11th iteration in late March. Doors are open at the busy venue a stone’s throw from Toronto Pearson International Airport first thing March 28 and 29.

The event is expected to draw thousands of attendees and more than100 exhibitors from the roadbuilding, aggregate and general construction industries. It features a wide range of products from big iron to crushing and screening equipment.

Mark Cusack, the national show manager for organizer Master Promotions Ltd. says many key industry players are set to return in 2019 and that a number of new additions

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have signed on to exhibit.

“It’s shaping up to be the ideal mix of exhibitors for Canada’s biggest show of its kind,” he says.

The 2019 edition follows the show’s 20th anniversary in 2017, when more than 13,000 visitors walked the floor.

The event features The Gravel Pit, a large display of working aggregate machinery; The Rental Pavillion, where an array of equipment and tools will be on display; and Safety Products, an area focused on worker safety. NHES also includes a recruiting program to connect job seekers

NHES 2019 Where: Mississauga, Ont. Venue: The International Centre When: March 28, 29

with those hiring and products related to snow and ice removal.

On the educational side, the show features numerous seminars. They will shed light on some of the construction industry’s long standing challenges, as well

as several new topics, such as the recent legalization of cannabis. On March 29, watch out for an On-Site-sponsored expert panel that will discuss the legal and labour challenges created by the end of marijuana prohibition.

As in previous years, NHES offers exhibitors the chance to show off their latest products and technology, while attendees can explore options that will help their businesses run smoother.

The show is open between 9 a.m. and 5 p.m. March 28 and between 9 a.m. and 4 p.m. March 29.

SPACE IS NOW 70% SOLD! DON’T MISS OUT ON THESE EXCITING EXHIBIT CATEGORIES: • The Rental Pavilion • Safety Products Pavilion • Screening & Crushing Pavilion

RESERVE YOUR SPACE TODAY! Contact: MARK CUSACK, National Show Manager mcusack@mpltd.ca • Toll-Free: 1.888.454.7469

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The shop floor at the Agile plant.

The facility produces a wide range of products, from repurposed sea cans to prefabricated wall panels and washroom pods.

STRATEGY

Modular

PHOTOS: PCL CONSTRUCTORS

momentum Embracing an unlikely source of growth, construction firms start shifting work off the job site

BY DAVID KENNEDY

W

ith high-capacity gantry cranes overhead, 65,000 sq. ft. of well-lit floor space and products at various stages of completion strung out along a tidy assembly line, PCL Constructors Inc.’s Agile operation in the Toronto suburbs looks more like it’s run by a manufacturer than by one of the country’s largest construction contractors.

A crew of about 100 workers, including 35 from an array of subtrades, work the

floor, producing everything from compact eyewash stations to decoupled washroom pods and 70-foot pedestrian bridges.

Typical work site nuisances like dust, active heavy equipment and the sometimes-punishing Canadian weather are conspicuously absent.

As labour shortages and accelerated construction timelines force builders to modernize their strategies, the off-site facility is one part of the industry’s evolution.

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STRATEGY Prebuilt wall panels can be quickly integrated, saving crews significantly compared to conventional construction.

“We take more of a manufacturing approach to building when we come off-site,” Troy Galvin, manager of PCL Agile, said in an interview. He pointed to standardized designs and repeatable functions that help workers perfect their skills.

“Over time, you do it more and more, you just get better at it. So, we deliver a higher quality product,” he added.

Integrating principles that have been ingrained in the manufacturing industry for decades has been slow process for construction, but the shift is underway.

According to Galvin, booming demand has allowed the Agile plant to more than double its output over the past few years. Currently, the facility is at, or over capacity, turning out components that are integrated into both small jobs and those that run into the billions of dollars.

The plant’s output can be broken down into two main streams. Full volumetric builds are essentially complete structures assembled at the plant and then transported to their final location. Washroom pods or wall panels, on the other hand, are just a fraction of an overall construction project. These decoupled elements are

assembled at PCL’s off-site facility and then incorporated on job sites as conventional construction progresses.

The process is a significant departure from typical construction, and for years faced a stigma among more conservative builders. According to Tom Hardiman, the CEO of the U.S.-based Modular Building Institute, modern challenges are beginning to turn this sort of thinking on its head. At a session focused on off-site construction at the Buildings Show in Toronto at the end of November, he detailed some of the segment’s biggest drivers.

“Every urban area has extremely high housing costs, either high labour costs or no labour availability, and then rising material costs,” he said. “All of these things are kind of coming together to form this perfect storm of: ‘Oh my gosh we can’t keep building the way we’ve been building, it’s just not working.’”

Hardiman pointed to exorbitant building costs in places like Toronto, San Francisco and New York as prime examples.

Turning to modular doesn’t necessarily bring down overall project costs, though it can in some cases. Still, taking even some

work off-site saves builders considerably on time by reducing congestion on-site and, more importantly, allows crews both on- and off-location to build separate parts of the project at the same time.

“We’re talking about parallel activities, so we see a compressed schedule or a shortened build schedule and a lot of times early revenue recognition for owners, which is a huge value add for them,” Galvin said.

Particularly when looking at the shortage of skilled labour, allowing individual workers to become more productive is invaluable for builders. Taking work off-site also greatly reduces the amount of material waste, translating to improved sustainability credentials.

For crews on the job site, working with pre-fab components is still relatively new, but workers are becoming more comfortable with the process, according Kyle Sandiford, a superintendent at PCL who works on modular builds.

“We have a solid crew of workers that have worked on our various modular installs and they find it very exciting,” he said.

“They can use their typical skill-sets, but they can apply it to something that’s new.”

48 / FEBRUARY 2019

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STRATEGY The logistics of moving large modules or entire pre-assembled buildings into place also requires plenty of heavy equipment – an easy sell for most teams.

“The guys, I don’t know if it’s to the nature or what, but everybody tends to like working with heavy equipment,” Sandiford added. “They kind of enjoy the craneage part of it. It’s pretty exciting.”

to the site to be integrated.

“We lift it up onto the floor that it’s final location will be with the crane,” Sandiford said. “We roll it into place, into the depression so that the floor finishes will match up, and then we grout it into place and any tie-ins can happen into the pod.”

“The drywallers will build up to the pod and then they’ll continue building around the pod to incorporate it into the finished aspect of “I’m not suggesting modular construction the building,” he is the silver bullet... what I’m saying is added.

Unlike convenwe should be part of that toolkit.” tional stick builds – Tom Hardiman MBI that can only progress sequentially, modular construction For full volumetric modular allows for parallel activities. In this case, as builds, where as much as 90 per crews pour concrete on-site, off-site workers cent of the work can be taken off-site, fabricate the mods that will arrive at the job projects typically come together very site once the groundwork is in place. quickly. Job site crews focus mainly on prep For large projects like hospitals, only and join modules to foundations at what’s about five to 10 per cent of the work is known as the mateline. Mechanical and currently shifted off-site, Galvin said. This electric connections are then made, typicould easily increase as modular becomes cally through access panels, and finishers more ingrained in project design, he noted, fill any gaps in flooring or drywall. though exactly how much builders will do In component builds, far more of the on- or off-site will remain project-depenwork is done on-site, meaning work scheddent. ules need to be synchronized so modules No matter where this balance is evenarrive at the job when they’re needed. tually struck, one thing is clear: off-site In a large project – a hospital for construction has made huge strides over the instance – crews pouring concrete leave previous few years. It’s gone from a niche a depression in the slab as the module is practice to a real consideration for a whole fabricated off-site. The pod is then shipped range of projects – from major commercial

EARN YOUR PLACE AT THE TOP

and institutional work to homes and mutliunit residential.

Meanwhile, PCL isn’t the only Canadian contractor expanding in the space.

Bird Construction Inc., for instance, acquired a 50 per cent stake in the Stack Modular Group of Companies last fall. The Vancouver-based firm manufactures steelframed modules at a subsidiary in Shanghai. At the time, the company’s president and CEO, Ian Boyd, said Bird Construction sees significant opportunity is the prefabrication market in the coming years.

This spring, another of the country’s top contractors, EllisDon, joined forces with Calgary-based Horizon North Logistics Inc. on modular work by signing a master teaming agreement. Horizon North is better known for its temporary work camps, but has begun adapting its knowhow to permanent modular buildings in the commercial and residential markets.

As the major players refine their off-site processes and begin incorporating modular on more projects across the country, the unconventional strategy is likely to relieve some of the cost and labour pressures currently squeezing builders.

Hardiman expects to keep seeing strong growth in the North American modular space in the coming years as construction firms in Canada and the U.S. catch up with similar movements in Europe and Asia.

“I’m not suggesting that modular construction is the silver bullet or the answer, what I’m saying is we should be part of that toolkit,” he said.

On-Site’s annual

Top Contractors survey launches this March. Are you ready to climb to the next rung of the ladder?

Learn more at on-sitemag.com/top-contractors/

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Assessing the future AUTOMATION

Job site robotics are quickly gaining ground, but with greater reliance on human input, the trend is more nuanced than what occurred with factory automation

BY JACOB STOLLER

PHOTO: EKSO BIONICS

I

n the 1959 sci-fi novel Starship Troopers, Robert Heinlein introduced, perhaps for the first time, the concept of the powered exoskeleton – a motor-assisted armoured suit that gives its wearer superhuman strength.

Since then, exoskeletons have shown up in countless sci-fi books and films, from Alien to Star Wars, and more recently, in emerging real-life applications in fields such as the military, healthcare, manufacturing and construction.

The idea of combining human brainpower with robotic capabilities makes a lot of sense in construction, where it’s proven difficult to automate many of the tasks that are commonly executed by robots in controlled factory environments. Larger exoskeletons that give their users superhuman strength are currently available from vendors such as Hyundai and Panasonic. It will probably take on-sitemag.com / 53

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NOTE:

PHOTOS: ACR

AUTOMATION

some time, however, before such devices start regularly appearing on job sites.

“Those things are heavy, and from what I’ve seen, still fairly slow, so they raise a lot of questions in terms of safety and practicality,” says Tanner Clark, director, of BIM/ VDC Construction Services at Calgary-based construction firm Stuart Olson. “In an indoor environment, where you can control pretty much everything, it makes sense, but in a real-world construction environment where weather and ground conditions change all the time, I don’t know how practical something like that would be.”

On the other hand, lighter and simpler exoskeletons, while not providing superhuman strength, can help ease the stress on job sites. One possible candidate is the EksoWorks Vest created by the Richmond, Calif. vendor Ekso Bionics, which provides arm and shoulder support to alleviate the strain of lifting objects. A 16-kilogram (35-pound) tool held at shoulder level by a user wearing the vest seems weightless, according to the company.

“We see exoskeletons as a potential way to reduce repetitive stress injuries

Pittsburgh-based Advanced Construction Robotics has developed an automated machine that takes on the tedious task of tying a large number of rebar intersections on projects such as bridges. Interestingly, it doesn’t use a plan, but uses sensors to approach the job like a normal worker would.

while giving workers more control over what they’re working on,” says John Rygg, technology strategist at Omaha, Neb.based Kiewit Corp. “This would allow older workers to stay on the job longer, and help them to be more productive.”

Rygg cautions, however, that these are early days. “This isn’t common yet in construction, so we’re looking at other industries that might have similar uses.

So we’re still in the research stage – we’ll need to see use cases within the job site.”

LARGER SCALE ROBOTICS The industry is also seeing large-scale robotic solutions that can be transported to a job site to execute specific tasks.

Pittsburgh, Pa.-based Advanced Construction Robotics (ACR) has recently commercialized the Tybot, a robotic machine that automates the tedious and stressful task of tying large numbers of rebar intersections on bridges and other large structures.

Site workers make the initial ties in the traditional way in order to frame and stabi-

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lize the mat, and then the robot takes over, tying all of the remaining intersections. Interestingly, Tybot isn’t programmed to tie each intersection according to a plan – instead, it employs sensors and artificial intelligence to identify the tie points, allowing it to work in the same way a human worker does.

The technology was designed to leverage both human and mechanical capabilities in order to achieve the best synergy possible. “When we develop a new product in the robotics realm – and this is something we pride ourselves in doing – we have to make a very smart decision on what the robot does and what the worker does, because they are way more productive together than they would be if they were completely independent,” says Jeremy Searock, ACR co-founder and vice-president.

“So going forward in the future of construction with robotics, it’s going to be a mutual relationship where they are going to help each other out, where each exercises their best skillset.”

ACR is developing additional solutions, including one that will soon be publicized, which the company hopes will help transform the industry. “There’s a labor shortage in construction,” says Stephen Muck, the company’s co-founder and president, “and we’ll be offsetting that, and hopefully adding some appeal to the younger generation to enter this industry as technology starts to more heavily permeate how we do things. We also hope to eliminate, over time, some of the more strenuous and dangerous activities that are less attractive for the workforce. Finally, robots can help older workers prolong their work careers without the physical limitations.”

BRINGING THE FACTORY TO THE JOB SITE Much of the application of robotics in construction takes place not on-site, but in

PHOTOS: LEICA GEOSYSTEMS

AUTOMATION

Machine control systems from providers such as Leica Geosystems are one example of how automated systems have become an integral part of construction projects.

factories that produce modularized components that are then shipped to job sites.

However, lighter and more adaptable robots are now making it possible to reverse this trend, bringing portable robotic machines to the job site.

There are several reasons for doing this.

Shipping large components can be troublesome and costly, particularly to remote areas, and once the shipment arrives on the job site, there can be compatibility issues. “That creates an overhead that we think can be overcome by bringing the robots on site,” says Asbjørn Søndergaard,

chief technology officer of robotics manufacturer Odico, based in Odense, Denmark.

Odico specializes in the fabrication of advanced concrete formwork, and is introducing a new robotic product, Factory on the Fly, which creates formwork on the job site. The robot ships in a standard shipping container, and is operated by file-to-fabrication workflow software that can be controlled by a non-specialized construction worker from a standard iPad. The underlying technology uses sophisticated parametric software to control the hot-wire cutting of EPS molds – a method that has been tested on over 250 projects, including some high profile buildings in Europe. It’s up to 126 times faster than CNC milling of EPS or timber molds, according to the company.

Søndergaard sees robotics as a positive trend on a number of levels. On one hand, Factory on the Fly reduces the project risks of deploying complex concrete formwork, encouraging architects to come up with bolder designs. On the other, on-site robotics will ultimately lead to a better work environment.

“We see robotic systems as complementary – augmenting the work of the

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PHOTO: TRIMBLE

AUTOMATION

Partially automating certain tasks, or giving humans a bit of assistance with intricate jobs like site preparation helps less experienced operators perform more efficiently, while allowing veterans hone their skills.

construction worker,” says Søndergaard.

“Construction is very complex, so what we want to see is robotic systems that don’t wear your construction worker down. Such systems would enable an occupation for a construction worker where you can function as well when you’re 65 as when you’re 25.”

THE ORIGINAL JOB SITE ROBOTS Perhaps the earliest “real-world” examples of human-assisted robotics on the job site can be found in site preparation, where dozers and excavators have employed automation technology for many years. As in other areas of job site automation, the

concept of humans and technology working side-by-side remains central to the deployment strategy.

“We see further automation on machines through what we call task assistance – machine control coupled with workflow automation,” says Denver-based John Naughton, business area manager for Machine Control at Trimble. “This makes new and less experienced operators more productive and really efficient on a job site, and also improves those experienced operators in terms of their performance. So we see a lot of efficiency gains.”

One of the advances driving the improved capabilities is the wide deployment of 3D grading, where a combination of sensors and Global Navigation Satellite System (GNSS) technology allows a blade to be positioned precisely in both a horizontal and vertical plane.

The technology eliminates operator guesswork, and the need for the operator to be guided by another worker. “The 3D technology puts the drawing in the hands of the operator, to achieve speed and accuracy that you wouldn’t otherwise achieve,” says Kyle Birch, the Canadian Machine Control sales manager for Leica Geosystems. “This gives operators a huge increase in productivity.”

A key advantage is that the newer systems are actually simpler from an operations perspective than the older 2D systems.

“The time to get an operator up and running is about 20 minutes,” says Birch.

PUNCHING ABOVE YOUR WEIGHT CLASS?

TYING IT ALL TOGETHER Behind every robotic solution is data – often lots of it – and the hidden challenge behind robotic advances will be securing and managing that data.

According to Chris Dill, vice-president and CIO with Kiewit Technology Group, IT departments are getting ready for the challenge.

“In construction, the annual IT spend has gone from half a per cent of revenue to 1.1 per cent of revenue – so it’s doubled in about six years,” says Dill, “and automation would inevitably be part of that.”

Robotic vendors typically provide their own software in the form of cloud solutions, but most applications require some form of integration with the contractor’s background IT systems. “In each case, we have to look at the interface with other software that we’re currently using to support the rest of the company,” says Clark. “Otherwise, you find yourself continually having to reinvest in your back-end systems.”

The good news is that automation is nothing new for IT departments. “Automation is not just about lifting heavy things and moving dirt,” says Dill. “We’re looking at software bots that can automate business processes and take a burden off people at our job sites. So no more sitting around and matching invoices and paying invoices. We can automate that through software and that takes a burden off those people and they can spend more time doing their real job, which is planning and executing work.”

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B2W Software........................ www.b2wsoftware.com/OnSite ..................................... 43

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RISK

By David Bowcott

Expanding your horizon Stakeholders must approach construction from a new perspective

T

he most important stakeholder within a construction project is the owner. Without their capital there would be no project to bid on. In addition, it’s the owner that makes the ultimate decisions on exactly how the project will be procured and what players will design, build and operate the new asset. It follows that the goal of any project should be to develop a fully operational asset with optimal construction costs and a schedule that delivers performance certainty at the level most desired by the owner.

Each of us as project stakeholders should be working to build an asset that achieves perfection in the eyes of the owner. If we all come together to achieve this goal, everybody wins. So, why is it that we seem to lose sight of the target with many of the projects being delivered in today’s construction economy? Are we really aiming to create an asset that delivers the desired operational performance certainty, or are we too focused on short-term costs at the severe detriment of the long-term objective?

We all know the answer to this question. But it appears there is a collective awakening afoot that will lead all parties to rethink their current procurement strategies and refocus on this long-term objective.

To reprioritize and begin working together toward achieving improved long-term operational performance, we need a collective “North Star.” A concept long-used within the manufacturing industry, Total Cost of Ownership, could provide this guiding light.

Let’s take a deeper look at long-term costs. The pictogram below represents a realistic breakdown of the total cost of ownership for a typical asset’s entire life.

The cost breakdown is not what you may expect. The present value of design amounts to roughly five to 15 per cent of the construction costs. The construction costs represent 10 to 20 per

cent of total costs of operations. Finally, the human capital costs (costs of human assets interacting with the physical asset) are double the cost of operational costs. These cost allocations vary from asset type to asset type, however, the exact breakdown isn’t required to understand how significant post-construction costs are to the owner versus those costs required to design and build the asset.

What is amazing about this bird’s eye view of ownership cost is that design represents just 0.5 per cent of the present value cost of all components of the asset over its life (both physical and human assets), while construction represents 4.5 per cent of all component costs of an asset over its life.

Those in the construction sector know that how you design and construct an asset is extremely impactful on the operating costs of the asset over its life. What is perhaps the most startling fact, when viewing an asset’s life from this vantage point, is that most construction done today overlooks these vital allocations almost entirely, and instead, focuses on the cost of design and construction.

If we could actually measure total cost of ownership impacts when making design and construction cost allocations, we could unlock trillions of dollars in total cost of ownership savings to the global economy. How many times have you seen situations where the owner could reap significant operational savings by incurring relatively small increases in design and construction costs? For instance, a change that would increase design and construction costs 10 per cent, which really is a one per cent increase in total costs, could reap a 20 per cent decrease in both operational costs and total costs.

From this perspective, it seems we have lost focus on what our primary goal is when designing, constructing and operating the assets we build. We need to refocus and harness the prodigious power of the technology and data solutions coming to market to reshape the procurement models we use to build a better world.

There has never been a better time to start down this path than now.

David Bowcott is Global Director – Growth, Innovation & Insight, Global Construction and Infrastructure Group at Aon Risk Solutions. Please send comments to editor@on-sitemag.com.

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WHERE

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The

CONTRACTORS & THE LAW

By Siobhan Small

Are you insured?

Hidden parties in builder’s risk policies

W

hatever your role on a project, always be sure to read the Course of Construction policy. It is surprising how often parties overlook potential coverage for a loss by assuming they are not insured.

Knowing who is covered by the policy can significantly alter your approach to any losses and prevent you from unnecessarily shouldering those costs. For pyramid structure multi-tier projects in particular, insurance can flow down from the owner – so owners, contractors, subcontractors, trades, and suppliers alike can benefit from this basic practice.

•

to find they are covered. In many policies, the definitions particularize the term “Insured” further than the declarations.

The most common example of this particularization is when “Insured” is defined to include “Additional Insured.” This category will then have its own definition. That definition, of course, varies by policy, but it is common to find that trades and suppliers who do work on the project are listed under “Additional Insured” Endorsements – This section is usually at the end of a policy and can alter any of its terms. Always check to see if there are relevant endorsements.

PURPOSE OF THE POLICY Course of Construction insurance (CoC), also known as Builder’s Risk insurance, is one of the broadest policies in the construction world. These policies will generally cover the costs of repair or replacement in the event of an accident. While the kind of coverage offered by a CoC policy is particularly valuable on projects that face extreme weather and hazardous conditions, the greatest utility of such policies come from the coverage of a broad range of insured parties.

The prime contract will usually stipulate who is responsible for obtaining CoC coverage. Owners and general contractors are the most common purchasers of the policy, as both benefit from knowing that the contractors will have the funds to rebuild in the event of a loss. The insured party, however, is not usually limited to the signatories of the prime contract.

Make sure you aren’t paying out of pocket for is covered. Read the policy.

WHERE TO FIND THE INSUREDS Check the following sections of the policy to determine whether you are insured: • Declarations – At the beginning of the policy, you will often see the title “Named Insured” and “Insured.” The Named Insured is usually listed by its corporate name, and is limited to the purchaser of the policy. “Insured” in a CoC policy usually covers all contractors, subcontractors and consultants, like engineers and architects.

• Definitions – This section is where parties other than traditional contractors and subcontractors might be surprised

SIGNIFICANCE Simply by looking closely at the policy, trades and suppliers can save themselves a lot of money.

It prevents them from absorbing losses for which they can rightfully claim coverage. This rule extends to any party that has agreed to indemnify those unexpected insureds, so it is in everyone’s best interest to read the policy thoroughly.

Owners likewise benefit from encouraging this practice. Projects can suffer disruption if an unexpected loss burdens a subcontractor, trade, or supplier to the point of insolvency. The problem is magnified if that party is somewhere in the middle of pyramid and can no longer pay its subtrades. Insurance is intended to protect the project from these cash flow issues, but the policy can only help if the relevant parties take advantage of that protection. All parties need to be aware of the protection available to capitalize on it. a loss that In the event of an accident that burdens a supplier, for example, an owner who is aware of full coverage can call on its insurer to cover the loss of the additional insured. This approach is highly preferable to relying on the supplier to pick up a potentially ruinous tab and hoping that it won’t slow production.

If the policy is properly utilized, owners can take comfort that project financing is operating as designed.

Make sure you aren’t paying out of pocket for a loss that is covered. Read the policy.

Siobhan Small practices construction law at Borden Ladner Gervais LLP. This article is for information purposes only and may not be relied on for legal advice. Please send comments to editor@ on-sitemag.com.

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