Issuu

January/February/March 2018 Vol. 15 No.2

The Exchange PM 40063056

Amit Patel, Turner Construction | Infrastructure | Roofing Bonding, Insurance, Surety | 2018 WoodWORKS! BC AWARDS

Wilson M. Beck Insurance Services Inc. “General Insurance & Contract Bond Brokers” ~ Serving the construction industry ~ ~ Personal, auto & ICBC fleet insurance ~ ~ Commercial insurance ~

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Inside 06 Connections Amit Patel, vice president and general manager at Turner Construction, has successfully built up a new office in Vancouver and gained market share in a few short years.

January/February/March 2018 | Volume 15 No 2

PUBLISHER

MANAGING Editor Contributing writers

12 Feature Project The Exchange in downtown Vancouver is a landmark project with the heritage conversion of the old Stock Exchange building and the addition of a 31-storey LEED Platinum office tower. B.C./ALBERTA SALES

18 Bonding, Insurance, Surety

21 Infrastructure Improving Irrigation Infrastructure Technologies set to impact infrastructure

23 Roofing The Need for More Green Roofs Roof Design in a Cold Climate Design to Build, Build to Maintain

Cheryl Mah Will Johnston Hillary Kernahan Devon Lehrer Glen MacRae Daniel Roehr Keith Sashaw John Singleton Bob Sloat Ted van der Gulik John Watt John Wells Dan Gnocato Tel: 604.549.4521 ext. 223

PUBLISHED BY

Industry Focus Water Damage Risk Who Wants to Get Paid? Prompt Payment Gathering Steam

Dan Gnocato dang@mediaedge.ca

PRESIDENT Kevin Brown vancouver office 2221 Hartley Ave. Coquitlam, B.C. V3K 6W9 Tel: 604.549.4521 Fax: 604.549.4522 Toronto office 1000-5255 Yonge St. Toronto, ON M2N 6P4 Tel: 416.512.8186 Fax: 416.512.8344

Copyright 2018 Canada Post Canadian publications mail sales publication agreement no. 40063056 — ISSN 1710-0380 Return all undeliverable Canadian addresses to: Suite 1000 — 5255 Yonge Street, Toronto, Ontario, M2N 6P4

Departments 04 Message from the Editor 27 The Legal File Supreme Court of Canada rules on L&M Bond Telling the Truth Canada Prompt Payment Act Update

30 Industry News

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Cover Photo

The Exchange in downtown Vancouver is a unique LEED Platinum office tower. Photo: Credit Suisse

Construction Business is British Columbia and Alberta’s construction magazine. Each issue provides timely and pertinent information to contractors, architects, developers, consulting engineers, and municipal governments throughout both provinces. Complimentary copies are sent bi-monthly to all members of the Architectural Institute of B.C., B.C. Construction Association, B.C. Roadbuilders and Heavy Construction Association, Consulting Engineers of B.C., Construction Specifications Canada — B.C. Chapter, Greater Vancouver Home Builders’ Association, B.C. Ready-Mixed Concrete Association, Independent Contractors and Businesses Association of B.C., Urban Development Institute of B.C. and Vancouver Regional Construction Association.

February 13 & 14, 2019

March 20 & 21, 2018

November 7 & 8, 2018

Editor’s Note

Getting Paid

etting paid on time and promptly is key to business survival. This is especially true in the construction industry where contractors (mostly small business construction owners) need cash flow to cover ongoing labour and material costs. Delayed payment has been identified as one of the biggest issues impacting the Canadian construction industry. Demand for prompt payment has been gaining steam across the country with Ontario leading the charge. The big news as we start 2018 is the passing of Bill 142 (the Construction Lien Amendment Act) in the Ontario legislature, which creates certainty for contractors about when to expect payment. The industry is also wait-

ing for Bill S-224 (The Canada Prompt Payment Act) which has been passed by the Canadian Senate, marking a key milestone achievement. The Act will ensure that construction contractors and subcontractors who do business with the federal government are paid promptly. The hope is the changes happening in Ontario will spread across the country. The impact of these two new Bills and the important issue of getting paid are covered by articles inside this issue. For our profile, we speak with Amit Patel, vice president and general manager at Turner Construction Company in Vancouver. He has built Turner’s Vancouver office from the ground up into a thriving and successful business in just five years.

Gracing our cover is The Exchange in downtown Vancouver. Read about this unique redevelopment project which involved the construction of a LEED Platinum office tower combined with the restoration of the old Stock Exchange building.

Cheryl Mah Managing Editor

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Complete 10 compulsory and 2 elective courses

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Connections

Building

Excellence By Cheryl Mah

Telus Garden

he next generation of construction leaders are making their mark in the B.C. industry. Take for example, Amit Patel, vice president and general manager at Turner Construction Company’s Vancouver business unit. At 37-years-old, he already has more than 10 years of experience and has proven he has the natural leadership skills to take on projects and put together the right teams. »

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Connections

Miller Thompson LLP

Patel says he’s surprised at how quickly they’ve grown, “But we’ve been fortunate to hire some great people during that time. And we just focused on one client at a time and that word of mouth and customer service is what really helped get us here.” Headquartered in New York, Turner is a North American based international construction services company. It was founded in 1902 by Henry Turner who pioneered the use of reinforced concrete. With more than 50 offices in North America, Turner is the largest general contractor in the United States. “In Canada, Turner operates in Vancouver and Toronto,” says Patel. “Then through our partnership with Clark Builders, we cover Calgary, Edmonton, Yellowknife and Saskatoon.” In the first five years, the company has established itself by focusing on tenant improvement (TI) projects for large corporate headquarters such as Telus Garden and Metrotower III for Metro Vancouver as well as notable law firms like McCarthy Tetrault and Miller Thomson. Early projects included an office upgrade at the Richmond Olympic Oval and an interior fit-

out and seismic upgrade for the SFU Discovery 1 project. “The goal is to continue building a strong leadership team here in Vancouver that will allow us to continue our growth. I also play a partnership role in growing our reach and business across Canada,” says Patel, who grew up in East Vancouver. Patel was exposed to construction at an early age by his father who was involved in plumbing and then real estate. He recalls working on job sites for his father doing odd jobs such as sweeping floors. After high school, however, his knack for math led him to engineering at UBC. “I was always naturally good at math and physics so I went into engineering at UBC, despite my parents insisting that I would become a doctor,” he says with a laugh. After graduating with a Bachelors of Science in mechanical engineering in 2003, a poor economic market meant jobs were scarce so he went to work for his father. While working for family can be challenging, it allowed Patel to realize he enjoyed construction rather than “sitting at a desk looking at AutoCAD all day.”

...the company has established itself by focusing on tenant improvements...

After starting his career in Turner’s Seattle office, he was tasked with opening a Vancouver office in 2011. Under his leadership, the office has grown from a staff of two to a diverse and multicultural team of more than 60 today. The company has gone from zero market share to more than $80 million in annual construction volume last year. 8

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January/February/March 2018

Connections

McCarthy Tetrault LLP

In 2005, he joined Turner in Seattle as a project engineer. While there, he worked on a myriad of projects including TI work and corporate headquarters. “It was a great training ground. Turner is a company that trains for a career and I learned so much about interior construction,” says Patel, who quickly worked his way up to become a senior project manager. When he decided to move back to Vancouver for family reasons in 2011, the timing matched Turner’s desire to open an office there. “At the time I was only 30... and it’s been quite a journey. I’ve learned a lot,” says Patel, who was promoted to his current position in late 2017. Recognized now as one of the top TI contractors in Vancouver, Patel says the company is turning its attention to other market sectors across the Lower Mainland in 2018. For example, Turner recently completed its first ground up project, the Towne Millwork Warehouse in Abbotsford. Current projects include the Cloverdale Sport & Ice Complex and the Lions Gate Hospital Power Plant replacement project. 10

construction business

“Turner has a long history in healthcare and recreational work so those markets make sense for us to explore,” notes Patel. “Our value added is the ability to do technical and specialty projects.” Turner fosters innovation and has been early adopters of new technologies and best practices. “Our culture has always been to push the boundaries of innovation with construction. We

Turner fosters innovation and has been early adopters of new technologies... did our first BIM project 10 years ago,” says Patel. “We are also doing lean construction — started that eight years ago where we’ve really focused on how we can make more efficient projects.” With projects becoming increasingly complex and required to meet more stringent regulations, utilizing leading-edge technology can improve delivery and minimize risks and costs.

January/February/March 2018

Innovation and extensive use of BIM were critical to delivering the new office for Miller Thomson. The first of its kind in Canada, the office expands across an acre (50,000 sq. ft.) on the fourth floor of the former Sears building in downtown Vancouver. Turner completed the project on schedule, overcoming challenges that included the lack of a service elevator, extremely limited working hours, and several unexpected challenges of building in an old space including hazardous material. The project earned the company the inaugural VRCA Gold Award of Excellence for Tenant Improvements. “To win the first one was a great honour. The client was amazing,” says Patel. “It was a tough job. It was a very intricate project with a fast timeline. The project team was so dedicated and delivered a unique space.” Patel was also honoured individually in 2016 with the VRCA’s U40 Award, which recognizes an individual under 40 who has made a significant contribution and has demonstrated leadership potential and a commitment to the advancement of the construction indus-

Connections try. “That was another nice surprise. I feel it’s important to make our industry better and to promote construction to future generations,” he says. He was recently elected as vice chair of VRCA’s General Contractors Division Council where he can have further influence on industry issues. VRCA is the largest and oldest construction association in B.C. “I’m also involved with the Lean Construction Institute Community of Practice,” he says, adding being involved and contributing back to the industry is a strong part of the Turner culture. The office is also heavily involved with Canadian Construction Women with some staff members serving as chairs over the last four years. The company’s core values since it was founded are integrity, commitment and teamwork. “The culture of the company has always been to treat clients like trusted partners and to provide excellent customer service,” says Patel. “And to have a positive environment to ensure people are engaged and happy. We also want to make sure we’re a safe culture.” As for the outlook for B.C., Patel says the next few years look strong and should be keeping the industry busy. “With the number of projects coming in the next five years, I’m very excited,” he says. Outside of work, the father-of-two enjoys spending time with his family and travelling.

Miller Thompson LLP

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January/February/March 2018

construction business

Feature Project

An Exchange of Old and New By Cheryl Mah | Photos: Harry Gugger Studio and Credit Suisse

construction business

January/February/March 2018

Feature Project

heritage building in downtown Vancouver has a new lease on life thanks to a unique and ambitious redevelopment project by Credit Suisse and SwissReal Group. The Exchange blends restoration of the old Stock Exchange building with a LEED Platinum development in a new 31-storey concrete highrise office tower. Located in the heart of the city’s central business district, the $240 million project offers 400,000 square feet of premium office, retail and hotel space in a distinct new landmark.

Designed by local architects Iredale Architects in collaboration with Harry Gugger Studio of Basel, Switzerland, the 48-month project required a complex retrofit of the 1929 building and the construction of a 375-foot tower with seven levels of underground parking. The site included the demolition of a two-storey structure next to the old exchange. “This was not an easy project and credit has to be given to the ownership group for having the vision and commitment to seeing it through,” says Daniel Hawreluk, project architect and partner at Iredale Architects.

Construction began in 2014 with PCL Constructors Westcoast achieving substantial completion on January 17, 2018. At peak, the site averaged 250 workers. To maximize the amount of density on the extremely confined site, the concrete tower with post-tension slabs is essentially built around and over top of the 11-storey existing building. The original building is tied into the new tower at the bottom levels, allowing the floor plates to be contiguous. Right from the outset, the lack of an underpinning agreement with the adjacent building meant top down construction was necessary for the tower’s foundations, according to PCL senior project manager Gary Thomas. “Constructing a new supporting structure for a highrise through an existing 90-year-old building was unique and added several months to the schedule,” he says. The support structure for the tower required four of the 10 column footings to be built through the 11-levels of the old Stock Exchange. The tower’s foundation columns also played a major role in providing seismic stability to the existing building. “That was a very long and expensive and risky part of the project,” notes Hawreluk. “We had to essentially construct a hole for each column from top to the bottom and construct the footings in the basement of the old building. That allowed us to support the tower over almost the entire old building while also allowing us to get decent size floor plates for the highrise.” The existing structure was connected to the concrete core of the new tower. The design also features an innovative design of giant trusses that are tied in at the roof level which help prevent the building from swaying in the event of a seismic event. “The core of the new building is restrained by four large trusses which tie into the rest of the structure by BRB — buckling restrained braced frames,” explains Thomas. “It required lots of coordination with what we called top of house — 4D modelling and 4D scheduling were undertaken to ensure a conflict free installation of the structure with the envelope and mechanical and electrical systems.” According to Thomas, tying the existing structure into the new tower posed many challenges. “We had elevation challenges at the street and there were also settlement differentials that had to be considered between the new and existing building,” he says, adding the busy downtown site meant overcoming the usual issues such as access and traffic management. In designing the tower, the key goals included achieving the highest environmental standards and architectural excellence while respecting the heritage building. “We were very conscious to make sure the tower is deeply set back from the facades of the old building. We wanted to maintain the elegance and presence of the old building, considered the grande dame of the block,” says Hawreluk.

January/February/March 2018

construction business

Feature Project By breaking up the mass of the tower over its entire height and by recessing its bulk from the perimeter of the site above the old Stock Exchange, the new building allows the existing structure to fully define the streetscape, according to Gugger, who was responsible for the exterior expression of the tower. The tower features a unique glass and aluminum triple-glazed curtainwall — a first for a Canadian skyscraper. The “tuned facade” is comprised of large vertical architectural fins that respond to the different orientations of the tower with a graduated ceramic frit on the windows. On the south facing facade, a high density ceramic frit is used to control glare and solar gains while the north side has less frit to maximize views. “As you move around the building, the density of that frit changes to address the different levels of sun exposure. Gugger did a fantastic job in creating a building that really responded to the environment but that also kept a very consistent look within the tower,” says Hawreluk, noting the large vertical feature caps were unique in that the only place in the world able to make them is in China.

The tower features a unique glass and aluminum triple-glazed curtainwall... Sustainability was a key design driver on the project. The Exchange is touted as Vancouver’s tallest LEED Platinum office tower and Canada’s first LEED Platinum heritage conversion with the restoration of the original Edwardian building. LEED Platinum is achieved using the latest passive technologies. The range of green features include solar thermal panels, rainwater harvesting, geothermal system, raised floor plenum to distribute fresh air, hydronic ceiling system for heating and cooling, and LED lighting throughout. The Exchange will have half the energy load of a traditional office building, with a 35 per cent reduction in energy costs and 85 per cent reduction in carbon dioxide emissions. “The ceiling mounted hydronic heating and cooling system is more common in Europe and starting to be adopted in North America. It required a fair amount of coordination between sizing the grid with the curtainwall system —making sure the system aligned with the curtainwall,” says Thomas, estimating more than 90 per cent of construction waste was diverted from the landfill. When it came to the restoration of the heritage building, Hawreluk stresses it wasn’t just the facade that was retained — it was the whole building and the elevator core with a full interior upgrade. “The beautiful facades and elevator lobby were identified as significant heritage features 14

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Feature Project in the conservation plan,” says Hawreluk. “The elevator lobby is a jewel within the building. It was the only space that was completely protected from start to end of construction before the heritage consultant came in and restored it to what it used to look like. We’re really proud of the outcome.” The brick and terracotta cladding was in poor condition and required extensive restoration. Custom terracotta components were sourced from a specialty shop on Vancouver Island. Also sourced from the island were new vertical sash windows to match the original windows. “We used modern materials to represent the original such as aluminum instead of wood facades on the storefronts,” adds Hawreluk. A 202-boutique hotel, occupying the first 11 floors, is currently under construction and is expected to open in the summer. “The hotel complements the building beautifully and will activate the building 24 hours a day,” says Hawreluk, who has been involved on the project since the local owner first approached the firm in 2009. The project has already garnered international attention, winning a 2017 American Architecture Prize for Heritage Architecture. “We are very fortunate to have had the opportunity to work on this project and hopefully it will be a fixture on the skyline for many years to come,” says Hawreluk.

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construction business

Awards evening held on Monday, February 26, 2018 • Vancouver Convention Centre

2018 Wood WORKS! BC Wood Design Award winners sig n awa r

Residential Wood Design

Multi-Unit Residential Wood Design

Environmental Performance

D’Arcy Jones, D’Arcy Jones Architecture Vancouver Okada Marshall House, East Sooke

Adera Development Corporation Vancouver Prodigy, Vancouver

Cornerstone Architecture Vancouver The Heights, Vancouver

HDR | CEI Architecture Associates, Inc. Vancouver

Prefabricated Structural Wood

Western Red Cedar

Wood Innovation

International

StructureCraft Builders Inc., Abbotsford Abbotsford Industrial Shop and Office Abbotsford

Larry Adams, NSDA Architects, Vancouver GoodLife Fitness Family Autism Hub (The Hub), Richmond

Acton Ostry Architects Inc., Vancouver Brock Commons - Tallwood House Vancouver

Event Sponsors

Trophy Sponsor

And BC member associations

Proud to be a part of

Jury Sponsor

Sponsors

Commercial

Jinjiang Zhou, Suzhou Crownhomes Co., Ltd. Suzhou, China

14 years of Wood Design Awards in BC were celebrated by 450 distinguished design and building professionals, including architects, engineers, project teams, local governments, industry sponsors and guests. The annual awards evening recognizes leadership and innovation in wood use and publicly salutes continued excellence in wood building and design. There were 100 nominations in 14 categories from all over BC as well as international and national nominees. Wood WORKS! is a national industry-led program of the Canadian Wood Council, with a goal to support innovation and provide leadership on the use of wood products and systems. Wood WORKS! BC provides education, training and technical expertise to building and design professionals throughout BC.

Wood Design

Interior Beauty Design

Jury’s Choice

Technologist Award

Bill Downing, Penticton Structurlam Products Ltd., Penticton

Karla Fraser, Vancouver Urban One Builders, Vancouver

Institutional Wood Design: Small

Institutional Wood Design: Large

Okanagan College, Kelowna Trades Renewal and Expansion Project Okanagan College, Kelowna

Penticton Lakeside Resort - West Wing, Penticton

Cornerstone Architecture Vancouver Crofton House School Dining Hall, Vancouver

Kimberly Johnston, Johnston Davidson Architecture + Planning Inc., Vancouver Logan Lake Fire Hall, District of Logan Lake

(Architect: Diamond Schmitt Architects, Toronto/ Vancouver in assoc. with David Nairne + Associates)

Wood Design

Engineer

Architect

Wood Champion

Timber Structure Enterprise Pavilion in Jiangsu Horticultural Expo, Suzhou City

Fast + Epp and GHL Consultants Ltd. Vancouver Brock Commons - Tallwood House, Vancouver

Acton Ostry Architects Inc. Shelley Craig, Urban Arts Architecture, VancouverBC Vancouver, Brock Commons -Student Tallwood House,Vancouver, VancouverBC UBC Engineering Centre,

Kevin Mahon Adera Development Corporation, Vancouver

wood-works.ca/bc

@WoodWORKSBC_CWC

Bonding, insurance, surety

Water Damage Risk Claims management of large water losses By Glen MacRae

n less than 10 minutes, water escaping from a four-inch water line can cause over a million dollars in damage and set a project months behind schedule. The ripple effect of the delay will impact the delivery of commercial or residential units and the lease-up of other space. With water damage claims on the rise, many insurers are now opting out of projects with a substantial residential exposure and the companies that do remain interested in this class of business demand deductibles of at least $25,000 and even $100,000. The best way to manage construction insurance premiums and the headache of a water damage claim is to avoid them in the first place. Good claims management begins with good quality control. For the mechanical contractor, best practices must be established, documented, communicated and enforced. As a prerequisite to setting foot on the construction site, the trade must have clear quality control procedures available for inspection. They must include procedures to identify and remove non-complaint materials and parts from the workplace because a growing number of losses are related to deficient materials making their way onto a construction site. There must be vigorous test protocols for all water lines with results scrupulously documented. Failed assemblies are to be retested until passed, all the while being conducted under the joint supervision of the trade and the general contractor. There shall be no deviation from manufacturer’s installation instructions. Crimping tools and their use are the source of numerous problems; therefore tools must be calibrated and checked on a regular basis. The trade must ensure staff are trained and have records to show that this was done. Plan for and expect leaks; put in place a process to immediately address leaks, including shut-off procedures during times when the site is not operational. Again, this is to be done in concert with the general contractor. The mechanical consultant must be vigilant to ensure that only approved materials are incorporated. If there is to be a change, correct certification procedures are to be followed and the means and methods of installation are to be communicated and verified. This requires regular site inspections and attendance at plumbing line tests. Owners of highrise projects are advised to consider using a leak detection system through a building automation program. During construction, some may choose to engage a third party mechanical engineer to do the quality control. The general contractor must ensure that there is a correct journeymanto-apprentice ratio. They must verify the trade’s QC program to ensure that routine checks are being followed. They are to ensure that frequent pressure tests are carried out with GC superintendents’ in attendance. As for the GC

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superintendents, more vigorous training in mechanical installations and best practices are required. Last, expect and prepare for water escapes. All superintending personnel must know the location of and have access to water shut-off valves. Every minute water runs unchecked costs tens of thousands of dollars. So, when bad things happen all affected contractors must mitigate their losses — it is common sense and also a requirement in all insurance policies. In the insurance world, the standard of the ‘Prudent Uninsured’ applies to any damage mitigation activities; do what is reasonable as if you were paying for the damage out of pocket. No insurer will challenge that approach. In practice, every affected contractor should set up a separate job number to track the costs to mitigate and repair damage. Don’t wait for the adjuster to give instructions, as they are the insurers’ eyes and ears and are hired by the insurance company to document the cause, nature and extent of the loss and to establish that the repairs and the costs are correct. The insurers are contractually obliged to pay what is fair and reasonable; the adjuster’s role is to certify that the costs presented for reimbursement are just that, fair and reasonable under the circumstance. For the general contractor, part of the site safety protocol is to have pre-established flood restoration companies selected and ready to be called in at a moment’s notice. Should a flood occur, immediately contact the flood restoration company to do the triage work but, until their crew arrives, use any resource available to initiate clean-up activities — logging their time as it is incurred. Standard operating procedure for any project should identify qualified contractors capable of undertaking the cleanup on the site. Identify the major firms in the area and stick with them, there will be less drama. Once the mitigation work is in hand, the contractor responsible for the damage must be notified that they will be held responsible by virtue of the “Protection of Property” clauses in most construction contracts. Section 9 in the CCA1 requires the responsible trade to make good on the damage caused. In most large projects with a wrap-up builders risk (course of construction) policy, the trade’s obligation is limited to the policy deductible. In the case of a loss, by the time the water is removed and damaged drywall is cut away, the insurance adjuster should be on site. The claims representative from the insurance broker should also attend to survey the scope of damage. A site meeting should be called where a critical path to recovery is developed. This is vital because it is during this meeting that the insurance adjuster becomes fully informed of the constraints on the repair process. Apart from the repair to the direct damage of the project, the timing of repairs and the availability of replacement materials will have a great impact on the extent of the related delay claims. If the cost of adding extra shifts and working weekends would reduce the cost of delay claims, then proceed. Again, keep the insurance broker and the adjuster informed. Your insurance broker’s role is to ensure that there is a satisfactory outcome and that the policy they sold functions as it is expected. The project owner expects no less of the contractors and the contractors should expect no less of the insurance broker. The key to a satisfactory outcome of a disastrous water damage loss is frequent communication between stakeholders. The insurance broker should see that owner’s representatives, general contractors, consultants, trade contractors and insurance adjusters meet and plan the shortest and most cost effective route to bringing the project to its delivery. If they have done their job correctly, the adequacy of insurance coverage to pay repairs, extra expenses, delay in startup and, project soft costs will never be a source of concern. Glen MacRae is vice president of claims at Wilson M Beck Insurance Services.

Bonding, insurance, surety

Who Wants to Get Paid? By John Watt

ho wants to get paid? The answer is everybody in the construction chain of course. It’s hard enough to secure work at a price that works, but spending energy and costs getting paid can be frustrating, time consuming and is not productive in building your business, which is what you would rather be doing. This is about cash flow and it should not be up to the contractor (general or subcontractor) to fund someone else’s project. The vast majority of owners and contractors honour their contractual obligations and do so promptly. In the long-run, it is bad business not to. It is the ones that do not, that threaten your business. The implications could potentially be more dire than inconvenience or time wasted, since a hung account receivable could leave a sizeable hole in the current asset side of a balance sheet and that could affect suppliers, shareholders, the bank and bonding company support levels. Your surety leverages support levels based on a number of factors and financial metrics including how much working capital is in your company. A receivable that is well overdue, or due from an entity of questionable solvency may not be viewed as current and thus could directly affect your capacity to access the surety credit you need for your business. The surety broker and the surety should be viewed as your partners in the business. Our interests are all aligned, especially when it comes to the matter of you getting paid. When the surety issues tender bond documents to an unknown owner, it is standard to include the “financing clause” on those documents. This basically requires the owner to furnish evidence

that they have financing or funds committed to cover the costs of the project, before requesting performance bonds. The surety does not mind being the one to ask the tough questions. We are in this together and anything that protects you and your balance sheet is good for us as well. And quite frankly an owner should expect those questions and diligence when awarding sizable construction contracts. If you are a sub-trade, you can query an owner to see if you have recourse to a labour and material payment bond that the owner would hold in trust for your benefit. Your surety broker can

When contracting with private parties, your first call should be to your surety broker. provide guidance in the matter, but having a labour and material payment bond in place provides additional security from a third party surety that you will be paid according to the terms of your contract. What about for unbonded contracts? When contracting with private parties or other contractors you don’t know, your first call should be to your surety broker. They are your business advisors in these matters, and are in the business of knowing who is who in the development and building industry. They have the means and the contacts to find out more and can help you before you sign that contract.

On the subject of prompt payment, if you do work in Ontario, there have been some interesting recent developments in that province. Prompt payment or the lack of it and need for it has been in the news a lot lately. Payment delays and delinquent payers have been identified as one of the biggest barriers to investment, productivity and employment in the construction industry. On December 5th, 2017 Bill 142, the Construction Lien Amendment Act passed unanimously in the Ontario provincial legislature. This legislation completely overhauls that province’s Lien Act which has been in effect since 1983 and was in need of updating. Here are some of the highlights: • Creation of new prompt payment rules to give contractors and subcontractors certainty about when to expect payment. Payment protection through the construction chain. • No exceptions rules to hold back release deadline means a no exceptions rule to when contractors and subcontractors will be paid. • The adjudication process will now provide an opportunity for resolution of construction disputes without disruption of project schedules and will likely assist in avoiding costly legal battles. • Mandatory performance and payment bonds on publicly funded projects over a threshold. While the bill passage itself is big news, the Ministry of the Attorney General of Ontario will next need to develop and draft the supporting regulations and when that is complete the full ramifications will be clearer to all. There are more than 400,000 workers in that province’s construction sector and they can hopefully soon see the effects of legislation that looks out for them. Time will tell whether we see this movement expand across the country. Other provinces are watching with interest as they too face similar issues with respect to dated legislation and issues with prompt payment affecting their businesses and citizens. With interest rates seemingly on the rise, the timing is good for this legislation to ensure the financing burden is kept where it belongs and not shifted onto the contractors attempting to build a business and employ a work force to build this country. Let’s hope it catches on in this province. John Watt, vice-president, surety, joined Trisura in 2006 where he originally set up and currently manages the surety department for the B.C./Yukon region. He has been in the surety business for 28 years.

January/February/March 2018

construction business

Bonding, insurance, surety

Prompt Payment Gathering Steam

Bonds now mandatory on public work in Ontario By Bob Sloat • The introduction of an adjudication process which will be binding on an interim basis. This will speed up dispute resolution and prevent disputes from delaying work on construction projects.

n December 5, Bill 142 passed third reading in the Ontario Legislature. The measure was supported by all three parties with the final vote tally of 87-0. This new legislation completely overhauls the province’s moribund Construction Lien Act which has been in effect since 1983. One of the key objectives of Ontario’s review of its Construction Lien Act — which took more than a year and involved an extensive consultation process with over 175 construction sector stakeholders — was to address the vexing issues around prompt payment. For many reasons the payment chain has become clogged over the past number of years, causing hardships and worse for increasing numbers of trades and suppliers. Prompt pay has become arguably the largest concern and issue for the construction sector. Importantly, Bill 142 includes a new Section II.1 which requires that all public work in the province be protected by Performance bonds and Labour & Material Payment bonds. This provision, the first of its kind in Canada, is akin to the Miller Act measures which have been in force in the United States since 1935. The bond requirements help to ensure both the certainty and timeliness of the payment regime for public

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construction in the province and were an integral part the bill’s overall objective. But Bill 142 was a good deal more than just bonds. Ontario can now arguably claim to have the most equitable and responsive construction payment protocol in North America. The bill introduces a number of sorely needed updates and upgrades to Ontario’s construction payment and lien provisions that bring about a level of fairness and efficiency never seen before. Among the key improvements found in the new legislation: • A reworking of the payment protocol in recognition of the changes in methods of construction procurement, delivery and payment that have taken place over the last 30 years (e.g. P3 projects). • The creation of new prompt payment rules to give contractors and subcontractors certainty about when to expect payment. • Extension of the timelines to file liens and start court actions, giving contractors and subcontractors time to resolve their disputes outside of court and avoid additional legal fees. • The requirement for holdback funds to be paid as soon as the deadline to file liens has passed, so contractors and subcontractors know when to expect full payment.

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That said, it should be noted that the work to fully implement Bill 142 in Ontario is not yet done. As in so many other groundbreaking measures, the devil will be found in the details. Over the next few months, the Ministry of the Attorney General of Ontario will be working on the development of supporting regulations to ensure that the new rules can be followed in an efficient, equitable and workable manner. For the construction industry, this next step is critical as it is the regulations that will determine the bond language, the penal sum requirements for the performance and payment bonds and the surety’s role in the adjudication process. The Surety Association of Canada (SAC) will continue to work diligently with its industry partners and of course the Ministry and the advisory group to ensure that the surety-related regulations will serve the needs of our industry, construction stakeholders and Ontario taxpayers and looks forward to the work ahead in Ontario. Given the importance of this issue, we can anticipate that similar initiatives will be undertaken in other provinces; SAC is prepared to work with construction sector partners on the changes as they unfold. We also know that the prompt pay issue is being pursued by construction associations and others in B.C. and Alberta. To date this has resulted in special provisions being written into Alberta Infrastructure procurement contracts, after a consultation process with the Alberta Construction Association. These provisions mean more transparency in the payment chain and allow trades and suppliers to know better the work that has been paid for as payment milestones are achieved. In B.C., the construction law section of the B.C. Bar Association is conducting a review of B.C.’s Lien Act with a view to the effect it has and could have on payment chain issues. In short, the prompt payment train has ‘left the station’ and we can expect to see momentum on this front across the west over the months and years ahead. Bob Sloat is director business development, Western Canada for the Surety Association of Canada.

Infrastructure

Improving Irrigation Infrastructure The need to deliver water to agricultural areas to attain future food security By Ted van der Gulik

Currently irrigate lands (green) and potential expanded irrigation (red)

ome to two thirds of British Columbians, the mighty Fraser River is the lifeblood of a vast watershed that stretches from the Rockies to the Pacific. The lower Fraser Valley, in particular, is one of the most productive agricultural regions in Canada. The region plays an important part in B.C.’s goal of achieving food security. While the region contains only 3 per cent of the provincial Agricultural Land Reserve, the farm gate receipts generated are about 50 per cent of the provincial total. What are the implications for food security? Facts and figures help paint a picture. With the technology that is available today, about 0.54 hectares of land is required to produce sufficient food for a healthy diet for every person. B.C.’s farmers currently produce about 50 per cent of all foods consumed within the province. An increase in irrigated farmland (from 120,000 to 300,000 hectares) would be required within the next 20 – 30 years for B.C. to attain food security taking into account population growth and other factors. This is a substantial increase over current irrigated levels. The agricultural irrigated area in the Fraser Valley is 28,000 hectares, which is about 1.4 times that of the Okanagan. This is a fact that few people know. Berries, forage and vegetables are the predominantly irrigated crops. The total amount of water required to irrigate these crops in a normal dry year is 128 million m3. The Fraser River flow ranges from around 10,000 m3/sec at freshet to a low of around 1,500 m3/sec later in the summer. Even the low flow of 1,500 m3/ sec can provide the agricultural water requirements in one day. The Fraser River therefore has sufficient capacity to provide the required agri-

cultural water requirements today and likely in the future as well. The potential buildout for irrigated farmland in the Fraser Valley is about 2.4 times what is currently irrigated, from 28,000 ha to 68,500 ha. This means that the Fraser Valley alone could provide approximately 25 per cent of the additional irrigated land area that is needed for food security. The limitations will be water quality and the required infrastructure to deliver water to the agricultural areas. Many of the small streams in the Fraser Valley do not have additional capacity to supply irrigation water during the summer months. There is some additional capacity in the larger aquifers,

The critical issue is... the shrinking window of opportunity for pumping water for agriculture... but for the most part the water supply in the future will have to be provided by the Fraser River. Infrastructure costs will be expensive as the corridors to bring water to some of the agricultural land have many roads, railways and other developments that also occupy the same space. Meanwhile, the climate is changing rapidly, leading to additional challenges. The ‘new normal’ is a recurring pattern of floods, droughts and wildfires. Impacts on watershed hydrology will be far-reaching. For years to come, Fraser River water levels (high and low) and quality will be affected. In the lower Fraser Valley, the consequences of summer droughts, rising sea levels and the

increased need for irrigation water are all related. The critical issue is the movement of the salt wedge and the shrinking window of opportunity for pumping water for agriculture from the Fraser River in Delta and Richmond. An increase in sea levels combined with a drought flow on the Fraser River would allow salt water to move farther up the river in the future. This movement has the potential to shut down current water supply intakes for a longer period of time. It could become challenging to extract sufficient quantities of good quality irrigation water for agricultural use in Richmond and Delta. In Delta, the Ministry of Transporation and Infrastructure spent $22 million on an Irrigation Enhancement project, partly to mitigate the loss of agricultural land to the Gateway Highway project. The Delta water supply system include 591 kms of ditches, more than 3,093 culverts and bridges and 100 water level control structures. The system required good quality water from the Fraser River. A modelling study conducted by EBA-Tetra Tech indicated what could happen in the future with the salinity wedge impacting water quality. The report can be found on line at: https://www. bcagclimateaction.ca/regional/lower-mainland/ What does this mean? Simply put, the water supply window for Richmond and Delta could be reduced from 24 hours per day for normal river flows in 2017 to less than three hours per day, due to the combination of sea level rise and drought flows in the foreseeable future. It will be important to monitor the salinity today and see how it changes over time. The salinity wedge movement is not uniform and it is important to find where the best opportunities are to obtain good quality water. In response to this information, Delta Farmer’s Institute has initiated a salinity monitoring project. The intent is to install salinity monitoring stations along the Fraser River which will measure the salinity at different depths. To date one new station has been installed near the Alex Fraser Bridge and the salinity monitoring at the Tasker Pump station has been upgraded. Additional station locations are being investigated. The monitoring program is an on-going tool for irrigation and drainage infrastructure and system planning. Capital spending for infrastructure including more intakes will be necessary to meet future demand. Ted van der Gulik, P.Eng., is president, Partnership for Water Sustainability in B.C.

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construction business

Infrastructure

Technologies set to impact infrastructure By Keith Sashaw

overnments at all levels now recognize the critical importance of investing in infrastructure. On the BC Ministry of Transportation and Infrastructure (BCMoTI) website, it notes that in fiscal 2016/17, BCMoTI intended to invest $894 million in infrastructure projects. On the Government of Canada website, Infrastructure Canada notes that investments in Clean Water and Wastewater Fund and Public Transit Infrastructure Fund are being used in B.C. to fund more than $625 million worth of projects. When investments made separately by municipalities, regional districts, crown corporations or agencies such as BC Hydro and Translink are factored in, clearly the total investments are in the billions of dollars. Expenditures in capital infrastructure projects have tremendous benefits. They improve the quality of life of citizens by ensuring cleaner water and a better environment, as well as improving the transportation of people and goods. They create employment for thousands of people, from engineers and designers to contractors, specialty trades and maintenance contractors. They allow for the implementation of new ideas and ways of doing things. A recent report (Infrastructure and Smart Communities) from the House of Commons Standing Committee on Transport, Infrastructure and Communities, suggested that infrastructure is one area where information technologies have not yet fulfilled their potential. However, that is changing very rapidly. The integration of new technologies into infrastructure projects is exciting and game-changing. Just a few items mentioned in the report include smart technologies that have given man22

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agers of public transit networks real-time information on vehicle locations so they can improve traffic flow. This information can also be shared with users, making it easier for them to plan trips and make services more accessible. Also, sensors are now used to monitor bridges, “helping [urban] planners to come up with maintenance and refurbishment plans, taking into account budgetary and manpower constraints.” In a blog entitled Six technologies that are transforming infrastructure PwC Global notes that the Internet of Things (IoT) “also presents major opportunities during infrastructure construction, including remote real-time monitoring and control of equipment through embedded sensors, faster and smarter business intelligence for decision-making, real-time tracking of the location and safety of employees and contractors, and delivering context-specific information to workers on-site through augmented reality.” It is not just embedding sensors that are going to impact infrastructure. New technologies will impact the very way our infrastructure is built and maintained. A recent PwC report, Clarity from above, puts the global market for dronepowered solutions at more than $127 billion USD, with capital projects and infrastructure accounting for the largest proportion claimed by any industry at $45.2 billion USD. We are already seeing growing use of drones in B.C. by engineers and highways personnel to do survey and inspection work. As mentioned in the PwC blog, “3D printing technology — also known as “additive manufacturing” — is now used by the majority of industrial manufacturers in developed markets such as the US. And its application in infrastruc-

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ture is now increasing apace, with uses ranging from the construction of 3D-printed buildings in China and the Netherlands to the printing of replacement parts on-site to maintain power infrastructure more quickly and efficiently.” It is not only the construction of infrastructure and what goes in these projects — it is also about how infrastructure will be used that is exciting. Ride-sharing and ride-hailing options are transforming the way we think about car ownership and how we get around. Autonomous vehicles are already being tested for full implementation in the not-so-distant future. The implications of this technology are staggering as experts are forecasting fewer accidents and increased performance of the road networks. Once fully implemented, the impact will be felt throughout every aspect of our lives. As we move to increasing use of autonomous vehicles, the very design and construction of roadways and bridges will need to be re-examined. While once seen as rather boring and pedestrian, the changes that are driving infrastructure today are exciting and impact all types of infrastructure, from new roads and bridges to water and waste water treatment plants. As infrastructure evolves and we learn how to take full advantage of interconnected technologies, the pace of change will quicken. This affects everyone involved, from the designers of projects who will be able to incorporate the latest technologies, to contractors who will utilize new tools and techniques to implement these innovations, and the end users who will have more options and information than ever before. Keith Sashaw is president and CEO of Association of Consulting Engineers Companies B.C.

Roofing

The Need for More Green Roofs By Daniel Roehr

quality of construction material, the amount of manufacturers and know how is extensive. For more than 20 years the green roof industry has established itself in North America, originally coming mainly from Germany and Switzerland in the 1970 and 80s. The big dilemma is that in the Vancouver building boom, which is mainly developer driven, the payback is not immediately evident. The extended roofing membrane is only of interest to the owner (less renovation), but not the developer/seller (more construction cost), so why the extra investment when constructing? Green roofs have mostly long-term economic and environmental benefits, such as avoiding overloading the already overloaded storm drains or the extension of the lifespan of the roofing membrane.

odern green roof systems have been around since the 1970s in Vancouver. Indeed the green roof icons in Canada are located in B.C., with Robson Square designed by the national and international renowned team of architect Arthur Erickson and landscape architect Cornelia Hahn Oberlander in the early 1980s. Since then many more spectacular green roofs have been built: the Vancouver Convention Centre, The Central Public Library and most recently the VanDusen Botanical Garden. It is therefore surprising that the City of Vancouver still does not have a green roof building policy, like Toronto, Seattle, Portland or Chicago. Vancouver has had a guideline in place since 2006, but it is still not required and this has to change. We not only need designers but also especially the builders to agree that green roofs should be integrated into every project, where it makes environmental sense. Green roofs have many benefits, but the two most convincing ones from a construction business and financial point of view are extended lifespan of roofing membrane and rainwater mitigation capacity. Research has shown that green roofs have a long term positive environmental impact on reducing water run-off during storm events, reducing storm sewer overflow, and doubling roofing membranes lifespan to 60 years. In their recent book “Living Roofs in Integrated Urban Water Systems” (2015) Daniel Roehr and Elizabeth Fassman-Beck describe the immense potential green roofs have as a tool to manage stormwater. All the current research on stormwater management is included in the book. Green roofs only make sense as stormwater management tools in combination with other stormwater management tools such as bioswales and rainwater retention and detention areas at grade. All of these tools are called low

impact development (LID) measures. In what combination these tools are applied to a project depends on each site individually, as factors such as climate, soil drainage capacity and water recycling have to be taken into account. This is where the builder’s knowledge comes into play. Not only the designers but also the construction industry needs to accept the implementation of green roofs as part of a larger LID system. They also need to inform and support the designer in front of the client about green roof function, usefulness and cost. Courses at BCIT in Vancouver are available for the industry to learn green roof basics. At UBC and BCIT there are experts to help with project expertise reports or further research and monitoring needed for specific projects to convince clients to build green roofs. There are also many manufacturers available to give further advice and support to install green roofs. Finally, Vancouver has some of the most iconic well functioning green roofs in Canada to serve as examples. Why is there so much hesitation in the B.C. construction industry? There are two issues which need to be overcome: first is the extra insurance the builders may need to add to their construction insurance and second, there seems to be a lack of knowledge about green roofs and the fear they could leak causing extensive building damage. Both are viable arguments to not get involved. But this sounds like a contradiction in a world of rapid changing building technologies, higher expectations in design and building practices, and the desire for Vancouver to be a leader in environmentally sensitive and forward thinking design. Green roof construction technology today with the current research available in comparison to the 1980s has changed dramatically. The

Why is the construction industry so important in building green roofs? They are the actual builders of the green roof. The builders use the designer’s drawings and instructions based partially on researcher knowledge and their own building expertise. In this sense they are not only executing the designer’s ideas, their building expertise dictates the long-term success of the green roof construction in B.C. How can the construction industry get more involved and how can researchers and designers engage the construction industry? The process has to be twofold: First the builders need to acquire basic green roof construction knowledge. And second, designers and researchers need to communicate and involve the builders in the research, design and building process. This could be through conferences, meetings, workshops and client consulting together. Without communication between all parties involved and the acceptance that the builder’s concerns such as leaking and insurance are not integrated into the discussion, we will not see green roofs being accepted as a major component of any future roof construction in B.C. To start the communication, the author suggests that the local building industry in B.C., together with designers and researchers, meet soon to find solutions for the concerns mentioned above to make sure that the construction industry in B.C. is not falling behind the rest of Canada in researching, installing and constructing green roofs. Daniel Roehr is an associate professor at UBC’s School of Architecture and Landscape Architecture. He is a registered landscape architect in B.C. and Germany. Contact him at droehr@sala.ubc.ca. More info at www. greenskinslab.sala.ubc.ca

January/February/March 2018

construction business

Roofing

Roof Design in a Cold Climate By Hillary Kernahan

ith the implementation of new energy codes, the drive for highly energy efficient homes and the desire for modern architecture, we are pushing the envelope on building design. The building envelope separates the conditioned, interior environment from the variable, exterior environment. A properly engineered and designed building envelope will prevent the exterior elements from entering the building, while controlling the conditioned interior space. In Canada, our buildings are put through climatic extremes and, in places like Calgary, where 114 freeze/thaw cycles per year are common, our buildings are put to the test. Roofs, in particular, must support loads such as snow and ponding water, effectively drain water off the roof and away from the building, and be designed to reduce the transfer of heat from the inside-out and vice-versa. As consulting engineers, we receive many emergency calls in the winter, especially with fluctuations in temperature due to chinooks. Complaints of roof leaks, frost build-up in attics, or “attic rain” are common. These issues can lead to costly water damage, mold growth and, if left without addressing, possible structural damage. There are design and operational considerations that can reduce the impact of these costly and invasive issues when designing nearly flat (lowslope) roof assemblies. A well-designed roof system must have a continuous waterproofing barrier to keep the exterior elements out. On low-slope roofs, commercial membranes such as 2-ply modified bituminous are used. On steep-slope roofs, a water shedding layer can be provided by shingles or shakes, with a water-resistant underlayment over the roof deck sheathing as back-up. Blown-in/ batt insulation or rigid foam insulation reduces the transfer of heat through the roof system as the thermal barrier. The air barrier and vapour retarder typically function together. The air barrier reduces interior air from leaking into the roof system while the vapour retarder slows the transfer of water vapour through materials in the roof assembly. Polyethylene (poly) sheet vapour retarder in conjunction with ceiling drywall or a self-adhered membrane vapour retarder applied to roof deck sheathing can function as the air barrier/vapour retarder. Limitations of selected roof assembly materials must be considered in the design of any roof system. In a steep-slope assembly, typically polyethylene sheet is applied on the interior side of the roof structure as the vapour retarder with insulation installed between the roof trusses in the attic. Polyethylene acts as a very good vapour retarder, however any un-sealed holes or laps can lead to warm interior air entering the cold attic.

Moisture damage from air leakage into roof system.

Frost build-up on underside of low-slope roof deck in reduced attic space.

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Roofing

Holes cut in the poly for pot-lights, ceiling fans, or speakers must be sealed. Perimeter soffits and static roof vents provide a means for ventilation in the attic space. Interior air that escapes into the attic mixes with cold air and flows out of the static roof vents located near the peak of the roof. Outside air entering the soffits drives air in the attic out of the static roof vents. Mechanical systems, such as forced air furnaces, can significantly increase the amount of air that is forced into the attic through holes in the drywall and poly. Occupant activities such as bathing, cooking, cleaning as well as the use of humidifiers will also increase the amount of water vapour in the interior air. It is important to note that warmer air can hold more water vapour. Water will condense out of the air when the air hits a cold surface, much like dew that forms on a glass of ice water on a warm day. For example, with an interior relative humidity of 50 per cent and interior air temperature of 21°C, condensation will occur when the air touches a surface below 10°C. At 20 per cent relative humidity and 21°C, condensation will occur at a temperature below -2.5°C. This would form as frost. Frost build-up in attic

The elimination of a cold, ventilated, attic space should be considered in a low-slope roof... With economic pressure to minimize building cost per square foot and the shift towards more modern designs, many roofs are being designed relatively flat. Considerations for different roof materials must be made as designs change. In a low-slope roof assembly, there is far less space between the interior and exterior compared to a steep-slope roof with a large attic. Where a poly vapour retarder may work in a steep slope roof, the risk for condensation and frost build-up is much higher in a low-slope roof. Control of interior air leakage becomes much more critical as frost can form when the warm, moist interior air hits a cold surface (the underside of the roof deck). This is common in low-slope roofs as the ventilation cavity is small and poor air flow from the exterior is common. The elimination of a cold, ventilated, attic space should be considered in a low-slope roof by moving the vapour retarder, air barrier, and thermal barrier above the roof deck. A fullysealed membrane applied over the roof deck sheathing provides an excellent air barrier/vapour retarder. Rigid insulation installed over the air barrier/vapour retarder provides the thermal barrier, while a robust roof membrane provides the waterproofing. The roof structure below the roof deck is now part of the conditioned,

Water staining on poly from condensation due to air leakage

interior space, allowing for the installation of pot-lights, speakers, plumbing, and electrical wiring with little concern of interior air migrating to the cold, exterior environment. By understanding the implications of roof designs, carefully selecting building materials, as well as monitoring the interior conditions in buildings, we are able to select sustainable roof designs that will function in our climate, while maintaining interior comfort for occupants.

Hillary Kernahan is a building science engineer working in Calgary with Williams Engineering, a multidiscipline engineering firm providing consulting engineering services for new construction and existing buildings. She is a team lead and project manager in the building science group who works on projects ranging from investigations in single-family homes to building envelope consulting on high-rise towers downtown.

January/February/March 2018

construction business

Roofing

Design to Build, Build to Maintain Resist value engineering of roofing and waterproofing systems By John Wells

oofs are a critical part of the building envelope, but are too often ignored in the big picture of building envelope performance and longevity. Out of sight, out of mind is an old description of roofing that unfortunately still holds true today and we forget the roof is usually the “first responder.” The roof keeps out the water, protects from the sun, heat and cold, and organic debris such as moss, tree debris, bird droppings and damage; often it provide a surface for humans to access for maintenance or pleasure etc. And then the rest of the building components take cover underneath this protection. So, given the apparent importance, why is it that roofs are often first to get “value engineered” or changed in order to save initial costs.

Design to Build In the design and construction stage, designers should consider the end user or purchaser of that roof. Design the roof assembly so it can be built and maintained! Not only should the usual technical items such as wind uplift, drainage and exposure be considered, but also items such as accessibility for maintenance, and resistance to local roof conditions such as the following: • Is the building in a colder climate? In addition to insulation solutions, what if there is excessive snow loading? How do you control or get rid of excess snow? Wet snow is heavy and may have to be removed prior to the melting cycle and if so how, and where? • Some downtown areas in cities like Victoria have a major problem with certain species of birds. Seagull and pigeons are often a particular issue. The buildup of fecal matter on roof membranes can be a real issue, both from a health standpoint and a physical issue with the roof membrane or overburden. How can these challenges be addressed by the design? • Designers and builders should also ask questions like: how does the end purchaser keep the roof reasonably clean and functional? Is the roof accessible for cleaning and maintenance? Is the roof covered with a gravel or concrete paver ballast which may make maintenance or repair access difficult? Is the roof access including the hatch reasonable and safe for access by maintenance and HVAC personnel? • Is it a “green roof ” that requires additional attention to control the growth? 26 construction business

To ensure that the roof assembly meets its performance and life expectancy, these questions must be answered and maintenance considerations must be taken into account during the design. It is key to remember that successful performance starts with the original design and construction, and that it then carries on through construction and to the owners and their regular maintenance.

Build for Value Value engineering may be characterized as the review of new or existing products during the design phase to reduce costs and increase functionality in order to increase the value of the product. The value of an item is defined as the most cost-effective way of producing an item without taking away from its purpose. Therefore, reducing costs at the expense of quality will simply be a cost-cutting strategy. With value engineering, cost reduction should not affect the quality of the product being developed or analyzed, but unfortunately this is not always the case. A designer may spend time designing a roof assembly with all or most of the desirable longterm performance and maintenance characteristics, only to see many of them changed or degraded in order to cut initial construction costs. It’s often, or perhaps usual, for the less noticeable or glamourous items like roofing to get cheapened in order that the noticeable items like interior and exterior finishes are protected. That’s what the buyer or occupant sees. All looks good when it is new to the purchaser, user, or manager of the construction. This person may or may not have the sophistication or experience to recognize the value engineering compromises that may have taken place during construction. Nor may they have an appreciation of the long-term effect on operations and ownership.

Maintain the Value Too many times we work with owners facing a major roofing remediation expense prior to 10 years of building life. One example that comes to mind is a large concrete strata condominium project. Architecturally, the project was amazing with lovely water features, pools and landscaping as part of the amenities. All of this built on top of the underground parking. Because of a myriad of factors, the waterproofing membranes and roofing membranes were “value engineered” to the lowest common denominator. As a result, after less than 10 years, the parking garage decks were leaking extensively resulting in reinforcing steel corrosion, spalling concrete, and rust dripping. Costly investigation

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and repairs were required, and the owners were inconvenienced for an extended period of time. This is not uncommon when problems start. Extensive and expensive investigation is required and is followed by reporting that when published, forms part of the building records and may result in lowered property values. That’s before the costs of litigation and subsequent remediation are even considered. The lesson? Build for value and maintain the value during construction. Resist value engineering of roofing and waterproofing systems.

Value of Maintenance Maintenance on a roof is much like on your car. You will get better and longer predictable performance if you service the car regularly. On a roof, if you don’t keep the drains clean (change the oil) and keep the organic growth under control (maintain to manufacturers recommendations) and keep a regular schedule of preventative maintenance, you can end up with a situation as seen in the photo. No one had noticed the build-up of water on this roof. It was 6 inch deep and about to leak into the residence but fortunately a non-roof related contractor had noticed and then cleaned the drain. The drain was completely plugged with organic tree debris. A roof should be examined by knowledgeable personnel, at least twice a year, spring and fall and after every major weather event. Just a look to make sure all is in place and avoid situations like this. Proper and regular maintenance is the only way to ensure that the roof assembly meets its performance and life expectancy expectations.

Conclusion The key to successful long-term roofing performance starts with the original design and construction, maintaining the value through construction, and carries through its life for the owners and their regular maintenance. John Wells has been a roofing consultant for the last 26 years and is now with RJC Engineers in the Victoria office.

Legal File

Supreme Court of Canada rules on L&M Bonds by Will Johnston

he Supreme Court of Canada released a decision on February 15, 2018 (Valard Construction Ltd. v. Bird Construction Company) which imposes a new obligation on an owner or general contractor of a construction project who requires a Labour and Material Payment Bond (L&M bond) to take reasonable steps to proactively inform claimants of the existence of the L&M bond. Failure to take reasonable steps exposes the “trustee” of the L&M bond to claims of breach of fiduciary duty and damages if an unpaid subcontractor or material supplier loses their rights to advance a bond claim because they do not know of the L&M bond’s existence. Prior to this decision, the trustees named in an L&M bond would only be liable if they failed to disclose the existence of the bond when asked. L&M bonds are typically used on large construction projects, especially for public infrastructure projects, but they are only mandatory if required by contract. The person who requires the contractor below them to obtain an L&M bond will be named in the L&M bond as the “trustee”. The trustee will almost invariably be either the project owner or the general contractor. A typical L&M bond provided by a subcontractor to a general contractor, includes language that creates a trust: “The Principal (subcontractor) and the Surety (bonding company), hereby jointly and severally agree with the Obligee (general con-

tractor) as Trustee, that every Claimant (subsubcontractor or material supplier) who has not been paid … within 90 days … may sue on this Bond.” Their purpose is to reduce the risk of disruptions from issues such as lien claims, procurement disruptions and work stoppages which can occur when lower level suppliers and subcontractors are not paid. The Supreme Court recognized that the security provided by an L&M bond is beneficial to an owner or general contractor even though they do not receive payment from the L&M bond themselves. This non-monetary benefit to the owner or general contractor was the underlying reason to justify imposing a duty on them as trustees to take “reasonable steps” to inform potential claimants of the L&M bond’s existence. The Supreme Court expressly states that not every failure to proactively inform potential claimants of the L&M bond will result in liability. The trustee only needs to take “reasonable steps” to inform potential claimants meaning that the underlying circumstances must be considered before a court can conclude whether a breach of the duty to inform has occurred. In this case, Bird Construction Ltd. could have met their obligation by posting a copy of the L&M bond in its on-site trailer where they held daily toolbox meetings. “This would have provided a significant portion of potential beneficiaries with notice of the bond’s existence. The

cost of doing so would have been negligible to Bird …” (at para 28). Another factor that motivated the Supreme Court to hold Bird Construction Ltd. liable was evidence that an L&M bond for this particular type of project was uncommon. Because of this, the trustee (Bird) should have anticipated that potential claimants would not be aware of the L&M bond’s existence and, in the Supreme Court’s view, the reasonable steps taken by a trustee under the circumstances would include proactively posting the L&M bond in the worksite trailer. This decision creates a great deal of uncertainty for owners and general contractors named as trustees in L&M bonds. The dissenting judgment expresses concern that trustees have little to no guidance as to how they can meet their duty to inform bond claimants given the wide range of factual circumstances. For example, how will the court determine which projects commonly have L&M bonds and which projects do not? What duties to inform should a trustee have to material suppliers who will not receive notice of the L&M bond if it is posted at the worksite? Until future cases considering a broader range of factual circumstances are decided, the magnitude of risk now facing owners and general contractors cannot be predicted. At this time we can only describe the two extremes of a continuum. At one extreme we know that failing to take any steps whatsoever to inform potential claimants that an L&M bond exists on a project will not be acceptable. Conversely, we know that this new duty does not require absolutely every potential bond claimant to be sought out and informed of the L&M bond. The extent of a trustee‘s duty to inform will now fall somewhere between these two ends of the spectrum. The extent of the obligation will depend on the unique circumstances of each project such as the options available to give notice and the costs of doing so. Future cases will likely consider whether a trustee must make additional efforts, beyond basic steps such as posting the L&M bond onsite, if the trustee is aware that their bonded subcontractor is facing financial difficulties and some bond claimants could lose their security . Will Johnston is an associate at McLennan Ross LLP in Edmonton. He represents clients in contractual disputes, negligence, builders’ lien and OHS. This article originally appeared in the Alberta Construction Law Blog.

January/February/March 2018

construction business

Legal File

Telling the Truth by John Singleton

ow often have we heard the phrase “Do you swear to tell the truth, the whole truth and nothing but the truth”? The phrase has been repeated thousands of times in a variety of television shows focusing on the lives of lawyers, and it is in the form of an oath administered to every witness who takes the witness stand in a trial. The oath is designed to bring solemnity to court proceedings and give sworn assurance that the witness to whom the oath is administered will in fact tell the truth. One might ask why one must take an oath to tell the truth, the implication being that without the oath one would be free to lie. Of course nothing could be further from the truth as in our legal system today it is presumed that one will be truthful, whether as a witness in a court room or in engaging in commercial relationships. Indeed, many aspects of the law which impact those who participate in the construction industry require adherence to this oath, without it being administered in each instance. The law would impose liability where there has been a breach of presumed obligation to be truthful, most recently by the Supreme Court of Canada in the case of Hrynew v. Basin, 2014 SCC 71 where damages were awarded in favour of a franchisee who had been misled during negotiations by the franchisor. In that case, the Supreme Court made it clear that the law expects honesty in the commercial setting and where it is absent, the failure to tell the truth can attract significant liability. The same obligation to tell the truth is imposed on all participants in the construction industry. Let’s look at a few examples. 28 construction business

In the case of an owner or developer of a construction project, the law imposes a duty of full disclosure and honesty in the procurement phase of a project. So an undisclosed secret preference in the evaluation of bids can lead to an award of damages in favour of an unsuccessful bidder, and a failure to disclose existing relevant geotechnical information can result in an award of damages in favour of the uninformed contractor. Yes, in both instances the law says these circumstances constitute negligent misrepresentation but, at the root of a finding of liability is a failure to make full disclosure or, in other words, a failure to tell the truth. Just as an owner can attract liability for additional costs for failing to disclose relevant information, so too can a geotechnical engineer attract liability for failing to make full and proper disclosure of soil conditions in a geotechnical report or in a geotechnical baseline report. Where there is knowledge of relevant information, relevant to the project upon which bids are going to be submitted, and a failure to disclose that information or tell the truth, liability for additional costs on the project can result. Other aspects of consultants’ roles on a project can attract the need to tell the truth and make full disclosure. For example, when a structural engineer is aware that there is insufficient geotechnical information to design footings or foundations for a building, an obligation can arise to make full disclosure of this fact to the owner of the project so that the owner knows the “truth” of the situation. And of course consultants, when issuing letters of assurance owe a duty to be truthful in certifying that the project will be designed to applicable codes and standards, or has been constructed in accor-

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dance with those codes and standards so as not to mislead an owner or building authority in allowing occupancy of a project. A failure to make an accurate disclosure of these facts in a letter of assurance presents a significant risk of liability to consultants who have been less than diligent in assessing whether a letter of assurance is appropriately issued. A similar obligation adheres to consultants who take responsibility for issuing progress claims upon which owners will rely in making periodic payments to contractors during the course of construction and, upon completion. Contractors and trades are no less bound by the obligation to tell the whole truth and nothing but the truth. In submitting their progress claims, a failure to be truthful in certifying the progress made to the date of the certificate can result not only in civil liability to parties who rely on that certificate, but also, in some circumstances, can attract criminal penalties under the Criminal Code. Perhaps one of the greater sources of claims being brought against contractors by owners is a failure on the part of the contractor to submit a realistic schedule or price at the outset of a project resulting in unsuspected cost overruns and project delays and loss of income. Suggesting in a bid that a project can be completed within a timeframe which turns out to be wholly unrealistic, or at a price which is clearly understated with the hope of extras as the project proceeds, is less than truthful and has on multiple occasions resulted in large damage awards against contractors for cost overruns and project delays. Finally, the obligation to tell the truth, the whole truth and nothing but the truth reaches as far as local building authorities who provide plan checking or building inspection services. If building permits are issued based on plans which are clearly non-compliant with applicable codes and standards or occupancy certificates are issued when building inspection discloses construction defects presenting a danger to human health and safety, local governments have consistently been held liable for consequential damages. At the root of findings of negligence in these cases is a failure to truthfully represent the adequacy of plans and specifications or the compliance of a project with applicable codes and standards. So the duty to tell the truth, the whole truth and nothing but the truth is not restricted to giving evidence in the courtroom, it permeates all aspects of the construction industry and informs, in many instances, the responsibility and duty imposed by the law of all those who participate in the construction process. John Singleton, QC, is managing partner and founder of Singleton Urquhart Reynolds Vogel LLP.

Legal File

Canada Prompt Payment Act Update Bill S-244 will regulate payment on federal government projects By Devon Lehrer

n April 2016, Manitoba Senator Don Plett, a veteran of the construction industry himself, introduced Bill S-224 (the Act) in the Canadian Senate. Known as the Canada Prompt Payment Act, Bill S-224 sets out new measures to regulate payment of contractors and subcontractors on construction projects involving the federal government. The bill passed the Senate and has been awaiting consideration by House of Commons since May, 2017.

Application The application of the Act will be limited to construction contracts between a government institution and a contractor, as well as to any related subcontracts. The Act does provide a broad definition of “government institution” which includes: • Any department or ministry of the Government of Canada, as well as a wide range of other federal government bodies; and • Any crown corporation or any wholly owned subsidiary of any crown corporation. The Act stipulates that no party may contract out of the rights, obligations and remedies it creates.

Progress Payments One of the primary mechanisms by which the Act seeks to enforce prompt payment is by mandating progress payments. The Act requires that progress payments must be made on at least a monthly basis, and sets standard deadlines for payment applications and progress payments by government institutions as well as for contractors and subcontractors down the contractual chain. Payment applications and payment deadlines are staggered, with payments by contractors and subcontractors to occur after payments by government institutions. The Act also sets

tight deadlines for final payments following the completion of the project. Parties to a construction contract are free to agree on the amount of the progress payments required under the Act, however if they fail to do so, progress payments must represent the actual value of the work performed by the payee during the relevant payment period. The Act allows parties to agree to payments based on constructions milestones instead of monthly progress payments; however milestone payments must be authorized by the head contract. Subcontractors hired under head contracts that allow milestone payments must be given notice of milestone payments in the contracts of the contractors or subcontractors who retain them.

Deemed Approval and Holdbacks The Act introduces restrictions and timelines on the approval of applications for payment. Applications for payment made by contractors and subcontractors will be deemed to be accepted on the 10th day after they are submitted, unless the payer or payment certifier gives written notice to the payee of a dispute of all or part of the application. The amount of a payment that may be withheld by reason of a dispute is strictly limited to the actual amount that would be required to correct the disputed work; the remainder of a disputed payment application must be paid in accordance with the contractual or statutory deadlines.

Rights to Suspend or Terminate The Act provides powerful remedies for unpaid contractors and subcontractors. If payment is not received within the deadlines set by the Act, an unpaid payee must immediately give a written “notice of default” to the involved govern-

ment institution and to any other contractor or subcontractor with whom the unpaid payee has a contract for the unpaid portion of the work. Seven days after giving the “notice of default”, the unpaid payee may suspend its work. Where a payee has suspended its work after giving notice of default, it may suspend its own payment to anyone to whom it sent the notice of default. Under the Act, the requirement to pay is suspended until the original default is corrected or resolved. Ultimately, the Act provides the right for an unpaid contractor or subcontractor to terminate its contract if it does not receive payment as required by the Act, upon giving seven days notice to its default payer that it intends to terminate the contract if payment is not made. The Act also stipulates that interest must be paid on all unpaid amounts, including payments which are validly suspended. Parties remain free to set their own interest rates, however if they fail to do so, a legislated rate will apply.

Right to Information The new Act will provide subcontractors with a new tool to keep tabs on the payments received by the contractor or subcontractor who hired them. A subcontractor may require by written notice that the party who hired them provide them with the due dates for progress payments and final payments under that party’s contract.

Prompt Payment Legislation in B.C.? While the Act works its way through the federal legislature, British Columbia does not appear to have plans to introduce similar legislation on the provincial level. While the Act provides new rules and a framework which may aid in easing construction industry cash flow problems, its applicability is limited to contracts originating from the federal government. Similar provincial legislation could introduce this type of regulation across the British Columbia construction industry. Efforts have been made in the recent past to prompt this kind of legislation on a provincial level. In December 2017, Ontario adopted a prompt payment regime in an overhaul of its lien legislation. The British Columbia Law Institute is currently undertaking a review of the Builders Lien Act, among the aims of which is alleviating cash flow issues in the construction industry; however plans for full scale prompt payment legislation have not been announced. Devon Lehrer is an associate at Jenkins Marzban Logan LLP in Vancouver. His practice is focused in the area of construction and commercial litigation.

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construction business

Industry News New trades funding for women The Canadian government has pledged $76 million to draw more women into the construction trades. Three new programs, announced in the 2018 federal budget, will inform women about apprenticeship programs, dispense financial grants for training and provide resources as they move into the workforce. To begin, the budget commits $46 million over five years for a pre-apprenticeship outreach program that will promote the skilled trades to groups that are currently under-represented in the construction workforce. Post-secondary educators, employers, unions and provincial/territorial governments are expected to collaborate in the effort to make women, disabled people, Indigenous Canadians and newcomers to Canada more aware of career opportunities in the skilled trades. Female apprentices in skilled trades, categorized as Red Seal trades, could receive up to $6,000 over a two-year period if they are training for employment in a male-dominated field. The budget commits $19.9 million over five years to the incentive program, which potentially tops up the grants of $2,000 already available to all Red Seal apprentices. Currently, less than a handful of the 57 designated trades would be female-dominated or have an even gender split. An additional $10 million over three years will be directed to programs for mentoring women in skilled trades during their training, while job-seeking and on the jobsite. B.C. announces new Pattullo Bridge The B.C. government is moving forward with the construction of a $1.4-billion bridge to replace the aging Pattullo Bridge. The Pattullo Bridge replacement project will be delivered solely by the province. The project includes a new Pattullo Bridge that will be located upstream of the existing one, network connections in Surrey and New Westminster, and the removal of the existing bridge. The new Pattullo Bridge will be owned, operated and maintained by the Government of British Columbia. The province will proceed with the request for qualifications (RFQ) phase of a competitive procurement process later this spring, with start of construction in summer 2019. The bridge will be open to traffic in 2023. The new bridge will be four lanes that will be built to modern safety standards, featuring a centre safety median barrier and wider lanes to accommodate both passenger and commercial vehicles. The bridge will also have walking and cycling lanes, separated from traffic, on both sides of the bridge. There will also be smoother connections on and off the new Pattullo Bridge with new direct road connections between the bridge and East Columbia Street in New Westminster, and a new direct off-ramp from the bridge to westbound Highway 17 in Surrey. Opened in 1937, the Pattullo Bridge is one of the oldest bridges in Metro Vancouver. The bridge was designed for a 50-year life, which has been exceeded by 30 years.

McArthurGlen Outlet Phase II begins Construction of McArthurGlen Designer Outlet Vancouver Airport Phase II has begun. Scheduled to open in Spring 2019, Phase II will deliver 84,000 square feet of additional retail space and up to 35 new luxury, premium and lifestyle brands to the centre. In addition, the expansion will result in the creation of 400 jobs for the construction and retail sectors. The new phase will adjoin east of the existing centre and will mirror the current European design, expanding on the centre’s notable open-air village style, with luxury piazzas, cobblestone walkways and a variety of facades. Phase II forms part of McArthurGlen Group’s plan to develop over 1.6 million square feet of retail space over the next three years across its 24-centre portfolio. The 240,000 square foot centre will remain fully open during construction. 30 construction business

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Team selected for Abbotsford law courts Plenary PCL Justice has been selected as the preferred proponent for the Abbotsford law courts project, the province’s first new courthouse in 20 years. The project will improve access to justice and meet the increasing demand for judicial services in one of B.C.’s fastest-growing regions. The $150-million project is estimated to provide opportunities for more than 1,000 B.C. workers. The project will also provide opportunities for registered apprentices to be on site, which will help develop the next generation of skilled trade workers in the province. The winning consortium includes: Plenary Group (Canada) Ltd. (project co-lead and equity provider); PCL Investment Canada Inc. (equity provider); PCL Constructors Westcoast Inc. (design-builder); WZMH Architects (architect); Smith + Andersen (IMIT consultant); and Johnson Controls Canada LP (service provider). Plenary PCL Justice has entered into final negotiations with the Ministry of Citizens’ Services and the Ministry of Attorney General to deliver a new, 14-room law court facility that will include Provincial and Supreme courts and space for all necessary justice partners. Plenary PCL Justice met the required criteria of price, quality of design, ability to adapt to the needs of those using the facility and ability to meet energy efficiency targets. Construction is expected to begin summer 2018 with project completion in 2021.

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