POWER SHIFT: What the new political leadership means for open shop construction
A FORUM ON OPEN SHOP CONSTRUCTION
Volume 24 • Issue 1 • Spring 2016
Survive and Thrive How to be successful in any economy
Top Tips for Winning Tenders Expert advice for bidding on contracts
Tomorrow’s Workforce
PM #40020055
Merit initiatives help students pursue their dreams
KEY PLAYERS 2016: The Contractor of the Year Awards recognize top construction professionals
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Contents Volume 24 • Issue 1 • Spring 2016
26
34 5 President’s Column By Malcolm D. Kirkland
7 News and Events
ON THE COVER 26 Upside to the Downturn Times are tough for Alberta’s construction industry but is there an upturn on the horizon? By Lisa Catterall
12 Supporting Today’s Students for Tomorrow’s Skilled Trades Merit’s Educational Initiatives are giving students across the province the opportunity to pursue their dreams By Kevin Armstrong
16 Understanding Open Shop What you need to know about the open shop approach and what it stands for By Kate Lakeman
19 Top Tips for Winning Tenders Fillmore Construction VP Rob Gomizelj shares some of his best advice for successfully bidding on contracts By David DiCenzo
22
12 34 Changing of the Guard New political leadership brings challenges for the open shop construction industry By Line Porfon
37 The Best in the Business The 2016 Contractor of the Year Awards recognize top construction professionals By Alberta Venture staff
42 By the Numbers Canadian construction statistics
22 Levelling the Playing Field With the move to apprenticeship harmonization building momentum, some concerns still need to be addressed By Willow White
30 Survive and Thrive 19
How to get through the downturn and come out stronger on the other side By Martin Dover
30 OPENMIND SPRING 2016
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VPS94577
112586 (02/2016)
President’s Column
Stronger Than Ever Volume 24 • Issue 1 • Spring 2016 Publisher
Ruth Kelly
Executive Editor
Malcolm D. Kirkland
Associate Editor
Kevin Armstrong
Managing Editor
Kim Tannas
Production Manager
Betty Feniak
Production Technicians
Brent Felzien Brandon Hoover
Circulation Manager
Karen Reilly
Vice-President Sales
Anita McGillis
Advertising Representative
Kathy Kelley
Sales Assistant
Julia Ehli
Art Director
Charles Burke
Graphic Designer
Andrew Wedman
Contributing Writers Kevin Armstrong, Lisa Catterall, David DiCenzo, Martin Dover, Robbie Jeffrey, Kate Lakeman, Line Porfon, Willow White Contributing Illustrators and Photographers Bluefish Studios, Heff O’Reilly, Raymond Reid, Andrew Wedman, Thomas Wölfram Open Mind is published two times per year by Venture Publishing Inc. for Merit Contractors Association. Venture Publishing Inc. 10259-105 Street, Edmonton, Alberta T5J 1E3 Tel.: (780) 990-0839 Fax: (780) 425-4921 admin@venturepublishing.ca www.venturepublishing.ca Merit Contractors Association 103-13025 St. Albert Trail, Edmonton, Alberta T5L 4H5 Tel.: (780) 455-5999 or 1-888-816-9991 Fax: (780) 455-2109 merit@meritalberta.com www.meritalberta.com Merit Contractors Association is a non-profit organization that offers human resource services to the open shop construction industry.
Printed in Canada by Westkey Graphics Ltd. The opinions conveyed by contributors to Open Mind magazine may not be indicative of the views of Venture Publishing Inc. or Merit Contractors Association. While every effort is made to ensure accuracy, neither Venture Publishing Inc. nor Merit Contractors Association assume any responsibility or liability for errors or omissions.
As president of Merit Contractors Association,
it’s my pleasure to welcome you to the 24th edition of Open Mind magazine. It’s a special year for Merit Alberta as we are celebrating 30 years strong. This anniversary has given us the opportunity to look back and appreciate how far the association has come in three decades. In 1986, 15 contractors came together to address common issues and put people first – now Merit is more than 1,400 companies who hold those same open shop values and principles. I’m celebrating my one-year anniversary with Merit, and I’m proud of what the association has accomplished in my short time here. Despite facing a significant economic slowdown, losing familiar and friendly faces with the provincial and federal government, and indications more turbulent times are in the future, we are stronger than ever. Just like 30 years ago, Merit remains steadfast in our commitment to our members and the open shop movement. You’ll see examples of our commitment in this edition of Open Mind magazine. In the article “Supporting Today’s Students for Tomorrow’s Skilled Trades,” Merit’s communications manager, Kevin Armstrong, documents how Merit is changing lives for students all around Alberta. The program is opening up career pathways that without Merit’s Educational Initiatives would not be possible. The programs created in schools across the province will result in a generation of skilled tradespeople ready to jump into the workforce and be employed by our member companies. We also share tendering success stories and offer tips on how to win the bid. In addition there’s an article to not only survive but also thrive in the economic downturn. In an article called “Changing of the Guard,” Merit’s vice-president of government relations, Line Porfon, delves deep into the political upheaval here in Alberta and across Canada. The article highlights issues and legislation that we must watch carefully. In the face of economic uncertainty, the construction industry showed its strength with a record number of nominations for the Contractor of the Year Awards. The sixth annual event showcases what our industry is all about – from amazing companies to outstanding employees. The 2016 award winners are profiled in this edition of Open Mind. I hope you enjoy this edition of Open Mind, and all the best in 2016.
Canadian Publications Mail Product Agreement #40020055 Copyright © 2016 by Merit Contractors Association No part of this publication should be reproduced without express permission of Merit Contractors Association.
Malcolm D. Kirkland PRESIDENT MERIT CONTRACTORS ASSOCIATION
OPENMIND SPRING 2016
5
News and Events
HOW TO GIVE BACK WHEN TIMES ARE TOUGH Merit Contractors Association members are known for
their generous giving and donations. Unfortunately, when money is tight, companies can’t always give in the way they did during the boom. Bruce McDonald, CEO of Imagine Canada, a Canadian charitable organization, offers some tips for companies who have to cut back on monetary donations but still want to give back.
Celebrating Three Decades Thirty years ago, 15 contractors changed the construction
industry in Alberta forever. They put their competitive nature aside and came together to discuss common challenges and agree to mutually beneficial solutions. While planning events for the 30th year in operation, the term “anniversary” was being used. However, anniversary just didn’t fit when considering Merit’s past, present and future, explains Merit’s president, Malcolm D. Kirkland. “The reason Merit exists today is because of the strong will of those who founded it, the persistence of those who have kept it strong, and all the members we have today showing that we are getting stronger,” says Kirkland, who decided to go with 30 Years Strong. In 1986, the founding members focused on their most important asset, their people. The first piece was to construct an industry-wide, portable benefit plan that would cover their workers and their families. From there other sections of the foundation were formed, including advocating for open shop principles and offering training opportunities through the Merit College of Construction. Merit will be celebrating 30 Years Strong throughout the year with events that include barbecues at the Calgary Stampede and K-Days as well as a special event in September (details to be announced later) and much more.
In-time contributions When people think about donating their time to charity, activities such as helping to build a house or serving meals to the less fortunate might come to mind. But people with corporate skills may not realize how valuable their expertise is for charitable organizations. “There are opportunities for people in companies to actually use their talent in the work that they do every day to support organizations,” says McDonald. He’s referring to people with skills in marketing, information technology, human resources, and accounting. Charities often need support in these areas and can benefit greatly from some one-on-one mentorship. Time-release policies Going hand-in-hand with McDonald’s first tip, companies can create time-release policies so that employees are able to donate their time during working hours rather than after work, when they may become too busy with personal responsibilities. Allowing employees to donate their time during work hours, either as mentors or simply with some hands-on assistance, can be a great help to charitable organizations. Concentrating your gifts When planning monetary donations, there are ways to make a reduced donation budget go further. Rather than spreading thin donations to a large number of charities, try focusing company giving to a few key organizations. That means making tough choices about where donations will go, but it also means those donations will continue to have a significant impact, says McDonald. McDonald reminds donors that “when economic situations are a bit tougher, not only are donations down, but demand goes up.” Now is a great time to think about ways to give back that involve creative alternatives to monetary donations that involve your employees and may even build up company morale during a rough season.
OPENMIND SPRING 2016
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Benefit News and Boom Events
Boost Your Productivity Aminah Robinson Fayek, a professor in the Department of Civil and Environmental
Engineering at the University of Alberta, has been studying the factors affecting productivity on construction job sites across the province for five years. Those productivity factors are modelled using statistical methods and artificial intelligence techniques – and, in particular, a technique called fuzzy logic. Essentially that allows for some very complex subjective factors to be mapped in a very straightforward way, explains Robinson Fayek. “The models we’ve created allow us to first of all determine the most significant factors affecting productivity but also how if you change the levels or improve certain factors, what impact it has on productivity improvement,” she says. It’s valuable information that comes at a time when companies can certainly use it. “Everybody is looking at innovation and efficiency improvements so this is another contribution to helping companies be more innovative, be more systematic in how they analyze their projects and hopefully increase their efficiency,” she adds.
The research is funded by the Natural Sciences a nd Eng ineer ing Resea rch Council of Canada (NSERC), the University of Alberta, as well as various industry partners, including Merit Contractors Assocation. The collaborative nature of the research is what makes it so practical and useful, emphasizes Robinson Fayek. “We’re bringing academics together with industry partners and we’re solving these problems collaboratively and because we have owners, contractors and labour providers in our program, we really take a multi-perspective view on the topic.” The research findings are being shared not only with the companies that the researchers work with (where they can put them into practice immediately) but also at industry conferences and in academic settings. “Because the data is highly confidential, what we do is we compile it and we analyze it in an aggregate way so that nobody can be identified and no companies can be identified,” notes Robinson Fayek. This summer, they will take it one step further and will be providing a series of industry workshops on the topic. For more information and workshop dates, visit www.strategic-construction.ualberta.ca.
Wage Survey Results Every six months, Merit conducts a survey that polls members and non-members across Alberta on hourly wage changes, expected change in labour force and future wage increases. Here are the results from January 2016. Overall sector breakdown Overall hourly wage change
residential industrial
11%
32%
Number of companies participating
356
6-month average wage change
0.61%
Number of employees reported on
15,184
1-year average wage change
0.91%
Expected change in labour force
increase
17.7%
decrease
16.85%
remain level
65.45%
commercial
57%
Future wage increase
yes
3.4%
72.8%
Where the Work is. The Edmonton Construction Association exists to help over 1200 member firms procure, collaborate, network, and learn. We provide unparalleled opportunities for the construction sector in Edmonton. Connect with us to find opportunities today. Visit www.edmca.com. Image Credit: City of Edmonton
no
unsure
23.9%
Forest Service Shed
LRT Station
Fort McMurray Airport
Bow River Bridge
Meadows Recreation Centre
Silver Sage
Celebrating wood’s rich heritage in the Prairies
PRAIRIEWOOD DESIGN AWARDS 2016
the winning projects were thoughtfully selected from over thirty entries by our esteemed jury panel. James Brown
AIBC Architect, MRAIC, MFA, Director, Bing Thom Architects
Herbert enns
B.E.S., M. Arch, MAA, MRAIC, Professor, Department of Architecture, University of Manitoba
Stephen teeple B.E.S., B.Arch., M.Sc., OAA, AAA, FRAIC, Principal, Teeple Architects Wood AdvocAte
coMMeRcIAl Wood deSIgn
Forest Service Shed — Fort McMurray Historical Society
Fort McMurray International Airport, AB
Macdonald and Lawrence Timber Framing | Engineer: ISL
office of mcfarlane biggar architects + designers inc.
Engineering and Land Services | Contractor: Macdonald and
Engineer: Equilibrium Consulting Inc. | Contractor:
Lawrence Timber Framing | Wood Supplier: Andersen Pacific
Ledcor Construction Ltd. | Wood Supplier: Structurlam
Forest Products Ltd. | Image courtesy of Elisa Rubalcava
Image by Ema Peter Photography
InStItutIonAl Wood deSIgn
RecReAtIonAl Wood deSIgn
Kingsway/Royal Alex lRt Station, Edmonton, AB
Borden Park Pavilion, Edmonton, AB
Stantec Architecture Ltd.
gh3 inc.
Engineer: Stantec | Contractor: North LRT Link Partnership
Engineer: Chernenko Engineering Ltd. | Contractor:
Image courtesy of Western Archrib
Jen-Col Construction Ltd. | Wood Supplier: Western Archrib | Image courtesy of Raymond Chow
ReSIdentIAl Wood deSIgn Silver Sage — the Sun lodge, Regina, SK
InteRIoR Wood deSIgn SHoWcASe
Kreate Architecture and Design
Meadows community Recreation centre &
Engineer: Brownlee Beaton Kreke | Contractor: MPM
Meadows Branch library, Edmonton, AB
Construction Services Ltd. | Wood Supplier: Western Archrib
Group2 Architecture Interior Design Ltd.
Image courtesy of Patricia Holdsworth
Project Architect: Perkins + Will | Engineer: CH2MHill Contractor: PCL Construction Management Inc.
JuRy’S cHoIce
Image by Tom Arban Photography Inc.
Bow River Bridge, Banff, AB StructureCraft Builders (Architect | Engineer | General Contractor | Wood Supplier) | Image courtesy of Paul Zizka
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Merit’s Educational Initiatives are giving students across the province the opportunity to pursue their dreams BY KEVIN ARMSTRONG
T
he rock music fades and is replaced by the voice of an excited radio show host who shouts: “Why didn’t they have this when I was in school?” It’s a common question that comes up when people learn about Merit Contractors Association of Alberta Educational Initiatives. On this chilly December morning, it’s Cold Lake, Alberta, that is learning about Merit’s latest announcement with the association’s vice-president of government relations, Line Porfon, being interviewed on the K-Rock 95.3 morning show with Chris Gill. “This sounds like it’s good news for pretty much everybody,”
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OPENMIND SPRING 2016
says Gill, who can’t contain his enthusiasm about Merit’s investment into the community and the hundreds of area students the initiative will impact. “It’s good news for the kids, it’s good news for the parents and it’s great news for the contractors out there, who are listening and saying, ‘You know what? I’m going to have people coming out of school that I can hire. That’s amazing.’ ” As part of the initiative, Merit partnered with Northern Lights School Division (NLSD) to deliver a certified scaffolding program and to create a skilled trades exposure program. “We are giving back to the community and supporting students,” says Porfon to the morning show listeners. ”We want to
help them get work-ready and get ideas around viable career options.” An hour later, Porfon stands in front of hundreds of those students at Cold Lake Middle School. The school council arranged a special assembly to recognize Merit’s support. The funding converted a storage area back to its original intent – a construction lab. The lab is accessible to students who attend several area schools, including students enrolled in outreach programs. A 17-year-old student from Cold Lake’s Outreach School takes the microphone to address all of the students, teachers and Merit staff. “I have always wanted to build houses, and Merit has given me the opportunity to work with mentors and learn some of the skills needed to do that,” says Nic Belley, the first outreach student to sign up for the skilled trades program. “And now I have the confidence and experience to move forward with more carpentry training and one day build a lot of houses.” Mandi Skogen, a board trustee with NLSD, takes the microphone next to explain how Merit’s grant is helping NLSD provide the programming that students, teachers and parents want. “It’s pretty amazing to have a partner like Merit Contractors Association. We are so thankful to Merit for providing our students with this wonderful opportunity to learn about construction and develop their skills through hands-on learning opportunities,” Skogen tells the stand-
ing room only crowd. “It’s these types of opportunities that our students and parents have indicated that they’d like to have offered in our schools.” Students and teachers present Merit with a large thank-you card, signed by every student at the school, while the school band performs a special song prepared for this assembly. This is just one of several Merit Educational Initiatives rolling out across Alberta during the 2015-16 school year. At a cost of $1.2 million, Merit’s president, Malcolm D. Kirkland, says the Educational Initiatives demonstrate Merit’s commitment to developing the workforce and ensuring the industry’s continued success. “For a long time, Alberta has had a skilled trades labour shortage. That has changed recently, but we expect that same shortage will return unless we have new, energetic and skilled people ready to be hired by our companies,” explains Kirkland. “We looked at the issue from the bottom up. Kids have to be exposed to tools and building materials at a young age in order to determine if construction is something they would like to pursue. These educational initiatives are literally putting tools in their hands.” School administrators lined up for the opportunity to access funding that Merit has identified for skilled trades exposure programming. Matt Trodden, Merit’s Educational Initiatives coordinator, helped to determine the best options
that would have the most impact on the largest number of students. It was a tough task, admits Trodden, who was accompanied by Porfon to meet with more than 40 school board and countless school representatives throughout Alberta. “We looked for strategic partnerships with educators who would create a sustainable model of providing Alberta students with viable learner pathways, in-demand job skills and career opportunities in the skilled trades industry,” says Trodden. After reviewing several submissions, Merit announced the successful applicants in time for the 2015-16 school year. The partnerships include: The Chinook Regional Foundation for Career Transitions With Merit ’s support, the Chinook Regional Foundation for Career Transitions will continue to offer safety boot camps designed to prepare students for summer employment and work experience. This not-for-prof it has been assisting high school students in southwestern Alberta since 1998. It has direct partnerships with the six main school d ivisions in southwester n A lberta . Career Transitions has already shown itself to be very positive in its promotion of the skilled trades, hosting an annual Youth Exploring Trades and Technology Expo, as well as a number of direct classroom presentations. OPENMIND SPRING 2016
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Supporting Today’s Students for Tomorrow’s Skilled Trades
Kainai High School on the Blood Reserve located in Southern Alberta The project enrolls 10 students in a safety boot camp, as well as three pre-apprentice training periods in the areas of carpentry, electrical, and mechanical (insulation). Students who complete their training will then be hired by the Blood Reserve Band for summer work positions at Kainai High School. Students will paint rooms, repair various structures and items, and insulate a currently unused school greenhouse. They will also build what are referred to as Tiny Houses, which are 170- to 200-square-foot homes. The Tiny Houses will be sold as a way to keep the program sustainable.
and SAIT. This program provides students with a Certificate of Completion in Pre-Employment Plumbing, with the opportunity to challenge written and practical exams for their first-year Plumbing Apprenticeship. Teaching Teachers A partnership with the Alberta Construction Association and the Red Deer Construction Association offers Red Deer teachers hands-on professional development experiences with area construction firms. This program will give school administrators a comprehensive look at skilled trades and allow educators to gain the knowledge they need to better assist
“I have always wanted to build houses, and Merit has given me the opportunity to work with mentors and learn some of the skills needed to do that.” – Nic Belley SAIT Polytechnic and the Calgary Board of Education Merit, along with the Calgary Board of Education and SAIT, is offering a new dual-credit program to be focused on pre-apprenticeship training in plumbing. This program is being modelled after the existing dual-credit pre-apprentice carpentry program that was set up by the Calgary Construction Association 14
OPENMIND SPRING 2016
students looking at the construction industry as a possible career path. Edmonton’s Centre High Campus Merit’s first educational initiative partner was Centre High Campus and Assistant Principal Dr. Kelly Harding. Together t hey produced prog ra m m i ng t hat includes construction workshops, safety instruction, and first-aid training to pre-
pare students for work experience placements and apprenticeships. The funding also allowed Centre High to hire a fulltime Merit Skilled Trades Liaison Program Coordinator who assists students in all aspects of their job search. “This really is about exploration. It’s about opportunities opening up for kids to explore different things, while at the same time building their resumé, so that at the end they can find some great work,” says Harding. Several students from the first graduating class have already been hired and are currently employed on job sites around the province, including Chelsea Ewaskow. “I’m thankful Centre High and Merit came together to offer this program. It opened my eyes to all the opportunities available in the construction sector,” says Ewaskow. Merit’s Kirkland says the early success for Centre High Campus is a sign of things to come, not only for Centre High Campus but all of its educational initiatives. “This program is showing its value, as graduates are already securing jobs while the construction industry is welcoming new people to the workforce. This program is highly effective, and Merit is proud to be partners with Centre High Campus and all of our partners as we continue to show students the skilled trades industry,” he says. Merit’s Educational Initiatives are also having a spinoff effect that was not anticipated so soon. It’s created skilled trades ambassadors like Cold Lake student Nic Belley. If he is not in the lab perfecting his skills, he is recruiting friends to take the skilled trades exposure program and he plans to continue to be an advocate. “I would like to give back to the youth one day and role model the skills I have been taught,” said Belley. “I want to encourage others to take part in this program and pursue their dreams.” With so much success, Merit is considering new applications for a second year of funding programs that will enable more young people, like Belley, a chance to achieve their dreams. Kevin Armstrong is the communications manager at Merit Contractors Association.
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OPENMIND SPRING 2016
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What you need to know about the open shop approach and what it stands for BY KATE LAKEMAN
M
erit Contractors Association represents the voice of
open shop construction in Alberta, focusing on the human resource needs of contractors and offering employee benefits, training, retirement programs and membership perks. One of the association’s main roles is to provide strong and proactive leadership for a fair regulatory business environment. But what exactly does it mean to be an open shop company? What are the advantages to this approach? What misconceptions are out there? And how do today’s challenging economic conditions factor into the equation? Open Mind spoke to Brad Wright, vice-president of benefit services for Merit, for the answers to these questions.
Q: How would you define “open shop”? A: Open shop represents or describes a organization, company or firm where the employment relationship between the employer or the owner and the employee is one that is not influenced by a collective agreement but instead that relationship is defined by pay, benefits, promotion and the standard by which that person works inside that organization. In a closed shop or a union, all of those conditions are quantified and contained in a collective agreement. Q: What are some of the benefit of this approach? A: If an individual wants to work harder – harder being taking on more tasks and stepping up for activities inside that company, doing things that set them apart from the rest of the individuals inside that shop – then that is recognized by the employer, and opportunities inside that place of employment come by virtue of that relationship as well. Hence the concept “Merit” – all those attributes, those values, would also define merit, and an individual would be recognized for those contributions and showing enthusiasum and loyalty to the company is rewarded through pay, opportunities for promotion, and training and development as well. Q: What are some of the misconceptions associated with the open shop approach? A: I can tell you open shop is simply the best place to be. Our research, our surveys show that the base pay for individuals in open shop, in construction anyway, in open shop as opposed to closed, is pretty well the same, and in some cases it exceeds collective agreements. The benefit program, the health and dental program, is equal to or better than what some unions offer.
Again, promotion is available inside open shop and not defined or laid out either by seniority, years of agreement or what the collective agreement says. Q: How do open shop companies remain competitive in terms of wages? A: Base pay without benefits, without the additions – so let’s say it’s $40 an hour – that base pay for a union person is probably similar to what it is with a tradesperson who is open shop – $40 to $41 an hour – so we’re competitive there. But unions add a whole bunch of other hourly rates onto that base pay, many of which don’t go to the individual employee. For example, they’ll add on an hourly fee for an education fund, or they’ll add on hourly dues for a defined benefit pension program or they’ll add on a contribution for a market enhancement fund. Now all those things aren’t paid by the worker; they’re paid by the employer who hires them, but that money moves off to the union and that employee will never see that. So since our wages in open shop don’t reflect all those additional fees, dues and other surcharges, they are a heck of a lot more competitive as compared to the ones with the collective agreement. Q: Is the open shop approach more favourable given today’s economic conditions? A: The open shop just isn’t sensitive to the economic conditions. Open shop is an approach that works regardless of whether we’re in a strong economy or a weak one, and this weak economy is affecting everybody equally. The impact on the people who are trying to work for a living and support their families is the same whether you’re in an open or a closed environment, but the open shop environment is a positive way to go, especially with respect to defining that relationship with your staff. However, should there be a layoff, employees have the ability to self-pay into their benefit package and maintain their benefits for up to six months, which could be the time it takes them to be hired on for the next project. Providing this security to the industry is an important component of Merit. I think that with an open shop there definitely is a belief that the most important assets are the individuals that work with you, and it’s more than a cliché, especially in a tough economy. Again in this environment it would be wrong for people to assert that this economic environment is going to be a ripe time for open shop. The open shop environment and the virtues and the values, that stands the test of time and the cycles of the economy as well. OPENMIND SPRING 2016
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THOMAS Insulation Inc. Mechanical Insulation Contractors
On behalf of Alberta Venture, our program partner Merit Contractors Association and sponsors Canadian Western Bank, Insight Insurance and Matrix Labour Leasing, thank you to everyone who attended the Contractor of the Year Awards Gala! Alberta Venture would also like to thank its sponsors for their generous support in making this year’s program such a success! Your contributions make it possible for us to recognize and celebrate the achievements of Alberta's top contractors. Plus – CONGRATULATIONS TO ALL THE WINNERS AND FINALISTS OF THIS YEAR’S AWARDS! PRESENTED BY
SPONSORED BY
For exclusive web coverage of the awards gala visit:
AlbertaVenture.com/COTY2016
Fillmore Construction VP Rob Gomizelj shares some of his best advice for successfully bidding on contracts BY DAVID DICENZO
R
ob Gomizelj has been a part of countless bids over his 20-plus years in the contracting industry. The 44-year old Edmonton native knows that to secure a tender, a bid has to be well thought out. Gomizelj, vice-president, business development for Edmonton-based contractor Fillmore Construction, started his contracting educating early, helping out on project sites for his dad at the age of 14. In the decades since, he has worked for some of the country’s biggest companies, gaining invaluable experience in both building and bidding. A common thread for many companies that have a high success rate with securing tenders is in the process they follow. Larger businesses are typically very formal with the
bidding process. At Fillmore, a mid-sized operation with 38 office employees and 90 in the field (about 110 during the summer), once the brass has determined that a job fits into their schedule, the process starts with a thorough spec review. Subcontractors get the invitation and drawings are reviewed. “It’s understanding your specifications, going through it in detail and just understanding the project itself,” says Gomizelj. After that, a bid comes down to three things: 1) the takeoff (a quantity survey of items needed), 2) pricing and 3) getting all your subcontractors lined up on the day the tender closes. Sounds simple enough. But securing a tender hinges on doing a number of things right. OPENMIND SPRING 2016
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Top Tips for Winning Tenders
Balancing estimating and operations When Gomizelj took his first office job after completing NAIT’s Construction Engineering program, he was thrown into an office, told to look at some drawings and do an estimate. He was unsuccessful on the first attempt. And the second. But third time was a charm. “I thought, ‘Holy crap, now I have to go build this thing,’ ” Gomizelj says of his first successful bid. “The thing you really learn is that there is a mindset an estimator has and the mindset that the operations guys have. When you run through the numbers on the estimating side of it, you have to use the most aggressive number you can to get the work without impeding the operational side of the company. It’s a balance. If you don’t put enough on something, you’ve got risk issues. But if you make too much of an allowance on something, then you might not get the work. “Usually, you find that really good estimators came up through the field. They’ve seen what it takes and they know what you can and can’t get away with when you’re pricing things.” It’s all in the details Gomizelj says that it is critical to take individual items on a bid and break them down into as many pieces as possible. He hammers this into his junior estimators – figure out what every single thing will cost. Gomizelj uses the example of a sidewalk. “You can just guess x amount of dollars per square foot,” he says. “But what’s worked successfully for me is that I take the sidewalk and I break it down. We’ve got the base prep, the formwork, the rebar, the concrete, the finishing and the cleanup. So it’s not just a sidewalk. It’s five or six components within that item.” Details regarding materials, labour and equipment is an absolute necessity. “It goes back to that balance between the operations and the estimating,” he adds. “If you understand what you’re actually pricing out, then you can explain it a lot better on the operational side. When you just look at something and say, ‘Yeah, I’ll just throw in a $1,000,’ that’s the death of a tender right there. It will either make you lose the project or when you turn it over to the operational side, that $1,000 was actually $8,000.” Find your niche Fillmore Construction specializes in mid-sized projects, typically in the $18to $20-million range. But the company is much more than a project-based contractor. Fillmore has some regular clients that it has worked with for years, which has been instrumental in its steady growth in an erratic Alberta economy. 20
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Gomizelj also knows the company’s strengths. “If your company focuses on institutional, build schools. Don’t go out and build retail projects,” he says. “That’s being general but if you build your reputation on doing something specific, it’s more difficult getting into other markets. Focus on what works well for you.” So bid on what you know. Know your subcontractors When doing the initial assessment of a project Fillmore is bidding on, Gomizelj says they examine the specifications and determine the trades required so they can compile a list and do an invitation to subcontractors. But not all tradespeople are created equal. And like the bigger companies, subcontractors can have their own niche. “If it’s a commercial project, we tend to go to the contractors within the market that do really well on that side of it,” says Gomizelj. “Same with electrical. Some do very well on institutional projects, some do very well on industrial. It’s where they focus. We want to build our relationships with those guys in that specific market. You basically try to get the best numbers out of them.” Don’t bite off more than you can chew Because Fillmore is a mid-sized company, they don’t try and take on a lot of work that they really don’t need to. “That would get us into trouble,” Gomizelj says. “So when we are looking at bidding a job, the first question is who are we going to put on it? Do
we have availability? “If it’s no, if we don’t have the manpower availability, we won’t bid on it.” Closing the deal Gomizelj remembers being one of the estimators on a massive bid for a project at the Edmonton International Airport back in the late 1990s. His company at the time had submitted a price just before the deadline arrived. He cont i nued work i ng t hrough some mechanical bids with colleagues when panic struck the group. “All of a sudden, one of the guys says, ‘How come we’re a million dollars lower?’ ” Gomizelj recalls, noting that the adrenalin levels understandably rose. “What ended up happening is that one of the guys touched the keyboard and accidently deleted a milliondollar trade just at the same time we submitted the price.
We phoned the guy who submitted the number and we told him, ‘Get the envelope back and add a million dollars.’ He thought we were joking. We literally had a minute to go so he actually grabbed the envelope back from the tender authority, opened it up, crossed out the number, added a million dollars and handed it back. “We got it restamped and submitted with one second left.” Not all bids are so dramatic. But it was a lesson learned for a young Gomizelj, one that he recounts often when training his junior estimators. “The majority of the problems we run into are on the day of the tender closing,” says Gomizelj. A big project might require
up to 30 trades. And for each of those trades, you can have numerous subcontractors offering up prices. So there is always potential to have some trouble as the deadline approaches. A way to combat that is to keep your closing group small and be prepared to troubleshoot. “Typically, when you’re closing projects, you don’t want 800 people in the office,” says Gomizelj, who has been a part of $150-million deal with just three individuals present. “The more people you have, the more confusion you get.” And minimizing confusion means you can focus on the necessary details to successfully close the deal.
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Levelling the F
With the move to apprenticeship harmonization building momentum, some concerns still need to be addressed or apprentices who transition between provinces, it can
ILLUSTRATION BY: THOMAS WÖLFRAM
be difficult to keep up with the skill expectations that differ from coast to coast. Each province in Canada is responsible for its own training program, and each program has different hourly requirements, different training content and a different arrangement of courses. This poses a serious issue for employers who – despite the jurisdictional differences – may assume that a third-year apprentice from one province has the same skills as a third-year apprentice from another province. The inconsistencies are also a concern for apprentices who, when moving to a different province, may
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face unnecessary bureaucracy and paperwork as they attempt to transfer between programs. For many years, there has been a push to harmonize the various apprenticeship programs in order to increase mobility for apprentices and save them from these complications – now that push is picking up momentum. Line Porfon, vice-president of government relations at Merit Contractors Association, says the association is fully behind harmonization across the country, but there are concerns. “We are in agreement with collaboration and harmonization across the country, provided it does not water down the excellence of our own apprenticeship training programs,” says Porfon. While harmonizing may help improve weaker apprentice-
Playing Field BY WILLOW WHITE
ship programs in the country, some worry that it may have a negative effect on well-established programs. This could be especially true in Alberta, which is often considered “the Cadillac of apprenticeship training.” Porfon says that Merit will face this potential risk head-on. One concern has already arisen for Alberta tradespeople with regard to creating consistent names for specific trades that could be used nationally. It was proposed that all electricians adopt the common national name “construction electrician.” However, this blanket title does not sufficiently describe the
role of electricians in Alberta. According to the Government of Alberta, electricians in the province are roughly divided into four categories: residential (housing developments), commercial (office buildings), institutional (hospitals) and industrial (plants and factories). The title “construction electrician” does not encompass all of the diverse skills that an Albertan electrician is trained for. “An electrician in Alberta does a whole lot of things outside of construction,” says Porfon. “So, it could be you have electricians who specialize in doing some of the measurement devices on pipelines – that’s not construction – or an electrician may be looking at lighting on your roads – that’s not
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Levelling the Playing Field
construction.” While creating a consistent national title for the trade has value, this particular name would simplify the role of electricians with diverse experience, undervaluing their skills. It is these kinds of issues that Merit is aware of, and Porfon assures members that Merit will be “in opposition to any potential changes that would lessen the quality of our training.” Porfon believes there will be co-operation on all fronts for this important issue. “Government has been extremely forthcoming,” says Porfon. “They have reached out proactively to have conversations with us and keep us informed on it and are very respectful of Merit’s voice in the industry.” Ken Gibson, executive director of the Alberta Construction Association, agrees and has been pleased by the efforts the government has made to collaborate. “We have been consulted by government in the past on specific trades, and we found that to be a productive process and we look forward to that being maintained,” he says. The Canadian Council of Directors of Apprenticeship (CCDA) has long identified the need for apprenticeship harmonization across the provinces. The council, which is a voluntary partnership between Canada’s federal, provincial and territorial governments to support the development of skilled trades in Canada, has identified harmonization as its number one strategic priority. Of course, the CCDA’s Red Seal program helps meet some of this need. First created in 1952, and representing 57 different trades, the Red Seal sets common standards for tradespeople across all provinces. While the program has long played an important role in harmonizing Canadian trades, more co-ordination is required to create consistency for apprentices. In 2013, a CCDA task force was formed in order to identify the inconsistencies in apprenticeship training programs between provinces. Ultimately, the task force identified four key areas of harmonization which include the use of the Red Seal trade name; the number of training levels; the total training hours; and the order of training content. The organization hopes that harmonization will increase completion rates for apprentices who may be deterred from finishing their programs due to the difficulty of transitioning between provinces. Most jurisdictions are fully co-operative with the proposed improvements as aligning apprenticeship programs across the country has the potential to drastically improve the experience of apprentices and employers alike. In the current economic climate, particularly with regard to Alberta’s slow oil and gas sector, the issue of apprenticeship harmonization has become less of an emergency, though not less important. During the boom, Alberta struggled to find enough skilled journeymen and apprentices from other provinces to meet the high labour demand. Apprentices training in other provinces may have struggled to take advantage of the labour need as they faced jurisdictional barriers. Working towards harmonization will make sure that when another boom comes to Alberta, the province will be ready with a mobile, interprovincial workforce. Harmonization will also help improve the quality of work being completed. During Alberta’s last boom, when the labour demand was skyrocketing, it was vital that apprentices shared the same skills – extra training time would have been nearly impossi24
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While the Red Seal program has long played an important role in harmonizing Canadian trades, more co-ordination is required to create consistency for apprentices.
ble during such a busy season. Time is not a luxury afforded to most companies during a boom. According to Porfon, “Now that the economics have changed, it’s not that much of as issue if you have people coming in who don’t have the standard of technical training that [employers] are looking for.” There is plenty of time to train apprentices in technical areas that may not have been covered and fill in any knowledge gaps. Alberta runs in a cyclical economy, and soon enough work in the province will be heating up again. The downturn provides an opportunity for provinces to work on harmonization and collaboration during a slower period. Companies will be able to hit the ground running when the rebound comes along. And as baby boomers continue to retire, and oilfield layoffs sweep the province, Alberta will soon need every apprentice it can get.
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Times are tough for Alberta’s construction industry, but it’s an opportunity to adapt, improve competitiveness and build for the future BY LISA CATTERALL
A
s oil prices declined, much of Alberta was left
grappling to adjust to a reality that had not been seen for decades. As the economy shifted, investment in oil sands projects fell, causing jobs to be cut across the province, many of which were in the construction industry. Up to that point, construction had been a major beneficiary of the oil and gas boom. The associated infrastructure costs allowed for unparalleled growth and development in construction across the province. The boom in spending and investment associated with the oil sands had created an unprecedented demand for construction work and skilled labourers. As oil prices soared, engineers, tradespeople, and general labourers from across the country flocked to Alberta, seeing it as the promised land for employment. When prices retreated, the situation changed. “The trickle-down effect from oil and gas into our industry is big. We’ve got layoffs in all sectors across the province, but especially in construction,” says Marla McCready, director at the Merit College of Construction. “Now, many companies are facing a situation where there’s nothing on the horizon, which can be concerning.”
According to the 2016 BuildForce Canada Construction and Maintenance Looking Forward report, the construction industry is predicted to lose approximately 31,000 jobs between 2015 and 2019. The majority of these jobs are expected to be in the residential housing market, where it is anticipated that 11,000 jobs will be cut. By 2020, markets are expected to recover, with the construction industry returning to above current levels. “We’re definitely shedding jobs at this point, but we still do have gaps in more specially trained positions, like project management,” says Line Porfon, vice-president of government relations at Merit Contractors Association, “so of course, there still is some positivity out there.” While many jobs will be lost in the next three years, a number of major infrastructure projects across the province will sustain some activity. As part of the 2015 Capital Plan, Alberta is set to invest $34 billion in infrastructure from 2015 to 2020. To date, many infrastructure projects have supported the industry, softening the blow of plummeting oil prices. In the future, major transportation and utility projects will continue to create jobs, though the extent of this over the long term remains to be determined. “It does equate to work, and these kinds of projects help. For instance, Edmonton has been more insulated as the downturn has continued, due to the massive amounts of infrastructure being constructed,” says Porfon. “Ideally, going forward we’re hoping to see that the province dedicates some substantial investment to spending in infrastructure.” While divining the future actions of oil prices and infrastructure investment can create more answers than questions, resiliency will play a major factor in future success. Perhaps more than in any other field, the construction industry faces constant workforce fluctuations. “Any construction company knows that construction can be very up and down, and whether seasonal or economic, these changes come with the territory and companies adjust accordingly during these times,” says McCready. However, Merit self-pay hour bank system will help soften the blow. The system was designed due to the project-based environment of the construction industry. The hour bank allows skilled tradespeople the flexibility to move to different companies without the costly distruption in benefit plans. In the case of layoffs, employees can maintain their benefit package for up to six months through
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Upside to the Downturn
the self-pay system, often long enough to be ment numbers marks an end to 25 years of generations look to other industries for hired and start working on another project. expansion in the industry. careers. Over the next decade, BuildForce This security to the industry, and during “Up to this point, we’ve had it pretty estimates that 21,000 workers will be lost to this time, is a critical piece to keep skilled good in the Alberta construction industry. retirement. With this in mind, it will be key workers healthy and ready to work. But in the end, business will go where the for companies to continue attracting future Through careful, strategic planning, money is,” says Porfon. generations of workers, keeping longermany companies will be able to term goals in mind. ride out the market f luctuations “Right now, businesses are “THE CURRENT SITUATION IS A MASSIVE expected over the next five years. looking at tomorrow – that’s During that time, companies will it. They’re not looking farther RIGHT-SIZING OF THE INDUSTRY. IT’S A BIT have the opportunity to improve on ahead. But it’s important for OF A RESET AND A SHOCK FOR OUR current industry practices, leading companies to keep the longerthe country and creating a more term future in mind, as we’re INDUSTRY, BUT IT’S AN OPPORTUNITY productive, efficient workforce. going to be impacted by the grey FOR US TO BECOME MORE COMPETITIVE.” “Unfortunately, up to this wave in the future,” says Malpoint, Alberta’s market has globcolm D. Kirkland, president of – Line Porfon, vice-president of government relations, ally been considered a high-cost, Merit Contractors Association. Merit Contractors Association lower productivity jurisdiction,” “The good thing is we have the says Porfon. youngest population in Canada. Over the last decade, many Now we need to make sure we’re companies in Alberta fought chronic shortIn the short term, this may mean that looking at how to engage them.” ages of labour. These shortages drove up some companies, employees, and investors Ultimately, adaptation will be key. By wages, first in the oil and gas sector before will migrate to other provinces. BuildForce taking time to evaluate the current sitspreading to other industries across the estimates that much of the market adjust- uation and its long-term implications, province. This included the construction ment will occur as interprovincial workers companies have the opportunity to adjust industry, where many companies struggled leave the province, returning to their home practices, focusing on efficiency, innovato find reliable, productive workers. Compe- provinces or moving to markets offering tion, and continuous improvement. tition for small pools of qualified workers increased opportunity, such as in British “There are some challenges that lie and tradesmen forced companies to match Columbia or Saskatchewan. ahead, and we are facing challenges now salaries in the ballooning oil and gas indusIn addition to worker migration, one too, but I have the utmost confidence that try. As the competition for qualified labour of the most significant hurdles facing the Albertan businesses will adapt and sucgrew, cost overruns and delays became com- construction industry going forward is ceed,” says Kirkland. “The light at the end monplace, creating scheduling problems the changing demographic of the availa- of this tunnel, once things turn around, is and production inefficiencies, ultimately ble workforce. With jobs scarce, companies that once contractors know the new reality, driving up costs for end users. These cost will face recruitment challenges as younger they will adapt.” pressures have eroded Alberta’s international competitiveness in recent years, a INVEST IN YOUR PEOPLE problem that could scarcely be addressed during the boom. During a downturn, expenditures on training and development are often the first “The current situation is a massive to be cut. But according to McCready, this approach must change. right-sizing of the industry. It’s a bit of a “I’d like companies to look at the big picture and keep training their staff – some reset and a shock for our industry, but it’s an companies say, ‘Oh, we can’t afford more training and development right now,’ but opportunity for us to become more competreally, how can you afford not to invest in your people? It’s a direct turnaround to the itive,” says Porfon. By learning from more benefit of your organization,” she says. competitive markets around the world, A downturn provides the perfect opportunity for companies to look internally, the Alberta construction industry has the focusing on what might be overlooked when markets are hot. “From a management potential to once again thrive and lead the perspective, it’s an opportunity to re-examine your company culture to ensure it country in job creation. attracts and retains great people,” says McCready. “If you want to be the best company For nearly two decades, Alberta’s conout there, you need to look at how you’re going to become that.” struction industry had led the country in Strategy is important. By taking a strategic approach to continuing training, job creation. As a result of Alberta’s boomdeveloping innovation, and improving workforce productivity, companies will be able ing oil and gas sector, employment numbers to move forward confidently, and be prepared when the market rebounds. in construction nearly doubled since 1997. The current fall in construction employ28
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CONSTRUCTION
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ILLUSTRATION BY: HEFF O’REILLY
Survive and Thrive How to get through the downturn and come out stronger on the other side
BY MARTIN DOVER
C
ONSTRUCTION FIRM, KNOW THYSELF. When it comes to surviving an economic downturn like the one Alberta is currently facing, that’s the overwhelming advice from veteran construction companies in the province. “Obviously, we’ve seen this movie before,” says Brian Lacey, vice-president of construction at Clark Builders. “It’s cyclical, so it’s nothing that the market hasn’t seen before, and we’ve survived. But the days of low-hanging fruit are over.” Executives who have been here before say one of the most crucial aspects in guiding your business through challenging economic times is in knowing what your company does best – and executing on those skills.
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Survive and Thrive “Something I see companies do is try to take on projects they’re not accustomed to,” says Paul Verhesen, president and CEO of Clark Builders. “Residential trades will come and bid in the commercial world, that kind of thing. You have to define what you’re good at and focus on those areas and be really good at it. This is not the time to figure out those things you’re not good at. Now is not the time to experiment.” Verhesen’s co-worker, Lacey, echoes this: “First and foremost, companies need to close the door and have a roundtable discussion about the reality of the economics and their individual company, and how it fits,” he says. “It takes some discipline, and you have to identify the reality – are we mediocre, good or great, and how do we improve? It’s one of the hardest things to do, and you often hear companies say they don’t have time. That excuse is now gone; now is the time.” Lacey notes that downturns can actually lead to stronger companies in the future: “With reduced competition, some businesses won’t survive this, and that’s healthy for the industry overall. You should take the opportunity to make improvements on staffing, systems, and streamline and de-bottleneck your operations,” he says. It’s also the perfect time to be brutally honest: “Leaders should ask themselves some hard questions with respect to their ability to survive the long game. Do you have confidence in your business and brand? Is your product desirable and does it stand out? Ask yourself, what is your competitive advantage? If your business and market needs don’t align, then you need to look for improvements and efficiencies.” Duncan Binder, chief project and operations manager at Binder Construction, says focusing on a solid foundation of working capital or retained earnings is essential. “Your cash flow will be limited, or won’t be as lucrative as it was in the past,” he says. “In a tight market you tend to get a lot of [companies] that undercut or underbid work, or work too cheap. So being a general contractor, you have to be very cognizant of engaging the services of others that cannot effectively deliver. In tough times, labour costs are make-or-break. You know the old adage: you have to spend money to make money.” 32
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“Surrounding yourself with competent, confident individuals is paramount to surviving these ebbs and tides.” – Duncan Binder, chief project and operations manager, Binder Construction This means being extra cognizant of the contractors that your company hires on for projects. “You really need to engage the services of others that will satisfy [your clients], and at times you have to spend a few extra dollars to obtain that service, even though that sounds weird in a tight market,” he says. “If you hire someone that’s too cheap, the service that you will be paying for probably won’t satisfy the clients you’ll be working for.” Binder insists that client expectations never change, even though a company may have to cut costs. “They’re paying for a sound, well-built, constructed building. So that level of service doesn’t change. It’s how you deliver it; you have to alter your thinking a little bit.” Binder Construction was formed in 1972, and the company boasts strong employee loyalty – the average employee has been working with Binder for 12 years. “Surrounding yourself with competent, confident individuals is paramount to surviving these ebbs and tides,” says Binder. “We deliver good projects, and we build fun projects.” Verhesen notes that surviving a downturn is no simple trick – and it’s something that all companies are currently dealing with. “Different companies are going to handle it differently, but it reflects who you are as a company both in good times and bad,” he says. “If you look after your people, it really doesn’t matter if it’s good times or bad because you’ll be successful regardless of the market.” Lacey echoes this, urging companies to improve their use and deployment of labour. “We’ve been so dependent on transient labour, but I think the market needs to be more productive with what we have,” he says. “We should do more with what we have as opposed to using more resources. I don’t think that’s healthy. We need a more sustainable labour workforce.”
This labour reduction and reconsideration has, in some senses, worked itself out, says Lacey. “The reality out there is that owners are shelving projects for six months because they think the costs [of labour] will come down. But with temporary foreign workers and transient workers going home, the market demand and hourly rates haven’t come down. It’s not reasonable to expect labour rate cuts, and the costs of commodities are going up. I think there needs to be some alignment between industry players, design teams, owners and contractors.” That’s a point that rang true across the board. “Part of the change in any market is expectations and your attitude towards the marketplace,” says Verhesen. “As things tighten up or become more competitive, consider your company’s competitive advantage and leverage that. And then you have to get to work.” That means accepting that there might not always be an infinite number of projects to bid on. “That expectation is over,” says Verhesen. “You need to go to work and focus on the opportunities in front of you, and do a good job of winning those and executing them.” In the end, it all comes down to the fundamentals of your business, says Verhesen. “We focus on the fundamentals of budget, quality and schedule. Those are the things that we can control on the execution side, and they are fundamental to us. “In good times, you can’t just pretend to do that and then in bad times think ‘Oh, now I have to do it.’ In our case you have to do it all the time – to be honest, that’s going to be the differentiation between companies that survive and do well and those who don’t. Those who have the fundamentals in place can rely on those going forward.” Binder adds that it’s important to keep on going: “The biggest thing is to go to work and have fun,” he says.
www.meritalberta.com
www.meritalberta.com
ILLUSTRATION BY: RAYMOND REID
Changing
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of the
Guard A
New political leadership brings challenges for the open shop construction industry BY LINE PORFON
lberta and Canada have seen a significant shift in political leadership that has impacted the construction industry, with the potential for even more turmoil ahead. In Alberta, the province swung far to the left during the May 2015 election, and industry has been reeling ever since. In the NDP’s first eight months in power, corporate taxes have increased from 10 per cent to 12 per cent and the flat tax has been cancelled in favour of a sliding scale. The NDP are introducing a carbon levy, which is in essence a carbon tax and will apply to almost all consumer spending. As part of their campaign commitments, the NDP initiated a royalty review that ensured uncertainty and shook investor confidence at a time when oil dropped to under $30/barrel. Finally, the province’s commitment to environmental controls will add costs at a time when many companies cannot afford to continue to employ their workforce, and in some cases, are closing their doors. According to Statistics Canada, Alberta had a net loss of 19,600 jobs in 2015, up from the 14,600 jobs it estimated in January. This is the worst single year loss since the 1982 where the province lost 45,000 jobs. The number of people receiving EI benefits has doubled from 31,220 in December 2014 to 62,480 in December 2015, and the unemployment rate has reached above 7.4 per cent in January 2016. All indications are that the numbers will worsen. The recently released BuildForce Canada Construction and Maintenance Looking Forward forecast, estimates Alberta could lose up to 31,000 jobs by 2019. Industry in Alberta initially took a wait-andsee approach with the NDP; what they’ve seen is a government intending on making sweeping changes, causing job losses and an economic collapse. Premier Rachel Notley was quoted many times as having a strong desire to work collaboratively with business, but announcements
and decisions continued to focus on social issues, deficits, and debt funding. The honeymoon period for the NDP government appears to be over. The October 2015 budget, while providing support for infrastructure spending, will impact business in Alberta more than any other stakeholder group. The NDP government has glaringly picked winners and losers. The NDP targeted business and high-income earners, leaving all public services and other earner groups untouched. The premier’s commitment to work with business and industry has yet to transpire, and many stakeholder groups, including Merit Alberta, complain of an overt unwillingness to meet. The provincial mood in Alberta, especially after the federal election saw a rejection of the federal Liberal and NDP parties, is that electing the NDP may have been a mistake. Despite that, the NDP government tabled a massive deficit budget, putting Alberta at risk of losing our credit rating and driving business away. Business is warily watching as concerns about changes to the labour code, apprenticeship training and requirements, and the planned Workers’ Compensation Board (WCB) review continue to mount. Alberta business has long fought for competitive, fair, and transparent labour conditions. The NDP, given their long-standing association with building trade unions, would like to see changes to basic employer and employee rights like the removal of the secret ballot and project labour agreements requiring the unionization of the workforce for public infrastructure projects. But there seems to be some recognition that these changes would further rock an already shredded industry. It is imperative that the NDP government recognize that Alberta’s competitiveness must increase to mitigate the economic conditions, and Merit Alberta believes that labour legislation must promote fair and competitive labour relations rules that strengthen Alberta’s construction industry. OPENMIND SPRING 2016
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Changing of the Guard Apprenticeship policies and regulations is another provincial responsibility that industry is watching. Alberta has arguably the strongest apprenticeship training system in Canada with a worldwide reputation for excellence. This is because the system is led by industry through the Alberta Industry and Training Board structure in partnership with Advanced Education and Campus Alberta colleges or training institutes, which demands a neutral training environment. Over the years, unions have requested public funding for their training centres and it is a concern that the current provincial government will be more sympathetic to these requests. Should the demands of unions be met, Alberta Apprenticeship and Industry would divert public monies from publicly funded and community-supported colleges and training institutes to facilities that are controlled by unions. Given that the majority of work and apprenticeship training is being done by small- to medium-sized construction companies that operate on an open shop basis, there would be significant pushback, especially from the 80 per cent of non-building trade union contractors. Without the support of industry, the apprenticeship system could implode. The NDP has long held a belief that the Workers’ Compensation Board is flawed and requires review and fundamental change. As a result, in fall of 2014, the NDP government announced a review of all agencies, boards and commissions, including the WCB. The WCB is currently developing the terms of reference and has created a bureaucratic secretariat to support the review. During the 2015 Legislative fall session, Premier Notley was quoted as saying: “We have engaged in a review of agencies, boards, and commissions, and the Workers’ Compensation Board is part of that. We are in the process of trying to do a fulsome consultative review of how we can improve the service provided by WCB” (December 7, 2015). In addition she said, “I think that there could be improvement with respect to how the WCB handles occupational disease, how it handles repetitive strain injuries, and how it handles mental health claims” (December 8, 2015). Given Premier Notley’s past experience with the WCB, these actions strongly suggest that the review is part of the NDP’s social re-engineering. But industry is concerned that the inclusion of mental health concerns as part of an employer-funded injury insurance program goes too far. If the review’s conclusion included such drastic changes, then employers will be left with significant premium cost increases in a time of volatile economic uncertainty. Merit Alberta believes that the current WCB framework is working in a relatively balanced way for both employers and employees. While any worker injury case management organization has its challenges, overall the system works. The inclusion of a case management system that goes beyond the recovery and/or impact of workplace injuries blurs the lines of responsibility towards a
“life skills” approach, which business would argue – correctly – is the responsibility of government, not private enterprise. While the construction industry waited for signs of collaboration and consideration of their challenges, the provincial government made sweeping changes and signalled additional ones that will impact the viability of construction companies across the province. And that’s only in less than a year. Industry will continue to watch and plan to mitigate these changes for the next three years, hoping for the best, but anticipating increased pressures. Federally, the indication from the newly elected Liberal government is they will make changes impacting the construction industry. However, it is early days and the impact is yet to be seen. The Liberal government has made very specific promises on the labour front, including the repeal of Bills C-525 (Secret Ballot) and C-377 (Union Financial Disclosure), both included as Liberal campaign promises. In January 2016, the federal government indicated it would introduce legislation to repeal secret ballot voting rights for workers in federally regulated sectors, a right that was only granted in December 2014. The open shop construction industry sees this as a step backwards for workers’ rights in Canada, as the system reverts to the old criteria, a system that Merit Alberta believes is ripe for intimidation and manipulation. The only way to guarantee the independent choice of whether or not to join a union is through a secret ballot, which is one of the basic tenets of a democratic country. Bill C-377, also proclaimed into law at the end of the Conservative government’s leadership, was hamstrung shortly after the fall election when a Canada Revenue Agency policy was posted in a press release, advising unions that they did not need to adhere to the legislation. These requirements sought to provide rank-and-file union members and the general public with information about the $4-billion black hole of annual union spending in Canada, which is collected in mandatory, tax-free dues from unionized workers. By reversing the dictate, the federal government will continue to let unions operate in secret, spending their billions each year without any accountability and transparency. The Liberals also made a commitment to organized labour around funding their training centres. In the Minister of Employment, Workforce Development and Labour’s Mandate Letter, the prime minister directed the development of “a framework to fund training facilities delivered in partnership with labour unions.” The combination of this directive with the provincial NDP government’s wish to reward their union supporters may result in a negative fundamental shift in apprenticeship training. So, while it is early days for the new federal government, and a quarter into the mandate of the provincial government, there remains a long road ahead for the Alberta construction industry. And Merit Alberta will continue to work collaboratively with our industry partners to ensure that the voices of construction are heard.
It is imperative that the NDP government recognize that Alberta’s competitiveness must increase to mitigate the economic conditions.
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Line Porfon is the vice-president of government relations at Merit Contractors Association.
BY WILLOW WHITE
Presenting the winners and finalists of the 2016 Contractor of the Year Awards in the categories of Trade Contractor Under $15 million, Trade Contractor Over $15 million, General Contractor Under $50 million, General Contractor $50 to $250 million, General Contractor Over $250 million and Heavy Civil Contractor TRADE CONTRACTOR UNDER $15 MILLION WINNER: Grasschopper Landscaping CEO: Trevor Ross, Head Office: Edmonton Grasschopper Landscaping began in 2001 as a summer job for Trevor Ross when he was 19. He hired a friend and the two managed to scrape together enough work to keep them employed. The next summer, he hired another friend, and the summer after that a few more. Today Grasschopper is a multimillion-dollar company with recently completed landscaping projects at the Strathcona Community Hospital and the Kennedale Eco Station in Edmonton. Ross hasn’t cut lawns in a long time. As head of the company, his time is spent estimating and managing projects and maintaining a strong company culture. It’s that culture that continues to draw in exceptional employees. “It’s our number one strength,” he says. The company also invests heavily in staff training. And it’s paying off with high retention rates and dedicated, long-term employees. Grasschopper now has more than 60 full-time employees, and last year’s revenue was more than $7 million. “People love it here,” Ross says. FINALIST: EverLine Coatings and Services CEO: John Evans, Calgary Since 2012, EverLine has provided line painting for parking lots. Over time, the company has grown rapidly in size, revenue and scope. There are now 10 full-time employees who provide parking lot power sweeping services, parkade cleaning, snow removal and other property maintenance needs to the city of Calgary and surrounding area. The company has grown by 50 to 100 per cent since its inception, which its CEO, John Evans, attributes to the company’s excellent reputation and professionalism. FINALIST: Stratus Electrical & Instrumentation CEO: Dave Smith, Calgary Incorporated in 2014, Stratus has seen rapid growth and great success. In
Kemway Contractors
Grasschopper Landscaping
the first five months after inception, the company hired 90 employees. In the first year, it generated revenue of more than $8 million. The industrial electrical and instrumentation company provides services to companies from coast to coast. The company attributes much of its growth to the emphasis on building strong working relationships, both within and outside of the company, in an effort to retain clients over the long term.
GENERAL CONTRACTOR UNDER $50 MILLION WINNER: Kemway Contractors CEO: Terry Kemp, Head Office: Edmonton In 1990, Terry Kemp started Kemway Contractors with his father, who had run a general contracting business for many years. Kemp’s father was nearing retirement age, so partnering with his son made sense. Even so, Kemp says it took a number of years for the business to really get going. Today, it’s a $30-million business. Kemp’s father retired in 2002, but along with other partners, Kemp has been able to carry on the legacy. He may not do hands-on contracting work anymore, but Kemp keeps busy heading up business development. And he’s doing a good job. Kemway boasts a near perfect completion rate, with more than 90 per cent of its OPENMIND SPRING 2016
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The Best in the Business projects completed on time and on budget. Kemp considers it his role to foster an excellent working environment. “I want my people to be successful so I help them become successful,” he says.
skylines of many communities in Alberta and Saskatchewan. The company specializes in structural concrete formwork, tower crane services and multifamily residential construction. Some notable projects include the Pearl, a 36-storey condominium tower in Edmonton, and the same city’s Radisson Hotel and Convention Centre. FINALIST: Fillmore Construction CEO: Brent Fillmore, Edmonton Fillmore has provided commercial, industrial and institutional construction services across Western Canada since 1991. Company president Brent Fillmore was the 2015 Construction Person of the Year. The company commits to building cost-efficient buildings in a reliable and professional manner and is a member of the Canadian Green Building Council (CaGBC), often completing LEED certified projects.
Kemway Contractors
FINALIST: Rockwood Custom Homes CEO: Allison Grafton, Calgary In 2009, Allison Grafton and Grainger Nimmo co-founded Rockwood Custom Homes and began providing exclusive, boutique custom home construction and renovations. Today, Rockwood has grown by 25 per cent year-over-year and has built a reputation in the Calgary area of completing projects in a timely manner and on budget. The company is also responsible for building the first ever net-zero home in Calgary. FINALIST: Fine Line Consulting CEO: Doug Roberts, Calgary After providing consulting services in the pipeline industry as an employee for seven years, Doug Roberts founded Fine Line Consulting in 1996. Creating the company allowed Roberts to offer a breadth of consulting services ranging from project estimating to pipeline replacement. Twenty years later, Fine Line has 28 full-time employees and revenues more than $8 million. Roberts credits his success to always asking tough questions, no matter how trivial, that will lead to innovative improvements.
GENERAL CONTRACTOR OVER $250 MILLION WINNER: Chandos Construction CEO: Tom Redl, Head Office: Edmonton Tom Redl has been CEO of Chandos since 2001, and he’s seen massive growth during his time in charge. Revenues hit more than $350 million in 2015, and Redl projects that this year’s figure will exceed that amount. He’s quick to credit that success to all the people who work at Chandos as well as the companies and communities they partner with. “We are big on collaboration,” Redl says. Chandos has recently worked with the province, MacEwan University, the University of Alberta and many of the province’s biggest developers. The company has been employee-owned since its inception in 1980. It now employs more than 350 people and is currently hiring, an impressive feat during a rough economic time. Redl is particularly proud of one of Chandos’s most innovative projects, the Mosaic Centre, which was completed in January 2015 and is the first net-zero office building in Alberta. This is the kind of project that makes Chandos stand out. “We’re here to stay,” Redl says. “We’re built to last.”
GENERAL CONTRACTOR $50 TO $250 MILLION WINNER: Delnor Construction CEO: Glenn Cyrankiewicz, Head Office: Edmonton In the current fast-paced, cut-throat economy, it’s not often that a company values long-term relationships with clients and employees above all else. But at Delnor Construction, the people that work with the company are family. “We’ve had clients through the life of the company,” says Glenn Cyrankiewicz, CEO of Delnor Construction Cyrankiewicz, referring to those that have stuck with Delnor since its inception 33 years ago. But it’s not just relationships between Delnor and clients that he’s referring to. Many employees have also stuck with the company for the long term. Over the years, many of Delnor’s projects have had a direct and positive impact on the lives of Albertans. As Cyrankiewicz points out, “Everyone, at some point and time, needs health care. There isn’t a hospital, especially in northern Alberta, which we aren’t working on or have worked on.” FINALIST: Pagnotta Industries CEO: Alex Pagnotta, Edmonton Since its inception in 1992, Pagnotta has had a significant impact on the 38
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Chandos Construction
FINALIST: Graham Construction CEO: Grant Beck, Calgary Graham has been a staple of Canadian construction since 1926. Today, the company has branches in Edmonton, Fort McMurray, Vancouver, Kelowna, Regina, Saskatoon, Toronto, Winnipeg and throughout the U.S. With more than 1,300 employees and revenues over $2 billion, Graham is one of the largest construction companies in the country. Graham remains on the cutting edge of sustainable construction practices, taking pride in its green initiatives.
FINALIST: PCL Construction CEO: Paul Douglas, Edmonton Founded in 1906, PCL Construction has spent the last decade becoming the largest general contracting company in Canada. With 31 offices across North America and beyond, the company is involved in multiple major projects in its home province, including the Rogers Place arena in downtown Edmonton and the recently completed Philip J. Currie Dinosaur Museum in Grande Prairie. Through these significant projects, PCL is not only defining the standard of excellence in construction but also preserving and defining the culture of Alberta for years to come.
HEAVY CIVIL CONSTRUCTION WINNER: Morgan Construction & Environmental CEO: Pete Kiss, Head Office: Edmonton When Pete Kiss purchased Morgan Construction & Environmental from his parents in 1999, it was a small business with 15 employees. Almost two decades later, Kiss oversees 300 full-time employees as CEO of the multimillion-dollar company. Morgan operates across Canada, and sometimes Kiss is monitoring projects in as many as four provinces. The company’s head office is in Edmonton with branch offices in Acheson, Calgary, Cold Lake, Fort McMurray and Fort St. John. Kiss spends a lot of his time between offices, staying connected with his teams. Though often thought of as an oilfield construction company, Morgan offers a broad range of services from mine development to bridges to tailings pond management. Many of these projects take place in remote, northern communities and the company is proactive about employing locals, hiring local contractors and using local products. At the end of the day, Kiss wants Morgan to be seen as a “solution provider, not just a dirt mover.”
TRADE CONTRACTOR OVER $15 MILLION WINNER: Action Electrical CEO: Don Bunting, Head Office: Edmonton Don Bunting began working in the electrical trade in 1962. In 1973 he decided to strike out on his own and founded Action Electrical. At the time, Bunting and his wife were raising a young family and ran the business out of their home. Today, Bunting remains the CEO of the company, which has more than 70 full-time employees with annual revenue of $16 million. Action Electrical sets itself apart from other companies by maintaining the family values that it started out with. The company focuses on hiring from within and is committed to doing business with honesty and integrity. It remains a family business as Bunting continues to work with his son Blake, the general manager. Bunting is also in business with one of his other sons. For Bunting, working with his family is just part of his everyday life and he finds it deeply rewarding. “We enjoy working with each other,” he says.
Action Electrical
Morgan Construction & Environmental
FINALIST: Borger Group of Companies CEO: William Borger, Edmonton Borger Group of Companies began as a family business in Winnipeg, Manitoba, in 1919. Since 1949, the company has been a vital component of Alberta’s construction sector. Today, Borger is a $110-million company and has won multiple awards for innovation, safety and environmental principles. Currently, the company is completing work on Edmonton’s ICE District, a new entertainment and shopping area in the city’s downtown core. Borger takes great pride in its employees, many of whom have been with the company for decades. These employees are protected by intense safety policies that have resulted in a time-loss accident free environment for more than three years.
FINALIST: AltaPro Electric CEO: Hubert DeBruin, Edmonton AltaPro Electric was formed in 1987 and provides electrical installations for a range of projects including homes, offices and hotels. Today, the $18-million company is made up of 94 full-time employees who provide excellent workmanship in their industry. All employees at AltaPro are provided with ongoing training and mentorship. The company purposefully seeks out great employees, and commits to shaping, training and educating those employees over the long term. AltaPro credits its success, in part, to the company focus on innovation. FINALIST: Concept Electric CEO: Dave Kinley, Edmonton Concept Electric is a $90-million company made up of 600 people across Alberta and Saskatchewan, which provides electrical construction innovations for instrumentation, data, controls, HVAC and plumbing. With offices in Calgary, Edmonton, Bonnyville, Fort McMurray and Saskatoon, the company is well-situated to serve communities in Western Canada. Concept is unique in its diversity – the company offers designbuilds and construction management in a variety of fields and on projects ranging from theatres to hospitals to universities. OPENMIND SPRING 2016
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PHOTO BY: BLUEFISH STUDIOS
The Best in the Business
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STILL WATER RUNS DEEP After helping to build one of Canada’s biggest construction companies, Bill Giebelhaus is retiring. But will he ever really leave Clark Builders? BY ROBBIE JEFFREY Between the whirr of buzz saws and the back-up beeper of a Genie north. They also opened an office in Reno, Nevada, and expanded boom lift, Bill Giebelhaus paces through the atrium of an uncompleted into Japan, China and Siberia, where they built a village in Yakutsk building. This building, NAIT’s new Centre for Applied Technology, in 1993. will be ready for classes this fall. But Giebelhaus, a co-founder and “Bill was always the kind of hands-on manager who led by chief operating officer of Clark Builders, who boasts 42 years with the example with both the long hours he put in as well as putting company, won’t be around to see it to completion. Today is actually one himself on the front lines of our most challenging projects,” of his first days of retirement. Clark says. “I’ve always enjoyed doing things with my hands, building things,” In 1997, Giebelhaus hired Andrew Ross, now Clark Builders’ Giebelhaus says, retelling how, after studying at SAIT, he found himself executive vice-president for northern Alberta. Ross first met him in cribbing basements. This was when he developed the entrepreneurial, Andy Clark’s office, where, for 40 minutes, Giebelhaus stayed silent. independent spirit that would drive him to strike out and join the “Most people’s impression of Bill, when they first meet him, is that company he’d help build into an empire. he’s the scariest man in the world,” Ross says. But Giebelhaus doesn’t Giebel hau s says he never have an aggressive or imposing “Bill was always the kind of hands-on manager who per son a l it y – pe ople a re expected Clark to expand as it led by example, with both the long hours he put in as intimidated by his silence, by did. Mostly, he says, they worked to keep the company af loat. well as putting himself on the front lines of our most the idea that you’re never sure But somehow, through every what he’s thinking. “He f lies challenging projects.” downturn, Clark Builders grew, under the radar,” Ross says. – Andy Clark, former CEO, Clark Builders and the team learned to conquer “He just does the right thing, the logistical complications of the harsh northern environments, from treats people well, keeps his nose down and plugs away.” He’s the last where much of their success would spring. Clark Builders grew into an one to speak, but when he does, everyone listens. $800-million-per-year company one step at a time, and Giebelhaus was The result of that attitude is that Giebelhaus has become, in Ross’s behind it every step of the way. words, “probably the smartest construction guy in Western Canada.” As a high school student in Calgary he worked at the flour mill where Both Clark and Ross concur that he’s been the perfect counterweight his father, a Russian-born immigrant, was a superintendent. He wasn’t to their brand of youthful enthusiasm, and that without him, Clark old enough to work there legally, but still he toiled from four until Builders would never have survived. “In starting a business from midnight until his grades started to fall because he’d worn himself out. virtually nothing, and going through all the stuff you go through in Eighteen months after graduating from SAIT, in 1973, Giebelhaus the tough times, those are invaluable experiences that you can’t teach accepted a job in Yellowknife with PCL, which years later would be one of anyone,” Giebelhaus says. Clark Builders’ biggest competitors. “I was 21 and engaged to be married One of Giebelhaus’s undeniable achievements has been the and they approached me,” he says. A week and a half after getting creation of a corporate culture based on collaboration and, above all, married, he and his wife Karen packed up their meagre belongings and delivering results. And that mentality will persevere. “That culture is flew to Yellowknife. what Bill created,” says Ross. Giebelhaus began the next chapter of his career at the Yellowknife In retirement, Giebelhaus will spend more time with Karen and Calvary Community Church, where he met Andy Clark, who founded his his kids. He’ll stay on a few boards, including FortisAlberta and own construction company in 1974, when they both joined the church Habitat for Humanity. But it won’t be easy. Especially on a day like building committee. “We sort of hit it off,” says Giebelhaus. In 1977, he today, when, just as he did through his many years transforming joined the fledgling construction company that bore his friend’s name. “I Clark Builders into the construction giant it is now, he walks through was the ‘can do’ guy and Bill was the ‘there’s a better way’ guy,” says Clark, the unfinished project, among bustling employees and the hum of who’s been retired since 2011. machinery, contemplative, pondering the work in silence. In 1978, they opened an office in Whitehorse, and in 1980, another in Edmonton. Within a year they built a gold mine in Echo Bay in the High Merit and Alberta Venture would like to thank the adjudication panel for assisting with the Contractor of the Year Awards. This year’s judges include Arctic. When the market in Alberta crashed, they refocused their efforts Moataz Omar, post-doctoral fellow, Faculty of Construction, Department of in the North, working on support structures for a pipeline from Zama Civil & Environmental Engineering, University of Alberta, and Carl Knowler, to Norman Wells, rebuilding the DEW line into the North Warning line assistant vice-president, Marketing and Advertising, Canadian Western Bank. and, more generally, becoming a global leader in construction in the far OPENMIND SPRING 2016
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BY THE
NUMBERS New housing price index
Construction price index
($ thousands)
for apartment buildings:
Calgary
Edmonton
Calgary
Edmonton
% change Calgary
% change Edmonton
2014
109.4
91.2
2014
171.6
167.2
1.4
1.8
2015
110.5
91.6
2015
170.8
166.3
-0.5
-0.5
Yearly value of all building permits
Housing starts in Alberta 2013 36,011
in Alberta ($ millions)
2014 40,590
2015 37,282
2014
18,256.3
2015
16,731.7
Value of building permits in Alberta (in $ millions) Jan. 2015
Jan. 2016
Residential:
877
605
Non-residential:
532
492
1,408
1,097
Alberta total:
Total person hours worked under the Merit Hour
Bank Benefit Plan: 2014 2015
Average number of employees covered under the
Merit Hour Bank Benefit Plan:
113,277,126 108,808,973
2014
2015
56,025
56,134
Wholesale merchants’ sales by industry unadjusted ($ millions) across Canada 2014 90,827.6
91,459.0
Electrical, plumbing, heating and air-conditioning equipment and supplies
28,493.7
28,675.4
Metal service centres
20,285.2
18,057.0
Lumber, millwork, hardware and other building supplies
42,048.7
44,726.7
133,378.7
134,067.5
Machinery and equipment 42
2015
Building material and supplies
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SOURCE: Merit Contractors Association, Statistics Canada
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