Over the next 12 to 24 months, Ontario will continue to see growth, but if buyers of construction are waiting for prices to come down, they may be disappointed, says John Mollenhauer, president and CEO of the Toronto Construction Association (TCA).
“If you were going to characterize the last 12 months in construction, there has been a tremendous volume of work out for tender or calling proposals, but a great many projects in the last six or eight months have not been awarded.
“This is either because the low number in a tender comes in significantly above what they believed it was going to cost because their budgets often are out of date or not inclusive enough, but also because buyers of construction seem to be under the misguided notion that prices will probably come down,” said Mollenhauer, who recently hosted the TCA’s annual general meeting and Best of the Best Awards Feb. 21.
When you aggregate all the elements in a large construction project there are some material or service prices that are coming down a little bit but on balance construction prices are not coming down, Mollenhauer explained.
“If you hit pause as an owner, as a buyer of construction and try to wait out lower prices, you’re very likely going to be disappointed,” he noted. “All you actually achieve in that process is delaying your project. You don’t actually very often see any savings. Even if there are savings what owners haven’t wrapped their heads around is you can create the opportunity for savings, you can create indexes for things so that if the price goes down then the buyer of construction is the beneficiary of a lower price but it has to be quid pro quo.”
There has to be some give and take between the buyer and the contractor, he added.
“Owners want their cake and eat it too,” Mollenhauer said. “They want a lower price on that component but they’re not offering any protection if it goes the other way. That’s one of the reasons why the industry is so reluctant to share any savings is there is no protection if it goes the other way. They’ve been burned so often in recent years.”
There are also a lot of moving parts in the industry at the moment which are impacting construction including labour shortages, price volatility and carbon emissions, greening and the war in Ukraine.
“It’s very difficult for economists and forecasters to accurately predict what the next 12 or 18 months might look like so now is not the time to shoulder more risk, now is the time to mitigate risk, now is the time to be very careful moving forward,” Mollenhauer said.
To better serve its members, over the last year the TCA has added a live chat feature on its website which offers real time assistance with questions on these very challenges. TCA has also increased paid advertising opportunities for its members.
“It’s our job to find the most effective way to serve our members and to help the industry,” said Mollenhauer. “The industry has to evolve because of the way it’s changing and so do we. We’re starting to recognize that we have to challenge the status quo and constantly be looking to improve how we serve our members.”
During the AGM it was announced Jeff Murva, president of J Murva Consulting, would stay on as TCA chair.
This year’s Best of the Best Awards were presented to extraordinary and very deserving recipients, Mollenhauer said.
The winner of the Donald P. Giffin Construction Industry Achievement Award was Craig Lesurf of Gillam Group. With over 35 years of experience, Lesurf sits on The Construction Institute of Canada (TCIC) Professional Development Committee; is the honourary chairman of the TCIC National Student Bid competition; former chair of the George Brown College Construction Management and Trades Program Advisory Council; sits on the executive board of directors at the TCA; is a past chairman of the TCA and past chair of its General Contractors Section; sits on the OGCA executive board of directors; and is an industry safety advocate including acting as chairman of the of the OGCA Safety Committee and chairing the League of Champions.
Lesurf said it was an honour to receive the award.
“It’s a great honour to be nominated as well as to win,” said Lesurf, thanking his family for their support. “When I was younger I got involved and I realized that I wanted to do things to make a difference because you either complain or you make a change.”
He added, “I got involved in a lot of organizations and over the years I have contributed to a number of these organizations…because if you want to influence the outcome you need to get involved, so I decided long ago that I would be part of that.”
Other TCA Best of the Best winners include:
- Sean. P McKenna YCL Award: Symone Parera, EllisDon Corporation
- Distinguished Volunteer Award: Amir Nezhat, The Home Depot
- Project Achievement (Large): Alberici Constructors Ltd. Humber Treatment Plant, South Plant Upgrades
- Project Achievement (Medium): Canadian Turner Construction Company Ltd. Pinterest Office Fit-Out
- Project Achievement (Small): Brook Restoration Ltd. Dufferin Transfer Station, Tipping Floor and Push Walls
- Trade Contractor Award: Priestly Demolition Inc.
- Outstanding Safety Culture Award: SG Constructors
- Innovation Award: PCL Constructors Canada Inc, Lakeridge Gardens
- Community Leader Award: Varni Tayalan, Mosaic Transit/ AECON Group Inc.
- Green Building Culture Award: AECON Group Inc.