After witnessing brisk development in major construction sectors over the past five years, Ottawa is seeing a slowdown during COVID-19. But it is not the only reason the industry is concerned.
Prior to the pandemic, the building industry projected that its resources would be taxed by projects, large and small, over the next five to 10 years. Those projections haven’t changed.
An aging workforce and recruitment difficulties represent hurdles to meeting the labour needs of future developments, David Hudock, who’s in business development with PCL Construction, told a webinar audience at the Ottawa Real Estate Forum recently.
“From our perspective, management of the resources through our own, through our subtrades…the craftworkers etc. is one of the key issues, challenges,” he said.
Hudock was one of the panellists at a webinar on where construction and development activity is heading in the Ottawa market.
He said the impact on “people resources” from COVID-19 has been notable over the past few months for such work as excavation, shoring, formwork and foundations. In a year-and-a-half, as those projects progress, he sees more resource challenges for mechanical, electrical and later trades.
The pandemic is also hampering some supply chains, Hudock said.
A case in point is a notice by Concrete Ontario recently on difficulties meeting schedules for the production of concrete for projects throughout the province.
“Ottawa recently saw a bit of a delay on a major pour on a major project,” he stated.
Hudock told the webinar that subtrades in Canada’s capital city are now requesting schedules up to a year in advance.
“We are going to see costs come up so we have to be smart about what we are doing.”
Panellist Steve Martin, director of development with Colonnade Bridgeport in Ottawa, said over his career he hasn’t seen such building cost increases as now.
“A lot of people are in the same boat,” he said, noting much of the resource and material draw is a result of “an extremely strong market” in sectors such as multi-unit residential and infrastructure.
While Ottawa is often fuelled by federal government projects, Martin said the development/construction industry “is being hit” by both private and public sectors.
He pointed out what is unique about Ottawa is that only a handful of major contractors are doing most of the work in some sectors such as multi-residential.
“It’s the same forming contractors, it is the same mechanical/electrical contractors and the same excavation contractors,” he said. “You are sole sourcing trades a year in advance just to make sure they are scheduled for your project. It doesn’t make for an environment where you are going to get very competitive pricing.”
Hudock said PCL sees the Ottawa construction industry as including the Gatineau region because many of its subtrades, craftworkers and key partners come from across the Ottawa River in Quebec.
He told the webinar audience because of the pandemic it is difficult to project what the city’s largest tenants, such as the federal government, will do about office space in the next two or so years.
“The jury is out on what it (office space buildout) will look like post-pandemic…and whether the biggest owner in town will do significant changes or not,” Hudock said.
“We’re never going to go back to the way things were.”
Hudock said the federal government will continue to sink money into infrastructure with an emphasis on green developments and innovation.
He said while the pandemic has paused or slowed some development, he has not seen Ottawa’s two universities and its colleges postpone project plans indefinitely.
“They have adjusted in some cases some of their focus…but they are still investing.”
Hudock pointed out that post-secondary institutions know students will be back in class once the pandemic is over.
“You can’t do lab work…you can’t do all of those different types of hands-on training” through online classes, he added.