With federal and provincial governments committed to spending hundreds of billions of dollars on construction infrastructure projects across the country, the Canadian Federation of Independent Business (CFIB) is calling for businesses affected by the work to be compensated.
A letter released by the organization suggests the economic costs of construction are being unfairly offloaded on small businesses and disruption should be mitigated through better planning, communication and execution of projects as well as reimbursing those worst hit.
“While major infrastructure projects are essential for urban development, they can be highly disruptive to small businesses,” director of interprovincial affairs Keyli Loeppky and senior policy analyst SeoRhin Yoo explained in the letter sent recently to the country’s mayors and councillors.
Data from the CFIB shows the problem is getting worse. Approximately 72 per cent of small businesses report they’ve been impacted by disruptions from local construction projects over the last five years.
Nearly a third of the businesses impacted say they were not given any notice prior to the start of the projects, and 26 per cent were given notice of only four weeks or less.
Furthermore, just 24 per cent of small businesses were notified by their government and only 39 per cent received direct communication from the construction project team.
The rest were left to find out about upcoming construction through street signs, local media, word of mouth and social media.
Small business owners have complained about several issues during local construction projects, from traffic and noise to dust and debris, according to the CFIB letter. Their operations are also disrupted by challenges with courier deliveries and accessibility for customers and staff due to limited parking. Often, these disruptions result in significantly decreased sales.
The CFIB estimates Canadian businesses lost 22 per cent of revenues in the last five years and had to spend nearly $53,000 per business on additional expenses such as repairing property damage, cleaning, increased insurance premiums and temporary relocation costs.
“It is therefore not surprising that 68 per cent of small businesses believe they should be financially compensated when a lengthy public construction project significantly affects their operations,” the authors state in their letter.
Giovanni Cautillo, president of the Ontario General Contractors Association, says such work usually causes little disruption and affects only sites adjacent to the project.
ICI sites, meanwhile, most often have controlled access routes and a plan in place to minimize disruption to the neighbourhood, he says, noting the exception might be a project in a downtown core where there is limited space and a crane is brought in to lift materials to workers.
However, he says, large-scale, phased, linear projects like water, wastewater lines and sewers, and roads pose more of a problem because, due to the nature of the work, streets often must be closed and transit has to be rerouted. The Eglinton Crosstown in Toronto is an example of such a project as crews had to tunnel underneath and put in shafts which are disruptive.
Cautillo, who was previously executive director of both the Ontario Sewer and Watermain Construction Association and the Greater Toronto Sewer and Watermain Contractors Association, says in such instances contractors will have a solid communications plan in place.
“I know for a fact that the vast majority of our members at the time would have communication plans and would let the surrounding neighbourhood know in advance,” he explains. “It wasn’t like, you know, we’d do the work and no one knew what the heck was going on.”
The CFIB letter notes it is important projects are completed within a strict timeline, and calls for penalties to be put in place for construction work that goes beyond its expected end date.
Far too often, roads remain torn up and storefronts are inaccessible long after planned project completion dates, prolonging the period of disruption for small businesses, the authors state. Municipalities should reward or penalize contractors for early or late completions.
However, Cautillo says compensation is already built into most contracts, so the idea is not revolutionary.
“The incentive, carrot thing, may or may not work, but it depends on the circumstance. What I’m saying is that you cannot have one solution that fixes everything.”
He points out project delays can occur as a result of weather and supply chain disruptions, which a contractor has no control of, so it’s more important developers understand the timeframe to complete a project might be lengthened based on where they get supplies.
“This is the kind of thing where the communication has to start before the shovels get in the ground.”
Contractors want to get the job done as quickly as possible and have no interest in delaying projects, says Cautillo.
“You want to get in, get it done and get out. At no point in time are we looking to prolong projects well beyond the point.”
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