Fewer municipal projects spell trouble for Ont. contractors

Contractors aren’t able to secure as many projects with municipalities due to less being tendered since the pandemic struck.
There have been fewer municipal projects available for tenders since the COVID-19 pandemic spread throughout the world, reports the Residential and Civil Construction Alliance of Ontario (RCCAO) in an industry survey.
According to the Ontario-based association, 61 per cent of civil and engineering contractors are anticipating revenue declines in 2020 compared to the previous year, and 25 per cent report they will need government support to stay in business.
“The results of this survey reinforce our message that the federal government must provide the necessary funds for municipalities to get moving on state-of-good-repair projects,” says RCCAO executive director Andy Manahan. “Without adequate funding in place, municipalities are pulling back on infrastructure projects which will lead to job losses and hamper our economic recovery.”
Just over half of those surveyed indicated there has been fewer municipal projects available to bid on since July 1.
The survey, entitled Coronavirus Contractor Survey: Spotlight on Civil/Engineering Sector, was done by the Ontario Construction Secretariat (OCS). The survey was commissioned by RCCAO to determine how firms that do work in the civil and engineering sectors in Ontario have been impacted by the pandemic.
Health and safety of workers and staff are the main concern of contractors, following by the ability to get skilled labour, the impact of supply chain disruptions, and the ability of government to quickly roll out stimulus spending on infrastructure projects.
Virtually no contractors said that there have been more projects to bid on since July. In fact, 54 per cent of contractors reveal that there has been fewer projects of all categories to bid on, reports RCCAO. These trends show that larger firms are also bidding on projects that they would not normally consider, with 55 per cent of respondents observing that larger firms are now bidding on smaller projects.
“This is consistent with what I’ve been hearing from contractors in the heavy civil sector,” says RCCAO board chair Peter Smith. “Senior levels of government must provide additional and immediate funds to shore up municipal capital budgets which are being rapidly depleted to help cover operating budget shortfalls. Investing in these projects creates jobs for our industry which will provide a boost for our economy. There is a tremendous multiplier effect from such investments.”
An earlier report outlined the potential consequences of under-investment in state-of-good-repair and other infrastructure projects. Ontario could lose out on 60,300 jobs and $22 billion in provincial and federal government revenue over the next decade if Ottawa cuts back on spending, reports RCCAO.
Increased spending on safety protocols, like PPE, physical distancing or contact tracing has resulted in a 17 per cent increase in project costs, on average, for contractors.