When it comes to critical infrastructure, the show must go on

Inflation, Bank of Canada rate hikes, labour shortages, the ongoing saga of material shortages; the list of reasons why a project could be delayed or cancelled is plentiful this year, and some have already been put on hold, either temporarily or permanently. Thankfully, however, many have not, and that’s the basis of this year’s Infrastructure Report.

Despite the challenges being faced by the construction industry, there are transportation- related projects underway from coast to coast in Canada, many of which have delivery targets more than a year out, meaning there will be work happening no matter where interest rates and inflation take the economy and Canadian economic sentiment in the near-term. While we’ve only listed a handful, projects like the ones profiled are the kinds of activities that will keep the sector busy as we weather these latest economic storms.

In some cases, plans are also set to be reworked. For example, the recently announced cancellation of Calgary’s Deerfoot trail P3 project included indications that several segments of the project would be broken out into individual projects that will be put out for tender. While disappointing that the full scope of the project is unlikely, reassessments like these should allow the most critical components of larger projects to happen. So, while the size of the projects may be smaller, the volume of work is not being completely eliminated. And with the inflationary forces at play, projects that do move forward will be doing so at a higher price, so the spend in the sector may not take a hit, despite a potential drop in actual volume of work.

Beyond roadways and bridges, other infrastructure work is also ongoing, like the water-related infrastructure project at Toronto’s Ashbridges Bay Treatment Plant outfall that’s also outlined in our report. Some of the water infrastructure projects that will happen over the next few years will be much like the portions of the Deerfoot project that will be salvaged; they will get funded because they are deemed to be so necessary that they simply cannot be put off.

Having seen wood pipes firsthand, including some that have been removed from service in just the past five to 10 years, I couldn’t help but dive into Statistics Canada’s recent snapshot of the nation’s water infrastructure. With roughly 20 per cent of Canada’s water, sewer and stormwater pipes having been built prior to 1970— more than 85,000 km of pipe—it’s no wonder that the pace of construction of underground piping networks has been on the rise.

That said, even with a jump from an average of less than 7,000 km of new pipes installed per year between 2000 and 2018 to more than 10,000 km per year since, the remaining useful life of water and sewage assets is on the decline, meaning more activity, and funding, is needed.

A 2021 report in Ontario pegged the infrastructure gap for water and wastewater in that province—the spend necessary to bring the infrastructure into good repair—at more than $12.5 billion in that one province alone. That’s a lot of potential new work; work that’s better tackled proactively rather than waiting on watermain breaks and flooding to make it a priority.

Regardless of the segment, rising lending rates are going to add more complexity to any civil or ICI project over the next little while, however, and some municipalities may use those rates as reasons to throttle back on less essential projects. Of course, having fewer projects may have an unintended consequence of easing some of the materials shortages and normalizing some pricing in our sector.

While nobody wants to see projects shelved, some selective rework and prioritization may actually help those projects that do proceed, bringing a silver lining for some.

Adam Freill / Editor

afreill@annexbusinessmedia.com