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Commentary: September-October 2010

There has been much ink spilled of late about the challenges of tidying
up federal Infrastructure Stimulus Fund (ISF) money ahead of the March
2011 deadline, and the potentially dire consequences for contractors who
do not meet that deadline.

There has been much ink spilled of late about the challenges of tidying up federal Infrastructure Stimulus Fund (ISF) money ahead of the March 2011 deadline, and the potentially dire consequences for contractors who do not meet that deadline.

Indeed, we’ve spilled our share in Aggregates & Roadbuilding. Last issue’s cover story surveyed the landscape of ISF spending and concern over late projects. In this issue, the Ontario Road Builders Association’s Rob Bradford discusses how the theory of shovel-ready projects can often differ from the reality of permits and approvals, leading to delays that may cost our readers sleepless nights and financial penalties.

These are all real concerns that need to be dealt with in the months ahead, as contractors rush to complete projects in the next five months. Still, they can at times distract from the real good that has come from the ISF, and from other levels of government hopping on board to keep the economy chugging and put a dent in Canada’s very real infrastructure deficit. According to ReNew Canada magazine, total actual federal spending under the ISF will hit $3.9 billion, very close to the original $4 billion pledge. Provincial and municipal funding added another $6.1 billion, bringing the total, actual infrastructure investment to a staggering $10 billion.

These are vast numbers. Like most such programs, the real impact is felt at the local level. Sitting in Construction & Pavage Portneuf’s head office just northwest of Quebec City this past August, editorial director Scott Jamieson had a chance to see the real impact of this investment up close and personal. The rapidly growing aggregate, road construction and paving company recently added an Astec portable asphalt plant to handle some $25 million in new work (see article on page 18).

That work will continue well into next year, long after the ISF is history. The company has also recently invested in a batch plant in Quebec City, for a combined $10-million-plus investment in new capacity in just a few years. Times are clearly good for Quebec’s rock-to-road sector. In fact, the Ministère des Transports du Québec says that $21 billion will be invested in its roads between 2007 and 2014, with over $4.2 billion of that being spent next year. So much for any stimulus spending hangovers.

“I think we’re in the best years right now,” explains Sébastien Savard, project manager for Construction & Pavage Portneuf. “These are the hot years – if you want to grow, this is the time. We prefer to be conservative in our forecasts, but it’s clear that there are at least another three or four good years.”

Nor is he pessimistic about the years after that. Back at the national level, it’s clear that Construction & Pavage Portneuf’s investment pace is no exception. According to the U.S.-based Association of Equipment Manufacturers, exports of heavy machinery to Canada were up a whopping 32 per cent in the first half of 2010 to $2.4 billion. The scale is not new, as Canada has traditionally imported more U.S. construction machinery than the next six or seven largest markets combined. What’s interesting is the sharp ramp up in purchases while many still talk of recession. As Mr. Savard reminds us, these are some good years to be in the aggregates and roadbuilding sector, especially if you’re willing and able to seize the opportunities.