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Commentary: July-August 2010

Regardless of your politics, there is no doubt that Canada’s stimulus
spending has been a lifesaver to our industry and our nation’s economy.

Regardless of your politics, there is no doubt that Canada’s stimulus spending has been a lifesaver to our industry and our nation’s economy. Sixteen billion dollars is a lot of money to inject, so we shouldn’t have been surprised when it took some time to get shovels in the ground. Yet wherever you travel this summer, evidence of this money, and our equipment at work, is everywhere.

As our cover article on infrastructure stimulus (page 10) points out, the aggregates and roadbuilding industry has noticed, and appreciated, this cash injection. According to the Canadian Construction Association, the spending has played a dominant role in the 90,000 plus jobs that have been created since last summer, a growth trend that came on the heels of some pretty heavy job losses in our sector. This was a dramatic turn-around that in fact received little mainstream press.

This is all good news, and explains in part why the aggregates and roadbuilding sector in Canada is on much firmer footing than our colleagues south of the border. Barring a major economic collapse, we will continue to be in much better shape for several years, as we benefit from a more stable economy, stronger government finances, better access to credit and a resource sector that continues to amaze. In most of Canada material is moving, machinery is running, and people are working, simple facts that can only be appreciated by spending time in some of your border states.

Yet if we’re far from the doom and gloom emanating from the U.S., wise heavy construction business managers are keeping an eye on a few areas of concern. As James Careless discusses in our infrastructure report, there are concerns that the March 2011 stimulus spending deadline will not allow the full package to be invested, that some contractors will be left holding the bag for incomplete projects, and that Canada’s private sector will not be able to close the spending gap once the stimulus dollars stop flowing.

These are all valid concerns. Indeed recent Canadian housing start figures show a slowing trend; nothing along U.S. lines, but a drop in demand nonetheless. Certainly it behoves us as associations, businesses and media to convey the need for a more intelligent, blended end to the infrastructure stimulus spending. For starters, no one with any knowledge of roadbuilding in Canada would have picked March as a cut-off month. Still, a little perspective is in order as you read our cover report. Compared to the bloodletting and continued poor indicators south of the border, we’re doing just fine, thank you.