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B.C. major projects building at levels unseen in a decade

Pressure building as contractors scramble for labour, supplies
The proportion of major projects actually under construction in B.C. is at a 10-year high, and that's putting pressure on builders | Source: B.C. Major Projects Inventory/Western Investor

The province may have nixed its ambitions to give the Royal British Columbia Museum new digs at a cost of $800 million, but the digging continues at sites across B.C. as major projects reach new heights.

The latest issue of the province’s major projects inventory recorded a total of $388.6 billion worth of projects through the end of 2021.

A growing proportion of those projects, 35 per cent, are actually under way – a level unseen since 2012. The total value of the 350 projects under construction is $136 billion.

“A lot of contractors are very busy, so there’s no complaints there, but people need to be aware there are a lot of great jobs available,” said Chris Atchison, president of the B.C. Construction Association. “It’s tremendous pressure in terms of workforce shortages that we’re experiencing.”

The value of major projects is 81 per cent above five years ago, while the number of construction trades workers in the province has fallen five per cent over the same period. This has fuelled a 14 per cent increase in wages to an average of $66,591 per worker, contributing to significant cost pressures on the sector.

“All of these additional projects coming on board, plus a labour shortage, plus cost escalations … Everybody’s trying to do more, but they’ve got less and they’ve got more risk,” Atchison said.

This could lead some contractors to say they can’t take on projects, or if they do, the price will be higher, contributing to further cost escalation.

The province’s major projects inventory tracks jobs with a value of $15 million or greater province-wide, and $20 million or more in the Mainland-Southwest development region.

All but two projects new to the latest inventory were located in the Lower Mainland, and the majority were residential projects. The two projects outside the Lower Mainland were infrastructure projects located in the Cariboo.

The largest projects reported as getting underway were the $3 billion Senakw housing project at the south foot of the Burrard Street bridge and the Pattullo gas line replacement, a $175 million project along Gaglardi Way in Burnaby.

The most active areas in the province in terms of project volume are the Mainland-Southwest, Vancouver Island and Thompson Okanagan regions, with more than 307 projects between them – 88 per cent of the total. With respect to value, the Mainland-Southwest claims the largest share, followed by the North Coast and Northeast regions, thanks in large part to their major energy and infrastructure projects.

With the province continuing to pour money into infrastructure, institutional and affordable housing projects, Atchison said the value to taxpayers may be diminishing.

“You’ve got more and more projects coming online. You’re going to have some of your best contractors that are having to look at their work plans and say, ‘Do we have enough people to do this work?’” Atchison said. “But then you layer onto that some of the uncertainty about the products, and people not being able to hold their prices, and it’s a big challenge. … You can get into a situation where the public dollars aren’t going as far as they would otherwise.”

Western Investor