Construction and Infrastructure will be at the Forefront of Canada’s Economic Recovery

The COVID-19 pandemic has caused the federal and provincial governments to reimagine the role that the built environment plays in Canadians’ lives. 

Discussion is beginning to emerge in policy circles about the utility of things once thought crucial to our economic success, and that includes the functionality and utility of infrastructure that is ubiquitous in cities, like office buildings and transit stations. These discussions also reflect a newfound urgency about implementing projects that could make it easier for Canadians to not just live with physical distancing, but to thrive in that context. Advancing fiber optic broadband rollouts in rural communities, building new infrastructure to protect coastal communities, and accessing sources of renewable and sustainable energy, such as geothermal applications, are all gaining traction.

The Liberals are discussing ways to emerge from the pandemic stronger by investing in green technologies. There is no question that they will have to put some water in their wine in order to assist provinces that depend on the oil and gas industry, and other natural resources sectors, in order to get people back to work and off government support programs more quickly.

In respect to the overall needs of the construction sector, the government has begun to solicit information about how the sector can address its current challenges and be prepared to bounce back as an economic driver. AED and partner organizations have a line of sight on developing unified priorities for Canadian infrastructure, and they will be focusing on the importance of government stimulus, support for on-site resources, keeping costs down for project owners and contractors and making it easier to purchase or rent equipment.

Provinces, territories and cities are beginning to reopen. However, the uncertainty of consumers, the hesitation of investors and lenders, and the burdens of adaptation in workplaces will continue to put pressure on the economy overall. In this respect, reopening should be viewed more as a part of the plan to survive the COVID-19 pandemic, rather than our opportunity to emerge from it.

Confidence will still be in short supply for many months ahead. For their part, the government in Ottawa and the premiers are aware of this problem. They continue to be wary of the possibility that without a vaccine or a proven treatment for COVID-19, their citizens remain at risk, and if they are to proceed in reopening it will have to be done with an abundance of caution.

Over the long term, signals are emerging that the federal and provincial governments will collaborate on ways to get people back to work. Early economic indicators show that workers in the services sector have been hardest hit and that many of the lost jobs may not return. Other roles will return but will operate in radically different ways than before, with an emphasis on decentralized delivery of products and services.

Governments can be convinced that this is an optimal time to redirect the energies of those unemployed or underemployed workers to skilled trades and to growing sectors where they can have fulfilling and potentially lucrative careers. This is especially true given that workers in construction tend to be older than those in many other sectors. We anticipate that roles like heavy equipment operator and diesel mechanic will be even more attractive to people faced with increasingly impersonal and at-a-distance learning in courses like business, arts, humanities and sciences. As an essential sector, construction should continue to appeal to youth and people seeking retraining in a field that is still creating new job opportunities.

A key element of the sustainability of this sector throughout the pandemic is the need for federal stimulus and directed projects from coast to coast. After the last recession, infrastructure stimulus played an important role in the recovery by getting people back to work and creating legacy improvements that continue to increase productivity for Canadian businesses and communities. The last economic crisis was spurred by a credit crunch, which is hopefully an avoidable by-product of the downturn we now face. Nonetheless, the government has a strong incentive to make investments that will create a short-term lift while providing long-term improvements for communities.

The first intervention of the federal government in infrastructure supports has been to speed up the delivery of nearly 10% of the $33.5 billion committed to community infrastructure in the Investing in Canada plan. The $3.35 billion intended for this construction season will focus on small projects and is especially geared to giving communities funding that will allow them to adapt community services to the pressures of COVID-19. The federal government will contribute up to 80% of project funding, which is an important signal to municipalities of all sizes and with all different resources across Canada. What we know is that this relatively small investment is only the opening stanza in the government’s approach for supporting the economy through infrastructure. What we also know is that AED will continue to advance the interests of heavy equipment dealers who provide the needed tools to make sure these projects can create jobs, improve communities, increase productivity and make a lasting contribution to the Canadian economy.

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