Brick by Brick and Board by Board we are Putting BC’s Contractors into an Unsustainable Financial Position.
BC Construction Association Responds to Budget 2023
With Budget 2023, BC’s construction industry is left wondering what it means to have BC’s government in its corner. While we welcome the investment in infrastructure and relish the opportunity to build world-class structures that serve our communities, we know that getting it done is not as simple as adding a multi-billion-dollar budget line-item.
Funding infrastructure is important, but it isn’t a golden ticket with a guaranteed outcome. We are not building a brighter future for all British Columbians if we continue to ignore the jeopardy of BC’s more than 25,000 contractors and the 171,000 tradespeople who work for them.
The predicament of many contractors is like that of BC’s overworked nurses. To quote the Minister, “they’ve never been under more stress”. “The status quo is not good enough”. They’re needed to work more and work longer because they’re essential and there aren’t enough of them. But with one crucial difference: the nurses know they will be paid.
Many of the Minister’s statements today are as true for construction workers as for workers from other essential sectors. Making ends meet is as big a challenge for contractors in the context of their business as it is for family budgets. Contractors are working harder than ever but not getting ahead for business reasons that are not addressed. Non-payment and late payment is out of control, right alongside skyrocketing interest rates, cost of materials, and cost of labour.
The result is that investment in infrastructure is becoming a catch-22 for all but BC’s largest contractors, whether open shop or union. Without complementary measures to mitigate the extreme financial risks of late or non-payment, a typical company could go broke building their share of the $4.2BN budgeted for housing. Brutal disregard of contract and payment terms plus skyrocketing costs of borrowing are bringing BC’s construction industry to the breaking point. The result is that contractors government needs might not be there to deliver.
Before the budget was announced we could plainly see the impact of increased costs of supplies and labour, the costs of borrowing, and the risks of non-payment on the 21 projects already late and/or over budget. Adding four new projects over $50M will add to the risk – supportive measures must be taken.
Construction needs the same system improvements for labour force development that are happening in healthcare for nurses and other specialty careers. We need express-qualification for internationally educated and trained tradespeople. We’re grateful for new grant programs that include trades training, but it is not enough.
Yes, we want shovels in the ground quickly. We need permitting to work faster, and while adding 160 new public servants is a welcome start, it is not enough.
The single biggest thing BC’s government can do for its 25,000 small and medium construction businesses is provide prompt payment legislation so that they will be reliably paid for the public and private projects they are called to build.
No amount of infrastructure investment will succeed if we don’t reduce the pressures on BC’s builders. They can’t build the hospitals, the schools, the transit networks, the housing, if they don’t have enough workers, and if they can’t count on getting paid for the work they do.
We are not yet certain that government has our back, but we’re open to convincing. The proof, in the form of prompt payment legislation, can’t come fast enough.