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Alberta construction executive claims the poor workmanship of the early 2000s is now history

Have the lessons been learned from the provinces’s homebuilding boom-times of the early 2000s?

Jan 2, 2013

by Ben Freeland

For many Albertans, the pre-2008 construction boom is synonymous with cost overruns, delays, design errors and, ultimately, shoddy buildings. The 2011 Penhorwood condo debacle in Fort McMurray, in which 168 units were ordered evacuated in the middle of a March night, brought to light the problem of boom-era construction, particularly in rapidly expanding regions. A similar situation in early 2012, in which the Bellavera Green condo complex in Leduc was evacuated, prompted the provincial government to pass new building-inspection legislation this past August.

“During the boom we lost some discipline in some key industry drivers, namely schedule, budget and quality control.” – Brian Lacey, vice-president of construction, Clark Builders

Part of the problem during the boom was the fact that demand for new buildings outstripped the supply of willing and capable contractors. “Leadership training is the key to supply chain management, and during the boom people ended up in management positions by default,” says Brian Lacey, the vice-president of construction at Clark Builders. Don Muth, the founder and president of Edmonton’s Muth Electrical Management, says it wasn’t much different for the people working on the sites. “What you had pre-2008 was companies grabbing work they weren’t able to handle and not properly seeing it through to completion,” he says. “People were being chosen who weren’t qualified and didn’t have their game hat on, and as a result messes were left everywhere.”

Activity in Alberta’s construction industry dipped in 2009, but bounced back quickly and has been growing for three straight years, boosted mostly by a surging energy industry. Most industry analysts say it’s back to where it was pre-2008, and for a year now the media has been heralding a new “boom.” Leaders in the construction industry aren’t fond of the word, but do recognize an uptick in activity. “We’re looking at busy times going into 2013,” says Alan Kuysters, vice-president at PCL Construction Management in Edmonton. In addition to a strong residential real estate market, he says, “there’s going to be major power industry work and a lot of civil work in northern Alberta, and Leduc-Nisku is growing on the industrial side.”

But there are a number of differences today that will help to prevent history from repeating itself. There have been changes in the industry’s culture around safety and quality, changes in various governing regulations, and changes to the underlying economic conditions that are driving the growth. And Muth says Alberta’s construction industry has indeed turned the page. “The past four to five years have seen new safety legislation, and the result has been a whole new safety culture that has taken hold in the industry,” he says. This has included an increasing number of employees working with companies that are safety certified, and a provincial crackdown on offenders. “This has had a huge impact on quality control,” Muth says. “Safety naturally feeds into quality control, and while it’s not perfect it’s a massive improvement.”

Another major change in the industry has been a renewed focus on training, and in particular management training. “Training is a much bigger focus in the industry now, especially with site managers,” says Jim Rivait, CEO of the Canadian Home Builders’ Association – Alberta?. “These days, companies are asking for notification on qualifications when they subcontract work.”

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The provincial and federal governments have also taken steps to ease the labour shortages that contributed to the substandard work that happened during the last boom. In January 2011, the provincial government changed the apprenticeship ratio from one journeyperson for every one apprentice to a one-to-two ratio across 37 trades. This has provided more options for employers and for employees looking to get a start in construction. Industry leaders were further relieved in April 2012 when federal Immigration Minister Jason Kenney announced the launch of a new immigration stream for skilled tradespeople, something the construction industry had long been advocating. It will place greater emphasis on skills and work experience and less on formal education. Further changes came in June, when Kenney announced a one-year pilot project that will increase the flow of temporary foreign workers into specific occupations like welding and ironworking.

On the productivity front, new IT developments such as Building Information Modelling (BIM) and Jobsite123, a new construction industry social media platform introduced to Canada last year, offer great promise in streamlining job sites. Most contractors admit, however, that there’s still some work to be done. “A lot of technological tools are being brought online right now, but in order for them to work there needs to be a mindset shift,” says Lacey. “Industry needs to recognize the need for a longer gestation period for projects. The present model is that you sign a contract and mobilize immediately. In order for [BIM] to work, you need greater emphasis on the pre-construction period, or you’ll have huge productivity drops.”

Finally, while the residential housing market may be strong, driven largely by a return to pre-2008 migration rates, it’s not white-hot like it was pre-2008 when commodity prices were rising rapidly and unemployment stood at just two per cent. “Those were wild times,” says Kuysters. “We’re not seeing that kind of growth at present.” That means a better balance between supply and demand and a greater ability for contractors to maintain a handle on development.

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