Hangover Coming?

Don Procter

February 2007

Toronto’s residential construction industry may be headed for a hangover. After living it up for the past five or so years, contractors in this sector will see a slowdown as the construction cycle appears to be near its end.

"We’ve had five exceptional years of about 220,000 housing starts. Clearly they are starting to decline,” says Alex Carrick, chief economist of Toronto-based Reed Construction Data. Both single and multiple housing starts were down 10 percent in the first 11 months of 2006 from the same period in 2005, and the drop-off could get worse toward the latter part of 2007.

But Hugh Laird, executive director of the Interior Systems Contractors Association of Ontario, isn’t worried that his members will go starving for work—at least not yet. He says unless the slowdown is "very significant” it is not particularly bad news ISCA contractors, many of which have been scrambling to secure enough skilled labor and management to meet the construction demand.

Nationally, Canadian housing starts have seen significant gains, largely because of the oil boom in Alberta. "Cities like energy-rich Calgary and others in the West are accounting for a huge total of job growth in the country,” Carrick says.

On the commercial side, times look much better than the residential in Toronto. John Mollenhauer, president of the Toronto Construction Association, says 2006 was an extraordinary year in commercial construction, with $183 billion in total construction, up from $120 billion in 2005. "The market was extremely busy and the commercial sector is sustainable into the foreseeable future,” he says.

Mollenhauser says good commercial times are partly buoyed by Alternative Financing and Procurement projects announced by a provincial government agency called Infrastructure Ontario. The structure of an AFP allows the province to finance large, complex public infrastructure developments through private contractors. In theory, AFP transfers all risk to the private sector to get projects done on time and budget, but it is not without its critics who suggest corners may be cut to meet budgets.

On another front, several construction groups continue to lobby the Ontario government to permit the use of stilts in residential construction. Laird says it is "mind boggling” that the Ontario government still doesn’t permit the use of stilts in residential construction because home builder associations, building unions, workers and contractors all say stilts could be safer than working on benches.

The industry hopes that 2007 will be the year the government lifts its ban on stilts. Ironically, in many American states and some Canadian provinces such as British Columbia, stilts are considered a valuable tool in a taper’s arsenal. "If they are used properly, they shouldn’t be a safety problem,” explains Don Nelson, spokesperson for WorkSafe B.C., the workers’ compensation board in Canada’s western most province.

WorkSafe BC permits stilts as long as a strict set of procedures is followed, he says. For starters, guard rails, normally 42 inches high, must be raised above that height by as much as the height of the stilts. If, for example, stilts are 20 inches high, then guard rails must be 62 inches high.

However, stilts can’t be used in B.C. areas where there are floor openings, the working space is on more than one level (sunken living rooms, for example) or the work area is littered with debris or obstructions. "If our (building inspection) officers see tapers working in an area with bad housekeeping, we will shut down the activity until it is cleaned up,” Nelson says.

About the Author
Don Procter is free-lance writer in Ontario, Canada.