Province to propose fuel-price relief to industry

Manitoba Transportation and Infrastructure recognizes that extraordinary measures need to be taken to ease the cost of escalating fuel prices that have hurt heavy construction contractors in the last month.

“Our meeting with senior officials at MTI made it clear that they see the additional cost burden on industry – both immediately in snow clearing works and in the coming work, such as flood control and road construction – must be addressed,” MHCA President Chris Lorenc told a meeting of the Executive Committee March 17.

“We are expecting to see very shortly MTI’s proposal, that will adjust the price-escalation clauses in large construction contracts in the coming season, but also look at retroactive cost-adjustments to snow clearing work.”

The price of diesel fuel has risen significantly since tenders on bid-hourly work (snow, flood control) were issued in the late fall and mid-winter, largely because of Russia’s invasion of Ukraine February 24.

Lorenc told the Committee MTI’s draft proposal is being sent to MHCA’s fuel price sub-committee members for comment and suggestions. MHCA has been advised the City of Winnipeg is looking at the same issue, but has not engaged industry in discussions as yet.

Highlights of discussion included

• MHCA members are strongly encouraged to register for the Inaugural Chair’s Reception; RBC Convention Centre April 5; 4:30 – 6 pm. Premier Stefanson, a number of Cabinet ministers, deputy ministers and Winnipeg city councillors are attending.
• WORKSAFELY^® is working, through the Common Ground Alliance, with Bell MTS to improve response times for locates this coming construction season
• The 2022 MHCA Membership Directory and Equipment Rental Rates Guide is being mailed to members now.

The Executive Committee also heard MHCA has engaged with the province on its review of immigration programs, specifically the Provincial Nominee Program. Minister Jon Reyes, Advanced Education, Skills and Immigration, will meet with the MHCA and industry representatives soon, Lorenc said.

The industry would like to see the PNP, now heavily weighted toward immigrants with higher education, skill certification and English/French fluency, open sponsorship to newcomers who have experience working in the industry.

Among the other issues discussed at the Committee were:

• Canadian Construction Association’s new board sees Atlantic Canada’s Brendan Nobes assume the Chair’s position. The heavy civil industry sees four representatives appointed or reappointed to the Board, three from Western Canada, including MHCA Chair Nicole Chabot.
  • Chabot will also assume the Chair of the Civil National Advisory Council, on which MHCA Past Chair Jack Meseyton and President Chris Lorenc also sit.

• CCA Conference March 6-11 in Vancouver focused on trade and strategic, long-term investment in trade-enabling infrastructure; Lorenc sat as a panelist on a conference discussion that spoke to the need for Canada to diversify trade and how that is tied to the country’s economic, social and national security interests. “Diversifying Canada’s global trade profile, which now depends heavily on the U.S. and China markets, through strategic investments in trade gateways and corridors is critical to our economic, social welfare and national security interests,” Lorenc said in his presentation.
• A letter to Transport Minister Omar Alghabra was sent by the CCA and the Western Canada Roadbuilders & Heavy Construction Association on February 10, pressing for a significant recapitalization of the federal trade corridors fund, and to support the proposed Western Canada Trade Gateway & Corridor Initiative (WCTG&CI).
• The CCA pre-budget submission to the federal government made a number of recommendations, including:
  • Close the gap between planned infrastructure investment levels and what is needed to address the country’s aging infrastructure, increase its resiliency to climate change and position Canada for the future
  • Invest in trade infrastructure, including the WCTG & CI to reliably connect supply chains and efficiently move goods and services across borders.
• Michael Swistun, Secretary to the provincial Cabinet’s new Economic Development Board, has been approached by MHCA to discuss economic growth and the need for strategic investment in trade gateway and corridors
• The provincial iMaQs system used for quarry and pit applications, permits and billings is being updated. MHCA’s Aggregate Committee held a meeting with department administration to discuss their issues and suggestions for improvements. The focus was on the timely return of information to industry for permits to extract, including producers’ emails and phone calls for information, to allow work to proceed.
• Finance Minister Cameron Friesen met with MHCA Board representatives February 17, and discussed what he saw as an issue with industry capacity to complete the work planned in highways capital annual programs. The MHCA responded that industry has ample capacity, and that program under-expenditure relates to:
  • Lower prices from competitive bids in 2020-21, compared to departmental estimates of project cost, which alone resulted a $40-million surplus; $11 million in additional work was slotted into the program in that construction year.
    • Of the $60.5 million total surplus that year, $22.5 million was carried over to ’21-22; the provincial commitment is to carry over all unspent funds
    • Just $16.5 million of the $100 million economic restart funds were spent in ’20-21 due to difficulty in rolling out additional projects quickly
  • The Program needs balancing – there is excess capacity; some contractors have not seen highways capital program work for years due to packaging all aspects of industry work into large contracts
  • Bid validity pressures industry to guarantee prices for 90 days, which is impossible in the current supply-delay environment driving up prices
    
    Friesen committed to discussing the issues at the Cabinet level and suggested a provincial-industry working group be established.
    
    
• New MTI Minister Doyle Piwniuk met with MHCA February 16 and assured the industry his department and government are focused on presenting multi-year budgets, expecting a three-year budget to be followed by much longer-term capital programs. MHCA stressed the need to address the $9 billion infrastructure investment deficit – $6 billion for roads and $3 billion for bridges.
• Winnipeg’s Public Works department is updating the funding model for the local and regional street renewal program, which is funded through reserve revenues raised by an annual 2% property tax. Pressure to use those revenues for other purposes (bridges, community and cultural programs) has been increasing in recent years. The report could be made to the IRPW Committee as early as April 6.
• Matt Allard met with MHCA’s Winnipeg Committee February 25 and expressed surprise that key elements of the IRPW Committee’s directive in September 2020 to the public service regarding the use of recycled concrete aggregates had yet to be started.
  • Allard said if he could be convinced of the environmental benefits of using RCAs he would support their increased use.
  • MHCA committed to preparing a precis of the next steps that needed to be taken to complete the work tasked to the city-industry working group that is to recommend ways to increase use of RCAs