NEWS FROM THE FIELD
Sharing news that SHCA members need to know
“Status quo” budget could
spell doom for industry
The 2019–20 budget estimate tabled in March by the Saskatchewan
Ministry of Highways of Infrastructure provided a familiar refrain. The
Saskatchewan Heavy Construction Association didn’t expect any surprises
or a significant shift in infrastructure spending for this upcoming season.
That’s exactly what was delivered, which could present positive and dramatically
negative outcomes for the industry in the near future.
“This was a status quo budget,” said Shantel Lipp, SHCA president.
“Taking into account the challenges the government is facing with
Covid-19, we realize the budget could have been a lot worse. (The government)
should be commended for sticking to its Growth Plan and trying to
advance it despite these challenges and circumstances.”
The overall budget for the Ministry of Highways and Infrastructure for
2019-20 is $648 million, a drop of more than $50 million from last year’s
budget. However, the $358 million set aside for capital expenditures slightly
increased from 2018–19.
The Urban Highway Connectors program also saw a slight bump from
$6.7 million to $7.3 million. The Rural Integrated Roads for Growth program
received a $1 million boost in funding and the Community Airport
Partnership saw an increase of $150,000.
“In terms of municipal spending, this is a positive budget,” said Lipp.
The government remained dedicated to safety by providing $13 million
to enhance intersection safety and $7 million in safety improvements to
alleviate frequency and severity of collisions. This is the second year of the
government’s five-year, $100-million commitment to highway safety.
Where this budget could spell doom for Saskatchewan contractors is
related to the major projects for the upcoming construction season. The
major projects that were announced this year are carried over from the previous
year, meaning there is no new work available for what is already an extremely
competitive market.
Lipp notes that neighbouring provinces Alberta and Manitoba are
struggling with member retention in their heavy construction associations.
She says it’s not because their respective associations are not delivering
the services required; it’s because the investment in infrastructure
isn’t there.
“The amount of infrastructure that is being built hasn’t increased,” said
Lipp. “The challenge for our industry is not the dollars being spent but the
number of kilometres the industry has the capability to build. If there is
no commitment to increasing the number of kilometres that the government
is going to build or maintain, we’re going to see more companies go
out of business.”
A dried-up market forced several Saskatchewan-based contractors to
cease operations in 2019. Lipp expects that trend to continue this year.
“Competition levels are going to be incredible this year because everybody
is looking for work and everybody is struggling to find work,” she
said. “Any prolonged delays in building is only going to cost taxpayers more
and going to deplete the capacity of the industry.”
IZIKMD/123RF
Saskatchewan will see
more companies go out
of business if there is no
commitment to increasing
the number of kilometres
that the government is
going to build or maintain,
says SHCA President
Shantel Lipp
4 | Quarter 2 2020 | saskheavy.ca
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/saskheavy.ca
