No slowing construction despite rising costs, city says

The City of Ottawa has "primed the pump"withcapital projectsfrom light rail to repaving roads, but now it's on the hook for rising constructioncosts as the industry scrambles to get the work done.

"It's booming," said Steve Goodman of the National Capital Heavy Construction Association, whose members include such majorplayers asAECON, Tomlinson and Thomas Cavanagh Construction.

"They're full. They have enough work for the year. They couldn't possibly get any additional work done, so there are fewer bidders on some projects, absolutely,"

The city can'tscrimp on itstransportation network and has to put the money in to keep our assets inshape.- Coun. Riley Brockinton

Locally, those projects includeStage 2 of light rail and the city'ssewage storage tunnel,as well asthe federal government's lengthy and expensive renovation ofParliament Hill, Goodman said.

At the same time, the city is trying to catch up on day-to-day infrastructure repairs including bumpy roads and ancient waterworks.

Labour costs are also causing prices to rise, Goodman said, as construction workersand tradespeoplework evenings and weekends to get the jobs done.

Priming the pump

"When we prime the pumpand draw more capital work out there, what you see is theconstruction community reacts to it and the prices go up," acknowledged city treasurer Marian Simulik in September as she laid out the pressures facing the municipal budget.

Based on inflation data from Statistics Canada, the draft 2020 budgetprojects the need for an added 5.8 per cent or$7 million for capital projects.

But there's no chance to slow down, according toCoun. Riley Brockington.

"My residents have told me loud and clear this is a priority. The city can'tscrimp on itstransportation network and has to put the money in to keep our assets inshape," he said.

That comes as no surprise to Coun. Allan Hubley, who points out Otttawa'sskyline is bristling with cranes.

"It's part of being a successful city, so that's going to happen," he said.

Effect on taxes

Coun. Jeff Leiperagrees the ongoing projects are "not luxuries" residents want pedestrian bridges and improved drainage buthe does wonder if the city should be more clear about the true costs, if only to explain how it affects taxes.

"We used to have a municipal price index that was cancelled," said Leiper.

"I think we need to bring that back in order to be able to have honest conversations with residents about what it costs to provide the services that they expect us to deliver."

Construction costs are rising more quicklythan household costs,Leiper pointedout, yetthe twoper cent consumer inflation figure is still used to explain cityspending.

At the same time, construction costs in Ottawa are rising faster than in other Canadian cities, according to the construction priceindex maintained by Statistics Canada.