• SKCA Q4 Advocacy Update


    By Mark Cooper, CEO, Saskatchewan Construction Association

    As Summer turns to Fall, it is time again for the SKCA to take stock of our advocacy work over the past year and begin planning our work for the coming year. This time of reflection and planning always comes with mixed feelings. It’s great to celebrate the successes we’ve achieved for our members, but it’s tough to recognize how much there still is to do.

    Advocacy – and specifically shaping public policy outcomes – is a long, slow, march. It is a journey on which you can know your destination but have no clue the route that will get you there.

    When you represent a group of people or companies, like the SKCA representing our member construction companies, advocacy has an added element of ensuring that the advocate knows the priorities and challenges of those they are advocating on behalf of. When I speak to lawmakers, I don’t speak with my voice, but with yours…which means I better know what you’re thinking.

    The best way to make sure that our advocacy work is aligned with your priorities is, of course, to ask you. Over the last few months, I’ve spent time talking one-on-one with construction leaders from across our membership. I’ve been asking about the things that keep them up at night right now, and the answers have been very similar. I’d briefly like to explore each of the themes we’ve been hearing below. If you have thoughts or comments on any of these issues, don’t hesitate to reach out to me at

    Supply Chain Disruption and Material Price Escalation

    No surprises for anyone that this issue is near the top of the list for every contractor out there. Seeing costs escalate by more than 20% and materials take several months longer to arrive has created stress for everyone along the construction chain. It’s not an issue that is unique to Saskatchewan, or even Canada, and it’s going to take some time to sort itself out globally.

    While there is very little that an individual contractor or supplier, or even our association, can do on a global issue like this – we can and will continue to support members in navigating this issue by providing timely advice and guidance. Most importantly, we’ll provide owners and design consultants with useful information on how they can manage in a more balanced way during these times. This includes consideration for shorter award periods, considering the implications of this problem when building project budgets and schedules, and building in material fluctuation considerations into procurement documents and contracts.

    Quality of Construction Documents

    More and more contractors have raised concerns about the quality of construction documents and drawings. As I spoke with design consultants across the province, this didn’t surprise them or me. The reality is that these consultants have been facing time and budget pressures from owners and are also struggling with labour shortages for key positions.

    Rare is the owner who both understands the long-term value of investing sufficiently in good design and procurement up front and is also willing to invest the resources to make that possible.

    As a result, the design consultants get stuck in the middle – trying to please clients who don’t want to spend money on design, while also working to avoid releasing sub-optimal design and procurement documents to the market.

    With the recent creation of an Advocacy Committee for Saskatchewan-based Architects, in partnership with the SKCA, now might be the perfect time for a construction and design coalition effort to educate and inform owners about the importance of proper design investments.
    Labour Pressures

    When I started the conversations with members this year, I didn’t expect to hear how many companies are struggling to fill positions. It has been an almost universal concern. Design consultants, general contractors, trade contractors, and even some suppliers are all carrying vacant positions. This is true for both experienced and leadership positions and for general labourers. Saskatchewan’s construction industry is back to having a labour shortage.

    I think we all knew this would be an eventual reality. After the last boom, as the economy cooled down, investments in construction workforce development also cooled. It was challenging to recruit people into an industry that was shedding workers instead of adding them.

    As a service industry, demand for construction floats up and down based on investment levels in nearly every other industry. Consequently, it is very difficult to project when future spikes in demand will drive a need for labour. Typically, when it comes to workforce development, given the lag in data and the uncertainty of future economic conditions, we tend to be fixing yesterday’s problem today with resources that won’t be brought on stream until tomorrow. As a result, we’re constantly chasing our tail.

    It isn’t clear to me if this is a problem that we can fix, or if we can just support members in managing the impact. Either way, we’re going to engage and see what can be done. With all the construction activity announced and planned over the next few years, there is little doubt we’re heading into another economic boom for Saskatchewan. Our industry will be on the frontlines of this growth, and we need to be ready.

    Extended Payment Terms (Non-Prompt Payment)

    As our members know, Prompt Payment has been a top priority advocacy item for close to five years. The closer we get to the finish line with this legislation, the slower the pace of progress seems to be. Nevertheless, the issue hasn’t gone away, or even gotten better for our members.

    Time and time again, I have heard about construction contracts demanding longer and longer payment timelines, and an increasing frequency of delays in payment. These circumstances are common both in private sector and public sector projects. Unfortunately, non-prompt payment, with contractors financing projects for the owners, seems more common than not.

    My favourite – by which I mean to say my most-hated – practice is the owner who offers to pay you faster if you give them a discount…and then argues they can’t meet the prompt payment timelines. Talk about unethical practices!

    The best part about an economic boom is that it will begin to shift the power balance back into the hands of contractors. A result of this will be that owners that act unethically will see fewer and fewer bids from reputable contractors. It is a perfect example of the biblical principle that you reap what you sow. I’m not going to lie…when I think about some of these chickens coming home to roost for these owners, I tend to model the Simpsons’ Mr. Burns and tent my fingers and gleefully say “Excellent!”

    Anyway, unethical practices rant aside, I am optimistic that THIS is FINALLY the year that Prompt Payment legislation will be in place. All indications are that we will see the legislation come into force on January 1, 2022. The new payment requirements will apply to all contracts signed on or after that date.
    You have waited far too long for the basic courtesy of getting paid for work you’ve already completed. I truly hope the wait is finally over.

    Onerous Contract Conditions and Risk Allocation

    Many companies have expressed concerns about what they see as the uneven allocation of contract risks, as those higher on the construction value chain strive to download as much risk as possible on to those closer to the bottom of that chain. Risk downloading has become a real challenge.

    Via the Industry Advisory Council, the SKCA has been hard at work coming up with a plan to address these concerns. This Fall we will be releasing a series of bulletins providing advice to owners, consultants, and contractors on how to better allocate risk along the construction chain.

    In addition to publishing these bulletins, we’ll be hosting a small number of workshops for owners, lawyers, consultants, contractors, and suppliers, where we’ll be talking about best practices in risk allocation.

    The economic boom that we’re now expecting in Saskatchewan will also likely help slow down the frequency and growth of these onerous contract clauses. Owners who use them in their documents will be more likely to see bids on their projects dry up, as contractors exercise their ability to pick and choose between project opportunities.

    This new market reality provides an opportunity for education and engagement, which is exactly what the Advisory Council intended. Over the next few months, we’ll be working to ensure that all parties to the construction value chain understand how risk allocation can be used to serve everyone’s interests.

    In Service to You

    Thanks to the great feedback and information we’ve received from you over the last few months, we’ve got a full agenda of issues to tackle this Fall and beyond. Your association teams are excited to get to work to help improve conditions for your company and for all our members by moving forward on these and other advocacy issues.

    Some of these issues are global in scale, and our ability to change the conditions is limited. However, no matter the circumstance there are always things we can do to move your interests forward. It is, as always, our pleasure to serve you. We take pride in representing your interests.

    Feel free to reach out to me directly, or to any member of the team at any of our associations across Saskatchewan, to share your thoughts on these issues or others. Let us know how we’re doing, how you’re doing, and how we can help. Take care, and thanks for all you do every day to help build Saskatchewan.