Demand for construction services is high, but labour supply, costs, and late payments are undermining development and putting B.C.’s builders in a tough spot.
More than 80 per cent of contractors, regardless of size, were paid late for their substantially completed work at least once this past year, according to the annual survey results from the B.C. Construction Association (BCCA).
Nearly half of large contractors (100 employees plus) report being paid late at least 25 per cent of the time, and 30 per cent of small contractors (20 employees or less) report the same. With the cost of borrowing skyrocketing, financing projects for owners is a burden most businesses cannot afford.
“It’s true that labour shortages and the cost of materials are constant challenges,” says Chris Atchison, president of the BCCA. “But industry can manage these pressures – it’s what we do. The biggest hindrances to building housing and other infrastructure today are the associated operations of the authorities having jurisdiction, from crowns to ministries and municipalities.”
Contract disputes related to costs are a common occurrence, with 44 per cent of small contractors saying they’ve filed a fixed price contract dispute in the last 12 months, compared to 31 per cent of medium contractors and 28 per cent of large.
Sixty-one per cent of small contractors surveyed said they’re considering leaving the industry due to payment pressures.
The average company size has decreased 11 per cent over the last three years to an average of 6.24 workers. Approximately 92 per cent of companies in the industry employ 10 workers or fewer.
The construction industry’s contribution to B.C.’s GDP is up 4 per cent over last year, and it remains the number one employer in B.C.’s goods sector, with 251,100 British Columbians relying directly on construction for a paycheque.
“Until B.C. catches up to the rest of Canada, the USA and Britain, and introduces prompt payment legislation, policy-makers need to be tuned into the fact that the financial risks for B.C.’s contractors are nearing a breaking point,” says Atchison. “There are actions that industry and government can take together and separately that will alleviate the challenges contractors are facing.”
