Engineering companies in Canada face best of times … changing times

Consulting engineering is a thriving business in Canada with more than $22.5 billion in revenues last year and a 3% growth in the number of employees. These rosy statistics were presented by John Gamble, P.Eng., president of the Association of Consulting Engineering Companies – Canada (ACEC), at the association’s annual meeting held in Prince Edward Island on June 23. Canadian engineering firms are also doing well in exporting their services, ranking fifth in the world.

The striking trend towards consolidation, with fewer and larger engineering firms in this country continues: Gamble pointed out that in the past decade the number of firms in the association has dropped 24%, but the total staff numbers they represent is up 88%.

Despite the prosperous times, it is not smooth sailing. Incoming Chair of ACEC, Murray Thompson (from the company URS Canada in Toronto), outlined some fundamental forces at work in the construction industry that are forcing companies to adapt and change.

For one thing, Thompson pointed out that the increasing use of public private partnerships and design-build methods means engineering companies are working with new types of clients. This means “a whole new set of rules for Canadian engineering companies,” he said. “We are working with new clients. We are working with contractors and financial institutions who want different working relationships. Governments … are entering into far reaching trade agreements and encouraging large foreign engineering companies to enter the Canadian marketplace.”

Globalization today therefore means firms are facing increasing competition from overseas, Murray said. “In the past, we have thought that globalization of engineering services meant exporting our services to other countries — which it still does. But clearly now it also means the rest of the world is coming to us.”

Murray also cautioned that “it is a simple fact that we are a more litigious society than we were even a decade ago. Clients are not only holding engineering companies more accountable, they are [also] insisting that we take on substantially increased amounts of risk when we sign contracts.” He warned that there is a large cost to everyone’s business when firms agree to sign these types of contracts.

Nonetheless, Murray sees the advent of an exciting “new world” for young engineers: “There are opportunities for young engineers to lead and excel in a way that hasn’t been available since the post Second World War infrastructure boom,” he said.

Other issues facing the industry came up when representatives of different provinces reported at the annual meeting. Common themes that emerged were their efforts —sometimes successful, sometimes still in progress — to have Limitation of Liability legislation passed so that professionals aren’t vulnerable to lawsuits their entire lives. ACEC and several speakers spoke about concerns with aspects of the New West Partnership Trade Agreement (NWPTA) which began as an agreement between B.C. and Alberta, but is now “moving west.” Firms in many provinces are also concerned about pending shortages of experienced staff and the retirement of the baby boomers.

Herb Kuehne, P.Eng. of Associated Engineering who was the outgoing chair of ACEC (2011-2012) also spoke at the annual meeting, as did Jason Mewis, ACEC’s treasurer.

The ACEC summit took place over 3 days, June 20-23 at the Brudenelle River Resort.