Boom times for consulting engineers in Canada

From Newfoundland to B.C., business for consulting engineering firms is enjoying almost unprecedented boom times.

Attendees at the Association of Consulting Engineers of Canada Summit in St. John’s, Newfoundland last week heard good news from almost all the provincial associations of consulting engineers at the annual general meeting on July 1. It seems that on this particular Canada Day the industry has never had it so good and truly has something to celebrate.

The outgoing chair of ACEC, Norm Huggins, P.Eng. (CH2M Hill, Toronto) gave the big picture, reporting that overall the consulting engineering sector in Canada now enjoys $12 billion in annual revenues, and is currently the third largest exporter of engineering services in the world. The industry is also growing 9% in terms of the number of its employees.

This success is also breeding some of the problems: in particular the pressure to recruit more employees to keep up with the work demand. Huggins said that when he and ACEC president Claude Paul Boivin visited consulting engineering associations in different parts of the country last year, they found the same concerns coming up again and again over staff shortages and competition for employees.

Another concern they saw repeatedly across different provinces, said Huggins, relates to procurement practices. Despite the prosperous times, firms are still competing for work on the basis of their fees, a practice which ACEC has been has for a long time been trying to control. ACEC now has a new tool in its arsenal, the proposed “Best Practice for Selecting a Professional Consultant” which was developed for the national InfraGuide program for use by municipalities.

During the cross-country reports consulting engineering associations in the different provinces reported that their member firms are benefiting from huge investments by governments in infrastructure and from thriving natural resource industries.

Newfoundland, the host province, for example, is forecast to spend $6 billion over the next five years on infrastructure, not only on road construction such as completing the Trans-Labrador Highway, but on public buildings such as a new courthouse in Cornerbrook, on hospitals and health care centres, and possibly a new penitentiary.

But it is in the resource-rich west where the growth is most intense. Paul Breeze, P.Eng., (CH2M Hill, Calgary), chair of Consulting Engineers of Alberta, kicked off the provincial association reports, explaining how firms are busy not just in work directly related to exploiting the oilsands but also in work for the accompanying population influx. He said Calgary is expecting 30,000 more people to move into the city every year, which means grossly more vehicles, which in turn results in huge needs for expanded infrastructure. The challenge for the consulting firms who will be needed to help design this infrastructure, he confirmed, is in recruiting and retaining staff. To try and improve the situation, they are running initiatives to recruit from overseas, and have a program to raise salaries in consulting engineering so that they will match salaries in other engineering sectors in the next five years.

Arnold Badke, P.Eng., (Aplin & Martin, Vancouver) newly elected president of Consulting Engineers of B.C., reported a similar boom in activity in the westernmost province, thanks to factors such as the 2010 Olympics and the Sea-to-Sky highway project. CEBC is celebrating its 30th anniversary this year. One of its priorities is to establish new fee guidelines “and have people stick to them.” The association has recently begun an outreach program to build closer ties with provincial politicians.

Ian Williams, P.Eng., (McCormick Rankin, Toronto) president of Consulting Engineers of Ontario, reported briefly that the largest province is in much the same position overall as the others, with firms being very busy and dealing with staff shortage issues. He noted that despite the good times, firms are still facing an “unreasonable” amount of competition on their fee prices.

Only in Quebec is the picture not quite so rosy. Johanne Desrochers, president and director general of the Association des ingenieurs-conseils du Quebec, said that a problem is that major projects face public opposition, and one of the AICQ’s goals is to try and improve the environment so that projects can more easily actually get built.

She noted that not all AICQ’s member firms at present support qualifications-based selection principles. She also noted that the association has been seeing the impact of companies consolidating over the past 10 to 15 years. The number of medium-sized firms has been decreasing, she said.
A further challenge in Quebec is a trend for clients to want to load more financial responsibility for projects onto the consultants. Desrochers said some contracts have asked for up to 25% of the fee in terms of responsibility for cost overruns.

Among the other highlights from the cross-country reports, Consulting Engineers of New Brunswick announced that it has now hired its first full-time staff director. It had a part-time director before.

The Association of Consulting Engineers of Manitoba said they have seen a 15% increase in membership. Large projects providing consultants with work in that province include the Red River Floodway Expansion, for which the budget has now risen to $850 million from $650 million, the new Manitoba Hydro Building in downtown Winnipeg, and the $1.2-million Wuskwatim Hydropower plant recently approved.

ACEC’s annual meeting and summit next year is to be held in Yellowknife, Northwest Territories, on June 21-23.