Does fighting the deficit mean bad news for consulting engineers?
September 13, 2010
By Canadian Consulting Engineer
There was a note of panic in articles in the Toronto Star this weekend about the economy. Articles like "Why t...
There was a note of panic in articles in the Toronto Star this weekend about the economy. Articles like “Why the Conservatives pretend there is no economic crisis,” and “Tories worry that malaise in U.S. will thwart Canada’s comeback,” painted a gloomy picture and suggested the federal government will be pulling back sharply on infrastructure spending in order to cut ballooning deficits.
Certainly one program — the two-year $4-billion Infrastructure Stimulus Fund — is winding down and due to end in March next year. But does that mean the future for consulting engineers in construction generally looks bleak?
John Gamble, P.Eng., President of the Association of Consulting Engineering Companies (ACEC), agrees that his member firms are uneasy at the ending of the economic stimulus fund. “We fully appreciate that this [the economic stimulus] program was never intended to be a long-term strategic infrastructure policy,” Gamble says. “It was a short-term job-creating stimulus program, and to that end in many respects it was a successful program.”
However, “I guess the concern is what happens afterwards. We’ve been working on the assumption — and we haven’t been told any different — that we will simply return to all the pre-stimulus programs and continue on that basis.”
“We also recognize that there is going to be a lot of pressure on the government to curtail its deficit,” Gamble says, “and we’re trying to convey to the government that they need to think long and hard about a long-term strategic vision for infrastructure. One of the priorities of the ACEC board is to make sure that the door doesn’t slam down on infrastructure spending.”
“What we want is a long-term vision,” says Gamble. “To us, it’s not about how much you can spend in a year. It’s whether you have a long-term game plan to address the infrastructure deficit. We as an industry can adjust to that. The problem historically has been where you have a drought of infrastructure funding, followed by a surge of infrastructure funding, followed by a drought. It is very difficult for us to maintain as an industry. And it’s very difficult for the owners as well and the construction companies.
“The delivery of infrastructure requires people of skills and abilities. These are not low-skilled jobs for which you can simply pull people off the street. It is expensive to get the training and to go through the education system, and skilled staff also represent a significant investment to the firms. You cannot design infrastructure using casual labour.”
The strict March deadline for finishing projects under the economic stimulus program is causing anxiety in the industry, because failure to finish a project in time may mean funding is cut. Gamble says the industry is “appealing for a little bit of flexibility just to reflect some of the reality of trying to deliver complex infrastructure projects. We’re not looking for an extension per se, but we are looking for some pragmatism and some flexibility when we get to the deadline.”
Even though most of the engineering on the funded projects is done by now, and the challenge of finishing lies with the construction companies, Gamble says it’s still a matter of anxiety for the consulting engineers. “The fact is we’re all in this together. What happens if all of a sudden there are insufficient funds, it could make it problematic to finish the project or there is going to be cost to the owner. That’s going to create some contractual tension for all the parties. We don’t want that to cascade back onto our members.”
“The big picture,” Gamble concludes, “is that we need a long-term plan. In the interim, we want the government to maintain the existing programs and ongoing levels of infrastructure investment.”
“It’s worth noting,” he adds, “that the Conference Board of Canada has recently issued a report indicating that of all the stimulus measures, the one that had the greatest positive impact on economic growth was infrastructure investment. I think that reinforces what we’ve been saying for decades. Infrastructure is not an expenditure, it’s an investment. It’s an investment in competitiveness; it creates good jobs, high-skilled jobs; it is an investment in our economy; it improves our social quality of life; and it is also good for our environmental quality of life.”