Construction sites to reopen in Ontario from 19 May as Canada takes further steps to restart its economy

18 May 2020 (Last Updated May 19th, 2020 09:56)
Construction sites to reopen in Ontario from 19 May as Canada takes further steps to restart its economy

On 14 May, Ontario Premier Doug Ford announced that all construction activities in the Ontario province will be allowed to resume from 19 May, along with retail stores, recreational sports and vehicle dealerships, among other services, amid the growing pressure from the business community to reopen the economy.

Ontario is the largest construction market in Canada and the country’s most populous province as well as Canada’s economic engine. Mr Ford has proposed a three-stage reopening plan for its economy, after his government shut down most of its business activity in mid-March and ordered most construction sites to stop work from early April in order to limit the spread of the coronavirus outbreak.

The announcement by Premier Doug Ford comes eleven days after Quebec Premier Francois Legault announced that construction activities in all construction sectors were allowed to reopen across all regions in Quebec from 11 May, including residential, infrastructure, institutional, commercial, and industrial. With the second largest population in the country, Quebec has been the hardest hit Canadian province by Covid-19 since the coronavirus outbreak began. As of 15 May, Quebec had 40,724 confirmed coronavirus cases and 3,351 deaths in comparison to 73,401 confirmed cases across the country and 5,472 deaths.

The government of Quebec shut down all non-essential business activities, such as construction, on 24 March, with only construction works required for emergency repairs or safety purposes allowed to carry on.

Other local authorities in Canada including those of Alberta, British Columbia, New Brunswick, and Saskatchewan recognised all construction activities as essential, allowing construction projects to continue with precautionary measures. However, some provinces such as Prince Edward Island took additional measures by ordering new construction starts to temporarily stop while the Newfoundland and Labrador province temporarily halted the construction of several major projects, including the Husky Energy’s West White Rose Project, the Vale’s Voisey’s Bay mine expansion and the Muskrat Falls dam.

Although the full resumption of construction activities in Ontario and Quebec should give a boost to Canada’s construction sector and the overall economy in the coming months, as well as ease supply chain disruptions in the industry, the risk of a second wave of coronavirus infections remains high in the country as the government continues to lift up restrictions to restart its stalled economy.

Health and safety measures to contain the spread of the virus at construction sites along with the declining demand for new projects amid increasing levels of unemployment are additional challenges for the industry as developers and construction companies are expected to continue to postpone or cancel projects, particularly those in the bidding or final planning stages.

According to Statistics Canada, the country’s unemployment rate rose by 13% in April compared to 7.8% in March, bringing the total number of lost jobs to more than three million since the pandemic started. This was the highest rate since December 1982 as job losses spread beyond the service sector to include construction and manufacturing.

The province of Quebec registered the highest unemployment rate in the country, with the rate of job losses jumping to 17%, the highest rate in more than four decades. In addition, Statistics Canada’s Labour Force Survey data showed that the construction and manufacturing sectors combined lost 621,000 jobs, a decline of 15.8% after being almost unchanged in March.

Also, data on building permits released by Statistics Canada on 8 May showed that the total value of building permits issued by Canadian municipalities fell by 13.2% in March, the largest decline since August 2014. Declines were reported in seven provinces and two territories, with British Columbia, Québec and Ontario reporting the largest drops at -19.4%, -18.1% and -12.9% respectively. By sector, permits issued for non-residential registered the largest drop, falling by 19.7%, followed by institutional, which posted a decline of 15% and residential permits declining by 13.1%.