by SHCA SHCA

The 2019-20 budget estimate tabled in March by the Saskatchewan Ministry of Highways of Infrastructure provided a familiar refrain.

The Saskatchewan Heavy Construction Association didn’t expect any surprises or a significant shift in infrastructure spending for this upcoming season. That’s exactly what was delivered, which could present positive and dramatically negative outcomes for the industry in the near future.

“This was a status quo budget,” said Shantel Lipp, SHCA president. “Taking into account the challenges the government is facing with Covid-19, we realize the budget could have been a lot worse.”

“(The government) should be commended for sticking to its Growth Plan and trying to advance it despite these challenges and circumstances.”

The overall budget for the Ministry of Highways and Infrastructure for 2019-20 is $648 million, a drop of more than $50 million from last year’s budget. However, the $358 million set aside for capital expenditures slightly increased from 2018-19.

The Urban Highway Connectors program also saw a slight bump from $6.7 million to $7.3 million. The Rural Integrated Roads for Growth program received $1-million boost in funding and the Community Airport Partnership saw an increase of $150,000.

“In terms of municipal spending, this is a positive budget,” Lipp said.
The government remained dedicated to safety by providing $13 million to enhance intersection safety and $7 million in safety improvements to alleviate frequency and severity of collisions. This is the second year of the government’s five-year, $100-million commitment to highway safety.

Where this budget could spell doom for Saskatchewan contractors is related to the major projects for the upcoming construction season. The major projects that were announced this year are carried over from the previous year, meaning there is no new work available for what is already an extremely competitive market.
Lipp noted that neighbouring provinces Alberta and Manitoba are struggling with member retention. She said it’s not because their respective associations are not delivering the services required. It’s because the investment in infrastructure isn’t there.

“The amount of infrastructure that is being built hasn’t increased,” Lipp said. “The challenge for our industry is not the dollars being spent but the number of kilometres the industry has the capability to build. If there is no commitment to increasing the number of kilometres that the government is going to build or maintain, we’re going to see more companies go out of business.”

A dried-up market forced several Saskatchewan-based contractors to cease operations in 2019. Lipp expects that trend to continue this year.

“Competition levels are going to be incredible this year because everybody is looking for work and everybody is struggling to find work,” she said. “Any prolonged delays in building is only going to cost taxpayers more and going to deplete the capacity of the industry.”

For more information:
Shantel Lipp
President, Saskatchewan Heavy Construction Association
slipp@saskheavy.ca
306-586-1821