The heavy construction industry is critical to Saskatchewan’s – and Canada’s – economy. Here are some of the ways in which SHCA fights for its members.
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The principal responsibilities of the Saskatchewan Heavy Construction Association are to advocate for our specialized industry and serve our members. SHCA acts as the voice of the heavy construction industry with President Shantel Lipp as its spokesperson, bringing issues to the forefront.
Construction is a diverse industry with many specialties, including heavy construction. SHCA’s responsibility extends past educating the public and politicians on what type of work is considered heavy construction; we ensure those connected to the industry understand its challenges and successes.
Knowing the size and strength of the industry is important to be able to advocate for it. Hundreds of members belong to SHCA, creating strength in numbers to gain the attention and commitment the industry needs to thrive.
Hundreds of members belong to SHCA, creating strength in numbers to gain the attention and commitment the industry needs to thrive.
Heavy construction spending builds economy
Last year, Praxis completed economic impact analyses on behalf of SHCA, which provide good evidence of our industry’s effect on the province. The firm explains, “a comprehensive economic impact study is…critical to gain an understanding of how the industry benefits the provincial economy in terms of job opportunities, other economic activity and government revenues.”
Praxis took its first step to producing the study by defining the scope of the industry. The heavy construction industry encompasses more work than highways, roads and parking lots. The work includes excavating and preparing commercial and industrial sites, as well as water infrastructure work, such as dams, irrigation structures, hydroelectric and water diversion tunnels, water and sewer lines, water drainage and irrigation ditches and minor bridges.
Based on that definition, we established some key facts about the direct, indirect and induced impact of the industry in the province. In the analyses, Praxis accounts for the heavy construction industry supply industries and how that activity trickles down into spending by households in the province.
Praxis determined that the spending on local goods and services as well payments to labour and business profits was over $14 billion in 2021. A breakdown of that figure shows that more than half – $8.4 billion – was spending by the heavy construction industry.
The study also quantifies spending strictly within Saskatchewan because of the heavy construction industry. Heavy construction added $6.2 billion to Saskatchewan’s GDP.
Heavy construction creates and maintains jobs
Praxis’ study also includes what this economic activity means for jobs and labour income in the province.
In 2021, the heavy construction industry and the industries that supply it created and maintained a total of 47,816 jobs in Saskatchewan. Of those jobs, more than 22,000 jobs were within the heavy construction industry, with those people earning $1.5 billion in income. This figure includes wages, salaries and employer contributions to pensions and benefits packages.
Prioritizing industry advocacy
Regardless of the size of their business, there are issues SHCA members face. Lipp brings member concerns forward to the people who need to respond.
A province over, her counterpart, Chris Lorenc, president of the Manitoba Heavy Construction Association, describes the approach involved in advocating for an industry.
“It is important to remember that advocacy is a marathon, not a sprint,” said Lorenc. “It takes years and sometimes decades to shape both public perception and government opinion. It requires determination and sustained effort.”
The Government of Saskatchewan – and, in particular, the Ministry of Highways – is one of SHCA members’ largest business partners in the province. Kelly Gallagher, vice-president of Martin Charlton Communications and a government relations professional, explained why having a relationship with the government matters.
“Governments often operate in a vacuum with little awareness as to how a regulation or a new piece of legislation will impact stakeholders outside of government,” said Gallagher, who encourages industry, business, associations, municipalities and non-profit organizations to have a government relations strategy.
Staying in constant contact with government – through meetings and correspondence – keeps an industry visible as the government considers its decisions and the impact of those decisions. Providing information to politicians and officials about the industry, difficulties it is facing and solutions being proposed can prompt the government to adjust.
Rising costs put a strain on members
An issue the government could address is the impact of rising costs affecting our industry, which was detailed in the Praxis report. The study shows it was costing members more to pay for fuel, fabricated metal products, professional services and computer/electronic products.
The heavy construction industry is expected to face an additional $426.7 million in new expenses because of these rising costs. According to Praxis, the industry’s profits are $670 million a year, meaning that this increase in costs reduces those profits to $243.3 million. With their profits cut in half, some businesses may not survive, and the drop in profits could also mean reduced job numbers.
As one of the industry’s largest partners, it is important for the provincial government to know and acknowledge the stark reality of rising costs – not only to be a better partner, but also to protect its own interests. The Praxis study states various taxes associated with the heavy construction industry add $676 million to the provincial government revenues.
In 2021, the heavy construction industry and the industries that supply it created and maintained a total of 47,816 jobs in Saskatchewan.
SHCA advocates for members
In 2022, the price of diesel climbed substantially, leading to difficulties for members with existing contracts with the Ministry of Highways.
The ministry presented SHCA with proposed adjustments to the fuel escalation clause, and members of SHCA reviewed the proposal. They also provided additional improvements they would like to see. Lipp advocated for those improvements in her meetings with the ministry.
Her advocacy resulted in updates included in fall tenders – updates to the specifications for bid requirements and conditions, measurement and payment (which includes details on payment for extra work, partial payments, final payments and diesel fuel adjustments) and site occupancy, which were incorporated into all contracts with a tender close date of Sept. 19, 2022 or later.
More advocacy needed
Following the victory Lipp secured for the industry, she continues to discuss other issues with government. On an ongoing basis, SHCA participates in the pre-budget consultation process and continues to stress the need for ongoing, predictable investment in the province’s transportation and infrastructure system to provide stability to the industry so it can manage its labour and capital investment planning.
Gallagher explains that once some organizations have an issue addressed by government, they believe there is no need to further interact with politicians and officials. But he encourages them to maintain a relationship through a government relations strategy to keep the organization visible. Any future issues that arise will benefit from that visibility and get prompt attention. Otherwise, an association will need to start from scratch initiating and building the relationship before it gets its concern addressed.
Federal and municipal advocacy
Advocacy by SHCA extends to other levels of governments too – municipal and federal. Municipalities also contract work to members of SHCA, meaning it is important they understand the industry.
Recently, a motion proposing a fair wage policy came before Regina’s city council. This motion could have affected the ability of members to secure work with that municipality. Lipp advocated for the industry by explaining how employees are trained and compensated and how requirements being proposed in the motion would exclude members from bidding on work. Her submission to council ultimately defeated the motion.
At the federal level, SHCA champions for long-term investment into trade infrastructure through its relationships with organizations such as the Western Canada Roadbuilders & Heavy Construction Association (WCR&HCA), the Civil Infrastructure Council and others, including the Canada West Foundation (CWF).
Strong relationships with industry associations lead to the production and promotion of influential reports, and these analysis reports develop a narrative for industries to hold discussions with elected officials and industry leaders. In mid-May of last year, CWF released a report titled From Shovel Ready to Shovel Worthy: The Path to a National Trade Infrastructure Plan for the Next Generation of Economic Growth.
CWF’s report pulled together compelling data to prove long-term vision and investment in the country’s trade infrastructure will benefit Canada. In addition to circulating From Shovel Ready to Shovel Worthy to stakeholder partners and political offices, the WCR&HCA is working with CWF and the Canadian Construction Association (CCA) to get the report in front of and seriously considered by the federal and provincial governments.
“As a group, we coalesce around issues we share in common to not just benefit the region, but the entire country, to advance public policy that grows the economy,” said Lorenc, who is also the president of the WCR&HCA. “We are promoting the importance of the federal government leveraging sustained investment in trade gateways.
“Growing the economy is job no. 1 for every level of government. That is how we fund our quality of life in this country that produces more than we can consume domestically.”
Connecting with others and advocating for those who share common interests is important work for an industry dedicated to being heard. Members are encouraged to bring forward their issues and ideas so that SHCA can appropriately fulfill its role, with Lipp at the helm.