A case can be made showing the $3.8B budget increase on infrastructure spending has already been spent on the increased costs of supply - and then some
On April 20th the BC Provincial Government announced its 2021 Budget. We understand and fully support the need to budget meaningful financial supports for sectors hard-hit by COVID-19, such as tourism and hospitality.
It is essential that our government protect businesses in these industries which are, like construction, crucial to our economy and to so many hard-working British Columbians in communities across the province. But we're concerned about the lack of focus on our industry.
Construction costs have escalated at an alarming rate, to the point that bid validity is an enormous challenge in the face of supplier pricing being good for only 7 to 14 days. The drywall market in North America is essentially sold out, lumber and steel costs have doubled. All this means taxpayer dollars won't go as far as they did pre-COVID. In fact, a case can be made to show that the $3.8BN budget increase on infrastructure spending has already been spent on the increased costs of supply - and then some.
The 3-year capital spending budget of $26.4BN will be hampered by risk premiums conservatively estimated at $1.32BN. This cost could be mitigated were BC to follow the lead of other provinces and introduce prompt payment legislation to support contractors in our industry who are faced with cash-flow challenges due to late payments. Given the $8.1BN projected deficit, that premium is something BC taxpayers can ill-afford.
Read the full BC Construction Association response to the latest budget announcements here.