A government-driven wave of construction may leave Ontario new home and condominium buyers facing move-in delays and price hikes over the next few years.

"The construction industry in this province is going to be stretched, possibly beyond its capacity, over the next 3 to 4 years because of the amount of work that is coming in from various levels of government," said Architect David Morgan of Toronto-based Dunlop Farrow Architects Inc.

Residential construction may suffer labour shortages and inflationary costs as the industry scrambles to complete billions of dollars in high-priority construction projects on hospitals, long term care facilities, schools and the Greater Toronto Airport. Long term care projects were delayed until Ontario Hospital Association negotiations were completed. Construction on school projects was interrupted by disputes and the recent Ontario election. Airport construction comes under the federal government umbrella. Now the conservative government would like to see each of these politically-sensitive projects finished before the next election, that is, before 2003.

"In the eighties, we were equally busy but the rest of the country was not," explained Mr. Morgan. "We could draw [construction workers] from the west and the U.S. This time these areas are all busy, too."

David Horton, Executive Director of the Ontario Homebuilders' Association says that while there are no labour shortages now, there may be in the future. Construction workers migrate to the best paying jobs and with the push on for non-residential projects, wages and incentives may be used to attract the labour necessary to finish the big projects before contract deadlines.

"The concern I have is that the smaller players will possibly lose out, particularly in the rural areas," said Mr. Morgan who has over 35 years experience in the construction industry. He explained that since the major construction and engineering firms are based in Toronto, projects in the rest of the province and smaller projects in Toronto may not attract the same caliber of construction firms or workers, or achieve the same quality of construction. Smaller, tight-margin residential projects may lose out to large-budget commercial projects.

"This work load could be handled by some really high-level planning," said Mr. Morgan. "That could release these [construction projects] in a more gentle fashion but quite frankly there are too many political pressures for that."

Over the next three to five years, buyers of new homes and condominiums, as well as homeowners planning extensive renovations, would do well to have back-up plans just in case move-in dates are delayed. Consumers should read the fine print of any purchasing or renovation agreement (or have their lawyer do it) to see what extra costs and delays they may be exposed to if completion deadlines are missed or construction costs increase.

Some industry experts are concern is that this frenzy of construction may be a breeding ground for disasters like the British Columbia "wet condo" fiasco. Hasty construction and overloaded building inspectors resulted in thousands of poorly-constructed condominiums which cost consumers their savings and left the condominium industry in ruin.

"Buyer beware" is the cautionary advice the construction industry is giving consumers. "Forewarned is forearmed" may be a better slogan.

Published: July 6, 1999

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