📉 Less gains

Capital gains legislation, a bridge meets in the middle, designing for dementia

Together with

Good morning! 📦 Tech giant Amazon has spread its reach into gaming, streaming, e-commerce, cloud computing and now affordable housing. The company has pledged $1.4B to construct 14,000 affordable homes in the Nashville, Seattle and Washington metro areas. The goal is to increase affordability in regions where Amazon has offices.

⏰ Today’s read: 5 ½ minutes

market direction arrowTSX21,587.88
market direction arrowS&P5005,473.23
market direction arrowNasdaq19,902.75
market direction arrowDollar$0.73
market direction arrowOil$80.19
market direction arrowBitcoin$91,373.10

*Stock data as of last market close; currency, oil and crypto data as of 8 pm ET June 17, 2024.

Economy: Canada's building construction investment dipped in April by 2% compared to March, with both residential and non-residential sectors seeing slight declines. Single-family home investment dropped the most, with only Saskatchewan showing an increase. Despite the overall slowdown, institutional construction investment rose slightly, with Manitoba leading the growth for the 15th month in a row.


Will capital gains reform impact construction?

The Canadian federal government has proposed changes to the capital gains tax rules, set to take effect on June 25, 2024. The capital gains inclusion rate will increase from 50% to 66.67% for all capital gains realized by corporations and trusts, capital gains over $250,000 realized by individual taxpayers in a year 

Why: Officials say they want to make the tax system fairer by narrowing the gap between how capital gains and employment income are taxed. It is expected to impact only the top 0.13% of Canadians with an average income of $1.4 million per year, and around 12% of corporations.

Criticism: The Fraser Institute says capital gains taxes discourage entrepreneurship and business investment. They believe it will reduce the return that entrepreneurs and investors can expect from starting a business or investing in the Canadian economy, making it more likely that they take their investment and ideas elsewhere.

Harming housing: Real estate experts expect the changes will make land assembly harder and discourage investment in new developments, ultimately reducing rental supply and driving up housing costs. Developers believe this discourages risk-taking and may lead them to choose projects outside of Canada. 

The bottom line: Over the past decade, Canada has seen a downturn in business investment. From 2014 to 2022, total business investment in areas such as plants, machinery, equipment, and new technologies – excluding residential construction – experienced a $34 billion decline. But the change raises the question of how we can balance encouraging investment with ensuring everyone pays their fair share of taxes. Reply to this email to let us know your thoughts. 


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The week's headlines

🤝 The Gordie Howe International Bridge, the longest cable-stayed bridge in North America connecting Ontario and Michigan, recently had its main deck installed. While the bridge won't be open to traffic until 2025, the connection officially marks it as an international border crossing with 24/7 passport monitoring.

🚿 Calgary's major water main break has been repaired, with eastbound lanes of 16th Avenue Northwest reopening. However, repairs on five other identified weaknesses in the pipe will begin soon, causing traffic delays. The City is grateful for San Diego's support in sending a needed pipe segment. While repairs are expected to take 3-5 weeks, crews will work 24/7 to minimize disruptions.

🧑‍⚕️ A new hospital will be built for the James Bay coast communities in Ontario. The federal government reaffirmed its $1.24 billion commitment, and the province added an extra $44 million for initial construction. This comes after a long advocacy campaign as the current hospital, built in 1950, is outdated and lacks many essential services. The new hospital will have 36 in-patient beds, a surgical suite, elder care facilities, and improved access for patients travelling by air.


Business moves

TC Energy, the company behind the Coastal GasLink pipeline, completed the biggest ever corporate bond offering in Canada at $7.15 billion. This refinances their construction loan for the pipeline and reduces debt, despite pressure from investors due to past project hurdles.

Canada Mortgage and Housing Corporation (CMHC) has partnered with DMZ and GroundBreak Ventures to support Canadian innovators tackling the housing crisis. These innovators will receive mentorship, coaching, and networking opportunities to help them scale their solutions. 

Avison Young and CBRE announced the largest industrial investment transaction completed in North Vancouver – a transaction that will provide HTEC access to significant quantities of clean by-product hydrogen fuel for the Metro Vancouver region, as well as the Western United States and beyond.

Kenaidan Contracting and Murphy have joined forces as KMJV to deliver large scale transit projects across ontario.


Last chance: Meet the Generals in B.C.

How often do this many general contractors, developers and owners get together under one roof? Ticket sales are nearly closed for the 2024 ICBA Meet the Generals & Owners event. On June 26 over 1,200 leaders will gather at the JW Marriott Parq in Vancouver to discuss business opportunities with preconstruction, estimating, operations, and more. This year’s event features teams from over 50 major general contractors, developers and owners.


B.C. museum reopens after 'cutting-edge' 18-month seismic upgrade

Alberta scraps plans for Bow River dam west of Calgary

Ontario lands major nuclear agreements abroad

$20 million reconstruction on Bayview Drive in Barrie set to begin

Five Alberta P3 high schools complete construction

🏗 That’s just a taste of what happened this week. Unlock our FULL project update list, Project Pulse, by referring this newsletter twice (make sure to use your unique link at the bottom of the newsletter.)

Congrats! You have access to our extended list of weekly project updates. Check it out here 👉 Project Pulse


LIST: 💪 Canada’s  7 biggest concrete producers

PHOTOS: 📐 ‘Unlimited height’ approved for Oklahoma tower

LISTEN: 🎙️ Cement association launches ‘Speaking Concretely’ podcast

READ: 🧪 Polyester polymer concrete has arrived in B.C.

PHOTOS: 🎨 Taiwan artist showcases abandoned buildings


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Here’s to a great rest of the week!

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