✅ Office rebirth

Good morning! 💰It’s Federal budget day in Canada. Lacking a time machine, we don't know exactly what's in the budget as we write these words on Monday night. But experts expect it to be fiscally restrained, with a price tag around $50 billion. We are poring over it as you read this.

Housing is one of the biggest issues that is sure to be top of mind as Ottawa releases the budget. One way cities are looking to tackle the issue is adapting empty office space, but is this all it's cracked up to be? Keep reading to find out.

MARKETS

*Stock data as of last market close; currency, oil and crypto data as of 11:00 PM ET March 27th, 2023.

Markets: The U.S. Supreme Court has declined to hear a challenge to controversial U.S. steel import tariffs imposed in 2018 under former President Donald Trump (25% tariff on steel imports from most nations and 10% tariff on aluminum imports). The appeal was raised by a group of U.S.-based steel importers. The tariff’s caused concern from Canadian builders who said they would cause higher construction costs and could cause cheap steel from other countries to flood the country.

THE BIG STORY

Out of the office: Converting empty spaces

When the world went into lockdown due to the COVID-19 pandemic, everyone’s idea of a workplace shifted on a dime. Now that the pandemic appears to have waned for the time being, remote work and hybrid work are here to stay. But what should be done with office buildings that are sitting empty? Some cities have seen vacancy rates higher than 30% and there has been a growing movement to repurpose these structures.

What’s being done:

• With a downtown office vacancy of 27%, Calgary created a conversion program. It’s just expanded to include other types of conversion beyond housing, such as hotels, schools and performing arts spaces.

• Global design firm Gensler is using digital tools to help cities like Calgary identify prime candidates for office conversions to residential.

• Officials in Ottawa are proposing changes that would cut red tape for similar conversions in the city.

• In the U.S. conversion has been picking up speed in cities like Chicago, New York and Baltimore. Between 2020 and 2021, according to Yardi data, office-to-apartment conversions grew at a faster rate than new construction, adding 11,000 apartments nationally.

Behind the hype:

• Some experts believe that office conversions aren’t likely to be common

• Large floor plates, inadequate lighting and existing clients that need to be bought out can render many buildings useless for residential conversion.

• Some data suggests that vacancy rates have dropped significantly since the onset of the pandemic, limiting options in some markets.

The bottom line: Reduce, reuse and recycle is what we were all taught growing up. And it also applies to the built environment. According to the American Institute of Architects, renovation and reuse projects typically save between 50 and 75% of the embodied carbon emissions compared to constructing a new building. While it’s not likely to be a silver bullet for housing or revitalizing downtowns, we should still work to limit waste in the built environment as much as possible.

NEED TO KNOW

The week's headlines

🧑‍🤝‍🧑 For the first time in history, Canada’s economy grew by 1 million people. According to Statistics Canada, the population grew 2.7% in 2022, the fastest expansion among advanced economies. Canada added a record 1,050,110 new residents over a one-year period to Jan. 1, bringing the total population to 39,566,248. International migration accounted for 95.9% of the growth.

⛵ A new report by Ottawa-based think-tank Public Policy Forum says Atlantic Canada has “wind in its sails” when it comes to the economy and growth is on the horizon. Using 20 key indicators - including population growth, employment and education - the report found that the East Coast provinces are experiencing historic momentum. However, some in the East say the boom is putting more strain on residents by increasing housing costs.

🚿 Local officials in Ontario are concerned that the province’s plans to convert part of the Green Belt into housing could take much needed wastewater infrastructure capacity away from other neighbourhoods. Newmarket Mayor John Taylor told the Globe and Mail that this would create a form of sprawl over the “best form of intensification, which is transit-oriented development on a major corridor at a transit stop.”

💵 The Manitoba government has introduced prompt payment amendments to the Builders’ Liens Act. Officials stated that the amendments would establish specific payment obligations to owners, contractors and subcontractors in the construction industry, specifying a timely payment structure based on the progress of the work, the achievement of project milestones and the project’s conclusion.

PROJECT SPOTLIGHT

Tunnelling project of the year

Sequence of events: As part of the Réseau express métropolitain (REM) project, extensive replacement and rehabilitation work on the Mount Royal Tunnel (TMR) was critical to constructing a new automated light metro network across the greater Montreal area. Opened in 1918, the double-arched tunnel required major work to meet current safety standards and to adapt the tunnel to the REM's electric light metro system. Hatch, REM, NouvLR and CIMA+ employed a unique tunnel replacement (Sequential Demolition Method) to install canopy pipe in an arch pattern above the envelope of the existing double arch and performed demolition and replacement advances in 12 sequences. The team’s efforts earned them the Tunnelling Association of Canada’s Project of the Year award.

MARCH 2023 PEOPLE MOVES

This month’s People Moves featured team members from Orion Construction, Lafarge Canada, LiUNA, RAM, Turner Construction, Avison Young, Intelligent City, Essence Properties, Ledcor and much much more. Roles included positions on the boards of the Canadian Construction Association and the Cement Association of Canada. Other positions included director of projects, director of construction, estimator, marketing manager and more. Check out the entire list here.

PROJECT UPDATES

SkyTrain’s Capstan Station project has been delayed until this fall.

Thunder Bay to lead GDP growth thanks to $1.2 billion jail project

Clark Builders will soon install the final beam at the Coronation Park Sports & Recreation Centre Project in Edmonton.

Work is set to begin on a bridge project for Regina’s Ring Road.

Canada’s military’s special forces base announced a $1.4B upgrade at Dwyer Hill.

WHAT WE’RE TALKING ABOUT

VIDEO: 🛻 Is this the tool truck to end all others?

PHOTO: 💡 Vancouver vs. Burnaby lighting looks weird

TWEET: 👑 This mower is the king of slopes. All hail!

READ: 🗞️ Engineer schools New York Times on construction

READ:👷 The 9 largest employee-owned builders in Canada

Here’s to a great rest of the week!