Trend Watch: Mass Timber Construction

Brock Commons Mass timber construction
After becoming the first province to allow mass timber towers up to 12 storeys in 2019, BC is now pledging to support the forest industry by encouraging the use of mass timber building products in its capital construction programs. This includes the future development of St. Paul’s Hospital and the Royal BC Museum. Last month, BC Premier John Horgan appointed Ravi Kahlon, Parliamentary Secretary for Forests, Lands, Natural Resource Operations and Rural Development to lead the expansion of mass timber in BC buildings.

"As our economy bounces back from the COVID-19 crisis, we want to do everything we can to support forest workers. By focusing on mass timber, we have an opportunity to transition the forestry sector to high-value over high-volume production. This will mean opportunities for local workers, strong partnerships with First Nations and greater economic opportunity while making a significant contribution to advancing CleanBC."

John Horgan, BC Premier, https://news.gov.bc.ca/releases/2020PREM0033-001076

Benefits Of Mass Timber

Premier Horgan claims that the use of mass timber is cost-effective, sustainable, and generates jobs for BC’s forest communities and workers. The increased demand from both local and global markets will help to revitalize the industry, increasing production in forest communities and creating jobs.

The use of mass timber will also offer a cost-effective solution for the construction industry. Because mass timber products are custom-made off site and assembled on-site, construction time can be reduced by up to 25%. Using this method of building, constructions sites are also cleaner and safer due to fewer hot tools and machinery.

Tall wood buildings are considered sustainable for multiple reasons.

  1. Mass timber has a lower carbon footprint than concrete or steel as it is made of a natural resource. Additionally, as it is only one-fifth the weight, mass timber panels have reduced transportation emissions and decreased congestion to and around construction sites.
  2. Mass timber generates less waste since panels are manufactured custom for each application. Scraps may be re-used by the manufacturer.
  3. Mass timber is sourced from sustainably managed forests, of which Canada is a leader.  One BC company, Structure Craft, is even engineering mass timber products from beetle-kill wood which would otherwise be waste, or worse, kindle for catastrophic wild fires.
One other benefit, specifically important to British Columbians, is that buildings using mass timber are more earthquake resistant. Structurally, mass timber weighs less than concrete and steel, and is more pliable, therefore the impact on the building is reduced.

The provincial government in Ontario is also in support of mass timber and tall wood structures, having prepared a comprehensive technical resource for engineers, architects, designers, fire service, and building officials.  This guide focused on two important topics: architectural design and fire safety.

Building Codes + Safety

In Spring of 2019, BC updated its provincial Building Code to allow the construction of wood buildings up to 12 storeys tall, doubling the previous maximum height of six storeys.  At the same time, 13 BC communities signed up as early adopters of mass timber technologies. These communities represented 35% of the province’s housing starts in 2018. To be eligible, each community was required to have the following:

  • Support from their city council and the planning, building and fire departments;
  • Level 3 certified building officials; and
  • Land use bylaws for buildings higher than six storeys.
The National Building Code 2020 will soon see the same revisions and it’s believed that UBC’s Brock Commons helped pave the way for taller wood buildings across the country and around the world.

Until now, the biggest hindrance to the use of mass timber in construction was building codes, which deemed tall wooden structures a fire hazard. However, thanks to new mass timber building technologies and techniques, tall wood structures are as safe or safer than traditional steel or concrete structures.

Cross Laminated Timber (CLT), for example, holds a high level of fire resistance thanks to its cross-sectional thickness and air-tight construction, reducing a fire’s ability to spread. If a fire does ignite, the burn is slow and predictable, meeting fire resistance ratings. Fire resistance can and should be enhanced with fire-resistant lining to the flooring or walls.

For Brock Commons, Vancouver Fire and Rescue Services (VFRS) was involved in the project early on, overseeing the initial approval process and executing the fire and safety plan. The project required a site-specific regulation that included fire and seismic standards exceeding those for steel and concrete buildings. Check out VFRS video covering the specifics of Brock Commons’ fire safety measures, which included compartmentalized spaced to prevent a total loss, which is common with traditional wood structures.

Cause For Concern

The debate about safety is not a closed case, however. While building codes are changing, insurers and insurance brokers are still uncertain of the risks posed by tall wooden structures using mass timber. Canada’s condominium market is already under scrutiny in the face of a hard insurance market. New constructions using mass timber may see additional premium hikes due to existing concerns about wood structures.

A recent study conducted in the US by Boston College found builder’s risk insurance quotes for concrete buildings to be 22-72% less than quotes for wood frame buildings, and quotes for commercial property coverage was 14-65% less than wooden frame structures. It should be noted that this study was commissioned by the National Ready Mixed Concrete Association (NRMCA) and did not differentiate between dimensioned lumber and engineered lumber which has a higher fire resistance rating.

On the other hand, Vancouver based Globe Advisors conducted a similar study that suggested there were other factors for determining higher insurance costs in wooden structures than fire peril alone. This study indicated that wood buildings are less durable, cost more to maintain, and have shorter life spans, all leading to difficulty in obtaining insurance for wood frame structures.

In addition, wood structures can have major moisture management issues leading to mold. Prevalent in BC and Central Canada, mold not only creates structural issues for the building, but it can also pose significant health risks to occupants, including coughing, nasal congestion, eye, skin, and throat irritation, and can sometimes be fatal.

The study emphasizes the importance of minimizing factors that could lead to mold and water damage in wood structures and claims that much of the annual losses from lumber decay is preventable. There is no one-size-fits-all when it comes to wood structure construction across Canada – what works in Prairie provinces, may not work in the coastal region.

According to the Insurance Bureau in Canada, water damage costs insurers, on average as of 2016, more than $1.7 billion annually. This includes water damage caused by flooding, sewer back ups, and burst pipes which can all lead to expensive repair and clean up bills for insurers. Wood structures are more susceptible to excessive water damage caused by any of these man-made or natural disasters.

Time will tell if insurers will begin to favour the new technologies of mass timber over steel or concrete. Mass timber technologies will need to address all of these additional and important concerns: durability, fire safety, and moisture. For now, BC is committed to growing its mass timber industry and will continue to innovate and find long term, sustainable solutions for the construction industry.

Notable Mass Timber Projects

Check out this interactive map of mass timber projects being developed around the world.

The experts at Normac keep their finger to the pulse of the construction industry and are familiar with all construction types, materials, and techniques that might impact replacement cost. For a complimentary, no-obligation quote, click here.

Property Managers’ Reopening Guide

Property Managers Reopening Guide

While most of the country is entering various phases or reopening, Ontario is heading into phase 2 of its 3-step reopening. More businesses will now be allowed to operate, public and social gathering restrictions will be loosened, and religious gatherings will now be permitted.

The government of Ontario has implemented workplace health and safety measures to guide businesses, organizations, and public spaces safely reopen. Officials have advised to continue following physical distancing measures to prevent the spread. Below are highlights from the Property Managers’ reopening guide.

What Does Phase 2 Mean For Property Managers?

As essential service providers, condominium managers have a fiduciary duty in keeping their Corporations safe amidst COVID-19. The Condominium Management Regulatory Authority of Ontario (CMRAO) conducted a survey in May on how the Ontario state of emergency had impacted property managers and identified the top three areas of concern at this time: holding meetings, entering owners’ units, and the use of common elements. According to the survey, 85% of respondents have developed plans to help their clients adapt as the government loosens restrictions and 83% of respondents have discussed these plans with their boards.

Holding Meetings

The holding of board meetings and owners’ meetings including AGMs have been temporarily amended in accordance to the changes in the Condominium Act, 1998. Condos now have an additional 90 days after the state of emergency ends to hold their AGMs. For those who had their AGMs scheduled within 30 days after the state of emergency, now have an additional 120 days. This amendment has been put in place only for those Corporations that have been affected by the pandemic, for example, if your year end fell after September 17.

The Condominium Management Regulatory Authority of Ontario (CMRAO) has suggested to hold board and owners’ meetings virtually when possible. If physical meetings are necessary, it is advised to maintain safe physical distancing measures and the use of personal protective equipment (PPE).

Entering Owners' Units

At this time, property managers are put in a difficult situation where they must respect the space of individual unit owners, while at the same time look out for the best interest of the Corporation. As unit owners may be hesitant to allow contractors into their units, there are precautionary measures that should be taken to ensure any health risk is mitigated as best as possible.

The CMRAO suggests that:

  1. The unit owner be provided with reasonable notice and given a fair opportunity to prepare themselves for when their unit will be entered.
  2. You or any service providers and the owner maintain a safe distance from one another.
  3. Proper use of personal protective equipment (PPE) be used at all times.
  4. Any and all other rules and guidelines are being followed as recommended by the government and Chief Medical Officer of Health.

It is important that managers communicate with contractors to ensure they are adhering to the safety measures put in place to protect owners. If the owner is hesitant to allow any work done inside their unit, carefully consider their concerns and accommodate them as best as possible. If the work is not time-sensitive, a reasonable effort can be made to postpone work to a later date.

Use of Amenities And Common Space

Condo managers are advised to discuss with their boards a plan in reopening amenities and common elements. The CMRAO advises collecting information on:

  • Normal capacity of amenities
  • Cleaning/disinfectant schedules
  • Ventilation systems within specific amenities
  • Reservation systems/processes
  • Hours of operations
Once this information has been gathered it is suggested that Corporations and Property Managers implement the following protocols:

  • Mandatory booking required to use amenities
  • Requiring residents to disinfect equipment before usage
  • Staggering operating hours to allow for more frequent disinfection
  • Lowering capacity to ensure appropriate physical distancing is possible
  • Changing the configuration or allowed usage of specific equipment, such as blocking specific gym equipment or barbecues on specific days so that residents maintain appropriate distancing
It is important to keep in mind current public health recommendations as well as the necessary measures to protect staff and residents when developing these plans.

Additional Recommendations

As condos differ in size, number of residents, and geographical location – All property managers are advised to take an approach that considers the unique needs of their condominiums. What works for one may not work for yours. In keeping with the evolving nature of Covid-19, it is important to stay up to date with public health recommendations and adjust protocols, when necessary.

Changes in British Columbia

As other provinces begin their reopening, these recommendations can also apply to property managers across the country. In BC, the Strata Property Act was amended to accommodate strata councils needing to meet virtually or postpone meetings all together. You can read more about this on our blog, COVID-19 Amendments to the Strata Property Act.

Other recommendations can be found on the BC’s Government website, here.

Changes in Alberta

A similar relaunch strategy is also happening in Alberta, with some variances to how much is reopening. While the Alberta Condo Act has also been amended to allow for delayed meetings, currently a Corporation’s right to enter an owner’s unit is suspended until further notice.

A complete list of amendments and recommendations can be found on the Alberta Government site here. They also have prepared a useful PDF for download, here.

Normac has also entered the second phase of our COVID-19 protocols.  With staff returning to the office and some site visits resuming, you can read more about our response, here.

We continue to deliver the same high standards and exceptional customer service that our clients have come to know and rely on. We have the technology and systems in place to continue delivering replacement cost valuations accurately and on time. If you are in need of an up-to-date valuation or are considering switching providers, we make the process easy. Request a quote from us today.

COVID-19: Response Update

COVID19 Normac's Response

June 24, 2020

To our Normac Clients and Partners,

RE:  NORMAC COVID-19 RESPONSE UPDATE

As Canadian provinces progress to the next step in their phased approaches to mitigate the impacts of COVID-19, Normac continues to take a measured response in ensuring the safety of our team and our clients.

We continue to take extra safety precautions, maintain physical distancing measures, and remain focussed on three things:

  1. Ensuring the safety of our employees and clients
  2. Continuing to provide exceptional service to our clients
  3. Supporting local efforts to limit the spread and impact of COVID-19

As of July 6th, we will be resuming interior common area site inspections for most jurisdictions in which we operate.   Interior common area site inspections are voluntary; for those clients who would prefer Normac to proceed with information collecting without entering the premises, we can still complete our appraisal reports in a timely and effective fashion.   In order to protect our team and our clients and minimize the risk of disease transmission, we will not be resuming in-suite site inspections and will collect the necessary information using alternative reliable sources.  We will confirm our findings with a designated site contact.

Normac has developed a comprehensive Health & Safety Plan which provides clear guidance on adjusted working practices implemented to mitigate the risks posed by COVID-19.  Appraisers and Property Information Collectors will exercise the utmost caution and follow all hygiene protocols when on-site.  All Normac team members are well versed and supported in the following areas:

  • Physical distancing measures
  • Use of Personal Protective Equipment
  • Enhanced cleaning, sanitizations & disinfection measures

We remain committed to serving our clients to the highest standards and prioritizing your health and safety at all times.  Thank you for your patience and your continued trust in Normac.

Stay safe and keep healthy.

Sincerely,

Cameron Carter

President

Download a copy of this letter.

COVID-19 Amendments to the Strata Property Act

Strata Property Act

The whole country has been forced to adapt to a new way of life thanks to COVID-19. From the way restaurants operate, to how we educate and care for our children, to the adoption of virtual hangs outs and meetings; nearly all industries and social experiences have been affected. This includes the manner in which business is conducted for BC’s strata corporations. Here is a summary of the recent BC Strata Property Act (SPA) amendments made to alleviate the effects of the pandemic.

Electronic Meetings

The first amendment made to the Strata Property Act came into effect on April 17, 2020. The Minister of Public Safety and Solicitor General issued an order under the Emergency Program Act which enables all strata corporations to conduct meetings electronically, regardless of whether or not the strata has an existing bylaw allowing electronic meetings.  That includes annual general meetings (AGMs), special general meetings (SGMs), and hearings that take place during a provincial state of emergency.

With restrictions on gathering ordered by the BC Public Health Officer, electronic meetings will allow strata corporations to comply and maintain the health and well being of owners. Electronic meetings can be held either by telephone conference calls or online video conferencing applications. For those without reliable access to a computer, they may choose to attend in person or participate via proxy.

The Condominium Home Owners Association (CHOA) has further interpreted this Strata Property Act amendment and shared a helpful checklist for holding electronic meetings.

Alternative options to electronic meetings may include delaying, relocating, waiving an AGM, or using restricted proxy voting. More on this here.

Delayed Meetings

There were two amendments to the Strata Property Act made via an Order-in-Council on May 29, 2020. First, strata corporations will be allowed an additional two months to hold an AGM or SGM if there is a local or provincial state of emergency in effect during the month before the statutory deadline for the meeting.

Example: To comply with the Strata Property Act, the strata corporation must hold an AGM by April 30. There is a state of emergency in BC that ends on April 15. The new deadline to hold the AGM is June 30.

This additional time will allow the strata council to develop and implement a new meeting format and effectively communicate the changes to owners.

The regulation change will apply to all future states of emergency and will provide flexibility during other unexpected disruptions such as floods and forest fires. More on this on the Government of BC’s website.

Paying For Insurance

The second amendment made via order-in-council on May 29th is intended to clarify that strata corporations may use their contingency reserve fund to pay for increased insurance premiums, without approval from owners, if payment is required before there is time to hold a general meeting.

The change will protect strata corporations who may not be able to approve a new budget during a scheduled AGM due to gathering restrictions or other delays caused by the pandemic. The ability to pay for unanticipated expenditures, such as increased insurance premiums or COVID-19 expenses, gives the strata corporation some flexibility to meet payment deadlines. It is only permissible to do so if there are reasonable grounds to justify an immediate expenditure, such as to ensure the safety of the corporation and owners, or to prevent significant loss or damage.

Since the contingency reserve fund is intended for future repairs and replacements, it is important that the strata corporation replenish the funds used for an urgent unapproved expenditure as soon as they can. This can be done either via a special levy, or an increase in strata fees. More about strata finances and strata fees here.

Business As Usual

Property Management and the work of strata corporations are essential services, now more than ever with much of the population spending increased time at home. That includes the 32,000+ strata corporations across the province. In support of strata communities, the Ministry of Municipal Affairs and Housing, the Ministry of Finance, the Real Estate Council of BC, strata homeowner associations, and strata property managers are meeting regularly to determine best practices and share resources. 

The Government of BC has compiled a comprehensive resource, interpreting the Strata Property Act during the pandemic and to share amendments to the Strata Property Act on their website: Information for COVID-19 Strata Housing.

Other useful resources have been put together by the Vancouver Island Strata Owners Association (VISOA), including their COVID-19 Resources for Strata Corporations, and documents prepared by strata lawyers, COVID-19 and Strata Corporations and Guidance Regarding AGMs and SGMs.

CHOA also has compiled a lengthy list of bulletins and resources for managing during the COVID-19 pandemic, including specific information from BC’s Regional Health Authorities, WorksafeBC, the Real Estate Council of BC, and more.

Normac’s vision is to provide peace of mind to our clients everywhere. During the COVID-19 pandemic, we continue to deliver the same high standards and exceptional customer service that our clients have come to know and reply on. We have the technology and systems in place to continue delivering replacement cost valuations accurately and on time. If you are in need of an up-to-date valuation or are considering switching providers, we make the process easy. Request a quote from us today.

Trend Watch: Ontario’s Mixed-Use Developments

Ontario Mixed-Use Developments

Recent data from the Toronto Regional Real Estate Board (TRREB) showed a steep 69% decline in home sales in early April, compared to the same time last year. Similarly, the number of new listings had also fallen 63.7%. One thing remains unchanged, however: housing prices.

Given the current economic climate caused by the pandemic, those in hopes of finding low housing prices are met with dismay as the average selling price for all home types in Toronto reached $885,371, a 3.7% decline compared to the same period last year. The Greater Toronto Area (GTA) housing market remained flat, with an increase of 0.1% to $821,392 for the same period over last year.

As housing prices in the GTA remain high, an increasing number of people are looking for alternative, affordable options outside of the city’s core. The biggest obstacle to overcome for these home buyers is how to live outside of the city without compromising their lifestyles. The answer is suburban self-sustainable mixed-use developments.

Revitalizing Suburbia

Many first-time home buyers and millennials are not willing to spend a fortune on small studios in the heart of downtown Toronto. Location is no longer a top priority for home buyers, according to Point2Homes Real Estate news. Today’s buyers value affordability, ease of access to work and entertainment, enough space to meet their needs, and modern features and amenities. Developers are responding by revitalizing some of Ontario’s oldest suburbs with large mixed-use developments.

Dubbed as “Hipsturbia,” Toronto developers are presenting walkable, condensed neighbourhoods with condo towers, restaurants, bars, cafes, and retail shops which create a familiar city vibe outside of the city. They are hoping to attract millennials into these otherwise unattractive neighbourhoods by providing easy access to public transit and a robust communities.

“Downtown Toronto is going to continue to thrive, but I think subway connected, suburban-urban locations are going to see a bit of a rebound in the next three to five years,” predicts Sean Menkes, director of office and retail at Toronto-based Menkes Developments Ltd.

“It’s a huge trend in the U.S. and it’s exactly what we’ve been planning for the last few years” said Jared Menkes, executive vice president of high-rise residential for the family-owned firm. “We’re bringing what we know downtown and bringing it to the suburbs.”

Development Highlights - Vaughan, ON

Menkes is teaming up with public-pension manager British Columbia Investment Management Corp. to develop an urban pocket in Vaughan, a suburb just north of Toronto. Construction for Mobilio started in 2019. This mixed-use development is an ambitious master-planned community with 12 phases, 40 buildings, and 10,000 residences. Phase 1, called Festival, is scheduled for completion in mid-late 2022 and will showcase a four-tower development and 85,000 square feet of retail. Residents can expect lots of outdoor play areas and walking paths, restaurants, shops, entertainment activities, top of the line amenities, and direct access to facilitated transit.

A rendering of “Festival” – Phase 1 of a master-planned community in the suburbs of Vaughan, north of Toronto.

Development Highlights - Mississauga, ON

Another exciting mixed-use development to look forward to is Mississauga’s Square One District by developer Oxford Properties Group and their partner Alberta Investment Management Corp. Claimed to be the “the largest mixed-use downtown development in Canadian history,” Square One District will begin construction in the summer of this year with expected occupancy to begin in 2024.  In this plan, they will be turning 135 acres into an 18 million square foot neighbourhood for 35,000 people, a dramatic boost to Mississauga’s population which is expecting a spike over the next 20 years, according to Mississauga Mayor Bonnie Crombie. This plan will host 37 towers, more than 18,000 residential units, office and retail space making it a “high density living and working zone.”

Square One District
Aerial view of The Strand, the transit-connected and pedestrian-friendly heart of Square One District.

Development Highlights - Ottawa, ON

Further North, the board of directors for the National Capital Commission (NCC) in Ottawa has approved a preliminary version of the LeBreton Flats master plan, which will include the redevelopment of 4 districts just west of Parliament Hill. Of the 24-hectare site, the commission is looking to have 44% parks and open spaces. The remainder will feature 4,000 residential units, 116,000 square metres of office space, and 21,000 square metres of retail space. The NCC describes Lebreton Flats as, “a place that is pedestrian and cyclist friendly, surrounded by lively and active parks and plazas, including the dynamic Aquedect District, the Ottawa riverfront and a large destination park.”  City of Ottawa Mayor, Jim Watson stated, “Ideally, we need to find things that attract visitors and complement the museums and monuments that are in that vicinity and it needs to be a destination for live, work and play and not just live.”

Lebreton Flats
Urban playground in Ottawa’s ambitious master redevelopment, Lebreton Flats, just west of Parliament Hill.

The Ontario Condo Act states that all corporations should maintain insurance equivalent to total replacement cost value for their property. During construction, Course of Construction insurance is required. However, upon completion and prior to the first occupancy, either the developers or the Condo Corporations must acquire Property Insurance for full replacement cost. Normac is Canada’s leading insurance appraisal provider. We are accredited appraisers who specialize in determining replacement cost value for all types of properties, including large mixed-use developments. Request a quote today.

 
Cover image from Cision in Canada, Oxford and AIMCo unveil Square One District, a new 130-acre 35,000-person mixed-use community in the heart of downtown Mississauga:
https://www.newswire.ca/news-releases/oxford-and-aimco-unveil-square-one-district-a-new-130-acre-35-000-person-mixed-use-community-in-the-heart-of-downtown-mississauga-818669612.html

Many Uninsured in Fort McMurray Flooding

Fort McMurray Flooding

On Sunday, April 26th, the rapidly thawing Athabasca River near the Regional Municipality of Wood Buffalo saw rising river levels escalate to full-fledged flooding in downtown Fort McMurray. By Monday, April 27th, close to 13,000 people had been evacuated from their homes.  As of May 1st, it is expected that more than 1200 building were impacted by the Fort McMurray flooding and that a boil water advisory could be in place until as late as September 2020. All of this comes after the 2016 wildfires devastated the community and amidst a global pandemic already impacting many businesses and residents.

Living On A Flood Plain

Much of Fort McMurray is built in a floodplain and while a flood of this measure hasn’t been recorded in 100 years, there have been 15 notable floods since the 1830’s. In 2019, plans were finally underway to improve flood defences in the area. The Regional Municipality of Wood Buffalo had started work on raising a road adjacent to the Clearwater River; it’s purpose to act as both a dike and a major arterial road. To date, $6.5 million of a planned $136.5 million had already been spent on flood mitigation, including building flood walls and berms.  Intentions to make Fort McMurray a walled city have now been thwarted.

This begs the question, why would perfectly rational people continue to build in an at-risk area. Based on extensive research conducted by the Globe and Mail, approximately 40% of the structures in the Lower Townsite and Waterways are directly in harm’s way.

Merwarn Saher, Alberta’s former Auditor General claims that politics are too blame. Despite Alberta Environment mapping out 48 flood hazard areas, including the low lying Downtown in Fort McMurray, the province leaves floodplain regulation to municipalities.  The hazard areas remain undesignated as off-limits to development due to a lack of community support. The problem is compounded by local officials who wish to revitalize the communities and can’t resist the income incentives generated by property development fees and annual property taxes. This is a common problem which can be seen in other parts of Canada, including Fredericton and Ottawa. “Meanwhile, it’s the provinces and the feds who get stuck with most of the tab for helping flooded communities recover.”

The Mayor of the Regional Municipality of Wood Buffalo, Don Scott, says, “More work needs to be done to keep the lower townsite as protected as we can make it. Council is going to have some pretty serious decisions to make about what steps we’re going to be taking.”

Most Uninsured For Floods

Mayor Scott claims that most of the community does not have any flood coverage or were vastly underinsured. The Insurance Bureau of Canada explains that overland flood coverage is not included in standard policies and typically not available to those in flood hazard areas at all. This means that not only will funds for repairs to buildings be unavailable, but there will be no payouts for any additional living costs associated with displacement, unemployment, or other consequences of the flood.

Monica Ningen, Swiss Re’s president and CEO of Canada & English Caribbean, told Canadian Underwriter, “If flood insurance is available to these properties, it is prohibitively expensive, reflecting the high probability for damage. For these high-risk properties, a mechanism to subsidize part of the premium would be required to make it affordable. This could be achieved through a partnership between the industry and the government.”

Mayor Scott is quoted in the Fort McMurray Today, “There’s a lot of damage and not a lot of coverage…Without federal and provincial help in this situation, there are going to be people facing financial ruin.” The Alberta Premier, Jason Kennedy, believes that the Northern Alberta flooding disaster will meet eligibility criteria for a Disaster Recovery Program, as a one-in-100-year flood event. Mayor Scott estimated on May 4th, that there was more than $100 million in damage.

Insurance Repercussions of 2016 Fires

The evacuation order from the floods ended on May 3rd, the four-year anniversary of the evacuation caused by the 2016 wildfires. 80,000 people were ordered to leave Fort McMurray as flames engulfed almost 2400 structures. The 2016 Fort McMurray wildfires are the largest insured catastrophe in Canadian history, estimated at nearly $4 billion.

Despite the fact that many were able to rebuild after the fires, there are others who are still in ongoing battles with insurance providers. For the condominium community, difficulty to obtain coverage has been exasperated by a nationwide hard insurance market. While condominium corporations are required to insure all units and common property to replacement cost value, according the Alberta Condominium Property Act, this hasn’t been possible for all condo boards and people are losing their homes because of it.

The Cedarwoods condo corporation saw their insurance premiums increase in 2019 by 650% following claims related to the 2016 wildfires. The policy they secured cost $925,000 and only covered one sixth of the total appraised value. The Winchester Greens condo corporation is in a similar situation where 2019 quotes jumped 800% over their 2018 premiums and for only one third of the coverage. Kathy Bowers, owner of property management firm, Fort Management, claims that in light of insurance premium increases and declining property values, many owners have no other choice but to hand over their homes to the banks.

A Perfect Storm

Between the 2016 wildfires, record low oil prices, COVID-19, and now the flooding, the devastation for this community is unfathomable. In neighbourhoods like Waterway, residents are looking at a second or third rebuild after the 2016 fires and summer floods of 2013. “Few have had the misfortune of being hit more than once by natural catastrophes, but that’s the case for many of the residents in Fort McMurray,” Ningen told Canadian Underwriter. 

The road to recovery for the Fort McMurray community is long and uncertain. There is no simple solution given the risks of living in the boreal forest and a flood zone. Rob de Pruis of the Insurance Bureau of Canada explains, “There’s some really big global economic factors that are also coming into play here as well that we may not have as much control over.” The municipal government of Wood Buffalo is calling on Provincial and Federal governments to step in and find a solution.  Alberta Finance Minister, Travis Toews, confirms that the government is working with insurance providers and has requested that they “work to find solutions for condominium owners in the region.”

At Normac, we are expert insurance appraisals and can assist you in determining your total replacement cost value. Have peace of mind that you are sufficiently covered during a catastrophe. Request a quote today. 

 

Cover image from Fort McMurray Today, Volunteer efforts save Heritage Village from flooding, Heritage Shipyard sees significant damage:
https://www.fortmcmurraytoday.com/news/local-news/volunteer-efforts-save-heritage-village-from-flooding-heritage-shipyard-sees-significant-damage

COVID-19 Disrupts The Canadian Construction Industry

COVID 19 Disrupts Canadian Construction

As we are now six weeks into a world-wide pandemic, we are looking at the Canadian construction industry to see how they are coping and what we can expect in terms of progress and costs. As an essential service, many sites forge on, but the decline in the availability of workers, accessibility to key construction materials, and delays associated with adapting site safety measures, are all leading to major disruptions across the industry.

About Canadian Construction

The construction sector is one of Canada’s largest employers and a significant contributor to the country’s economy. The industry employs more than 1.5 million Canadians and contributes to 7 per cent of Canada’s Gross Domestic Product (GDP). In March, the Canadian Construction Association (CCA) released it’s standardized protocols for all Canadian construction sites – a living document that is updated with the guidance of public health authorities. It highlights best practices and a consistent national approach to protect the well being of all those in the industry.

An Essential Service

Many job sites across the country have remained open and are subject to the recommendations set out by provincial governments across Canada. Mary Van Buren, President of the CCA is quoted in a March press release,

“The projects we deliver are fundamental to Canadians’ quality of life and to the success of our country. In many cases, they support the delivery of essential services, including the clean water we drink, energy infrastructure and the power grid, critical transportation infrastructure, and the hospitals and other health care facilities where we receive care.”
Public Safety Canada supports Van Buren’s claims and explicitly states which sectors of construction are essential on their website here. Yet, many provinces included commercial, residential, industrial, and institutional sectors in their lists of essential workers, including BC, Alberta, and Ontario.

Impacts on Construction Sites

Several provinces across Canada have declared a state of emergency, including Ontario, British Columbia, Alberta, Manitoba, and Nova Scotia. The provinces of Ontario and Québec have additionally issued all non-essential workplaces to be suspended until further notice. While in Québec, all residential construction has been shutdown between March 25 to April 20, some workers returned to residential construction sites to help the province avoid a housing crisis.  Exact figures are unknown as to how many private sector construction sites for residential and commercial use have remained open, but it is suspected that most have continued on despite disruptions and concerns from workers.

Reduced Productivity

The most obvious source of delay occurs from a full project shutdown, following a government order to suspend all work. Projects are experiencing low productivity due to understaffing and physical distancing. Physical distancing measures put forth by the federal government is restricting the number of people on-site and imposing an increased control of site movement. An example of this can be seen in developments where elevators and hoists are used; with only two workers at a time on a 40-storey tower trying to get to their floor[,] that’s an hour per person lost every day (minimum).

Worried Workers

The CCA claims that the construction industry already has “highly disciplined health and safety protocols” which are being “significantly amplified” based on recommendations put forth by public health officials. However, construction workers have voiced concerns about the inability to put the added protocols into practice. Jack Da Silva, an agent for Labourer’s International Union of North America (LiUNA) Local 183, was captured on video on an unidentified site in downtown Toronto stating,

“When you’re in the work site there, you guys don’t have six feet around you. We’re all breathing on each other. Where’s your eating facilities? Are they sanitized? Do you have water to wash your hands when you eat your sandwiches?”
A Labourers’ Union business agent’s video plea for safer site conditions in Toronto during the COVID-19 pandemic has been captured and broadcast.

After the recent outbreak at the Kearl Lake oil sands facility in Alberta, these concerns are legitimate and protocols need to be taken seriously and implemented to the fullest extent.

Supply Chains Affected

The disruption in supply chains is also putting a strain on construction projects due to restricted border access and limited manufacturers. While Canada has made efforts to keep supply chains open for trade and commerce, such as the Canada-US border, the decline in manufacturing from other countries is starting to have an impact.

In 2019, China was Canada’s second biggest source of imports, behind the U.S. (which supplies half of what Canada buys). However, much of the items that are imported to Canada from the US require materials which the US imports from China. At the peak of the Covid-19 pandemic, China had shut down factories which were responsible for producing 80% of it’s exports. The Port of Vancouver – a major hub for import goods has reported fewer container vessels due to reduced cargo-loading activities at Chinese ports. There will be a trickle down effect as we deplete our existing inventories, and despite China’s manufacturing beginning to pick up again, demand will continue to slow from it’s major trade partners in North America and Europe.

Dennis Darby of Canadian Manufacturers and Exporters (CME) said that manufacturers cannot shift their delivery models like other industries. “The production workforce can’t work from home. The local and international supply chains of production components will become restricted and their customers will limit purchases.”

Construction Costs

How construction costs will be impacted is still too early to be seen. It will depend entirely on how long the pandemic continues. The Altus Group has an interesting opinion piece on this that explains a short-term recovery from COVID-19 could see stabilized and perhaps even increased costs, whereas a long-term shutdown will see heavy declines. For a more detailed read, view the article here.

Final Thoughts

The construction industry and its costs are always fluctuating, similar to the fluid developments of COVID-19. The CCA is calling on the Government of Canada to issue a clear statement and work towards future legislation on how it will handle delays, project disruptions, and other costs incurred due to the outbreak. The construction industry plays a vital part in Canada’s overall economic health, so continuation of that sector is imperative for economic recovery. However, precautions must also be taken to ensure the safety of its workforce.

Normac is taking precautionary measures to protect our staff, clients, and to do our part in preventing the further spread of COVID-19. Read more about our efforts here.

Cover image from blogTO, 3 Workers Test Positive For COVID-19 At Toronto Construction Site: https://www.blogto.com/city/2020/03/3-workers-test-positive-covid-19-toronto-construction-site/

COVID-19, The Canadian Economy, And The Housing Market

As Canadians enter their 4th week of a national shut down and physical distancing, we are beginning to see some of the effects on the Canadian economy. There has been an obvious downturn as businesses have closed their doors and workers laid off. While there are a few companies reporting growth during the pandemic, such as Canadian owned Dialogue Technologies and Loblaws, most are seeing steep declines and predictions of a global recession are looming.  While it is still too early to know what will happen or how we will emerge from this, here is a round of what experts are saying about the Canadian economy and how it will affect the housing market.

Canadian Economy - What Is Happening?

Economists and elected leaders agree that the COVID-19 pandemic is causing economic activity to slow and are acting proactively to curb anxiety for both businesses and consumers. The Government of Canada has unveiled a plethora of relief funds in support of small businesses and citizens; the Canada Emergency Response Benefit, subsidies for small businesses, increased childcare benefits, and support for students and vulnerable populations, just to name a few. The Government relief efforts topped $90 billion at the end of March and they have also been in discussion with major banks to further ease the burden on Canadians.

On March 27th, The Bank of Canada lowered the overnight rate to 0.25 per cent, down from 1.75 per cent in the 2nd week of March.  Other major banks have since announced that they will be lowering their credit card interest rates for customers under financial pressure caused by COVID-19 and offering Government backed loans for small businesses as early as next week.  This is in addition to their already implemented mortgage payment deferrals.

While these efforts will help many people during this crisis, critics wonder if it will be enough. Frances Donald, Chief Economist with Manulife Investment Management states that Canada’s economy was already showing warning signs in 2019 with a Q4 growth of only 0.3 per cent. Between a collapse in oil prices and a housing market bubble on the verge of bursting, Canada could have been already heading towards a mini-recession before the outbreak. Over 3 million people have applied for EI and the Emergency Response Benefit since the outbreak, setting “historic levels of devastation in the labour market.”

National Housing Market Trends

There is no single consensus on how COVID-19 will affect Canada’s housing market. Even prior to the outbreak, conflicting headlines about housing bubbles and whether or not we were in one shows that there is a dichotomy between those who anticipated a burst and subsequent recession, and those who believed that the Canadian housing market was generally balanced between supply and demand, despite regional differences.

Time will tell if Canada’s presumed bubble will burst over the following months, but what we know to be true is that the novel coronavirus is changing the way we buy and sell real estate. The Alberta Real Estate Association, in an attempt to minimize face-to-face interactions, has officially banned all of its members from conducting open houses and encouraged agents to use “virtual tours, video-conferencing and digital contract signatures.”

In addition to buyers and listers pulling back from the market, we are also starting to see fallout from lenders as mortgages get cancelled before closing dates. Ron Butler of Butler Mortgage claimed this happened to a client of his after the lender conducted a routine check and discovered the client had been laid off indefinitely. Bank analyst, Robert Hogue claims that the impact of physical distancing and an economic fallout could see home resales at a 20 year low.

Calgary, Toronto, and Vancouver – The Numbers

According to John Pasalis, President of Realosophy Realty in Toronto, Canada’s biggest markets were preparing for a “sizzling house-hunting season” prior to the virus entering Canada.  In February, we saw a 27% increase on home sales compared to February 2019 and a 15 per cent increase in the national average home price. Pasalis says, “that outlook has now dimmed.”

The Calgary Real Estate Board (CREB) claims that sales activity in Calgary has fallen 11 per cent in March 2020 compared to March of last year, the lowest level since 1995.  The number of new listings has also fallen 19 per cent. Chief economist Ann-Marie Lurie at the CREB is quoted saying, “This is an unprecedented time with a significant amount of uncertainty coming from both the wide impact of the pandemic and dramatic shift in the energy sector.” Because of this, Alberta is expecting price declines to be higher than originally anticipated.

In Toronto, Canada’s largest housing market, the first half of March recorded a surge in sales which were up 50% compared with the same period in 2019, highlighting the strength in Toronto’s housing market. However, after physical distancing measures were introduced in the latter half of the month, sales activity fell a significant 37% compared with a year earlier, and new listings had also dropped 33% from the 2019 figures.  As we are still in the early stages of the pandemic, Toronto Regional Real Estate Board (TRREB) president Michael Collins states that “sales figures for April will give us a better sense as to the trajectory of the market while all levels of Government take the required action to contain the spread of COVID-19.”

Similarities were seen in Vancouver where the first two weeks or March were recorded as the busiest of the year, according to the Real Estate Board of Greater Vancouver’s President (REBGV), Ashley Smith
. While March 2020 showed a 46 per cent increase over a record low March 2019, most of the sales were already in process before the Government of BC declared a state of emergency. By the end of the month, sales were 20 per cent below the 10-year average.

The Future Is Unclear

The most optimistic view at this point is that self-isolation will bring the pandemic under control so that businesses can re-open and workers can begin to return to their jobs by this summer. Doug Porter, chief economist at BMO Capital Markets, stated in a report, “We believe the fiscal steps are enough to help propel the economy into a forceful recovery in the second half of the year.” But this viewpoint is not shared by everyone.  Frances Donald is concerned that current programs, which are only in place for a three-month period, may not be enough if the majority of those laid off are not rehired. He is quoted:

“We are living through history that will end up in textbooks and case studies as we analyze central bank policy, how effective it is, how quickly central banks should be reacting, and whether or not we look back and say: ‘They acted too late,’ ‘too early,’ or ‘right on time.’”

From BNNBloomberg: https://www.bnnbloomberg.ca/rbc-cuts-prime-lending-rate-after-bank-of-canada-move-1.1400320

Normac is taking precautionary measures to protect our staff, clients, and to do our part in preventing the further spread of COVID-19. Read more about our efforts here.

Coronavirus in Condos: Best Practices for Property Managers

social distancing best practices for property managers
As the COVID-19 pandemic continues, recommendations for our industry are constantly evolving. We have compiled a list of suggested best practices for Property Managers based on the information currently available. This is Pt. 2 of our series, Coronavirus in Condos.
“Wash your hands and practice social distancing.”

This message has been reinforced time and time again since the World Health Organization (WHO) announced COVID-19 a pandemic.   Property Managers are now facing an abundance of property related issues resulting from the novel coronavirus. Residents are spending more time at home, converting their homes into offices, and many are self-isolating. New precautionary steps are being implemented to stop the spread of COVID-19 and to ensure smooth day-to-day operations of Condo and Strata Corporations. Here are some of the recommendations being made.

Basic Condominium Protocol

Before diving in, it is important to lay out basic protocol that Property Managers should be implementing at this time. The Condominium Management Regulatory Authority of Ontario (CMRAO) states that condos should:

  • Provide alcohol-based hand sanitizers at main doors and elevators.
  • Display signs reminding residents and visitors to:
    • wash hands with soap regularly,
    • cough or sneeze into a tissue or your sleeve. Immediately dispose of tissue in a lined trash can and wash your hands,
    • avoid touching eyes, nose, or mouth, and
    • avoid contact with people who are sick.
  • Keep objects and surfaces clean and disinfected. Instruct cleaning teams to provide more focus on high-contact surfaces, such as front desk counters, door handles, or common areas.

Taken from: https://www.cmrao.ca/en-US/newsroom/blog/Coronavirus-in-Condos/

Notices to Owners

Property Managers should consider providing notices to tenants regarding the following topics:

  • Provide tips from and website information for the local public health authority, provincial Ministry of Health, and Health Canada, and request that residents comply with all recommendations.
  • Advise that resident should refrain from using the amenities (or close them all together) and minimize the use of the common areas, especially if they have recently travelled and/or exhibit any symptoms such as coughing or fever.
  • Advise that residents practice social distancing measures in common element areas such as lobbies, elevators, and other shared facilities.
  • Outline and communicate procedures for reporting to property management if the resident is in self-isolation or quarantine.
  • Reduce parcel deliveries by highlighting the difference between essential and non-essential items.
  • Remind residents of proper garbage disposal and preventing drain clogs and back-ups resulting from residents spending more time at home.

Service Provider and Contractor Best Practices

Before issuing work with service providers and contractors, Property Managers should consider the following precautions:

  • Discuss what steps are being taken to minimize the chance of exposure for residents, including ensuring that any representatives who have recently travelled to affected areas are not sent to the site.
  • Discuss what measures may be taken if representatives will be entering a unit to perform duties, to address any health concerns of the residents and of the workers.

    *Note that in response to COVID-19, Normac has opted to temporarily suspend ALL interior site inspections until further notice and has provided our clients with alternative solutions.*

  • Consider postponing non-urgent work where appropriate.
  • Discuss with all service providers whether or not any disruption in service is anticipated, including any disruption due to employee absence or supply disruptions.
  • Discuss with onsite staff, such as maintenance staff or concierge, any concerns they have relating to the safety of the workplace and encouraging all workers who feel ill to stay home.
  • Incorporate social distancing measures for over-the-counter communications with onsite staff.
  • Review options and consider business continuity plans in the event of any severe disruptions to the Corporation’s operations as a result of COVID-19.

AGMs and BOD/Council Meetings

One simple approach is to defer any and all meetings to future dates, after the COVID-19 restrictions are lifted. If the meeting must go on, consider the following:

  • Encourage proxy and electronic voting rather than in-person attendance.
  • If the total number of condo owners is less than the prohibited 50+ gathering, use a venue that is large enough to accommodate the required 2-meter safe distance between attendees.
  • Make hand sanitizers available as well as new pens for completion of ballots and sign-in forms.
  • Post signs with reminders of safety precautions — no handshaking, wash hands or use hand sanitizer, stand apart from other owners and maintain the required 2-meter distance, do not touch your face, etc.
  • Make arrangements for owners to view the meeting on a live video feed.
  • Keep the meeting moving as expeditiously as possible to minimize the duration of the meeting, perhaps offering to answer owner questions by email prior to the meeting to attempt to both reduce in-person attendance and to minimize the duration of the meeting.
  • Hold all BOD / Council meetings via Zoom Video Conferencing.

Taken from: http://www.mondaq.com/canada/Real-Estate-and-Construction/906464/Coronavirus-And-Condominiums-March-12-2020-Update

*Note some of this has been revised to reflect current recommendations from health authorities.

Final Recommendations

It is important to note that the coronavirus is a developing situation which requires an adaptive approach. The number of confirmed cases in Canada are continually rising, it is imperative to follow the latest developments and adjust your building’s protocol as needed. These best practices are to be considered general guidelines – any specific matters should be consulted with a legal firm.

Additional Resources

Normac is taking precautionary measures to protect our staff, clients, and to do our part in preventing the further spread of COVID-19. Read more about our efforts here.