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.

COVID-19: Normac’s Response

COVID19 Normac's Response

March 16, 2020

To our Normac Clients and Partners,

RE:  COVID-19 UPDATE


We appreciate how overwhelmed you must be with the news regarding COVID-19.   We are committed to being both responsive and responsible, navigating these difficult times with the safety of our team and clients at the forefront of our minds and procedures.   We 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

We do not anticipate any interruption in Normac delivery of services.  We are, however, suspending all interior site inspections until further notice.  We offer an alternative to in-suite site inspections that will allow our appraisers to collect the necessary information in a timely manner.  We will continue to view the exteriors of buildings without entering the premises.


While our physical offices are not open, we continue to serve you with the same high standards and customer service as always.  A significant number of our employees already work remotely, and we are fortunate in that our business allows us to easily transition to a fully remote workforce.  We have the technology and systems in place to continue business as usual.  This makes us confident in our ability to continue providing great service to you and conducting business normally.

That means, among other things:

  • Our Client Services team will remain available for phone calls and emails from 6am PST (9am EST) – 5pm PST (8pm EST).
  • Appraisal reports and appraisal updates will continue to be emailed to all stakeholders with the same frequency and delivery dates as normally scheduled.
  • Standard Insurable Unit Description Outline self-completed forms will be offered as an alternative to in-suite site inspections. An SIUD expert will be available to assist condo boards through the process should any questions arise.

We are committed to serving our clients to the highest standards. Thank you for your patience and your trust in Normac. We are prepared to push through these challenges and put the safety of our Normac team, our clients, and our partners at the forefront of every decision we make. Stay safe and keep healthy.


Sincerely,






Cameron Carter

President


Download a copy of this letter. 


How to deal with coronavirus in condos. 

How To Deal With Coronavirus in Condos

coronavirus in condos
Last week, the World Health Organization declared Coronavirus (COVID-19) a national pandemic. Condominium corporations, directors of the board, and property managers should be on high alert, taking the necessary preventative measures to ensure their properties are safe. It is important to note that the possibility of transmission will always exist, however, can be drastically reduced with good hygiene practice and knowing how to deal with Coronavirus in condominiums.

What Is Coronavirus?

The coronavirus (also known as “COVID-19”) is a virus which symptoms include fever, cough, shortness of breath, and breathing difficulties. In more severe cases, infection can cause pneumonia, severe acute respiratory syndrome, kidney failure, and even death.

As of March 16, Canada has 324 confirmed cases of coronavirus. At the time of writing this, Ontario has the highest number with 145 confirmed, and British Columbia and Alberta are close behind with 73 and 56 reported cases respectively. The contagious nature of this virus means that this number will continue to grow exponentially.

The transmissibility of this virus is much like the common cold. The virus can be passed on from person-to person or through contact with contaminated surfaces or objects. This is why officials are recommending social distancing to prevent the spread.

Travellers, particularly those who are returning home from Europe, Middle East, and Asia are at the highest risk. Anyone coming into Canada is being told to self-isolate for 14 days and monitor symptoms.

How Does Coronavirus Affect My Condo?

Condominiums house a high number of people living in close proximity to one another with shared common spaces. These shared spaces include elevators, fitness rooms, condo lobbies, etc. The traffic in these areas pose a high risk for contamination, especially when it comes to door handles and elevator buttons.

If you are feeling sick, are returning from travel, or are other wise high risk of infection, it is imperative to self-quarantine as per the Canadian government’s recommendations. As a condo owner, this means remaining within your unit and having people bring necessities to you, or only leaving for medical care.

What Are My Legal Obligations On Behalf Of The Condo Board?

Quite frankly, condo corporations are not fully equipped to combat the spread of the coronavirus. The jurisdiction of this surpasses property management – into the domain of public health and communicable diseases. Rod Escayola writes in Condo Advisor last week that, Condo corporations have a duty to “control, manage and administer the common elements and the assets of the corporation.”  Similarly, boards of directors have a duty to manage the affairs of the corporation. Simply put, condos are there to manage the property, not pandemics.

The corporation can make rules on “the safety, security or welfare of the owners”, however this does not specify how to go about a contagion like coronavirus. In section 117 of the Ontario Condo Act, any activity that is likely to cause bodily harm (in units or common areas) is prohibited. Does this legislation give the authority to quarantine someone in their unit? Not likely, but that does not absolve the board from their social responsibility as leaders for their community.

Josee Deslongchamps, an Ottawa condo manager, provided this very informative notice to owners on the coronavirus. Condo boards could share a notice similar to this, which requests those who are at risk to self-quarantine and refrain from using common property, in a respectful and factual manner. It also communicates what precautions are being taken by the condo corporation to protect owners.

How To Deal With Coronavirus in Condominiums?

It is not expected for condo corporations to have foolproof measures against coronavirus. However, property managers and directors of the board can fulfil their fiduciary duty by taking these basic precautions:
  • Ensure that commonly used common element areas (sanitary facilities, fitness rooms, lobby/garage entrance door handles and elevator call buttons) are kept clean and disinfected with industry appropriate products;
  • Install hand sanitizers in common areas, by the main doors or by the elevators;
  • Post signs reminding owners to be extra diligent when wiping fitness equipment;
  • Remind owners not to use the fitness room, the pool or the amenities if feeling sick;
  • Encourage occupants having travelled to high risk-zones to consider avoiding using the common amenities for 14 days;
  • Encourage occupants/employees to self-quarantine if required;
  • Encourage occupants/employees to report to the corporation should they have been infected by the virus. This could allow the corporation to take early measures;
  • In certain circumstances, it may be worth considering postponing some of your social events… and perhaps even the AGM depending on how things evolve in your areas.  You may want to consult with your legal counsel before you do so.
Taken from Condo Advisor: http://condoadviser.ca/2020/03/coronavirus-in-condos/condo-law-blog-Ontario

Condo boards could also take note of how Italian condo dwellers are keeping their spirits up with music, or how other residents are working out together from their balconies in Seville, Spain.

The Bottom Line

Good hygienic practices go a long way in combatting airborne viruses. Taking proper precautionary measures in your condominium will drastically reduce the spread of coronavirus. In keeping with your community’s policy on Discrimination and Inclusiveness, residents are reminded that acts of racism, xenophobia and other discriminatory behaviours should never be tolerated. A collaborative community effort is vital in effectively managing a pandemic as such.

Additional Resources

CHOA – Preventing Coronavirus: https://www.choa.bc.ca/wp-content/uploads/600-014-Preventing-coronavirus.pdf

PAMA – What Do We Know and What Can We Do about COVID-19?: https://www.pama.ca/common/Uploaded%20files/pdfs/Almanac/COVID_19.pdf

ACMO – ACMO Coronavirus Advisory: https://acmo.org/acmo-coronavirus-statement

Normac is also 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.

Hard Insurance Market Persists Through 2020

Toronto Construction Street View

As insurance companies experience significant losses, adjustments must be made for them to remain profitable. Whereas in the past, insurance companies offered competitive rates with lenient underwriting guidelines, the cyclical nature of insurance has turned this around. Canada is experiencing a hard insurance market where premiums are on the rise and policies are much more difficult to obtain. While some carriers are taking on preferred risks, others have completely stopped writing insurance at this time.

Hard Vs. Soft Markets

Insurance has a life cycle which is characterized by two periods – soft and hard. A soft insurance market reflects lower premiums, broader coverage, relaxed underwriting criteria, more policies, as well as healthy competition among carriers. On the other hand, a hard insurance market reflects higher premiums, strict underwriting criteria, less policies, as well as less competition among carriers. We are currently facing a hard market.

Rise in Premiums + Deductibles

Since the start of the hard insurance market, premiums have been skyrocketing nationwide. British Columbia strata corporations are facing premium hikes between 50% and 300%. Tony Gioventu, Executive Director of the Condominium Homeowners Association, (CHOA), adds that, “deductibles are going from the conventional $10,000 or $25,000 to $100,000, $250,000 or $500,000.”

Subsequently, some condominium boards in Alberta are seeing condo insurance increases up to a 700%. Ryan Chernesky sits on the condo board of a building he owns two units in. In 2018, the premium on the condo building was approximately $51,000. Last year, the insurer declined renewal and only two other companies were prepared to take the risk. The lowest quote was approximately $402,000 – an increase of 690 percent.

“We’ve been told by the insurance companies that it’s to do with the 2016 wildfire and there is an increased risk associated now and various other reasons on a more global scale,” Chernesky said in this article.

Why Now?

Current underwriting standards have been shaped in response to a series of global and local catastrophic events, a lawsuit-first approach, and an increase in construction costs.

In Canada, we have seen an increase year over year in property claims caused by severe weather. It is not just one single event that causes higher claims, but rather a series of events happening across the country.

  • There are approximately 5000 earthquakes that are recorded in Canada every year, with the majority in British Columbia. The risk also exists in eastern Canada, along the St. Lawrence and Ottawa River valleys.

  • In 2016, the Fort McMurray wildfires that swept through Alberta estimated a total loss (direct and indirect costs) of $9.9 billion dollars, with an estimated $3.7 billion in claims.

  • The 2019 spring floods in Ontario, Quebec and New Brunswick have also contributed to the increase in premiums. About, one in three Canadian homeowners are insured for overland flood risk, the Insurance Bureau of Canada said in this article released June 18.
Top Insured Damage Severe Weather Events in 2019 - Insurance Bureau of Canada
Catastrophic events like these have resulted in billions of dollars in losses for insurance companies. According to the Insurance Bureau of Canada, eight out of the top ten highest loss years on record are between 2010 and 2019.
Top-10 Highest Loss Years on Record - Insurance Bureau of Canada
In addition, the cost of building materials such as brick, wood, and cement has increased. As reported in this article, Rider Levett Bucknail (RLB), an international property and consultancy firm, stated that construction costs in Toronto has been increasing faster than any of the 14 North American markets, which include Boston, Los Angeles, New York, San Francisco, Washington DC, and Calgary.
Indicative Construction Costs - Rider Levett Bucknall

Cause + Effect

Insurance companies are taking a closer look at what the actual replacement cost of a building is and are finding that many buildings are underinsured. This may have been acceptable in the past, as a total loss was unlikely, but as natural disasters are more prevalent and building costs on the rise, insurance companies are now requiring buildings to be insured to their full replacement value.

As insurance appraisal experts, Normac stays on top of current construction costs and is aware of industry developments and trends. As a result, we deliver the most accurate and reliable insurance appraisals, and ensure that your properties are protected and always adequately insured to full replacement value.

For a no-obligation proposal, click here.

Climate Change and Canada’s Building Code

Climate change is among the top issues that Canada and many other countries have chosen to tackle. Our efforts to reduce the negative effects of climate change vary drastically and have taken form in several different ways in Canadian society – one of which is revamping building practices.

Over the past ten years, provinces throughout Canada have begun adopting methods and technological advances that would positively impact and reduce our carbon footprint. Many of these advances have made drastic impacts to Canadian building codes to reduce greenhouse gas emissions, material waste, and energy consumption. While we have seen these efforts represented more and more with new builds across the country, there is still a large amount of discussion around older properties and the renovations and updates required for adequate progress.

For example, Ontario’s Planning and Growth Management Committee submitted this article in 2017, highlighting requests for further improvements to the Ontario building code in a battle with climate change. The requests (also common amoung other provinces) were as follows:

  • “Continue to expand the list of items in the Ontario Building Code’s list of “green standards” to include incremental energy efficiency provisions for all buildings”
  • “Take measures to discourage the growth of illegal renovation and develop technical support and training for the building industry, building officials and building owners”
  • “Continue to review the Ontario Building Code for other potential amendments to mitigate against the effects of extreme weather such as flooding, ice storms and extended periods of heat and extreme winds. Specific areas which should be addressed include passive cooling measures in buildings, and a review to ensure that climatic data in the Ontario Building Code reflects current conditions.”

The third recommendation is especially interesting, as we are now beginning to view the effects of climate change as something to expect and prepare for its effects rather than just something to attempt to prevent. In fact, the issue of climate change has begun to hit so close to home, that homeowners in Toronto are being offered a Basement Flooding Protection Subsidy Program– a program designed to mitigate flood damage from the ever more common sever weather events.

The issues Canada is facing with the current day impact of climate change is in fact so severe that the Canadian Building Code is expected to be fully reformed with strict guidelines and rules set to take effect 2025. With more frequent wildfires, heat waves, and flooding, our buildings will need to be designed and renovated to meet these new challenges. If these building code changes are ignored, the infrastructure failures associated with climate change could cost Canada $300 billion over the next decade as outlined in this CBC article. There is no doubt that our buildings, roadways, and city systems will take on great changes over the next 10 years in response to the effects of climate change – the question is whether your property is able to begin that process.

Did you know that Normac is Canada’s leading insurance appraisal firm? For more information on or to request a quote, click here or email info@normac.ca. To read more on Canada’s Building Code and Climate Change, click here.

Building a Sustainable Future Through Passive House Designs

2018 has become a critical year for the global community as researchers have warned leaders and policy makers that the world has only 12 years to curb global climate change. This requires urgent action not only on an international scale, but also making drastic changes in how we live our lives and produce goods in Canada.  This is why many policy makers, engineers, and city developers see the need to implement sustainable living and development as buildings create about 56% of greenhouse gas emissions – more than that of transportation and waste combined. One way engineers and design teams are tackling the tremendous issue of greenhouse gases, is through Passive House Designs.

Passive House Design refers to conscious design strategies that help reduce a building’s energy consumption, and often implements reusable energy. Passive Houses achieve their goal of hyper efficiency through the design and implementation of highly insulated building envelopes. The main standards of a Passive House Design are as follows:

  1. Proper Insulation.

Proper insulation reduces energy and heat leaving the home through areas such as window panes. With Passive House Designs developers and designers will want the structures to contain as much heat as possible, so as to reduce using heating systems that push hot air inside and inevitably consuming more energy.

  1. No Air Leakages.

Similar to the definition above, the intent here is to contain the heat and air that is better used within the home rather than letting it escape.

  1. No Thermal Bridges.

In this case, architects and engineers must be cognizant of heat that can easily travel through walls and other means. A good use of design can prevent this from happening.

  1. Proper Windows – Triple Pane Glass.

Windows are common areas to lose heat and by implementing triple pane glass windows this will not only allow for insulation for hot days, but for cold days as well.

  1. Proper Positioning.

This standard refers to the positioning of windows and ventilation systems. The strategy utilizes the natural heat from the sun and allows for heat to enter a home, and when it is warm outside this method also helps contain cool air inside.

  1. HRV (Heat Recovery Ventilation).

This component allows for fresh air to circulate without allowing heat to escape in the process. Some buildings have even incorporated sophisticated ventilation systems that circulate air in and outside of homes; by extracting and redistributing warm air to different parts of the structure. This method is quite revolutionary as we can create comfortable heating without emitting CO2.

 

Photo provided by: Passive House Institute

 

Passive House Designs also tend to incorporate other components that help reduce emissions while continuing to produce energy efficient heating and cooling for its occupants, such as solar energy and geothermal energy. This is all done in the effort to prevent climate change, but these design strategies are also great for high density areas with high cost of living. Reducing energy consumption is great for keeping energy and appliance bills low. For those residing in areas such as Toronto, Calgary and Vancouver where temperatures change drastically throughout the year, Passive House structures may be coming to you much sooner than you may think! Buildings and developments across Canada are beginning to implement these methods and designs, as well as imbedding them into provincial and municipal standards.

It is possible to reduce energy consumption for a large number of residents, as well as reduce one’s energy bill, all while remaining environmentally conscious. With how quickly technology is advancing, and environmental standards making waves across the country, it’s simply a question of when will your city be implementing Passive House Designs?

For an in-depth look at passive house designs, see this wonderful resource, What is a Passive House? Understanding the Principles Behind This Sustainable Housing Movement.

The Future of Construction – Smart Technology in Building Materials

2018 seems to have been the year of smart home technology as gadgets such as smart locks, lights, thermostats, home assistants and many devices more push past the early adopter stage and are becoming more popular with consumers. All these smart home products can be a great addition for any individual looking to make their home a more comfortable, efficient space – but what about the physical property itself? Basic wood and concrete have been fundamental elements of building construction for centuries, and although construction techniques have certainly improved, there hasn’t been anything necessarily smart about these construction materials until recent developments in building material technology.

What to expect?

While society continues to barrel toward a more tech-based future, new companies are taking advantage of adding smart capabilities to building materials. These developments aim to help make buildings and structures safer, more durable, and technologically capable. Currently, there are a multitude of smart materials in development with applicable uses:

Smart Concrete

Whether a structure is intended for residential, industrial, or commercial use – concrete is a necessary and critical component of any building. Smart concrete is a recent development from the State University of New York at Buffalo and is not only stronger than traditional concrete, but can be monitored wirelessly for strain, stress, and damage before the concrete structure fails. With smart concrete, there will be no need for manual inspection or expensive embedded sensors. The composition of this new concrete can help in detecting areas where damage is present or likely to occur by using voltage monitors.  These monitors allow for timely repairs which is ultimately safer and more cost effective. There are even current developments working to create a version of this smart concrete that can self heal when it comes in contact with water. The applications of this type of concrete are endless, as it requires no special setup or additions as smart concrete is premixed with the necessary material.  To read more on smart concrete, check out this link.

Smart Glass

The future of windows is right around the corner. Smart glass is a new technology that enables glass panels to alter its transmission properties based on a change to either voltage, heat, or light. When a high amount of light is applied, smart glass can dim itself and transition from transparent to translucent.  Given that the glass can respond to a variety of different influences makes this smart material ideal for construction purposes. This glass can be used to replace static building envelopes, with the dynamic ability to respond to climate and adapt accordingly to save costs on electricity, heat, air-conditioning, and even the cost to buy and maintain traditional blinds and curtains. Smart glass is already being used by Boeing’s new 787 Dreamliner – more on that here.

Self-Healing Coatings

Self-healing coatings are a revolutionary product set to greatly impact building structures of all types. These coatings are a polymer-based product that can be applied directly to a variety of material, which will repair themselves when influenced by heat, light, or water. The most interesting part about these coatings is they can be used on existing structures, creating self-healing properties for material such as metal, ceramic, paint, glass, and even concrete. Coatings can be used to create building envelopes that can intrinsically correct damage such as scratches, cracks, and even utilize anti-corrosion properties. The application of coatings such as these can potentially save hundreds of thousands in repair and maintenance costs for property owners or managers.

With smart materials such as the above being introduced to the market, we are on track for safer, more reliable, and more durable structures. These structures can respond appropriately to the elements, monitor and repair themselves, and provide useful alternatives to older building components and forms of construction.

Normac is Canada’s premier provider of insurance appraisals, with experience in multi-residential, commercial, light industrial, and unique properties. For more information on the current state of construction or how construction directly impacts the total insurable value of your property – download our most recent eBook here. If you are interested in a no-obligation proposal for an insurance appraisal, request a quote today.