March 28, 2012

Construction industry leaders support 2012 federal budget

Construction leaders in Canada are applauding the Conservative government's 2012 Federal budget, which promises to reduce the deficit and implement regulatory changes that cut the time it takes for environmental assessments of major construction and development projects.

"We will implement responsible resource development and smart regulation for major economic projects, respecting provincial jurisdiction and maintaining the highest standards of environmental protection,” said Minister Flaherty during the budget speech.

"We will streamline the review process for such projects, according to the following principle: one project, one review, completed in a clearly defined time period. We will ensure that Canada has the infrastructure we need to move our exports to new markets.”

Finance Minister Jim Flaherty presented the 2012 federal budget today, which outlines measures to eliminate the deficit, as well as improving the existing regulatory framework for the construction of energy and industrial projects in Canada.

The $24.4 billion deficit projected for 2011–12, before measures announced in this budget, is $6.6 billion lower than the $31.0 billion deficit projected in the 2011 Budget Update. The deficit in 2011–12 is projected to be $8.5 billion lower than it was in 2010–11, and it is projected to decrease by an additional $3.8 billion in 2012–13.

The deficit is projected to continue to decline to $1.3 billion in 2014–15.

The budget also addresses the rules and bureaucratic reviews faced by major construction projects, which can undermine the economic viability of projects, by increasing costs and uncertainty.

“We are very glad the government is continuing their focus on jobs, growth and paying down to achieve fiscal balance,” said Terrance Oakey, president of Merit Canada. “We are also pleased that the government plans to make the permitting and federal environmental review process more efficient.”

The Canadian Building Trades are also pleased with the measures in the budget that streamline the regulatory process.

“The skilled tradespeople who go to work every day on large energy projects ought to benefit from the streamlining of the regulatory process,” said Robert Blakely, director of Canadian affairs for the Building and Construction Trades Department of the AFL-CIO in Canada. “When we are workforce planning and training apprentices, having this kind of roadmap is invaluable. We support a system that is fair, and rigorous for the environment – we also support a system that makes economic sense for workers and industry.”

The 2012 Budget 2012 proposes to improve the review process for major construction projects, such as establishing clear timelines, reducing duplication and regulatory burdens, and focusing resources on large projects where the potential environmental impacts are the greatest.

To achieve this goal, Budget 2012 plans to invest $165 million on the following measures: $54 million over two years to renew the Major Projects Management Office initiative to support effective project approvals.

  • $13.6 million over two years to support consultations with Aboriginal peoples to ensure that their rights and interests are respected.
  • $35.7 million over two years to support responsible energy development, which new regulations for tanker inspection and safety.
  • $13.5 million over two years to strengthen pipeline safety.
  • $47 million over two years to the Northern Pipeline Agency to support federal regulatory responsibilities related to the Alaska Pipeline Project.
  • “There are not a lot of details at the moment, but we support the government’s intention to streamline the regulatory process and ensure there is predictability in the process,” said Oakey. “We are in communication with the government in terms of what we would like, and are hopeful we can work out a regulatory process that benefits everybody.”

    The federal and provincial governments share responsibility for regulation, which means some major projects are examined twice. In addition, public hearings into proposed mines and pipelines can drag out the approval process for years.

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