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Commercial construction slowed by the recession.

Commercial construction slowed by the recession

Building officials from the five major Northern Ontario centres are predicting that the recession will continue to stunt construction activity in the commercial sector.

The value of permits issued for commercial construction in 1990 were down throughout Northern Ontario and are not likely to recover for at least another year.

Officials of some cities note that the only factor which is helping stabilize the situation is past economic diversification efforts.


Building officials with the City of North Bay believe that the diversification of the local economic base is largely the reason for the amount of new commercial construction over the past year.

Last year the building department issued permits for $2.3 million worth of new commercial construction. To the end of February of this year the department had already issued permits worth $3.5 million.

Last year's figure included the construction of the Algonquin Square Shopping Centre., built in the city's downtown.

According to Rolf Vasbotn, the city's chief building official, there was a substantial amount of renovation and alteration work completed in the commercial sector last year.

The city issued permits for additions and renovations worth $4.3 million, and Vasbotn anticipates that level of activity will be maintained this year.

In the first two months of 1991 the city issued permits worth almost one-third of the total value of the permits issued for all of last year.

Permits issued in the first two months for renovations and alterations totalled $1.6 million, compared to only $435,000 for the same period last year.

"Last year it was encouraging to see private industry active in renovations and additions," Vasbotn said, "North Bay is fortunate to have an economic base which maintains levels without setback."


Sault Ste. Marie's building department officials predict very little, if any, new construction in the commercial sector for the remainder of 1991 largely due to the uncertain future of the city's largest employer, Algoma Steel Corp.

The city's chief plans examiner, Syl Allard, noted that the value of commercial building permits issued this year to the end of February dropped to $600,000 from $2.5 million during the same period last year.

However, there was an increase in the number of permits issued for alterations and repairs, which includes expansions, to 13 from eight.

Allard said the effects of the situation at Algoma Steel were already being felt in 1990 and that one project accounted for most of the value of the commercial permits issued.

He said that construction of the third phase of the Station Mall, which also saw improvements to 50 stores within the shopping complex, accounted for roughly $2 million worth of new commercial construction in 1990.


Building officials from the Region of Sudbury expect a decrease in the value of new commercial construction this year. However, the decline is expected to be only short-term.

In January and February the department issued construction permits valued at more than $1 million, down from more than $2 million during the same period last year.

However, Bernie Fransen, the director of building controls, expects that there will be a turn-around towards the end of this summer when the country is expected to begin its recovery from the current recession.

Last year the region issued permits for new construction worth more than $16.1 million.


If compared with figures from 1989, new commercial construction would appear to have taken a nose dive in Timmins last year. However, activity in the sector was above average for most years, according to the city's director of planning, building and maintenance.

Ron Peterson said that the 15 permits issued for new construction during 1990 were valued at $3.8 million, compared to $18.6 million the year previous.

Peterson said he expects the level of new commercial development to remain at 1990's level.

"There is the possibility of new developments and, with any luck, we will be within reach of obtaining figures comparative to last year's, somewhere in the neighborhood of between $5 million


Officials of the City of Thunder Bay building department are expecting an average year for commercial construction, much the same as 1990.

In 1990 the building department issued 22 permits for new construction valued at $4.3 million and 121 permits for renovation-related work valued at $4.6 million.

One of the more notable projects in terms of value was the City of Thunder Bay telecommunications building which cost $1.7 million.

"The remainder (of the projects) hovered around the $200,000-to-$300,000 range," said Jim Buie, the city's co-ordinator of plans examination.
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Title Annotation:Report on Construction; Northern Ontario's commercial sector
Publication:Northern Ontario Business
Date:May 1, 1991
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