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Environmental assessments add $232M in costs.

Ontario's uniquely extensive municipal-class environmental assessment system adds $232-million in additional costs and untold delays to construction projects every year, according to a study commissioned by the Residential and Civil Construction Association of Ontario (RCCAO).

The findings of the independent 52-page study, entitled "Are Ontario's Municipal Class Environmental Assessments Worth the Added Time and Costs?", are hardly surprising to businesses in the North, according to Peter Birnie, president of the New Liskeard-based Wabi Iron and Steel.

"The whole issue makes everything take longer, and you'd be hard-pressed to find an industrial manufacturer in Northern Ontario with municipal clients who hasn't been affected by this," says Birnie.


"When you're doing large projects, the struggle is always with getting things done in a timely fashion and these assessments definitely interfere with that. That said, we have to be kept in balance with the world around us, and being ahead of the curve is good, but we need to find a middle ground."

The study took a look at municipal infrastructure projects throughout the province, including a handful of road-widening and extension projects in Northern Ontario.

Overall, the North was found to have the largest minimum duration for environmental assessments at 10 months, as well as the highest average at 22 months.

However, its 29-month maximum was much shorter than that of the other three regions identified in the study. Eastern and central Ontario had a maximum of 37 months, while southern and western Ontario had 69 months, and the Golden Horseshoe had 87 months.

The costs for the environmental assessments themselves typically only represent one per cent of the total project cost. Their impact is instead more directly felt in their creation of project delays, which the study says constitutes 14.5 per cent of the construction costs.

The study also assumes additional costs would be incurred such as the internal municipal costs for staff time and resources for tendering or selection of the assessment consultant, publication of notices, related legal fees and so on. These costs were not estimated, and would be in addition to the $232-million.

To some extent, these assessments are responsible for some of the federal stimulus funding going to projects that would ordinarily not be considered priority infrastructure, says Andy Manahan, executive director of the RCCAO.

A municipality may opt to upgrade lighting in parks instead of pursuing roads and sewer projects as the environmental assessments may be too time-consuming to ensure the projects would be completeD by the March 2011 deadline. What's more, construction becomes less of an option once the snow hits the ground, making the unofficial deadline the beginning of winter this year in October or November.

As any invoices issued after that March 2011 deadline will not be paid by stimulus funding, many municipal governments have instead chosen to avoid the potential financial problem of coping with these assessments, says Manahan.

This is made worse by the fact that federal and provincial levels of government have begun to discuss an "exit strategy" with regards to stimulus-related infrastructure funding so as to start bringing the ballooning deficits under control.

"This kind of infrastructure money probably won't be available to the same degree in the future, so have we lost the opportunity to build the infrastructure that should have been built rather than stuff that is maybe more secondary in nature?" asks Manahan. "What does the future hold post-2011? I don't have that answer, but we're all saying these improvements can't be done off property taxes alone, and we're concerned there's going to be less money in the pot."

The solution, suggests the report, is to remove the obligation for environmental assessment study reports to consider alternatives in cases such as road widening and intersection improvements, cutting down on time and leading to an estimated savings of 10 per cent to 25 per cent. Manahan agrees, arguing that the time and money would be better spent on improving overall measures of mitigating environmental concerns.

Meetings were held with senior staff from the Premier's office and the Ministry of the Environment in early April, where RCCAO made the case for what Manahan refers to as "simple" fixes, such as bringing the provincial classification of projects on par with inflation. As many projects are classified by cost, this would allow for more projects to be brought under less onerous environmental assessment work.

Prior discussions with both levels of government have earned some recognition of the problems of duplication. While some streamlining has been inserted into the language of the Green Energy Act, similar solutions have not been offered for the broader municipal-level construction industry, says Manahan.

"We need to work with government on this, make them understand that we need to stay competitive with other jurisdictions both in Canada and around the world," says Birnie.


Northern Ontario Business
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Title Annotation:CONSTRUCTION
Author:Stewart, Nick
Publication:Northern Ontario Business
Date:May 1, 2010
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