New local figures give the chief executive director of the association representing the construction sector on Vancouver Island (VICA) reason to remain bullish about his industry despite new mortgage rules designed to cool down the residential housing market.
Building permit values in Saanich reached $176.5 million through August 2016, according to the Vancouver Island Construction Association. This figure is just below the total value of $179 million for all of 2015.
“These are pretty impressive numbers,” said Greg Baynton.
So what accounts for these figures? Baynton says Saanich, like the Capital Regional District, is currently experiencing a strong residential market.
Figures released by Yellow Sheet Construction Ltd. show that new residential building permits rose 29 per cent across the CRD through the first seven months of the year for a total value of $326 million.
Other sectors are also performing well. Demand for commercial space is on the rise and local governments are investing in infrastructure, he said.
“It is everything,” he said. “It’s a nice scenario.”
Overall, Vancouver Island building permits reached their highest levels since 2008, according to Baynton, who predicts a 10 to 15 per cent increase in new permits across Vancouver Island.
Looking at the larger economic picture, Baynton remains optimistic despite predictions of a hike in interest rates and the economic situation in Alberta.
The federal government last month also announced a series of measures that make it harder for homeowners to take on mortgage debt.
They include “stress testing” for borrowers who take out insured mortgages amidst fears that extremely low interest rates have encouraged Canadians to take on more debt than they and the financial system at large can afford to assume.
Baynton said this stress testing could cool down the current high level of building activity.
“But we are still forecasting a very positive outlook,” he said.
Baynton made these comments after VICA announced its new board. Leaving the board is Saanich’s Don Cameron of Northridge Excavating. A long-standing board member, Cameron served VICA in various roles, including as chair in 2015. Cameron also played an instrumental part in the 2011 amalgamation of VICA and the Mid-Island Construction Association (MICA).
This merger completed a process of consolidation. At one stage, four separate organizations represented the construction industry on Vancouver Island — three smaller regional bodies and VICA.
Daynton said their merger under the VICA umbrella aimed to improve service, governance efficiency, communication and representation.
As Cameron looks back on his time with VICA and ahead to his time as a consultant, he notes that the construction industry faces a number of issues.
They include the availability of skilled labour and navigating the different project and procurement rules that exist across the multiple municipalities in the Greater Victoria area.
Cameron, who favours amalgamation of Greater Victoria area municipalities, says this process can “be extremely difficult.”
Also retiring from VICA’s board is Eric Ulrich of Playsted Sheet Metal.
Joining VICA’s board is Saanich’s James Clapp, senior vice-president of the construction division at Jardine Lloyd Thompson (JLT) Canada, one of the leading suppliers of construction insurance.
Clapp said in an interview that he looks forward to joining the board.
“I hope to contribute as much as possible to benefit members of VICA,” he said.
Proper insurance is an important part of any building project, especially when it comes to public project funded by taxpayers, he said.