Nova Scotia

N.S. construction industry worried projects will be scrapped as fuel prices soar

The Construction Association of Nova Scotia says fuel prices are affecting every aspect of the construction business.

Every aspect of business impacted by fuel prices, says construction association

A person is shown kneeling and welding together pieces of rebar.
Work continues on construction of the new Nova Scotia Community College Marconi Campus in downtown Sydney, N.S., on Thursday, March 17, 2022. (Tom Ayers/CBC)

There are concerns in Nova Scotia's construction sector that new projects may be delayed or scrapped if the cost of fuel continues to rise along with the price of building materials. 

Kramer Levatte of RDL Construction in Point Edward said fuel increases mean contractors are paying more for gravel, concrete and everything else.

Not only is it inflating the cost of doing business, Levatte said costly fuel may slow construction projects around Cape Breton.

"I think it's going to stagnate the economic growth that we've seen in the past couple of years, because construction projects are over budget now from what they were two years ago," Levatte said.

In Halifax, the cost of residential construction at the beginning of 2022 had increased 18.7 per cent over the year before, while costs of non-residential construction increased 11.4 per cent during the same period, according to Statistics Canada. 

The price reflects the value of all materials, labour, equipment and overhead to construct a new building.

Duncan Williams, president and CEO of the Construction Association of Nova Scotia, said fuel prices are affecting every aspect of the construction business.

"Everything from materials, supplies, delivery, shipping, manufacturing, you name it," he said.

"You will see some increases in prices for any renovations, or remodeling or repair work, maintenance work."

Williams said if high fuel prices continue into the fall, some projects may be reconsidered. 

Most construction contracts don't have escalation clauses that would cover fluctuating gas prices, Williams said, though contractors can go back to purchasers and renegotiate.

'Every aspect of the business' will be affected by fuel prices, says Duncan Williams, president and CEO of the Construction Association of Nova Scotia. (CBC/Rob Short)

"Obviously, we'd love to see government take a look at their contracts and have conversations with contractors," he said.

"Because we don't want these prices that are really unprecedented to cause contractors to go out of business or jeopardize projects."

The Department of Public Works said projects are moving forward.

"We are working closely with our construction teams including our contractors to mitigate supply chain issues and costs escalation," said a department spokesperson.