Landmark Ottawa library project faces the same conundrum as the rest of the construction industry

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“There is no information in the market to suggest that prices are going down. In fact, they are still going up.”

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How can the cost of building a new super-library in Ottawa soar by $ 141 million?

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Among the factors: a devastating winter storm in Texas, construction stimulus programs in Asia and massive new distribution centers popping up across North America.

The perfect storm that swept through mundane renovation and construction projects also struck a landmark joint project between the Ottawa Public Library and Library and Archives Canada. Originally set at $ 192.9 million in 2018, the new library is now expected to cost $ 334.16 million.

The city received two bids to build the project: one from EllisDon and the other from PCL Construction. PCL’s bid was the lowest, but still represented an increase of $ 64 million.

Given the volatility of material and labor costs, PCL took a considerable risk by offering the city a firm price, said John DeVries, president of the Ottawa Construction Association.

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The 2016 cost estimate included a possible escalation of 10 percent, but actual construction inflation in Ottawa is currently over 65 percent, according to a report to the library’s board of directors.

“The bid price is a fixed price, so it will not increase. There is no information in the market to suggest that prices are going down. In fact, they continue to increase, ”said the Orleans council. Matthew Luloff, the chairman of the library board.

“Waiting for the prices to drop and relaunching the tender would result in a more expensive project and potentially no project at all if the general contractors did not come back to the table to bid on this project a second time. “

The City of Ottawa and Library and Archives Canada, which will share the building at 555 Albert Street, have embarked on an iconic project at a time when global markets are in turmoil, DeVries said.

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There are risks involved in large projects spanning multiple years, especially one-off projects like a new central library where items are custom-made, he said.

The design of the new bookcase incorporates exterior glass with a sintered pattern. This will help reduce glare, lower cooling costs, and lower the risk of bird strikes, giving the exterior a distinctive textured look. But the number of global manufacturers capable of producing glass for a project of this size is very limited, DeVries said.

Shortages and shortages of materials have been reported across all sectors of the construction industry.

The price of steel, for example, has gone from $ 600 to $ 800 a metric ton before the pandemic to $ 1,800 to $ 2,000 now, said JC LeBlanc, director of business development for Canam, based at Montreal, the largest steel manufacturer in North America.

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Last June, the Ottawa Construction Association hosted an industry roundtable to discuss the turmoil and price escalation in the materials market. Building large distribution centers, such as those built by Amazon, Costco and Walmart, is pushing steel prices up as consumers turn to online shopping, the roundtable said.

The issues affecting the Canadian construction industry are global. There is a global shortage of shipping containers and congestion at ports, which has delayed unloading and delivery. Government stimulus plans in Asia are boosting demand for building materials.

A winter storm in early 2021 affected petrochemical manufacturing in Texas. Factories had to be closed, pipes burst, and equipment and factories had to be rebuilt. This affected the supply of plastics, firestop materials and paint. The price of resin pipes has risen 100 to 200 percent, according to the roundtable.

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By the end of the spring, the North American drywall market was exhausted and there were a few instances in eastern Canada where the distribution network had no inventory of 5/8 ” drywall for sale to consumers. suppliers. This spring, plywood costs had doubled to $ 100 a sheet, and oriented strand board (OBS), a type of engineered wood similar to particle board, was more expensive than plywood.

Meanwhile, the construction industry is also struggling with labor shortages. DeVries predicts this will get worse as customers begin to demand vaccination policies for workers.

“Projects of this size have a number of subcontractors and subcontractors of subcontractors, each of whom needs a team dedicated to this project at the time their service needs to be delivered,” said Luloff.

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“First of all, it is increasingly difficult to hire in the trades these days, resulting in an increase in the cost of labor and the challenges of its supply. Second, the Ottawa construction market is very dynamic right now. All these teams are busy on other projects, which creates a supply and demand dynamic that drives up prices.

“Value engineering” seeks to achieve savings on project components, such as identifying alternative materials. A report to the library’s board of directors said $ 100 million in savings had been identified by re-examining materials in parts of the building.

The city will share the building with Library and Archives Canada, which will contribute $ 136 million compared to the initial estimate of $ 70.6 million.

The Government of Canada is committed to its share of the project and is confident it will move forward, Library and Archives said in a statement.

“Library and Archives Canada has taken the necessary steps to secure additional funding from the Government of Canada to respond to increased pressures related to COVID-19 and the overheated construction market in the National Capital Region. “

This project is not a condo box or tower, DeVries said.

“Architects do beautiful, creative things. Then it’s up to the building industry community to determine if they can build it, ”he said. “Constructability is part of the sticker shock.”

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