Moncton builders consider delaying projects as pandemic continues

The coronavirus pandemic is prompting developers in the Moncton region to assess week-by-week what construction projects can move ahead this year.

Construction is allowed during the province's state of emergency, though companies must follow physical distancing rules.

Delays or cancelled projects could result in lost work for tradespeople involved in construction in an already declining economy and, for the municipality, the possibility of lower revenue when costs are rising.

"There's not a lot of certainty around the situation," said Vaughn MacLellan, the president of Westmount Developments.

Westmount and its partners planned to break ground in May on a six storey mixed use building called Tannery Place North along Vaughan Harvey Boulevard.

"We're monitoring what we can do in terms of construction, what delays may be and, if the situation continues, if we can keep on with the same time frame."

The building, part of a multi-phase development known as The Junction, would be adjacent to a similar building still under construction.

He said that building remains on time with precautions in place, including screening all workers entering the site.

Jim Dixon, a principal with The Ashford Group, said construction could start this spring on another six storey building that the company has planned for a block bounded by Elm, Gordon and Highfield streets.

The 65-unit apartment building received approval by the city's planning advisory committee last week. It still requires a building permit. He said the total cost of the building would be about $13 million.

"We're still going forward until circumstances suggest that's not the prudent thing to do," Dixon said.

Dixon said Ashford will defer most work on plans for another apartment building along Lorentz Drive until next year because of uncertainty caused by the pandemic.

The company recently demolished the former Paramount Theatre building on land it purchased downtown last year.

"We're still proceeding with our planning and by the time we're ready to execute, we'll be hopefully moved to a more positive phase of life," Dixon said.

For the municipality, the buildings are expected to result in more people living downtown and an increase to the city's tax revenue.

Kevin Silliker, Moncton's director of economic development, said the city is contacting builders to talk about construction projects that were planned to assess whether any changes are anticipated.

"We're still in the relatively early stage," Silliker said. "So far, most projects seem to be on track."

Nadine Fullarton, president of the Moncton Northeast Construction Association, said its members have reported delays to industrial or commercial construction.

Fullarton said the pandemic has led to many layoffs of administrative workers and skilled tradespeople.

The region's municipal governments, chamber of commerce and economic development agency are preparing a business survey to gather data about layoffs. Silliker said results may be available by the end of the month.

Just months ago, the region was in the midst of a boom. Population growth was lowering residential and commercial vacancy rates, prompting new construction. Home sales and prices were climbing.

But the nation's economy shrank a record nine per cent in March, Statistics Canada estimated Wednesday. The Canadian Real Estate Association reported home sales fell 14 per cent nationally last month.

Premier Blaine Higgs said two weeks ago that up to 30,000 people in the province have been laid off.

The provincial and federal governments have launched financial relief programs in an attempt to cushion the blow.

MacLellan said Westmount Development will consider a number of factors when deciding whether to continue with its plans this year, including financing terms, the labour market, whether further restrictions are placed on construction activity and supply of building materials like steel and concrete.

Beyond the two Tannery Place buildings, a third building facing Main Street was tentatively expected to start next year with a fourth expected to include a hotel.

MacLellan said they're taking a long-term view of the projects and now looking at a 20 to 30 year timeframe.

"We don't know ultimately the degree of economic damage we're going to have," MacLellan said. "We're certainly going to have a recession. Are we going to encounter something that's more similar to a depression? … If that happens, that can have long-lasting impacts."