In the past few days, an awful lot of construction projects have been cancelled across Canada, and I lay the blame at the feet of Stephen Harper.
I design and sell buildings for a living. I deal with hundreds of prospective clients all across Canada, and generally it’s a satisfying and well compensated occupation. This year has been quite a roller coaster, with freight costs yo-yo’ing, steel costs surging by up to 50%, and uncertainty in the marketplace. OK, thats what makes life interesting, and there are sound reasons for all these things.
This year has seen agricultural construction demand collapse due to surging fuel and fertilizer costs all spring and summer, followed by the drop in many crop prices at harvest time. Construction for the manufacturing sector in Ontario, traditionally a huge and stable market has totally collapsed with the slow death of the whole automotive sector. Other manufacturers do not have a stable exchange rate environment, so despite the drop in the Canadian dollar, it is not dependable enough for exporters to sign long term contracts, without paying punitive fees to hedge the dollar.
Alberta has seen a raft of projects frozen, or even cancelled, for all the reasons above, PLUS collapsing energy prices.
There is still super strong demand in NewFoundland, and Saskatchewan, but fear is starting to set in, and good solid projects are being shelved due to uncertainty, and fear. It is that fear that is capping a bad year under the stewardship of the Conservatives, with a totally preventable disaster.
This week alone, I have had a significant number of building projects collapse. Due to the Conservative induced, and ONGOING political uncertainty, the Canadian dollar is moving down, like a basketball bouncing down the stairs. There is no rhyme, nor reason, but with an integrated North American materials market, every participant has to build ever increasing hedges into their project costs. This is pricing marginal projects out of the market, and I have personally witnessed HUNDREDS OF CONSTRUCTION JOBS LOST because of this volatility. They are mostly good projects, and when the situation settles, then the projects will mostly proceed in the 2009, and 2010 construction season. What really pisses me off, is that these, plus a large number of Government funded projects could, and should be starting RIGHT NOW! Canada really needs this to happen, and every small town that sees a project delay is losing 20 – 50 jobs over the winter.
So, why do I blame the Conservatives? They started this mess with their gratuitous attack on the opposition. They piled more rhetoric onto the hyperbola, and continually raised the stakes. Now they are putting their communications team into high gear, inventing a spurious constitutional crisis. The world is starting to listen, and political risk premium is now driving the dollars crazy ride. The Conservatives need to acknowledge that they screwed up, and surrendered their right to govern. They need to pay the price for their screwup, and step aside so a majority coalition can take the reigns with the full confidence of the house. It’s no longer about partisan interests, it is the only solution that will kill the uncertainty dead. The fact is that the Conservatives cannot, under any circumstances form a majority in the house TODAY, and that is now the only thing that will settle the uncertainty, and stop this death spiral.
I’m talking to you Ottawa, are you deaf to Canada’s Plea?