While the COVID-19 pandemic has already had a dramatic impact on how infrastructure is built in Canada, its effect will also be felt for many years.
In the short term, social distancing requirements and travel restrictions have meant that construction projects have suffered delays. In the Atlantic region, says Daniel Simmons of McInnes Cooper (Government priorities shift with COVID-19), a $200-million expansion of St. John’s International Airport was put on hold because of COVID-19 and the drop in air travel.
Many existing infrastructure projects now need project sponsors to request relief from the lender where COVID-19 is causing delays, says Catherine Doyle of Blake Cassels & Graydon LLP (Investments not abating despite pandemic), which means increased requests for waivers and relief under existing finance covenants.
On the bright side, virtual dispute resolution has gone into overdrive, with costs savings and efficiencies created overnight.
“On all fronts, we’ve seen that, over the past few months, parties have been able to accomplish what the courts and arbitrators and mediators have been trying to do for the past two decades,” says Sharon Vogel of Singleton Urquhart Reynolds Vogel LLP (Adjudication, virtual dispute resolution in overdrive).
Changes in government priorities will have an even greater effect on how infrastructure is built. Roads and bridges may be falling out of fashion as Canadians stay home to work, but health care and IT infrastructure have become government priorities.
There is also a new openness to different funding models, and ballooning debt may cause governments to revisit P3s. “As much as infrastructure is the big ticket that governments love to announce, I struggle to think where the money will come from unless through the P3 model,” says Glenn Ackerley of WeirFoulds LLP (Government priorities shift with COVID-19).
Yet while project execution may change, the importance of infrastructure to the Canadian economy has never been more apparent.
Lexpert is pleased to partner with The Canadian Council for Public-Private Partnerships, whose advocacy, research and education on behalf of its members continue to drive this sector.
Tim Wilbur, Editor-in-Chief