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

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

Kramer Levatte ofRDL Construction in Point Edward said fuel increases mean contractors are paying more for gravel, concreteand 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 andoverhead to construct a new building.

Duncan Williams, president and CEO of the Construction Association of Nova Scotia, said fuel prices are affecting every aspectof 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 saidif 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.

"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 saidprojects 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.