A few days ago, I was watching the Globe and Mail Canadian Federal Debate and it struck me how much Ontario construction companies can benefit from all three candidates proposing to significantly improve spending on infrastructure.
Regardless of whether you are voting for Mr. Trudeau’s Infrastructure Bank, Mr. Harper’s $5.8 billion plan, or Mr. Mulcair’s $1.3 billion annual transit spend, the next federal cycle will bring unprecedented new investment in Canadian infrastructure.
So what’s the real story here?
Yes, the increased spend will mean more projects for construction companies all over Canada and more projects means the hiring of more skilled trades, which is great, but what most people don’t know, is that a few of those companies will have a massive advantage over their peers. Here’s why:
For those of you in the know, the requirements for occupational health and safety are changing dramatically in Ontario in 2016. So much so, that if your company is not prepared for the shift, your ability to bid on new projects will be significantly diminished, if not erased entirely. Yes… you read that right, if you are not prepared for this change, you better start thinking about how your employees will start leaving for companies that are ready.
The change is a result of the movement towards the Certificate of Recognition (COR), a mechanism for public endorsement by the Canadian government and the most influential worker safety organizations including the IHSA. COR drives positive workplace behavior by forcing companies to design, maintain and actually practice risk reduction techniques that follow a strict set of standards.
In the same way that GAAP and IFRS are designed to protect shareholders, COR is designed to protect workers, and it’s working. Without COR, buyers of construction are left without a mechanism to ensure that their sub-contractors are adequately protecting employees.
It’s not just the government mandating a new program of higher standards, the industry has also made it very clear that companies that don’t achieve their COR won’t benefit from the proposed increase in infrastructure spend.
COR is here to stay and if your immediate reaction is a drop of your shoulders with a frustrated sigh because you think this oversight will reduce efficiency and profitability, a) you’re not alone, and b) you’re wrong and need to change the way you think about safety. Numerous studies have now concluded that investments in safety actually enhance profitability. Like every other investment you make in your business, you need to think carefully about which ones you choose. COR is a good one. It gives you a specific and measured way to reduce risk and gives you a competitive advantage by allowing you to qualify for major infrastructure contracts. If you commit the resources and execute on the change management, there is no downside of achieving your Certificate of Recognition.
Here are the facts:
Most people reading these facts will recognize the competitive advantage they will receive by achieving COR. Make no mistake though, it’s not a pencil whipping exercise and requires commitment from both management and executives to include safety in their corporate KPIs. It’s a culture change, but one that will benefit everyone, including shareholders.
The federal election is shaping up to be a close race, and with what is likely to be a minority government, the leaders of the opposition will have a significant influence on policy. Regardless of the outcome, you can be confident that spend on infrastructure will continue to increase, giving rise to innovative construction companies looking for a true competitive advantage.
Be forward looking and start the COR process today because your competitors may be starting tomorrow.