Construction industry ready to embrace innovation with $150M in federal assistance

By Debbie Lawes

Canada's construction industry is seeking an initial investment of $150 million in the next federal budget as part of an ambitious strategy to transform the sector from a productivity and R&D laggard to a global research and innovation leader. Canadian Construction Innovations (CCI), an initiative spearheaded by the Canadian Construction Association, says government funding would be matched with "significant industry co-investment" to create an industry-led technology demonstration program that supports partnerships across the construction value chain, and with academia, the National Research Council, small technology developers and other players in the infrastructure space.

"We want to engage academia to help deliver projects that would be very applied and commercial, under the guidance of industry," says CCI president Pierre Boucher. Launched in 2014, CCI represents construction owners, architects, engineers, general contractors, industry suppliers, urban planners and others.

The CCI ramped up its lobbying efforts this spring, meeting with ADMs and senior policy advisors with Infrastructure Canada, Natural Resources Canada (NRCan), Innovation, Science and Economic Development Canada, and Finance Canada. Boucher was joined at most of these meetings by Catherine Cobden, an Ottawa-based consultant. Cobden previously worked as an executive VP at the Forest Products Association of Canada, where she played a key role in developing the Canadian Forest Sector Transformation Strategy. CCI is following up these lobbying efforts with a November 15 event on Parliament Hill.

Canada's construction sector is the fifth largest in the world and one of this country's main economic drivers, generating 7% of GDP and employing more than 1.25 million workers. Yet, according to Statistics Canada, its R&D intensity as a percentage of GDP is just 0.06%, the lowest of all major industrial sectors in Canada. The industry is also highly energy and resource dependent — it contributes over 40% of Canada's greenhouse gas emissions and utilizes over 50% of natural resources Canada uses annually.

A May report by the World Economic Forum said these challenges affect the engineering and construction sector in many countries, a problem it attributes to "persistent fragmentation of the industry, inadequate collaboration with suppliers and contractors, the difficulties in recruiting a talented workforce, and insufficient knowledge transfer".

CCI believes a national strategy and better linkages in the construction ecosystem will help to reverse this trend, with the pay-off being improved sector performance, market expansion and more sustainable and resilient infrastructure.

"Canada is an industrial country with a mature industry in construction," says Boucher. "We can do better. We should be world leaders."

CCI sees a major role for the federal government, as both a regulator and buyer of construction services, in stimulating innovation in the construction industry. The government has committed to spend $125 billion over 10 years on infrastructure, split evenly between public transit, green infrastructure and social infrastructure. Most of this infrastructure is owned by the provinces, municipalities and indigenous communities, which CCI sees as major partners in drafting the industry's first innovation strategy.

From idea to scale up

CCI's pre-Budget brief to Finance Canada urges Ottawa to develop and implement a Construction Value Chain Innovation Strategy "to dramatically reshape the future of Canada's built environment over the next 10 years."

The strategy would include government funding for three pillars of research and technology development: ideation, validation and procurement. The ideation phase would see government supporting networks or incubators that bring fragmented academic public R&D communities together to focus on research that industry needs.

The money, starting from about $500,000 to $1 million per incubator, would likely come from the $800-million committed in the last federal Budget for networks and clusters.

CCI created its first incubator in January, with funding from NRCan. Its aim is to create an industry-led program for energy conservation in the heavy construction sector. It issued a report in March that includes several recommendations for the design of such a program.

The second pillar would support technology demonstrations through a Built Environment Innovation Pilot (BEIP) fund. The CCI is asking for an initial federal investment of $150 million over five years for research that mitigates the risk of bringing new products, processes or models to market, such as new ways to cure concrete, the use of drones for site assessments, sensor-equipped buildings and advanced building materials.

"There are also new technologies coming into the industry like robotics and BIM (Building Information Modeling) which takes an integrated approach to design. We're falling way behind as an industry," says Boucher.

BEIP funding would be available to public or private owners, contractors, equipment manufacturers, material suppliers and others, and be matched with industry capital. The insurance sector is viewed as a key investment partner as it already spends millions of dollars each year on risk engineering.

The third pillar would require significant changes in how governments purchase construction services. The CCI argues in its submission to the Innovation Agenda that "existing procurement approaches are having a dramatic chill effect on innovation". It recommends a procurement set aside for major projects, to be phased in over several years beginning in 2021. Modelled on the US Federal Highway Administration's Research and Technology Program, the set aside funding would support the validation of commercially ready innovations.

"This government wants to create growth," says Boucher. "You create growth by attracting investment and attracting companies to Canada. To do that, you have to have a modern infrastructure."

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