Report on the CBA September 2014 Conference: Building for the Future!
Andrew J. Heal
|On September 19 and 20, more than 100 leading practitioners of construction and infrastructure law met in downtown Toronto for a biennial conference devoted to delivering informative and engaging continuing professional development program to CBA members.Keynote speaker Stephen Bauld kicked off the conference with an enthusiastic discussion of procurement issues. As a long-standing participant in the construction procurement process, Stephen candidly shared his views of the many challenges facing the construction industry and its legal advisers. These challenges include: the shrinking pool of bidding contractors as time goes on; pre-qualification becoming very specific; and specifications that seem written towards a specific company. Smaller contractors with no expertise to bid have also become a looming issue. Stephen humorously mentioned one occasion where a supposedly broad-based tender effectively reduced the market to “only two bidders.” Stephen reminded the audience to keep in mind that the bid and contract documents are “living documents;” and that he often runs into the situation where the tender calling authorities have “re-purposed” documents originally designed for a different context or a different purpose. Health and safety issues, bid-shopping and bid-rigging were also subjects of Stephen’s talk.Following the keynote address were two panel discussions. First up was a panel of in-house counsel, courtesy of Gold Sponsor Borden Ladner Gervais LLP, comprised of lawyers from a number of industry companies including owners, contractors and consultants. Participants discussed how the role of in-house counsel has changed for them, acknowledging that the “new normal” for larger companies is to appoint in-house counsel. Those roles include a larger emphasis on the solicitor and “front end” contract work. Compliance issues have also become internalized, with the resulting expertise developing internally. In a competitive legal environment, in-house counsel acknowledged that allocating work to external counsel is budgeted beforehand. External counsel must work closely with internal counsel (who already have the trust of the internal business client,) and external counsel must make sure their retainer remains limited to “what it is asked and not more.”
It was particularly noteworthy that in-house counsel regarded their role in dispute avoidance, and being proactive in managing problem files, the key “value add” for them.
Next, a panel of leading practitioners (both in-house and “outhouse” counsel), courtesy of Gold Sponsor Cox & Palmer LLP, discussed MegaProjects, including the East Coast Muskrat Falls Project in Newfoundland and Labrador, and other mining and energy projects across Canada.
The panel discussed a number of important issues, including scheduling. On the very large energy extraction projects, some suggested that it appears schedule is more important than cost, and cost overruns may be tolerated to avoid schedule slippage because of the impact of lost production revenue.
Many of the issues arising of the MegaProjects panel dovetailed with a later panel discussing skilled trade issues.
Among the challenges and acting for large owners is the aging of the work force and the need for owners to be aware of local conditions particularly with regard to labour. Other points of note included the empowerment of First Nations, the Supreme Court of Canada decision acknowledging the duty to consult and the need to work with these communities to generate trust.
“Without the building block of trust, MegaProjects involving First Nations are going to be problematic, panelists said, making broad-based consultation and consensus-building key.”
Economic factors are not always the most important drivers in decision-making for First Nations.
There was also an invigorating discussion about P3 agreements and Ontario’s experience, particularly with Infrastructure Ontario and the delivery of many projects in that province using the P3 model.
Other panel discussions covered topics such as insurance and bonding issues; urban renewal; insolvency and construction; the shortage of skilled tradespeople; and exporting construction expertise – focusing on dispute resolution issues.
The Conference concluded with a “Cross Country Check-Up” on legal and industry developments of note from CBA Provincial Branch Chairs. Topics ranged from the Quebec legislative response to clean up public procurement practices following on issues raised by the Charbonneau Commission, to proposed Construction Lien Act reform in Ontario, arising partially in response to prompt payment concerns.
Themes arising from the 2014 Conference include the need to, regionally and nationally, develop the country’s rich bounty of natural resources in a prudent and sustainable way; the consequences of underinvestment and poor procurement practice in terms of the harm done to public Health and Safety.
As we explored the theme of Building for the Future, the positive consequence of construction activity was noted. Building for the Future involves not only the private sector taking risks, but now more frequently we are seeing governments participating in a novel way in partnership with the private sector to bring medium- and large-scale projects to completion.
As noted, this is often because we have to do more with less. It was also noted that lawyers are leaders in the knowledge economy. Yet lawyers need to continue to innovate to meet client needs. Clients bring lawyers the need for alternative project delivery mechanisms – lawyers have to meet that need. Clients bring lawyers the need to find ways to protect them in markets abroad and lawyers have to meet that need as well.
Now that large projects are the new normal, public scrutiny is ever more fierce, governments are accountable to the electorate, and we have to do our part to continue to help our clients, private and public, to new and improved solutions to their legal needs, and do our part to build for Canada’s future.
Conference materials are available through the CBA.
Thanks to the Construction and Infrastructure Law Section of the CBA and all those who participated. Looking forward to seeing all of you in Banff at the 2016 CBA Construction and Infrastructure Law Conference!
This article originally appeared in Skylines – October 2014, The CBA National Construction and Infrastructure Law Section Newsletter http://listserver.cba.org/t/3193203/33873288/18062/12/