Major Capital Projects

Article by Mark Bain and Pat Maguire

Capital spending by governments at all levels, by quasigovernmental entities and by private enterprise has been on the rise in Canada over the past few years. There has been extraordinary activity in certain areas, notably the development of the oil sands in northern Alberta, and the broad expansion of activity across all sectors generally have meant upward pressure on costs as prices for labour and materials have increased. In some cases, the increases have been quite dramatic.

In fact, the acceleration of private capital spending has compounded the existing public infrastructure crisis, with private projects crowding out public works. This trend is most pronounced in Alberta, where the sheer number of major capital projects in the works by private enterprise will both crowd public infrastructure projects out of the market and, paradoxically, require additional spending on public infrastructure as existing stock is stretched to its limits.