Market Q1 Intelligence 2015 Report Oil price bust is a boon to other sectors

BTY.COM Contents

5 Overview

5 Escalation Summary

6 Regional Snapshots

6 Ontario

8 British Columbia

10 Alberta

12 Saskatchewan

14 Quebec

16 Manitoba

17 Atlantic Region

18 United States

20 Cost Data Parameters Comparison

FEATURED STORIES

4 Canada: a continuing success story

5 More people, more investment, more projects

9 Taller wood buildings gain ground across Canada

11 Major mining prospects north (and south) of 60

13 Mobility is key for meeting labour demand

15 Making the most of modular construction

19 U.S. has potential to become world’s largest market for P3 projects

2 BTY Group Market Intelligence Report - Q1 2015 BTY.COM 3 Canada: a continuing success story OVERVIEW More people, more investment, more projects

Joe Rekab Toby Mallinder Gord Smith Managing Partner Partner Partner

WELCOMING 2015 WITH CONFIDENCE EXPORTING OUR EXPERTISE CELEBRATING P3 ACCOMPLISHMENTS A lower oil price notwithstanding, housing starts reflect the steady influx: 2015 Escalation the continuing flow of people to, and 189,000 units in 2014 and 189,500 in 2015. It’s an ill wind that blows no good – so goes Resurgent U.S. and overseas economies The continuing success of the Canadian investment in Canada will help keep Summary the old saying. The drop in the price of oil are also creating opportunity for the construction industry is due in no small workloads stable in 2015. Sustained Construction will remain strong in BC, may be painful for oil producing provinces, Canadian construction industry. Many of measure to the projects procured using investment in the energy sector in while activity levels settle back from Downward pressure is but it is blowing plenty of good across other Canada’s leading builders have taken on the P3/AFP models. And the Canadian P3 particular – hydro, oil and gas, and record levels of prior years in Alberta and coming from: sectors of the Canadian economy. Consider large Public Private Partnerships (P3) model’s reputation as best in class is well renewables – will combine with a steady Saskatchewan. The silver lining there is the growth drivers in this time of lower- infrastructure projects in the U.S. BTY grounded in the numbers. stream of immigrants that supports much lower cost escalation and easing • Forecast for continued modest cost oil, lower value Canadian dollar, and has been there to assist them (and U.S. residential demand to power steady growth labour demand for skilled trades. economic growth now even lower interest rates: builders) with our P3 advisory services. The value of projects that have reached in the construction industry. An estimated • Lower oil prices See more about the burgeoning U.S. P3 financial close exceeds $70 billion – and the $675 billion worth of projects – 75% of Bolstered by increasing demand from • Softer commodity prices (except • Intensive energy users such as market on page 19. models have a nearly impeccable record of them in the energy sector – are underway a strengthening U.S. economy, a lower lumber) that could cause a manufacturing, mining, agriculture, projects completed on-time and on-budget. or planned over the next decade. The lower loonie that favours manufacturing exports, decrease in materials costs and forestry are enjoying huge cost The growing U.S, market is also fertile Over the past decade The AFP/P3 model has oil price and legal and environmental continued infrastructure and other • Tighter restrictions on mortgage savings. ground for developing new markets for our delivered an estimated $9.9 billion in cost challenges may cause delays, but long- non-residential spending, and resilient • Demand for their output is rising as Cost Management and Project Monitoring savings for taxpayers over the traditional term, the tide is rising for oil and gas, residential sectors in their big cities, lending the U.S. economy continues to post services lines. In fact, we have opened two procurement method. That may help explain liquid natural gas, and hydroelectric as Ontario and Quebec will see accelerated impressive gains. new offices – in Los Angeles and Phoenix – why P3s are also becoming more popular well as renewable energy projects. About growth, as will Manitoba. Atlantic Canada Upward pressure on pricing • The lower Canadian dollar makes to serve the industry across the U.S. More across the U.S. See page 19 for more on half of the foreign direct investment in is again seeing record investment in is coming from: their exports more affordable – and on that on page 18. that. Canada – an estimated $343 billion in 2013 major projects, but the lower oil price Canada a more attractive place for – went to manufacturing, oil and gas and in Newfoundland and Labrador, and foreign investment. BTY has also been leveraging the Today, there are 220 P3/AFP projects mining. The lower loonie will only increase population losses elsewhere, sap the • A weakening Canadian dollar, international expertise, experience in operation, under construction, or in Canada’s appeal to foreign investors. vitality of overall construction activity. raising the cost of imported The lower cost of energy and borrowing and global networks of many of our procurement across Canada. The P3/ goods primes the pump for business to expand team members. And the reputation for AFP model has been used successfully for Continuing high levels of immigration The consensus view among major banks • Sustained spending on with capital investment in commercial and excellence that our firm enjoys. We’ve been transportation, transit, healthcare, justice, targeted at 285,000 in 2015 – and a total is that Canada’s GDP growth in 2015 will infrastructure industrial projects. Consumers (especially building new relationships with authorities, education, sports venues, and recreation of more than 2 million since 2006 – are be closer to 2.1% than earlier forecasts of • Continuing strong immigration car owners) have more to spend on goods agencies, and lenders in Europe, Asia, projects. also supporting Canada’s position as 2.5%. The Bank of Canada is expected to • Low interprovincial migration of and services, including homes. and Africa to provide services on projects a construction powerhouse. These continue to keep interest rates at or near skilled trades to meet regional in growing economies overseas. They, Ontario leads the way with more than 100 newcomers drive our 1.2% annual the historic lows of the past half-decade, demand We expect the construction industry to too, are discovering the benefits of P3 AFP projects. BC has more than 40 P3 population growth, almost double that of at least until the second half of 2015. The share in the good with lower costs for procurement. Many around the world now projects in procurement, under construction the U.S., and support robust residential lower rate serves to dampen inflation, transportation, easing demand for skilled regard the Canadian P3 model as best in or in operation. Alberta, Quebec and New construction, especially in the core of large which should also help to keep overall trades, and stronger competition (and class for innovation in delivering projects Brunswick have all used the model, and the urban centres as more and more people construction escalation low in 2015. weaker margins) among contractors. All of most cost effectively. government of Saskatchewan has mandated move downtown. The projections for stable these factors will help keep cost escalation that procurement be prioritized through P3 in check. These benefits strengthen our The potential for the construction industry where possible. ESCALATION FORECAST 2015 already positive outlook based on the we see in Canada is mirrored by perhaps Ontario 2%-4% strong construction pillars of immigration, even greater opportunity overseas – The performance of P3/AFP projects to British Columbia 1%-2% investment and infrastructure detailed in more good reason to welcome 2015 with date – and their prospects for even wider Alberta 0%-2% the Overview on the facing page. confidence. adoption and use – are part of the continuing Saskatchewan 0%-2% success story of Canada’s construction Manitoba 1%-2% The Canadian construction industry is industry. Quebec 1%-3% highly adaptable. It shifted smoothly to Atlantic Region 0%-2% public infrastructure after the financial crisis, then to private sector mega projects as growth drivers. We believe it will adapt again. It’s why we call the Canadian construction industry a continuing success story – and are welcoming 2015 with confidence. 4 BTY Group Market Intelligence Report - Q1 2015 BTY.COM 5 REGIONAL SNAPSHOTS

ESCALATION SUMMARY

2014 : 1-2% 2015 : 2-4% 2016 : 2-4% Ontario

Ontario set to surge with boost from lower loonie

ntario will be the big winner with Big-ticket items include Eglinton Buttonville comprises 9 million to 10 Preliminary Construction lower priced oil, a lower dollar Crosstown Light Rail Transit, Spadina million square feet of mixed-use space, Investment Projection for 2015 and interest rates, and its location Subway Extension, and the Union Station while the West Don Lands will have 6,000 Oclose to major U.S. markets as the U.S. Revitalization. The Mayor of Toronto’s residential units. in $ billions Source: Buildforce economy revs up. Expect these factors vision for SmartTrack, a 53km surface 0 20 40 to work together to boost the province’s subway, 90% of which will be on existing Office projects such as 1 York, 100 Maintenance manufacturing and exports and make it GO Train tracks, will also be a significant Adelaide West, and the Bay Adelaide 10.6b Canada’s growth leader. investment within the GTA over the next East Tower are some of the more high few years. Other major transportation profile projects of the more than 5.9 “Ontario manufacturers and Residential/ Renovation Strong non-residential building projects include Ottawa Light Rail, million square feet of commercial space exporters can expect a bump from 37.2b and a still robust housing sector – Kitchener Waterloo Cambridge Rapid under construction in downtown Toronto. the lower loonie and lower oil prices Non-Residential undergirded by major transportation Transit and the International Trade Tenants continue to search for a way that could boost investment in 19.5b and social infrastructure projects – will Crossing between Windsor and Detroit. to reduce their office footprint as more commercial and industrial building further contribute to Ontario’s healthy collaborative working environments are sectors.” Engineering/Infrastructure construction levels as the economy gains The new $810 million Providence designed and implemented on new fit-out 18.1b momentum. Care Hospital in Kingston leads the projects. As tenants continue to move to PHILIP NIXON list of projects underway in social new buildings in the downtown core, a DIRECTOR The condominium market in the GTA infrastructure, which includes the $2 high vacancy rate may affect older office remains strong, driven in part by the high billion Oakville and $1.75 billion Humber stock. But as businesses start moving cost of single-family homes in and around River Hospitals as well as funding for back to the core, it is expected that this the core and a very robust condo rental dozens of projects at colleges and added capacity will be soaked up. market. The need for affordable housing universities. is driving a growing number of purpose- New wind power projects are making built, multi-unit residential rental Net migration to Ontario is expected Ontario a global leader in renewable developments. to rise from 82,500 in 2014 to 93,200 in energy generation. Major new efforts 2015 and 98,800 net migrants by 2016. include Kingston Solar Park, the latest in Retail is expected to perform well in the That increase, spurred by growth in net Samsung’s $5 billion investment in solar core as developers look for opportunities international migration that is expected and wind energy, and the $580 million to provide residents with services and to double from 5% in 2014 to 10% in 2015, Armow Wind Project, in which Samsung amenities that they demand. High-end should help sustain demand for new is partnering with Pattern Energy Group. “Massive infrastructure projects, still retailer Nordstrom figures prominently housing and the prevailing urbanization Longer term nuclear and natural gas strong residential and commercial in mall expansion and redevelopment of the downtown core. Even with the energy projects are working their way sectors – bolstered by Canada’s across the GTA; it will have new stores moderating effect of rising higher interest through the approvals process. The highest international in-migration, in four out of six major mall renewal rates projected for late 2015, housing development of the mineral-rich Ring of and a recovering U.S. economy that projects now underway. starts are expected to increase from Fire in northern Ontario has also stalled drives manufacturing and business 59,200 in 2014 to 63,000 in 2015. as financing and approvals for roads to investment will keep Ontario busy Some $15 billion in provincial funding remote mine sites have yet to be finalized. through 2015.” for transit infrastructure in the GTHA, The multi-year Buttonville Redevelopment and $14 billion for transportation and the West Don Lands in the GTA Overall, the province’s economy is DARREN CASH infrastructure outside the GTHA, are exemplify the continuing strengths of forecast to grow from between 2.8% and DIRECTOR the construction industry mainstays. the commercial and residential sectors. 3.1% in 2015.

6 BTY Group Market Intelligence Report - Q1 2015 BTY.COM 7 REGIONAL SNAPSHOTS

ESCALATION SUMMARY Taller wood buildings gain ground across 2014 : 1-2% Canada 2015 : 1-2% British 2016 : 2-4% When the 95.9 foot (29.25 metre) high $25 million Wood Innovation and Design Columbia Centre (WIDC) in downtown Prince George, BC was completed this fall, it instantly became North America’s tallest modern all-wood building. Although only six storeys, the WIDC’s high ceilings make it Major energy projects as tall as most 10-storey high-rises.

power upswing in BC The WIDC building is part of a wave of new Tall Wood buildings all over the world – ajor utility, mining, LNG annually. New housing starts are and challenging the conventional wisdom Preliminary Construction terminal, and pipeline projects forecast at 28,300 units across the of how high wooden buildings can rise. Tall Investment Projection for 2015 are expected to ramp up over province in 2015. Wood structures rely on engineered wood Mthe next two years, ushering in an in $ billions Source: Buildforce products called “mass timber,” which upswing in construction. Many of the Metro Vancouver continues to see 0 10 20 features multiple thin layers of wood that projects, such as the newly approved Site healthy commercial and retail Maintenance C dam and proposed LNG projects, are construction, with more than $1 billion are glued to form solid panels and beams. 4.4b located in northern BC and valued in the worth of projects in downtown, and billions. They are expected to generate three major mall renewals planned or The WIDC pilot project received permission Residential/ Renovation significant demand for skilled labour, underway. Major projects include the to work outside the provisions of BC’s 15.7b putting upward pressure on labour $398 million Trump Tower, which will building code, which five years ago upped Non-Residential costs. be the city’s second tallest, and the the limit for conventional “stick-built” 6.1b $200 million Exchange tower. Strong wood frame construction from four to six Rendering by Michael Green Architecture The optimistic outlook remains despite demand for larger industrial spaces in storeys. Today there are nearly 80 multi- Engineering/Infrastructure uncertainty over the timing of specific suburban Metro Vancouver, driven in unit six-storey projects under construction 10.8b projects such as proposed LNG plants, part by improved port and transportation designing and building high-rise wood We have also contributed to multiple across BC. In September 2014, Ontario and potential implications for pipeline infrastructure, will see sustained activity demonstration projects. The CWC and studies on costing Tall Wood projects as announced it would enact code changes to and resource developments following despite high land and development costs. Natural Resources Canada are currently well as conducting cost comparisons on the Supreme Court’s June ruling on allow the use of wood-frame construction reviewing short-listed submissions. Tall Wood vs. comparable concrete and native land claims. Overall, there are some 20 major in buildings of up to six-storeys. Although steel construction. commercial developments in the they are conventional wood frame and The successful proponents can get a At the same time, major new provincial planning or rezoning stages in the not Tall Wood structures, they reflect an helping hand from the recently released infrastructure projects are either region. The Surrey City Centre expansion increasing move to using wood for its Technical Guide for the Design and underway or in the planning stages. alone will see 10 more towers over the environmental benefits. These include major airport and port next decade, as well as a five-star hotel Construction of Tall Wood Buildings expansions, two new hospitals valued and performing arts centre. in Canada (2014) commissioned by FP While concrete emits nearly its own weight at $600 million in northern Vancouver Innovations, a not-for-profit organization in carbon dioxide during production, Island, a new $200 million correctional Exports to international markets and that specializes in creating scientific centre in the Okanagan, a new bridge to other Canadian provinces will also the raw material for tall wood buildings solutions in support of the Canadian forest replace the George Massey tunnel, and a drive healthy near-term expansion. The literally grows on trees, absorbing carbon sector’s global competitiveness. new Pattullo Bridge. favourable Canadian dollar and U.S. from the atmosphere as it does so. growth are forecast to give exports a Responsibly harvested wood is naturally The Guide was created to support Rising net migration that pushed BC’s significant boost, and drive industrial renewing and, when a building is finally experienced design and construction population growth in 2014 to its fastest and commercial investment. Buoyed by torn down, can be recycled or burned for “A wave of major new energy and annual rate (1.2%) in almost four years the U.S. housing market expansion and teams in undertaking Tall Wood projects. energy. infrastructure projects in the further supports BC’s momentum. continuing growth in exports to Asian It provides the concepts and background pipeline and resilient residential and Total net migration is forecast at 42,400 markets, BC’s forestry and wood- to questions that inevitably arise when commercial sectors are setting up for There are many more innovative Tall Wood people in 2014 and 41,600 people in products sector, in particular, will be designing beyond the height and area an upswing in construction for British 2015. And that population growth is, a significant engine for the provincial structures higher than six storeys in the limits prescribed by the National Building Columbia.” in turn, helping to sustain residential economy. Bank forecasts are for works for Canada. In 2013, the Canadian Code of Canada. The section of the guide construction levels. Projected population economic growth from between 2.7% Wood Council invited Canadian developers, CONNOR FALLS dealing with Project and Construction growth of just over 1% a year is expected and 2.9% in 2015. institutions, organizations and design DIRECTOR costing was prepared by BTY Group. to add approximately 30,000 households teams to propose new approaches to

8 BTY Group Market Intelligence Report - Q1 2015 BTY.COM 9 REGIONAL SNAPSHOTS

ESCALATION SUMMARY

2014 : 1-2% 2015 : 0-2% 2016 : 0-2% Alberta

Oil price impact to ripple across province

he impact of lower oil price will underway in Calgary, with Brookfield Preliminary Construction be felt most deeply here, but the Place expected to be Western Canada’s Investment Projection for 2015 momentum of years of massive tallest when completed in 2017. Plans for in $ billions Source: Buildforce Tinvestment in the oilsands, record an additional five major commercial as well as fifteen residential towers may be 0 20 40 in-migration and a more diversified economy should help the provincial scaled back, depending on oil prices. Maintenance construction industry ride out the storm. 5.6b Expect GDP growth in 2015 to fall short Edmonton has three major new office of earlier estimates of 3.0%. projects underway, the Stantec tower, Residential/ Renovation the Kelly Ramsey Building and the City 18.1b Work is currently underway on projects of Edmonton building, as well as the Non-Residential worth more than $55 billion in the oil $480 million Rogers Place and the $340 9b sands alone. With other oil and gas and million Royal Alberta Museum, and Major mining prospects pipeline projects added, the value is several new residential towers. Engineering/Infrastructure close to $63 billion, according to Alberta north (and south) of 60 32b Innovation and Advanced Education. The expansion is even more dramatic in Fort McMurray, where a $258 million That’s in addition to multiple multibillion- BTY’s previous Market Intelligence Some of the leading projects include airport expansion and surging residential dollar transmission line projects and reported on the $778 million being invested the largest new diamond mine under large wind power projects. market are the warm-up for a planned civic centre, public square, arena, and in the north for roads, ports, geomapping development globally, as well as projects and research north of 60 as part of the for gold, copper, zinc, iron, cobalt, and rare There should be some easing of the multiple high-rise residential towers in tight labour market that saw Alberta’s the downtown. public and private investment supporting earth minerals. unemployment drop to 4.9% in 2014. mineral resource development. That Oil patch workers may migrate to other The surging non-residential sector is infrastructure investment is paying off with South of 60, the development of the Ring of energy, resource and infrastructure expected to experience a steady demand a rising tide of projects north – and south Fire, Ontario’s mineral rich district in the projects ramping up elsewhere in for trades involved in oil sands, pipeline, – of 60. province’s northwest, has been stymied by “While the oil price drop will slow utility and manufacturing construction Canada. delays in the construction of infrastructure growth, there is still considerable while demand will be more moderate in Despite the current cyclic downturn in and power supply. The region is estimated momentum from long-term the residential sector. The new workers are part of the steady commodity prices and associated financing to hold deposits worth $60-billion worth investment in energy, infrastructure, inflow of migrants, which is expected office and commercial projects to hurdles, it is expected that mining north of minerals, with chromite being the most to moderate after two years of record Ongoing major infrastructure projects support workloads in Alberta.” in-migration to 79,000 in 2014 and 64,000 will also put pressure on the labour of 60 will double by 2020, with a forecast important. The government of Ontario has in 2015. They will help keep demand for supply. Spending commitments on annual growth rate of nearly 7.5% in the pledged $1 billion to build a road that would LESLIE FOWLER new housing high, with starts projected healthcare facilities, new schools, Yukon, the Northwest Territories and provide access. DIRECTOR at 40,400 for 2014, 37,400 for 2015. highway expansion, the $2 billion Calgary Nunavut compared to 2.2% in the rest of Airport, and the $3.2-billion Edmonton Canada. Similarly, the Quebec government has LRT Valley Line promise to stretch The influx of investment and people is revived its commitment to the Plan du construction industry capacity to the also fuelling sustained building booms At the start of 2014, there were more than Nord, the province’s ambitious plan to limit. in Calgary, Edmonton and Ft. McMurray. 30 major projects either entering or moving make natural resources the centerpiece of Seven major new office towers are through the environmental assessment its economic development, with funding for and permitting processes across the road infrastructure and improvements as a three territories, with an estimated capital feasibility study for a new rail line. investment of over $25 billion.

10 BTY Group Market Intelligence Report - Q1 2015 BTY.COM 11 REGIONAL SNAPSHOTS

ESCALATION SUMMARY Mobility is key for meeting rising labour 2014 : 1-2% demand 2015 : 0-2% 2016 : 1-2% 2015 will provide respite before competition Saskatchewan for skilled trades ratchets up.

Canada’s construction industry has been phenomenally successful. It has hired 600,000 new workers over the past 18 years – a growth rate of 86%. Now a record 1.3 Mining, infrastructure million Canadians – 1 in 14 – make their living and residential activity working in the construction industry.

create balanced But forecasts say that won’t be enough to workloads meet the anticipated demand for labour as up to 210,000 older, more experienced workers leave the workforce for retirement over the fter a modest 2014 following Regina Wastewater Treatment Plant next decade. This exodus will contribute to a started over the summer; it’s slated for • Alberta needs to replace 37,000 retiring In addition to trades training, a key to meeting Preliminary Construction a string of high growth years, projected shortfall of more than 100,000 new Investment Projection for 2015 completion at the end of 2016. workers in the long term even though the longer-term demand for skilled labour Saskatchewan is expected to workers. in $ billions Source: Buildforce Arebound in 2015, with healthy crop demand for skilled trades – and the need will be the mobility of the workforce. Labour yields expected to offset the squeeze for non-resident labour -- should ease in requirements will shift back and forth across 0 5 10 The combination of this shortfall with a from lower oil prices. A lacklustre Overall, the government will spend the short term. different geographic markets and sectors fat pipeline of massive projects in energy, Maintenance performance in agriculture (following $2.9 billion on infrastructure projects, • Saskatchewan will see a shift away from over the next decade. ranging from power generation facilities mining and infrastructure underway or in 1.5b bumper crops in 2013) and low potash big projects and housing to commercial prices slowed the pace in 2014, to telecommunications networks to the planning stages across the country will Residential/ Renovation and institutional building; 19% of the but ongoing mining, pipeline and schools to highways to hospitals. intensify competition as projects progress 2.9b workforce heading for retirement needs infrastructure projects will help keep SaskTel will spend $355 million to over the next decade. For 2015, cyclical expand its wireless network in rural to be replaced. Non-Residential construction levels steady this year. dampening of commodity prices, uncertainty areas. Another $200 million is marked • Manitoba’s major hydro projects are 2.3b Growing global demand for potash over land claims, and the dip in oil prices will add momentum to the non-energy for highway and bridge projects. generating high demand for select will see some projects delayed or scaled Engineering/Infrastructure mining sector. skilled trades – and after a pause in back. These recalibrations and the general 4b Net in-migration of 12,900 people is 2015, that will increase with a new round pullback in residential building will provide At 4.3%, the province’s unemployment projected in 2014, before slowing to of projects after 2016. Up to 21% of the 11,300 in 2015. Housing starts will follow some respite over the next year, with a will continue to be the lowest of any province’s construction workforce is a similar downward trend with 8,400 limited recovery in non-residential building province. There are 15 projects valued retiring. at more than $30 billion underway in the forecast for 2014 and 7,700 in 2015. Bank starting in 2016. • Quebec is seeing a pause in labour mining sector, and another 20 projects projections call for GDP to range from 2.6% to 2.8% in 2015. employment after an extended valued at $5 billion in oil and gas and Here’s a preview of where and when labour pipeline expansion. Some major projects boom. The pause is due to reduced demand will shift in 2015 and beyond: “After a modest 2014 following have already peaked and are starting to residential demand, completion of several years of record growth in wind down. major infrastructure projects, and major • Ontario’s massive infrastructure nearly ever sector, Saskatchewan hydro projects passing their peak labour will rebound in 2015 despite the Major infrastructure projects underway projects drive current demand; longer- demand. squeeze from low oil prices. Growing include the Children’s Hospital of term resource and power projects will • Atlantic Canada can expect weak global demand for potash and Saskatchewan, the Regina Football accelerate demand as up to 25% of the demand in New Brunswick and Prince continuing growth in agricultural Stadium, Regina Highway Bypass Project province’s workforce retires. Edward Island, with Nova Scotia and production will help spur expansion.” and the $1 billion Boundary Dam coal • BC is facing the retirement of 34,000 Newfoundland and Labrador seeing power station. Construction on the new workers – and the arrival of major higher requirements from ongoing oil MICHAEL GABERT resource and infrastructure projects that ASSOCIATE DIRECTOR and gas and shipbuilding projects. will drive employment along with a surge in housing – and competition for skilled trades – to an all time high by 2017.

12 BTY Group Market Intelligence Report - Q1 2015 BTY.COM 13 REGIONAL SNAPSHOTS

ESCALATION SUMMARY Making the most of modular construction 2014 : 1-2%

2015 : 1-3% There has been a growing expansion in 2016 : 2-3% the use of modular construction methods Quebec across Canada for homes – especially rental homes, and other residential applications such as employee housing, student accommodation and budget hotels. The need for employee housing for large energy and resource projects in remote Lower oil and loonie boost areas across Canada — especially in the Quebec’s prospects North — has been a particularly strong driver of modular construction.

uebec is another beneficiary billion Romaine hydro project Complex Factory-built homes alone accounted for of lower oil prices and a lower (hydroelectric) leads the way, with a Preliminary Construction Investment Projection for 2015 11% of all the single-family homes started loonie. They will be a shot in planned new power line – valued at $1.1 in $ billions Source: Buildforce in 2012 , up from roughly 3% to 4% in 2000. Qthe arm to what has been sluggish billion – to meet the growing demand for Part of the reason is that advances in growth and sweeten the outlook for electricity north of Montréal. 0 10 20 As with any construction method, there are • Modular construction is best suited technology have enabled more innovative both residential and non-residential some issues, such as: where unit absorption rates are Maintenance designs on the factory floor that have building for industrial, commercial, and Total net migration is expected to reach expected to be high. 7.3b helped to make modular building more institutional sectors in 2015. Ongoing 34,262 people in 2014 and rise to 39,000 • Size limitations of modular units due • Depending on the procurement and proposed major engineering people in 2015. This increase will have a Residential/ Renovation attractive – and more competitive. to transportation. method, lenders may require projects, including bridges, roadwork, positive impact on demand in Quebec’s 19.5b • Cost savings from labour efficiency additional security, information, port infrastructure, transit, mines, and rental market as well as support the While the names may differ, the methods Non-Residential gains can be offset by transportation coverages, and measures to be in electric power generation, will provide residential building sector, with housing all involve off-site fabrication of building 9.5b costs. place due to deposits and storage of a solid base on which construction can starts projected to rise slightly from components, from window frames expand. 38,200 in 2014 to 39,000 in 2015. • Potential for construction delay from units off site. Engineering/Infrastructure right up to pre-cast concrete structural damage during delivery and on-site 13.6b elements. The items manufactured off- The Quebec government has maintained Major commercial projects underway installation. The modular method has shown itself site are then delivered when work on the overall level of investment in the in Montréal include the $800-million • Large volumes of manufacturing for to be particularly well suited to student site has progressed to the installation Quebec Infrastructure Plan, with Deloitte Tower, scheduled for completion both individual projects and greater accommodation or budget hotels, which infrastructure spending increasing to in 2015, and the 50-storey Tour des stage. An entire modular unit can even be industry adoption needed to realize are typically built when a high occupancy $11.5 billion in 2014-2015, from $10.7 Canadiens, due in 2016. Over the next delivered to site, complete from framing higher cost savings. absorption rate is more or less assured. billion in 2013-2014. Major transportation five years, however, the retail sector to internal finishes, including mechanical • Need for strict control of tolerances projects moving forward include the $5 in Montréal is expected to undergo and electrical installations and mounted on site. High-rise residential apartments or billion St. Lawrence Crossing to replace a significant transformation in the cabinets and millwork. the crumbling Champlain Bridge, downtown core with St. Catherine Street • Less flexible design compared to commercial spaces have an absorption the $3.7 billion rebuild of the Turcot forecast to be completely transformed traditional construction. rate or a timeline to get to full occupancy. The key advantages of the modular Interchange, and a $1.5 billion extension over the next five years. • Need for design teams to be familiar Since both contain some element of tenant approach are: of the Métro in Montréal’s east end, as with the method and process, and to customization, creating a standard unit well as port and river infrastructure in Overall, Quebec’s diversified export be involved as early as possible. only slows down the absorption rate. various locations. sector is expected to strengthen • Decreased construction time on site, significantly with a lower loonie and on-site running costs, and material There are also financial considerations More widespread adoption of modular Plan Nord, which aims to stimulate the stronger demand from the United waste. when undertaking a modular building construction will require volume orders economic, social and environmental States resurgence in manufacturing • Increased quality – and cost control “New transportation and ongoing project: that will enable the economics of scale that development of northern Quebec, is and exports should translate to greater from fabrication in a controlled also moving ahead with work on road business investment and increased energy projects will keep Quebec will reduce costs. Developers and building environment. infrastructure to improve access for investment in non- residential on an even keel. Expect a boost in • Cashflow varies significantly from the contractors working with traditional • A safer work environment. resource development. Major new mine construction after 2015. other non-residential building from standard construction project. methods will need to adapt their business developments include the $752 million new business investment spurred by • Modular suppliers can require models to deliver the full benefits of Stornoway diamond mine, two iron ore Bank forecasts for Quebec’s 2015 increased exports to the U.S.” deposits prior to final design and modular building to their clients. mines, Aupaluk and Kemag valued at $7 economic growth range from 1.5% to 2%. again prior to manufacture. billion. ANTONIO NIRO DIRECTOR In the energy sector, the ongoing $6.5

14 BTY Group Market Intelligence Report - Q1 2015 BTY.COM 15 REGIONAL SNAPSHOTS

ESCALATION ESCALATION SUMMARY SUMMARY

2014 : 1-2% Manitoba Atlantic 2014 : 1-2% 2015 : 1-2% 2015 : 0-2% 2016 : 2-3% Region 2016 : 0-2%

Manitoba powers up with Slower economic growth massive energy projects lowers expectations for building number of major energy and Leading the way in downtown tlantic Canada set another Gas Tax Fund, which together will deliver Preliminary Construction mining projects are the driving commercial projects are the $180 million investment record in 2014 with $440 million to the province to improve Preliminary Construction Investment Projection for 2015 force in construction in Manitoba. RBC Convention Centre expansion, the 439 projects worth $122 billion, infrastructure. Bank GDP growth Investment Projection for 2015 AAltogether, investment in engineering 21-storey Glasshouse Lofts residential Aa 7% increase over the previous year. forecasts for 2015 range from 0.8% to in $ billions Source: Buildforce in $ billions Source: Buildforce construction is projected to rise 26% tower, and the proposed $150 million, Annual spending on major projects 1.2%. 0 5 10 0 5 10 from 2014 to 2015. Both engineering and 54-storey SkyCentre office tower, which in the region was also on the rise, up Maintenance ICI construction – especially industrial would be the city’s tallest. about 8% to a record $15 billion for the Nova Scotia Maintenance 1.1b – remain well above historical levels of year, with Newfoundland and Labrador 2.2b activity. The province’s economic growth leading the pack. Even with the increase, Natural gas production will fuel Residential/ Renovation should get a boost from the lower overall slower economic growth in the expansion of Nova Scotia’s economy Residential/ Renovation 2.8b The major energy projects include the loonie that reduces the cost of exports region has led to a fall off in forecast forecast to grow at between 1.2% and 4.7b $6.2 billion Keeyask Generating Station, to a strengthening U.S economy. A construction spending for 2015. Net 2% in 2015. The ongoing $300 million Non-Residential expansion at the Halifax shipyard will Non-Residential 1.8b the $3.5 billion Bipole Transmission rebound in manufacturing will spur in-migration in the region – except 3b Line, and the $1.6 billion Wuskwatim construction – as will continued positive for Newfoundland and Labrador – is see it ready to start building navy Engineering/Infrastructure hydroelectric dam. However, other net in-migration, which is projected to projected to come in at or near zero, combat ships in mid-2015, giving the Engineering/Infrastructure construction industry, and the economy, 3.9b economic mainstays such as metal moderate to 9,200 in 2014 and 9,100 in and expectations for growth in new 9.3b mining will see little growth and crop 2015. Housing starts are expected to residential building are equally weak. a welcome boost. Construction continues production is expected to decline this decline slightly from 6,700 for 2014 to at a mixed-use development at King’s year. 6,500 for 2015. The impact of workers returning to the Wharf on the Dartmouth waterfront, region from Alberta and Saskatchewan and the $500 million Nova Centre is Manitoba’s increased public in the wake of oil patch project scheduled for completion in 2015. infrastructure spending is providing cancellations may generate housing stimulus to the economy, supporting demand – and swell the construction Newfoundland and bank growth forecasts of between of workforce. Labrador 2.1% and 2.8% for 2015. In spring 2014, Newfoundland and Labrador’s economic the Manitoba government announced New Brunswick – and construction -- growth slowed details of its five-year, $5.5 billion substantially in 2014 as capital spending infrastructure-spending plan. Construction levels across the board will dip slightly in 2015 and are then expected levels eased and oil production remained steady. Lower oil prices may reduce the The province will spend $3.7 billion over to rebound sharply in 2016, lifted by the previous GDP growth forecast of 1.5% five years on highways, bridges, and Energy East Pipeline and associated for 2015. The oil price impact may have a critical transportation infrastructure, marine facilities. Overall GDP growth ripple effect that leads to lower overall and more than $300 million on flood is forecast at between 1.0% and 1.9% in 2015 as the natural resource sector, a construction levels. protection and water quality projects. “A 26% jump in investment in major economic driver, waits for the U.S. Municipal infrastructure investment will engineering construction from 2014 recovery to gain strength. average over $300 million a year for five to 2015, a surging industrial sector, “Even with record investment, the years, for a total of $1.5 billion. multiple major new infrastructure lower oil price, slower economic projects and strong commercial Prince Edward Island growth and near zero in-migration One of the province’s longer-term activity will give construction in The Atlantic Provinces Economic Council will see Atlantic Canada experience infrastructure projects is the $3 billion Manitoba a power surge for several has identified $2.1 billion dollars worth an overall fall-off in construction East Side Transportation Initiative that years.” of upcoming investment projects in the spending in 2015.” will see 1,028 km of all-season road province for 2015, up 10% over 2014. built connecting the east side of Lake ALISTAIR DEARIE DAVID LAI PARTNER Public investment will get a boost from DIRECTOR Winnipeg, and eastern Manitoba in the New Building Canada Fund and the general, with the wider road network.

16 BTY Group Market Intelligence Report - Q1 2015 BTY.COM 17 REGIONAL SNAPSHOTS

United States

BTY expansion into U.S. U.S. has potential to become world’s has only just begun largest market for P3 projects

ive years ago BTY made what some Leading BTY’s operations and the fall 2014 report from Moody’s more rapidly. The first is the need to might call a risky bet. It committed new office in Phoenix, AZ is Director Investors Service says the U.S. has upgrade, replace or build out essential to entering the U.S. market by Ryan Brady. He brings 16 years of U.S. strong potential to become the infrastructure assets; the second is F and international experience in the offering its services on P3 projects, A world’s largest market for P3 projects. the inability of governments to finance then a relative rarity there compared to industry, with expertise in project and The firm’s Global P3 Landscape report these current and future infrastructure the Canadian industry, and did so at the construction management, cost and risk height of the financial crisis. management, and technical advisory notes the sheer size of the country’s investments entirely on their balance services for P3 projects. infrastructure and growing urban sheets. Careful risk analysis and patience population – in conjunction with an have proved it to be a well-timed Supporting Ryan, and working out “With 37 states having passed increased willingness of state governments The use of the P3 model has been steadily “The strengthening recovery in the investment. Today the firm has 15 major of the Los Angeles office, is BTY’s legislation enabling P3s, to use the P3 model - are creating increasing in the U.S. over the last five U.S. is driving strong growth in both infrastructure assignments live in nine Business Development Manager for expect to see more projects in strong momentum for the procurement years, with a strong history of using the residential and non-residential states (two of which achieved financial the U.S., Janine Fisher. She has 15 both transportation and social model. The strong resurgence of the U.S. toll, or demand-risk model. In this P3 type, building sectors, with 12 of the 20 close in the last year), two offices (Los years of experience providing Lenders’ infrastructure across the country.” economy – spurred in part by becoming the the private developer is paid back through fastest growing types of companies Angeles and Phoenix), and a healthy Services for residential and commercial world’s top oil producer – also supports user fees it has been granted to collect. tied to the construction industry.” appetite for further expansion. developments. RYAN BRADY DIRECTOR the availability of the financial resources This fee-for-service model transfers JANINE FISHER At first BTY partnered with other BTY aims to build on Ryan’s and Janine’s needed to undertake the kinds of large performance risk to the private developer. BUSINESS DEVELOPMENT MANAGER Canadian firms participating in US P3s. expertise – and its successes in P3s - infrastructure projects that are so well Now we are developing relationships to seek out new projects and partners suited for the P3 model. More states are authorizing the use of directly with major US construction firms in new sectors as part of its planned P3s for transportation projects, which are and project proponents. Most projects expansion. The expectation is that the There are now 37 states that have passed typically the first type of P3 project in a new have been in the transportation sector, investment made in the trough of the enabling legislation for P3s. Colorado, market. Over the past 12 months, traction as they are often the most attractive crisis will bear healthy dividends as the Florida, Texas and Indiana have the most in the social infrastructure project space for public agencies entering the P3 U.S. construction industry embraces robust P3 programs, with multiple projects has also started to take hold, with projects market for the first time. Highway and the P3 model, and the industry overall transit developments have led the way, continues to recover and return to full in each state. California, Pennsylvania, such as the Long Beach Civic Centre, the with aviation developments gaining strength. Kentucky, Maryland, Michigan, Nevada, Indianapolis Justice Complex and Houston momentum. Arizona, and Oregon all have P3 Projects at Justice Facility hitting the street. varying stages of procurement. As the P3 model also gains favour for But the market for availability-payment building new social infrastructure, BTY While New York and New Jersey do not P3s in the US is also expanding, according is finding that its proven track record have P3 legislation, the Port Authority of to The Moody’s report. In this type of in justice and public safety is helping New York & New Jersey does have special P3, payment to the private developer is it win new projects in this sector, most dispensation to use the model, and is using made as long as the asset is available frequently in the role of Lenders’ and meets specific performance criteria. Technical Advisor. In fact, no other firm it for the Goethals Bridge and LaGuardia in either the U.S or Canada has fulfilled Airport Central Terminal Building The payments cover operating and the role of Technical Advisor on more P3 Replacement Projects. maintenance costs, as well as debt service projects since 2013. on borrowings to pay for construction The report explains that there are costs. More P3 availability payment two inter-related trends at work that projects are reaching financial close or are could cause P3 activity to expand even in procurement than ever before.

18 BTY Group Market Intelligence Report - Q1 2015 BTY.COM 19 Cost Data Parameters Comparison

BTY Group has been publishing the annual Market Intelligence Report and a comparison of Cost Note: The unit rates reflect hard construction costs, including general requirements and fees, and Data Parameters since 2003. The Cost Data includes unit rates for select project categories, excluding site works and tenant improvements. Variances in unit rates and escalation will occur due to based on in-house data surveyed on a provincial level, and tendered data where available. The the remoteness of some regions and prevailing local market conditions. Construction costs can also be affected by a multitude of factors that may not be limited to market conditions. comparison provides actual data for 2014 and forecast data for 2015, using escalation levels generated by BTY Group. BTY Group strongly recommends that readers seek the advice of a Professional Quantity Surveyor (PQS) prior to establishing a budget for their specific projects.

PROJECT CATEGORY PROJECT CATEGORY BRITISH COLUMBIA BRITISH COLUMBIA ALBERTA ALBERTA SASKATCHEWAN SASKATCHEWAN ONTARIO ONTARIO QUEBEC QUEBEC 2014 2014 2015 2015 2014 2014 2015 2015 2014 2014 2015 2015 2014 2014 2015 2015 2014 2014 2015 2015 $/m² $/sq.ft $/m² $/m² $/sq.ft $/sq.ft $/m² $/m² $/sq.ft $/sq.ft $/m² $/m² $/sq.ft $/sq.ft $/m² $/sq.ft$/m² $/sq.ft $/m² $/m² $/sq.ft $/sq.ft $/m² $/m² $/sq.ft $/sq.ft $/m² $/m² $/sq.ft $/sq.ft $/m² $/m² $/sq.ft $/sq.ft $/m² $/m² $/sq.ft $/sq.ft $/m² $/sq.ft Health Care Health Care Residential Care Residential Care2,300 - 2,530 214 - 2352,300 - 2,3302,530 - 2,570214 - 235216 - 2392,330 - 2,5702,550 - 2163,080- 239 237 - 2862,550 - 2,5903,080 - 3,130237 - 286241 - 2912,590 - 3,130 2412,600- 291- 3,000 242 - 2792,600 - 2,6403,000 - 3,050242 - 279245 - 2832,640 - 3,0502,430 - 2452,760- 283 226 - 2562,430 - 2,5002,760 - 2,840226 - 256232 - 2642,500 - 2,8402,500 - 2322,840- 264 232 - 2642,500 - 2,5502,840 - 2,900232 - 264237 - 2692,550 - 2,900 237 - 269 Ambulatory Care Ambulatory Care4,510 - 4,680 419 - 4354,510 - 4,5804,680 - 4,750419 - 435425 - 4414,580 - 4,7504,580 - 4255,000- 441 425 - 4654,580 - 4,6505,000 - 5,080425 - 465432 - 4724,650 - 5,080 4324,690- 472- 5,560 436 - 5174,690 - 4,7605,560 - 5,640436 - 517442 - 5244,760 - 5,6404,470 - 4425,030- 524 415 - 4674,470 - 4,6005,030 - 5,180415 - 467427 - 4814,600 - 5,1804,600 - 4275,120- 481 427 - 4764,600 - 4,6905,120 - 5,220427 - 476436 - 4854,690 - 5,220 436 - 485 Acute Care Acute Care 5,400 - 6,000 502 - 5575,400 - 5,4806,000 - 6,090502 - 557509 - 5665,480 - 6,0905,900 - 5096,890- 566 548 - 6405,900 - 5,9906,890 - 6,990548 - 640556 - 6495,990 - 6,990 5565,560- 649- 6,600 517 - 6135,560 - 5,6406,600 - 6,700517 - 613524 - 6225,640 - 6,7005,810 - 5246,250- 622 540 - 5815,810 - 5,9806,250 - 6,440540 - 581556 - 5985,980 - 6,4405,000 - 5566,390- 598 465 - 5945,000 - 5,1006,390 - 6,520465 - 594474 - 6065,100 - 6,520 474 - 606

Laboratories Laboratories Research Labroratories Research Labroratories5,680 - 6,310 528 - 5865,680 - 5,7706,310 - 6,400528 - 586536 - 5955,770 - 6,4006,150 - 5366,810- 595 571 - 6336,150 - 6,2406,810 - 6,910571 - 633580 - 6426,240 - 6,910 5806,400- 642- 7,400 595 - 6876,400 - 6,5007,400 - 7,510595 - 687604 - 6986,500 - 7,5106,040 - 6046,820- 698 561 - 6346,040 - 6,2206,820 - 7,020561 - 634578 - 6526,220 - 7,0206,090 - 5786,990- 652 566 - 6496,090 - 6,2106,990 - 7,130566 - 649577 - 6626,210 - 7,130 577 - 662 Teaching Laboratories Teaching Laboratories4,420 - 4,900 411 - 4554,420 - 4,4904,900 - 4,970411 - 455417 - 4624,490 - 4,9705,020 - 4175,840- 462 466 - 5435,020 - 5,1005,840 - 5,930466 - 543474 - 5515,100 - 5,930 4745,200- 551- 5,780 483 - 5375,200 - 5,2805,780 - 5,870483 - 537491 - 5455,280 - 5,8705,100 - 4915,860- 545 474 - 5445,100 - 5,2505,860 - 6,040474 - 544488 - 5615,250 - 6,0405,050 - 4886,010- 561 469 - 5585,050 - 5,1506,010 - 6,130469 - 558478 - 5695,150 - 6,130 478 - 569 Animal Research Animal Research7,200 - 8,000 669 - 7437,200 - 7,3108,000 - 8,120669 - 743679 - 7547,310 - 8,1207,310 - 6798,000- 754 679 - 7437,310 - 7,4208,000 - 8,120679 - 743689 - 7547,420 - 8,120 6898,300- 754- 8,700 771 - 8088,300 - 8,4208,700 - 8,830771 - 808782 - 8208,420 - 8,8306,020 - 7827,870- 820 559 - 7316,020 - 6,2007,870 - 8,110559 - 731576 - 7536,200 - 8,1106,190 - 5768,110- 753 575 - 7536,190 - 6,3108,110 - 8,270575 - 753586 - 7686,310 - 8,270 586 - 768

High-rise Residential High-rise Residential Rental Units Rental Units 2,050 - 2,610 190 - 2422,050 - 2,0702,610 - 2,640190 - 242192 - 2452,070 - 2,6402,100 - 1922,650- 245 195 - 2462,100 - 2,1202,650 - 2,680195 - 246197 - 2492,120 - 2,680 1972,100- 249- 2,650 195 - 2462,100 - 2,1202,650 - 2,680195 - 246197 - 2492,120 - 2,6802,000 - 1972,300- 249 186 - 2142,000 - 2,0502,300 - 2,360186 - 214220 - 2832,050 - 2,3601,800 - 2202,300- 283 167 - 2141,800 - 1,8202,300 - 2,320167 - 214169 - 2161,820 - 2,320 169 - 216 Market Units Mid End SpecificationsMarket Units Mid2,370 End Specifications- 3,010 220 - 2802,370 - 2,3903,010 - 3,040220 - 280222 - 2822,390 - 3,0402,420 - 2223,100- 282 225 - 2882,420 - 2,4403,100 - 3,130225 - 288227 - 2912,440 - 3,130 2272,420- 291- 3,100 225 - 2882,420 - 2,4403,100 - 3,130225 - 288227 - 2912,440 - 3,1302,300 - 2272,800- 291 214 - 2602,300 - 2,3602,800 - 2,870214 - 260253 - 3272,360 - 2,8702,200 - 2532,800- 327 204 - 2602,200 - 2,2202,800 - 2,830204 - 260206 - 2632,220 - 2,830 206 - 263 Market Units High End SpecificationsMarket Units High2,830 End Specifications- 3,600 263 - 3342,830 - 2,8603,600 - 3,640263 - 334266 - 3382,860 - 3,6402,790 - 2663,620- 338 259 - 3362,790 - 2,8203,620 - 3,660259 - 336262 - 3402,820 - 3,660 2622,790- 340- 3,620 259 - 3362,790 - 2,8203,620 - 3,660259 - 336262 - 3402,820 - 3,6602,800 - 2624,120- 340 260 - 3832,800 - 2,8704,120 - 4,220260 - 383303 - 3922,870 - 4,2202,700 - 3034,000- 392 251 - 3722,700 - 2,7304,000 - 4,040251 - 372254 - 3752,730 - 4,040 254 - 375

Low & Mid-rise Residential Low & Mid-rise Residential Rental Units Rental Units 1,270 - 1,650 118 - 1531,270 - 1,2801,650 - 1,670118 - 153119 - 1551,280 - 1,6701,290 - 1,700119 - 155 120 - 1581,290 - 1,3001,700 - 1,720120 - 158121 - 1601,300 - 1,720 1211,290- 160- 1,700 120 - 1581,290 - 1,3001,700 - 1,720120 - 158121 - 1601,300 - 1,7201,200 - 1211,420- 160 111 - 1321,200 - 1,2201,420 - 1,450111 - 132113 - 1351,220 - 1,4501,200 - 1,420113 - 135 111 - 1321,200 - 1,2101,420 - 1,430111 - 132112 - 1331,210 - 1,430 112 - 133 Market Units Mid End SpecificationsMarket Units Mid1,420 End Specifications- 2,000 132 - 1861,420 - 1,4302,000 - 2,020132 - 186133 - 1881,430 - 2,0201,500 - 1332,100- 188 139 - 1951,500 - 1,5202,100 - 2,120139 - 195141 - 1971,520 - 2,120 1411,500- 197- 2,100 139 - 1951,500 - 1,5202,100 - 2,120139 - 195141 - 1971,520 - 2,1201,300 - 1411,650- 197 121 - 1531,300 - 1,3301,650 - 1,680121 - 153135 - 1561,330 - 1,6801,300 - 1351,650- 156 121 - 1531,300 - 1,3101,650 - 1,670121 - 153122 - 1551,310 - 1,670 122 - 155 Market Units High End SpecificationsMarket Units High1,850 End Specifications- 2,280 172 - 2121,850 - 1,8702,280 - 2,300172 - 212174 - 2141,870 - 2,3001,950 - 1742,400- 214 181 - 2231,950 - 1,9702,400 - 2,420181 - 223183 - 2251,970 - 2,420 1831,950- 225- 2,400 181 - 2231,950 - 1,9702,400 - 2,420181 - 223183 - 2251,970 - 2,4201,760 - 1832,100- 225 164 - 1951,760 - 1,8002,100 - 2,140164 - 195167 - 1991,800 - 2,1401,700 - 1672,100- 199 158 - 1951,700 - 1,7202,100 - 2,120158 - 195160 - 1971,720 - 2,120 160 - 197

Townhouses (Wood Frame) Townhouses (Wood Frame) Rental Units Rental Units 1,100 - 1,350 102 - 1251,100 - 1,1101,350 - 1,360102 - 125103 - 1261,110 - 1,3601,100 - 1031,400- 126 102 - 1301,100 - 1,1101,400 - 1,410102 - 130103 - 1311,110 - 1,410 1031,100- 131- 1,400 102 - 1301,100 - 1,1101,400 - 1,410102 - 130103 - 1311,110 - 1,4101,000 - 1031,350- 131 93 - 1251,000 - 1,0201,350 - 1,38093 - 125113 - 1351,020 - 1,3801,000 - 1,350113 - 135 93 - 1251,000 - 1,0101,350 - 1,36093 - 12594 - 1261,010 - 1,360 94 - 126 Market Units Mid End SpecificationsMarket Units Mid1,300 End Specifications- 1,610 121 - 1501,300 - 1,3101,610 - 1,630121 - 150122 - 1511,310 - 1,6301,350 - 1221,650- 151 125 - 1531,350 - 1,3601,650 - 1,670125 - 153126 - 1551,360 - 1,670 1261,350- 155- 1,650 125 - 1531,350 - 1,3601,650 - 1,670125 - 153126 - 1551,360 - 1,6701,300 - 1261,610- 155 121 - 1501,300 - 1,3301,610 - 1,640121 - 150125 - 1451,330 - 1,6401,300 - 1251,610- 145 121 - 1501,300 - 1,3101,610 - 1,630121 - 150122 - 1511,310 - 1,630 122 - 151 Market Units High End SpecificationsMarket Units High1,510 End -Specifications2,200 140 - 2041,510 - 1,5302,200 - 2,220140 - 204142 - 2061,530 - 2,2201,600 - 1422,200- 206 149 - 2041,600 - 1,6202,200 - 2,220149 - 204151 - 2061,620 - 2,220 1511,600- 206- 2,200 149 - 2041,600 - 1,6202,200 - 2,220149 - 204151 - 2061,620 - 2,2201,500 - 1512,100- 206 139 - 1951,500 - 1,5302,100 - 2,140139 - 195145 - 1771,530 - 2,1401,500 - 1452,100- 177 139 - 1951,500 - 1,5202,100 - 2,120139 - 195141 - 1971,520 - 2,120 141 - 197

Shopping Centres Shopping Centres Strip Plaza Strip Plaza 950 - 1,600 88 - 149950 - 1,600960 - 1,62088 - 14989 - 151960 - 1,6201,250 - 2,00089 - 151 116 - 1861,250 - 1,2702,000 - 2,030116 - 186118 - 1891,270 - 2,030 1181,250- 189- 2,000 116 - 1861,250 - 1,2702,000 - 2,030116 - 186118 - 1891,270 - 2,030950 - 1,600118 - 189 88 - 149950 - 1,600970 - 1,63088 - 149125 - 156970 - 1,630900 - 1251,500- 156 84 - 139900 - 1,500920 - 1,53084 - 13985 - 142920 - 1,530 85 - 142 Enclosed Mall Enclosed Mall 2,260 - 3,030 210 - 2812,260 - 2,2903,030 - 3,080210 - 281213 - 2862,290 - 3,0802,300 - 2133,000- 286 214 - 2792,300 - 2,3303,000 - 3,050214 - 279216 - 2832,330 - 3,050 2162,300- 283- 3,000 214 - 2792,300 - 2,3303,000 - 3,050214 - 279216 - 2832,330 - 3,0502,200 - 2163,000- 283 204 - 2792,200 - 2,2403,000 - 3,060204 - 279156 - 1872,240 - 3,0602,100 - 1562,900- 187 195 - 2692,100 - 2,1402,900 - 2,960195 - 269199 - 2752,140 - 2,960 199 - 275 Anchor/Department Store Anchor/Department1,990 Store- 2,420 185 - 2251,990 - 2,0202,420 - 2,460185 - 225188 - 2292,020 - 2,4602,200 - 1882,850- 229 204 - 2652,200 - 2,2302,850 - 2,890204 - 265207 - 2682,230 - 2,890 2072,200- 268- 2,850 204 - 2652,200 - 2,2302,850 - 2,890204 - 265207 - 2682,230 - 2,8901,900 - 2072,400- 268 177 - 2231,900 - 1,9402,400 - 2,450177 - 223190 - 2241,940 - 2,4501,800 - 1902,400- 224 167 - 2231,800 - 1,8402,400 - 2,450167 - 223171 - 2281,840 - 2,450 171 - 228 Supermarket Supermarket 1,450 - 1,940 135 - 1801,450 - 1,4701,940 - 1,970135 - 180137 - 1831,470 - 1,9701,740 - 1372,150- 183 162 - 2001,740 - 1,7702,150 - 2,180162 - 200164 - 2031,770 - 2,180 1641,740- 203- 2,150 162 - 2001,740 - 1,7702,150 - 2,180162 - 200164 - 2031,770 - 2,1801,400 - 1641,940- 203 130 - 1801,400 - 1,4301,940 - 1,980130 - 180140 - 1791,430 - 1,9801,200 - 1401,650- 179 111 - 1531,200 - 1,2201,650 - 1,680111 - 153113 - 1561,220 - 1,680 113 - 156 Discount Store Discount Store 1,200 - 1,540 111 - 1431,200 - 1,2201,540 - 1,560111 - 143113 - 1451,220 - 1,5601,400 - 1,800113 - 145 130 - 1671,400 - 1,4201,800 - 1,830130 - 167132 - 1701,420 - 1,830 1321,400- 170- 1,800 130 - 1671,400 - 1,4201,800 - 1,830130 - 167132 - 1701,420 - 1,8301,200 - 1321,540- 170 111 - 1431,200 - 1,2201,540 - 1,570111 - 143113 - 1351,220 - 1,5701,150 - 1,500113 - 135 107 - 1391,150 - 1,1701,500 - 1,530107 - 139109 - 1421,170 - 1,530 109 - 142

Office Office Under 5 Storeys Under 5 Storeys1,510 - 1,790 140 - 1661,510 - 1,5301,790 - 1,820140 - 166142 - 1691,530 - 1,8201,850 - 1422,800- 169 172 - 2601,850 - 1,8802,800 - 2,840172 - 260175 - 2641,880 - 2,840 1752,018- 264- 2,390 187 - 2222,018 - 2,0502,390 - 2,430187 - 222190 - 2262,050 - 2,4301,450 - 1901,750- 226 135 - 1631,450 - 1,4801,750 - 1,790135 - 163156 - 1871,480 - 1,7901,450 - 1561,750- 187 135 - 1631,450 - 1,4801,750 - 1,790135 - 163137 - 1661,480 - 1,790 137 - 166 5 - 10 Storeys 5 - 10 Storeys 1,840 - 2,390 171 - 2221,840 - 1,8702,390 - 2,430171 - 222174 - 2261,870 - 2,4302,210 - 1742,780- 226 205 - 2582,210 - 2,2402,780 - 2,820205 - 258208 - 2622,240 - 2,820 2082,260- 262- 3,450 210 - 3212,260 - 2,2903,450 - 3,500210 - 321213 - 3252,290 - 3,5001,760 - 2132,200- 325 164 - 2041,760 - 1,8002,200 - 2,240164 - 204167 - 2081,800 - 2,2401,750 - 1672,200- 208 163 - 2041,750 - 1,7902,200 - 2,240163 - 204166 - 2081,790 - 2,240 166 - 208 10 - 20 Storeys 10 - 20 Storeys 2,100 - 2,620 195 - 2432,100 - 2,1302,620 - 2,660195 - 243198 - 2472,130 - 2,6602,280 - 1982,950- 247 212 - 2742,280 - 2,3102,950 - 2,990212 - 274215 - 2782,310 - 2,990 2152,330- 278- 2,970 216 - 2762,330 - 2,3602,970 - 3,010216 - 276219 - 2802,360 - 3,0101,990 - 2192,430- 280 185 - 2261,990 - 2,0302,430 - 2,480185 - 226189 - 2302,030 - 2,4801,800 - 1892,430- 230 167 - 2261,800 - 1,8402,430 - 2,480167 - 226171 - 2301,840 - 2,480 171 - 230 20 - 30 Storeys 20 - 30 Storeys 2,420 - 3,020 225 - 2812,420 - 2,4603,020 - 3,070225 - 281229 - 2852,460 - 3,0702,590 - 2293,560- 285 241 - 3312,590 - 2,6303,560 - 3,610241 - 331244 - 3352,630 - 3,610 2442,680- 335- 3,370 249 - 3132,680 - 2,7203,370 - 3,420249 - 313253 - 3182,720 - 3,4202,420 - 2533,020- 318 225 - 2812,420 - 2,4703,020 - 3,080225 - 281212 - 2652,470 - 3,0802,280 - 2122,930- 265 212 - 2722,280 - 2,3302,930 - 2,990212 - 272216 - 2782,330 - 2,990 216 - 278

Educational Educational Elementary Schools Elementary Schools1,950 - 2,270 181 - 2111,950 - 1,9802,270 - 2,300181 - 211184 - 2141,980 - 2,3002,140 - 1842,790- 214 199 - 2592,140 - 2,1702,790 - 2,830199 - 259202 - 2632,170 - 2,830 2022,200- 263- 2,800 204 - 2602,200 - 2,2302,800 - 2,840204 - 260207 - 2642,230 - 2,8401,660 - 2071,980- 264 154 - 1841,660 - 1,7101,980 - 2,040154 - 184159 - 1901,710 - 2,0401,600 - 1591,900- 190 149 - 1771,600 - 1,6301,900 - 1,940149 - 177151 - 1801,630 - 1,940 151 - 180 Secondary Schools Secondary Schools2,090 - 2,590 194 - 2412,090 - 2,1202,590 - 2,630194 - 241197 - 2442,120 - 2,6302,250 - 1972,860- 244 209 - 2662,250 - 2,2802,860 - 2,900209 - 266212 - 2692,280 - 2,900 2122,300- 269- 2,900 214 - 2692,300 - 2,3302,900 - 2,940214 - 269216 - 2732,330 - 2,9401,760 - 2162,200- 273 164 - 2041,760 - 1,8102,200 - 2,270164 - 204168 - 2111,810 - 2,2701,700 - 1682,150- 211 158 - 2001,700 - 1,7302,150 - 2,190158 - 200161 - 2031,730 - 2,190 161 - 203 Higher Education Higher Education2,500 - 3,030 232 - 2812,500 - 2,5403,030 - 3,080232 - 281236 - 2862,540 - 3,0802,600 - 2363,520- 286 242 - 3272,600 - 2,6403,520 - 3,570242 - 327245 - 3322,640 - 3,570 2452,600- 332- 3,600 242 - 3342,600 - 2,6403,600 - 3,650242 - 334245 - 3392,640 - 3,6502,500 - 2454,000- 339 232 - 3722,500 - 2,5804,000 - 4,120232 - 372194 - 2362,580 - 4,1202,500 - 1944,000- 236 232 - 3722,500 - 2,5504,000 - 4,080232 - 372237 - 3792,550 - 4,080 237 - 379

Light Industrial Light Industrial Warehouse Warehouse 850 - 1,130 79 - 105850 - 1,130860 - 1,14079 - 10580 - 106860 - 1,1401,020 - 1,40080 - 106 95 - 1301,020 - 1,0301,400 - 1,41095 - 13096 - 1311,030 - 1,410 1,02096 - 131- 1,560 95 - 1451,020 - 1,0301,560 - 1,58095 - 14596 - 1471,030 - 1,580800 - 1,10096 - 147 74 - 102800 - 1,100820 - 1,12074 - 10296 - 117820 - 1,120800 - 1,10096 - 117 74 - 102800 - 1,100810 - 1,11074 - 10275 - 103810 - 1,110 75 - 103

Hotels Hotels Low Rise Low Rise 1,750 - 2,500 163 - 2321,750 - 1,7702,500 - 2,530163 - 232164 - 2351,770 - 2,5301,800 - 1642,500- 235 167 - 2321,800 - 1,8102,500 - 2,510167 - 232168 - 2331,810 - 2,510 1681,800- 233- 2,500 167 - 2321,800 - 1,8202,500 - 2,530167 - 232169 - 2351,820 - 2,5301,700 - 1692,300- 235 158 - 2141,700 - 1,7302,300 - 2,350158 - 214163 - 2151,730 - 2,3501,700 - 1632,300- 215 158 - 2141,700 - 1,7202,300 - 2,320158 - 214160 - 2161,720 - 2,320 160 - 216

Roads - Paving Roads - Paving $/Lane km $/Lane km$/Lane km $/Lane km $/Lane km $/Lane km$/Lane km $/Lane km $/Lane km $/Lane km$/Lane km $/Lane km $/Lane km $/Lane km$/Lane km $/Lane km $/Lane km $/Lane km$/Lane km $/Lane km Paved Highway - Linear RoadworksPaved Highway - Linear 900,000Roadworks-- 1,140,000 900,000 920,000 -- 1,140,000-- 1,160,000 920,000 -- 920,000 1,160,000-- 1,180,000 920,000 940,000 -- 1,180,000-- 1,200,000 940,000 -- 1,200,000 1,080,000 -- 1,250,000 1,080,000 1,100,000 -- 1,250,000-- 1,280,000 1,100,000 -- 900,000 1,280,000-- 1,030,000 900,000 940,000 -- 1,030,000-- 1,070,000 940,000 -- 1,130,000 1,070,000-- 1,280,000 1,130,000 1,150,000 -- 1,280,000-- 1,300,000 1,150,000 -- 1,300,000

Road Overpass Bridge StructureRoad Overpass Bridge Structure$/m² $/m² $/m² $/m² $/m² $/m² $/m² $/m² $/m² $/m² $/m² $/m² $/m² $/m² $/m² $/m² $/m² $/m² $/m² $/m² Highway Overpass StructuresHighway Overpass Structures 3,500 -- 4,900 3,500 -- 3,600 4,900-- 5,000 3,600 -- 5,000 3,600 -- 5,900 3,600 -- 3,800 5,900-- 6,200 3,800 -- 6,200 4,200 -- 6,100 4,200 -- 4,400 6,100-- 6,400 4,400 -- 6,400 3,600 -- 5,600 3,600 -- 3,700 5,600-- 5,800 3,700 -- 5,800 4,400 -- 6,400 4,400 -- 4,600 6,400-- 6,600 4,600 -- 6,600

“Adequate capacity in the non-residential sector – with increased “On the residential side, continued strong U.S. competition and lower margins among contractors – will make for recovery could generate an uptick in material modest price increases in 2015.” prices in Canada.”

NEILL MCGOWAN IAN WILKINSON PARTNER PARTNER

20 BTY Group Market Intelligence Report - Q1 2015 BTY.COM 21 CANADA

 119 Spadina Ave, Suite 305 Toronto, ON M5V 2L1 T: 416-596-9339

 275 Slater Street, Suite 900 Ottawa, ON K1P 5H9 T: 613-288-2119

 63 Church Street, Suite 302 St. Catharines, ON L2R 3C4 T: 905-680-2344

 1000 de La Gauchetiere St. buréau 2454 Montreal, QC H3B 4W5 T: 514-933-4500

 645 – 404 6th Avenue SW Calgary, AB T2P 0R9 T: 403-269-5155

 10180 – 101 St. Suite 3400 Edmonton, AB T5J 0E8 T: 780-809-0983

 410 – 135 21st Street East Saskatoon, SK S7K 0B4 T: 306-242-9210

 2288 Manitoba Street Vancouver, BC V5Y 4B5 T: 604-734-3126

UNITED STATES

 6080 Center Drive, 6th floor Los Angeles, CA 90045 T: 213-629-2011

 17470 N. Pacesetter Way Scottsdale, AZ 85255 T: 480-359-8618

BTY.COM