CDAO Construction & Design Alliance of Ontario May 29, 2020 Honourable Doug Ford Premier of Ontario Legislative Building, Room 281 Queen's Park Toronto, Ontario M7A 1A1 RE: Cancellation of the Halton Regional Courthouse Project Dear Premier Ford: The members of the Construction and Design Alliance of Ontario (CDAO) would like to express our gratitude to you for the commitment and determination the Government of Ontario has shown in addressing the COVID-19 pandemic. Your efforts, which our industry is actively supporting, are fighting to preserve and protect the health of citizens and our communities. Recognizing these very difficult times we are together navigating we feel compelled to provide you with some reflective feedback on the repercussions of the recent decision to cancel the Halton Regional Courthouse Project. It is important to share with you the breadth and depth of the impacts the termination of this project will have on our sector, the Ontario economy and your administration. This project was arguably the largest shovel ready and shovel worthy project of its kind. With a construction price of over $300 million and a total project cost of approximately $725 million when aggregate payments over the 30 year project agreement are included. After years of preparatory work, with the imminent announcement of financial close expected and construction expected to begin shortly thereafter, no one could have foreseen the decision to terminate this project. If the building had to be adapted for a post-COVID world, that would have been understandable. To be clear, the member organizations of the CDAO respect the government’s right to make its own decisions. Unfortunately, in this particular case the net benefit of this choice is not clear to us. While the explanation of the decision is rooted in the policy of virtual delivery of justice services given the present need for physical space to provide these services, the present state of the existing physical infrastructure this project was meant to support, along with the still evolving present state of Ontario’s virtual justice services infrastructure, it is unclear to us that the termination of this project was the right choice to enable the greatest net benefit; to the provincial justice system or the Ontario economy. Construction and Design Alliance of Ontario Letter to Premier Doug Ford Re: Cancellation of the Halton Regional Courthouse Project May 29, 2020 It is not our intention to debate a decision that has already been taken. Rather, we wish to bring to your attention the arguably more significant impact this choice will have on Ontario’s broader construction sector and the economy. The cancellation of this project will have profound and immediate consequences for both the provincial and immediate regional economies. Existing well-paying direct jobs in professional, construction and construction- related services will be jeopardized or lost and anticipated positions will not materialize. Equally important broader sector spin-off jobs expected for the regional economy stemming from this project will not materialize. Further, the anticipated stimulus from additional future investment in the region and the broader Ontario economy will be hampered because of a lack of market confidence. An accounting of the sunk costs must also be objectively considered. Significant time, effort and money has been spent to assemble land required for this project; land which will now sit idle until another institutional or commercial use can be found. This will also impact the immediate neighbourhood as idle space will fail to catalyze anticipated spin-off development. The more than three years of effort to complete several phases of environmental studies by technical, architectural, legal, and financial and procurement advisors will go unrealized until a similar project can be developed for this site. Of course, millions of dollars of fees to the Ministry of the Attorney General associated with all of this work will have been spent for no return to the taxpayer. These observations are not presented as a complaint, rather they are offered as context of how deeply this particular choice, on this particular project, at this particular stage of procurement at this particular time will negatively impact our sector and the provincial economy at a particularly vulnerable time. Our concern is that project cancellations such as this, along with the Hamilton LRT, contradict the core values and policies that form the foundation for your administration. The consequence of the cancellation of these two projects within six months, particularly with the courthouse project being so late in the procurement process, will be an undermining of proponent and investor confidence in the Province’s commitment to its infrastructure program. This presents a very real risk of stifling the flow of market capital into Ontario and of driving existing potential investors from the province. It will be difficult for the government to maintain its position of being investment-friendly, “open for business”, supportive of Ontario’s communities, and commitment to creating stable, well-paying jobs – particularly at a time of crisis when broader political and socioeconomic stability is bolstered by continuity and consistency of government action is so desperately needed. It brings us no pleasure to write this letter. However, it is out of respect for you and your administration that we frankly bring our concerns and perspective to your attention. We would like to work more closely with you and your advisors to develop the sound, balanced and thoughtful recovery plan for Ontario; a plan that responds to the current crisis utilizing the full range of talent, resources and capabilities that our sector can bring to bear. Page 2 of 3 Construction and Design Alliance of Ontario Letter to Premier Doug Ford Re: Cancellation of the Halton Regional Courthouse Project May 29, 2020 I propose we open a dialogue with you and your senior advisors to chart our next steps together. Please contact Saskia Martini-Wong (416-200-2102 or [email protected]) at the CDAO office with details on how you would like to proceed. Sincerely, Sandro Perruzza Chair, Construction and Design Alliance of Ontario (CDAO) c.c.: Hon. Doug Downey, Attorney General of Ontario Hon. Laurie Scott, Minister of Infrastructure Ehren Cory, President & Chief Executive Officer, Infrastructure Ontario Patrick Sackville, Executive Director of Policy to Premier Doug Ford Patrick Schertzer, Senior Policy Advisor to Attorney General Doug Downey Zach Potashner, Director of Policy to Infrastructure Minister Laurie Scott CDAO Member Associations Association of Registered Concrete Ontario Consulting Engineers of Ontario Heavy Construction Association Interior Designers of Ontario www.rmcao.org www.ceo.on.ca of Toronto www.arido.ca www.hcat.ca Mechanical Contractors Ontario Association of Architects Ontario Association of Ontario Electrical League Association of Ontario www.oaa.on.ca Landscape Architects www.oel.org www.mcao.org www.oala.ca Ontario General Contractors Ontario Home Builders’ Ontario Road Builders’ Ontario Sewer & Watermain Association Association Association Construction Association www.ogca.ca www.ohba.ca www.orba.org www.oswca.org Ontario Society of Professional Residential Construction Council Residential and Civil Surety Association of Canada Engineers of Ontario Construction Alliance of Ontario www.suretycanada.com www.ospe.on.ca www.rescon.com www.rccao.com Page 3 of 3 .