We are pleased to present the first Market Update of 2023.
This Market Update includes a listing of 38 projects in pre-procurement and active procurement (totalling more than $35 billion in estimated design and construction costs), building upon the provincial government’s efforts to build Ontario and its historic commitment in modernizing the province’s public assets, including highways, public transit, hospitals, children’s treatment centres, schools, and correctional facilities.
The list also includes 16 government-announced projects in the initial stages of planning, for which scope, timing and delivery model are still being determined.
This March Update reflects the progress made on projects already noted on our November 2022 Market Update.
Most notably, three projects have advanced to partnership stages. Those projects are:
- Scarborough Subway Extension – Stations, Rail and Systems – Development Partner Agreement signed
- Weeneebayko Area Health Authority – Health Campus – Development Partner Agreement signed
- Niagara Health’s New South Niagara Hospital Project – Financial Close/Contract signed
We have also brought two projects, previously in pre-procurement, to market, with procurements launched within the past three months:
- Garden City Skyway
- Ottawa Hospital’s New Civic Redevelopment
Our progress has also included the recent opening of the Highway 401 expansion through Mississauga and Milton as well as reaching substantial completion of the New Toronto Courthouse.
The total value of contracts currently in construction is approximately $45 billion, not including the additional contracted value to ensure the long-term operations and maintenance of assets on projects such as Metrolinx GO Rail Expansion On-Corridor works.
We take very seriously our commitment to the market to maintain a dependable pipeline which is appropriately staged to maximize opportunity and competition. Infrastructure Ontario continues to demonstrate our unwavering focus on progress and delivering on our commitments.
As we look forward, we now face escalating inflationary costs not seen in a generation. We have had to work closely with government to ensure that project cost estimates are appropriately updated. We continue to work with industry partners to manage any escalations during active procurements.
To maintain the type of momentum and success we have enjoyed until now, we need to be constantly adapting with the world around us. New government priorities mean that the types of projects we deliver are changing. The dynamics of the marketplace and the companies we aim to partner with are also constantly evolving.
The construction sector around the globe is experiencing many changes and challenges. IO is continuing to lead and execute through (and despite) challenging times. Some examples of the initiatives IO has taken to adapt to these realities are:
- We have had to work closely with government to ensure that project cost estimates are appropriately updated.
- We continue to work with industry partners to manage any escalations during active procurements – and we have introduced indexing mechanisms on our major transit projects to do precisely this.
- We continue to be very careful regarding the staging of our projects - so that both we and the market have the capacity to deliver.
- We are careful to ensure the projects we put to market are ready to be procured – with relevant details regarding scope and readiness that lead to positive technical and commercial discussions.
- We are constantly examining and updating our contracting approach to address the changing market dynamics, the feedback we are hearing from you, and in view of the increasingly complex projects we are delivering.
We are continuously taking lessons learned from projects past and present and applying those as we plan for the significant work entrusted to us, particularly on Progressive and Rapid Procurement projects. We also continue to stage our projects in a thoughtful way that adapts so we are in-line with market capacity, the projects we put to market are ready to be procured and will have sufficient labour and addresses legacy supply chain issues that remain from the COVID-19 pandemic.