What have been the impacts of the COVID-19 pandemic on construction supply chains? On October 22, the Canadian Construction Association (CCA) hosted a panel discussion with a group of experts from across the industry to discuss material shortages and their impacts on projects.

Joining moderator and CCA president Mary Van Buren were Derek Nighbor, president and CEO, Forest Products Association of Canada; Ed Whalen, president and CEO, Canadian Institute of Steel Construction; and Bart Kanters, president, Ready Mixed Concrete Association of Ontario.

Van Buren began by asking the panelists about those supply chain blockages that exist in their respective industries. Whalen responded that his industry has been largely unaffected by the pandemic. Steel mills are active and fully functional across the country, and usually have enough stock to supply the industry for between two and four months.

The situation is much different in the lumber sector. Nighbor explained that COVID is just one of several lenses through which national lumber shortages should be viewed. Production has been hampered by a number of natural disasters on Canada’s west coast. Pest disturbances and forest fires that were very much in the news two or three years ago have hurt production now.

“The pine beetle outbreak in British Columbia ate 60 percent of the pine trees in the province,” he said. “That means that our industry’s allowable cut has been far lower than usual.”

Structural issues such as driver shortages, strikes in the Montreal port, and labour disturbances at VIA Rail, further caused the industry to be unable to move its product efficiently from one end of the country to the other. These issues were compounded by higher-than-usual demand for Canadian lumber from the United States, which imports about 25 percent of its lumber from Canada.

“The good weather here in Canada combined with post-lockdown pent-up demand for housing caused a huge push for lumber. So too did a worse-than-usual hurricane season in the United States,” he said.

The early days of the pandemic also caused chaos at lumber yards. Producers were unsure whether their work was deemed essential and therefore could be allowed to continue to operate. Additionally, those first few weeks in March saw many order sheets collapse, and big-box stores cancelling most of their orders, which caused the price of lumber to plummet by about 30 percent in April.

Coming out of lockdown in May, demand for lumber shot through the roof, and the industry was caught in short supply.

Concrete faces its own unique set of supply challenges, Kanters explained. The material is produced at more than 1,000 plants across the country, so limitations in supply are largely localized.

As with the lumber industry, the concrete industry faced a huge amount of uncertainty during the early days of the pandemic. Particularly in Ontario and Quebec, where lockdown measures were strictest, producers were unsure whether their plants could continue to operate as essential services.

“The pandemic hit us at a time when our industry usually performs critical maintenance of its plants,” he said. “That’s work that has to be performed, but we didn’t know whether we could perform it. Demand for concrete dropped by 30 percent in March and April, but by mid-May, it was up 10 or 15 percent over typical spring levels, so we had a huge problem with shortages.”

The result is that producers are rationing supply of products such as slag or fly ash.

Concrete’s other problem is the number of mixers and drivers available to supply to sites.

“Some contractors are reporting delays of up to two weeks in bringing concrete to a site, where usually the industry could delivery in a day or two,” said Van Buren.

Managing demand is a problem, said Kanters. For ready-mix concrete, contractors are being told to advise producers of their supply needs well ahead of pour dates so materials can be allotted and trucks scheduled for delivery.

“The good news for us is that once we get to the end of November of beginning of December, demand for concrete drops off significantly,” said Kanters. “That will allow us to build up supply reserves and be much better prepared for the 2021 construction season.”

Nighbor likewise sees his industry catching up with demand, and projects it should be back on track by the beginning of next year.

Asked about their biggest concerns for their industries into 2021, the panelists agreed that the swift delivery of infrastructure funds from the federal government will be key to keeping construction working. All agreed that the government must lead this work as the private sector remains cautious.

“My other concern is about ensuring that the large and medium infrastructure projects that are funded under the stimulus programs are awarded to domestic companies,” said Whalen. “There’s no economic benefit to Canada for awarding these projects to foreign companies.”