Prince Albert construction value could hit $1B in 12 months

When added together, the construction value of new commercial building is just under $800 million but if the amount of money to be spent upgrading the pulp mill is included, it rounds out to $1.3 billion.

One of the forestry-related projects has made some recent progress.

The OSB mill is likely to start construction this year, having recently received its subdivision approval and reached the next phase of the environmental process set out by the Province of Saskatchewan.

Developing the site involves hundreds of construction jobs but the operating mill will also bring continuous work and extend to contractors bringing wood supply to the mill location on Highway 55.

With the creation of primary industry jobs, others generally follow.

“That creates what I like to call an industry-cluster. It kind of puts Prince Albert on the map for OSB and OSB-related projects,” Guidinger said.

Primary jobs create secondary jobs and then tertiary jobs which means more homes needed and more services.

“What I’m hoping is that these big projects will result in smaller stuff. We’ll see more retail open. We’ll see more restaurants,” said Guidinger.

That is what is happening in The Yard District, where, as soon as the construction of the new aquatics centre and ice arenas was finalized, the remaining lots in the subdivision started selling fast and now stand at 80 per cent sold, including a large new hotel that is set to open this summer.

The constuction value of this new hotel is about $20 million, just of of many happening around the city this year. (Susan McNeil/paNOW)

One dampening effect is the current interest rate of 4.5 per cent set by the Bank of Canada. Interest rates and inflation have been growing since last year as economies work to re-balance following pandemic measures.

The cost of supplies also remains an issue, said Guidinger.

Lumber has dropped in price significantly since 2020 but is still higher than it was before the pandemic started.

Last month, the Bank of Canada kept the interest rate static, but it’s governor Tiff Macklem, has repeatedly said they will do what it takes to bring inflation to the target of two per cent.

The fact that the interest rate is unlikely to drop in any significant way could mean that planned projects are continuing despite the cost of borrowing.

“I think generally people have just kind of accepted that and they want to forge ahead with their projects,” Guidinger said.

Prince Albert Chamber CEO Patty Hughes said a recently completed survey of members shows that the local business community feels quite optimistic but does have one major worry and it is not interest rates.

“When it came back, what people are more concerned about is the labour supply. Having those skills available to them, that was the top thing identified,” she said.

No particular industry is harder hit when it comes to finding workers in Prince Albert. Hughes said it is across the board whether it was construction, retail or the food industry.

Supply chain issues were secondary and then interest rates came in as the third highest issue.

The most likely solution for the labour shortage is immigration and being able to attract them to come to smaller centres.

Businesses want to be able to keep the staff they have and make sure they are properly trained for their industry.

“They are really looking forward to the economy and the upturn happening because of it,” Hughes said.

Interest rates are a bigger concern when it comes to housing.

Last year, construction was slow due to a number of things from new mortgage rules, COVID, and the war in Ukraine, said Guidinger. The effects carried on all of 2022 and into 2023.

That too looks more positive this year.

“We’ve had quite a few inquiries about property sales on top of that which usually leads to house builds as well. We’re definitely seeing an upward trend in 2023,” Guidinger said.

For residential building, Guidinger said that some higher-end condos have been built and are very popular.

The rental situation is different, however.

“Something that Prince Albert has been lacking, and is lacking, is the good high-end affordable rentals and that is what is being met with the latest land sale that city council approved,” he said.

That project is being done by Brar Construction and will have three buildings with 180 units and will cost about $50 million. Brar is also building a hotel in The Yard District, which has a $20 million budget.

When added together the large-scale projects add up to more than $1 billion but whether they are completed in 12 months remains to be seen as much of it is up to private businesses or outside organizations.

Upcoming builds planned for Prince Albert

– Construction of a new OSB mill near the pulp mill that has a value of $250 million by One Sky Forest Products.

– Reopening of the pulp mill by Paper Excellence, which has existing buildings but is expected to cost about $550 million to be fully upgraded.

– The City of Prince Albert’s construction of a new twin pad ice arena and aquatics centre will be around $110 million

– Provincial expansion of a second tower and larger ER at the Victoria Hospital, costing about $300 million

– Construction of a new campus for the First Nations University will range between $40 and $60 million.

– Brar Construction is building a hotel in The Yard District plus 180 unit apartments near the Vic – $70 million

– The Metis Nation plans to build an office and childcare space near Victoria Hospital. No estimated costs are public as yet.

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susan.mcneil@pattisonmedia.com

by Susan McNeil

Prince Albert construction value could hit $1B in 12 months

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