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An RCMP officer walks along the causeway to the Pattullo Bridge, which is to be replaced, in this file photo from Jan. 18, 2009.

The Canadian Press

Construction costs rose more in Vancouver than in any other city in Canada during the past two years and were predicted to go up about 4 per cent this year, says a national tracking study.

The costs are increasing at a time when the province is on a massive drive to deliver big infrastructure projects, including two SkyTrain lines and a new Pattullo Bridge, along with thousands of units of low-cost housing.

Only Ottawa, a much smaller metropolitan region that is undergoing a surge of federal projects and private-sector tech startups, came close, according to Turner & Townsend, a company that does cost accounting and project management. It tracks about 300 projects annually in seven major cities.

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Vancouver’s costs increased by 5.19 per cent in 2018 and 6.39 per cent in 2019, with slightly more than 4 per cent anticipated for 2020.

Average construction costs everywhere in Canada exceeded the rate of inflation.

“We’re seeing a shortage of subtrades capable of delivering complex projects,” said Gerard McCabe, the Canadian management director for Turner & Townsend. “And construction costs are not necessarily linked to inflation. In a market where there’s a significant level of activity, costs will go up.”

Those predictions are less certain now because of the recent and ever-changing estimates of the impacts from the COVID-19 pandemic.

If there’s a global slowdown and fewer investors are prepared to put money into new construction projects, that could mean less competition for labour and supplies and potentially reduce costs significantly, Mr. McCabe said.

Construction costs can go much higher than inflation during boom times and drop abruptly.

Mr. McCabe noted that Toronto construction costs dropped overnight during a slowdown in Toronto in 1989, and they’ve come down about 10 per cent in Calgary during the recent tough economic times in Alberta.

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But, in British Columbia, where a lot of construction is being driven by the province, there might not be the same kind of drop-off.

Rising construction costs have been a significant problem for both private developers and the province’s social-housing sector for the past several years.

Developers have backed away from some projects because of the combination of soaring land costs and constantly increasing construction costs.

Between 2017 and 2018, the price of the lowest-cost construction – wood-frame buildings at the most affordable end – went up to $165 a square foot from $155 a square foot, a 6.5-per-cent increase.

More-expensive concrete towers increased in cost, at the higher end, to $315 a square foot from $280 a square foot – a 15-per-cent increase, according to estimates from Altus Group, a company that monitors commercial real estate.

While construction cost increases mean private buyers have to pay more or settle for less space, the impact for government projects means getting less for needed projects or having to come up with more tax money to maintain the same quantity or quality.

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