P.E.I. contractors ask province for help as fuel prices eat up construction budgets

The Construction Association of Prince Edward Island says its contractors are feeling the impact of volatile fuel costs on the Island, and hopes the province can help.

In a letter sent to the government on May 20, the association outlined how frequent fuel price increases have impacted every aspect of the industry, and asked "that the government look at a fuel adjustment index to cover the escalating fuel price."

The association's general manager, Sam Sanderson, said contractors are absorbing costs ranging from worksite commutes, to the delivery and supply of materials, to the fuel consumption of heavy equipment being used.

'A substantial increase'

"Contractors are carrying a very big, big risk with anything and everything that they're doing today, no matter how big or small the project," said Sanderson.

"And unfortunately, we have to pass on those expenses and increases to our customer at the end of the day."

There is a tender process for large-scale projects where contractors could wait up to 60 days to be awarded a project, which he said could leave room for unexpected rises in fuel-related costs during that time.

Sanderson said this level of uncertainty has forced contractors to guarantee quotes to clients for only 5 to ten days.

Sanderson said his counterparts in Atlantic Canada will also be reaching out to their provincial governments to see if a system can be implemented to shelter unforeseen price fluctuations.

He said his counterpart in New Brunswick has seen a 64 per cent surge in fuel cost for projects — numbers that, according to him, are not far from P.E.I. costs.

"It's a substantial increase that not a lot of contractors can bear," said Sanderson.

"When the contractor is carrying that risk, there has to be some avenue to protect yourself or there's going to be no contractors in business."

All aspects of construction impacted

Charlottetown contractor Jason Ellis said he is also having to factor fuel as part of an estimate for a job.

"We have people digging foundations and they have trucks and excavators and bulldozers coming. Their price has been changing week-to-week like crazy, the amount of fuel that they use," he said. "Then that comes back on us as a surprise in the price."

Fuel costs were almost negligible a year or two ago because it was such a small percentage of the actual project, said Ellis, but now it has added about $10,000 for an average home build, and that doesn't include materials and supplies.

"Asphalt shingles — takes a lot of fuel to make those, and those have skyrocketed [in price]. So it's every single piece of every screw, every two-by-four in your house has gone up as the fuel costs only made that worse."

Sanderson said he would be consulting with the Canadian Construction Association to see what else contractors on P.E.I. could do.

"We just want to get the word out," he said.

"We are hurting with these large fuel costs and it is having a big impact on the brunt that contractors are carrying today in all projects, big and small."

In a statement to CBC, the province said it received the letter from the Construction Association of P.E.I. and is in the process of setting up a meeting with the association, as well as a separate one with the P.E.I. Road Builders and Heavy Construction Association, to further discuss the impacts of fuel costs on the industry.

"We look forward to hearing potential ideas and solutions from industry."