Inflation won't slow construction projects, says N.S. public works minister

Inflation may be driving up the cost of construction, but Public Works Minister Kim Masland said it will not slow Nova Scotia's capital project plan.

"We've always dealt with supply issues, with cost demands," Masland said in an interview Friday.

"Now we're seeing inflation at unprecedented times, but we know the importance of these infrastructure projects to Nova Scotians."

The government passed an order in council this week approving an additional $8 million for the construction of a new elementary school in Springhill. The project that will replace Junction Road Elementary and West End Memorial School has been years in the making.

First announced in 2018, it is slated for completion during the 2023-24 school year, a Public Works Department spokesperson said this week.

The spokesperson said the additional money was required as the construction industry faces "significant cost escalation" due to inflation, supply chain issues, commodity price increases and general labour rate increases.

The new budget for the project in Springhill is $30 million. But cost overruns are not unique to the new school or to Nova Scotia in general.

Proceeding as planned

Masland said it's important to proceed with the projects on the books because they address longstanding needs.

The government released a $1.5-billion capital plan in March that includes spending on hospitals, schools, roads and bridges.

Although officials in her department are keeping an eye on costs, Masland said that she does not anticipate having to delay the start of any projects in the plan.

No project in the province is facing greater volatility due to inflation than the redevelopment of the Halifax Infirmary.

When it was announced in 2015, the hospital expansion was expected to cost around $1 billion. That price is all but certain to go up.

Uncertainty around hospital project

One of the two consortiums pre-qualified to bid on the work recently dropped out, citing the mounting cost pressure and risks associated with the job.

The province rejected a proposal from the two pre-qualified bidders — EllisDon Infrastructure and Plenary PCL — to do the work jointly. EllisDon later dropped out of the running.

Although internal documents obtained by CBC suggest the scope of the project has changed to include more in-patient beds, more operating rooms and a new emergency department — something that would drive up the price tag even more — Masland and officials in her department haven't confirmed it.

Premier Tim Houston has said the public will be updated on the hospital project sometime this fall, after Plenary submits its final bid on the work. It is not a guarantee the company will win the tender, Houston recently told reporters.