City staff propose new criteria to ensure critical construction work gets done within approved budgets

Inflation creating global havoc on construction industry

Guelph, Ont., March 24, 2022 – On April 4, City staff will speak to Council about the pressures that an unstable economy and high inflation are having on the City’s plans for capital projects.

“From the impacts of the pandemic including resource shortages and supply chain delays to Russia’s invasion of Ukraine, inflation is much higher than expected,” says Tara Baker, City Treasurer. “This is causing problems, not just in Guelph, but across the globe, particularly around rising costs for construction as we saw with the bids for the South End Community Centre. Unfortunately, this challenge isn’t expected to end anytime soon.”

Without a strategy, critical infrastructure projects could face significant delays. City staff are asking Council for delegated authority to decide what work moves ahead based on newly refined criteria which focuses first on projects that address infrastructure deficiencies or risks. These kinds of projects include the City’s annual road paving program and planned work to replace aging underground water and sewer pipes.

Throughout the COVID-19 pandemic, staff successfully found efficiencies and reprioritized spending to minimize overall impacts to the City’s budget. Guelph’s whole-city budget approach also allows for operational cost pressures in one area to be offset by cost benefits in another area. The same approach and thinking can be used to support the City’s capital costs.

Impacts of inflation also being felt at home

A survey done by Leger this month found that 81 per cent of Canadians say that inflation is a very or somewhat serious problem for their household with the increasing cost of groceries and gasoline having the biggest effect.

“We know that people in Guelph are feeling the pinch of inflation too and moving ahead with certain projects will help stimulate our local economy,” adds Baker. “We don’t want to, nor can we, simply stop everything, but some growth-related projects may need to be delayed while we ensure our critical infrastructure—roads, bridges and pipes—are taken care of.”


Inflationary Financial Impact Strategy 2022-118

Media Contact

Tara Baker, General Manager & City Treasurer
Finance, Corporate Services
City of Guelph
519-822-1260 extension 2084
[email protected]