Wild weather threatens Kelowna’s building boom

Developers, suppliers, truckers scramble to patch B.C.’s damaged supply chain

Damage to the Coquihalla Highway north of Hope. Repairs are expected to take months | Matt Steberl/Fraser Valley Road Group

Devastating damage to B.C.’s 543-kilometre Highway 5 is among the threats to the supply lines into Kelowna, which is on a $100 million-per-month construction pace this year.

Kelowna building permit values hit a record $1.07 billion as of the end of October, according to the city’s planning department, with 2,466 permits issued.

To put this into perspective, Kelowna’s October building permits were valued at $121.5 million, nearly twice as high as the City of Victoria and higher than Regina and Saskatoon combined.

But the head of construction for Kelowna’s largest developer is confident they will keep work on track.

Luke Turri, executive vice-president of Mission Group, which has three large residential and mixed-use towers under construction in the city, said that, with the Coquihalla expected to be closed for months, suppliers are rerouting building materials from the Port of Vancouver through the U.S. and tapping distributors in Alberta and further east. The older two-lane Highway 3 is also being pressed into service.

BC Trucking Association (BCTA) president and CEO David Earle agreed that a pivot is already taking place.

“The goods will arrive. They may take a little longer, they may take a few days more, but they will get there.”

Earle added that the BCTA is working with Canada and U.S. customs and border services and the Commercial Vehicle Safety Alliance to use routes through Washington state to get to areas of B.C. cut off by the highway closures. He said meetings with government officials, carriers, national and other provincial trucker associations have been taking place at a “feverish pace” to figure out solutions.

Earle said if products can’t be sourced from one area, they will be transported from another.

But delays will lead to higher construction costs, Turri cautioned, noting that prices for building materials were already increasing before the recent devastating B.C. rainstorms, which are expected to continue this week.

“We can expect cost escalation,” he said.

Everything people buy has transportation built into its costs, Earle said, but he doesn’t anticipate prices to jump too high due to the current station.

“A rule of thumb is about 10% of any good is related to transportation,” he said, noting that can vary between truck, plane and boat.

“If it costs 10% more to move something because it’s taking 10% longer – instead of taking nine days it’s taking 10 – what that means for you and I is it’s 1% more when we go to buy it,” Earle said.

He said he expects those incremental price increases to continue until the supply routes return to normal, which is something engineers will determine as they assess damage on area highways. •

– With files from Castanet