PEGO releases Policy Paper on Delays in Infrastructure Project Delivery in Ontario

PEGO has released a policy paper titled “EXPECT DELAYS – PEGO’s Policy Paper on Public Service Engineering and Ontario’s Infrastructure Priorities – August 2024”

The purpose of this paper is to bring awareness about key structural issues in the Ontario Public Service which are contributing to delays in the delivery of critical public infrastructure projects in Ontario under the Ontario government’s $185 billion capital plan.

Executive Summary

The Professional Engineers Government of Ontario (PEGO) is the professional association representing in-house engineering and land surveying experts who work in the Ontario Public Service (OPS), delivering Ontario’s priority infrastructure projects and managing the operations of an estimated $85 billion worth of Ontario’s assets. PEGO members work in eleven ministries/agencies and perform critical project management and enforcement roles related to the provincial highway network, the Ontario Building Code, land surveying, food and workplace safety, clean air, and safe drinking water.

This paper will address how increased pressures faced by the Ontario government’s in-house engineers are creating delays in delivering the Government’s ambitious $185 billion capital infrastructure plan and in maintaining the existing built infrastructure that Ontario’s economy relies on everyday. This is a problem unsolvable through increased outsourcing or using contract engineering firms, and in fact, the evidence points to the increasing use of third-party engineering for tasks that used to be done in-house is making projects more expensive to taxpayers.
While the purpose of outsourcing is normally to transfer risk, access specialized expertise and relieve pressure on internal resources, this is not being wholly achieved as in-house engineers are being required to correct and modify outsourced work to avoid costly contract disputes and project delays. The Ontario Government is taking on far more risk than it means to, and the market incentives, regardless of contract model, designed to keep projects on time and on budget have not been able to reliably prevent cost escalation and delays. Profit-driven firms predictably use any mechanism possible to prevent the realization of lost revenue, avoiding the pressure points that the Government depends on for keeping these service providers on course.

While some proportion of outsourced engineering services are expected to continue, functions including the leadership in project management and procurement of major infrastructure projects, directing consultant engineering work, writing provincial specifications, developing standards and manuals for engineering practice by government service providers all must – by definition – be done by in-house expertise. Simply put, in-house engineers are needed to properly develop project scope, direct projects, conduct negotiations with contractors including consulting engineers, to ensure value-for-money as well as to ensure satisfactory completion of contractual requirements.

It is also important to note that PEGO members perform specialized engineering and land surveying roles, write the codes that govern building and bridge design in Ontario, regulate environmental compliance of industry and work to ensure the safe and secure operation of mines, water treatment facilities and vital telecommunication networks – as just some examples. Many of these public protection functions are roles that cannot be outsourced or contracted and should logically be kept within the span of control afforded by the public sector.

Unfortunately, the ability for in-house experts to complete these necessary functions is being eroded by a steady out-flow of departing talent from the OPS. These departures have stretched government organizations beyond their capacity to deliver on the Ontario Government’s mandate and challenged the government’s ability to retain institutional knowledge in specialized fields. There are simply not enough engineers and surveyors remaining to perform the necessary work to launch procurements, manage and direct government engineering projects and get shovels in the ground on priority infrastructure projects. This breakdown of the government’s ability to deliver high quality engineering for Ontario has progressed despite years of warning by in-house engineers and PEGO.

As we show in this paper, the under-resourced in-house engineering expertise has led – and will continue to lead – to increased project costs, multi-year project delays and a bottleneck of projects that need to be designed and built. Simply put, the government’s infrastructure agenda and its obligations to keep our existing infrastructure safe and in good working order is hampered by misjudged expectations of the scope and breadth of engineering services suitable for outsourcing with a corresponding under-resourcing of in-house expertise.

In this paper PEGO lays out practically achievable short-term solutions to address engineering and surveying retention issues and proposes the re-staffing of many engineering functions to sustainable levels that align with the needs of government programs.

PEGO’s proposed recommendations would not result in increased costs to the treasury, but in fact would save the taxpayers money and place greater decision-making ability for the long-term that the Government needs back in its own hands.

PEGO recommends that the Government of Ontario:
1) Immediately commence a review of engineering staffing needs in the core Ministries involved in planning and executing the $185 billion capital plan to determine the appropriate or optimal in-house staff engineering complement needed to execute on this plan. This plan should include a recruitment and retention strategy to address current and expected needs in delivery on the capital plan.
2) Provide labour stability and retain a highly qualified workforce, by implementing a permanent long-term market alignment mechanism for PEGO members’ compensation.
3) Create an Office of Engineering Quality Assurance to perform the work of engineering oversight under the Owner Acceptance quality model. The Ministry of Transportation could perform its mandate of ensuring quality construction more capably and efficiently
through the adequate staffing of engineers performing these roles.
4) Ensure professional engineers are given the authority to make engineering decisions by reviewing the Ministry’s framework for decision making in design and construction within the scope of professional practice. Ensure accountability mechanisms are in place for decisions made.

PEGO and PEGO-represented Professional Engineers employed in the Ontario Public Service are interested in a partnership with the Ontario government that will help it realize its ambitious and transformative infrastructure agenda. Only by working together will we achieve our objectives.