001-48_126_RENEW_SEPT-OCT26_PT - Flipbook - Page 36
RISK MANGAGEMENT
These are risks that cannot simply be
transferred through insurance. They must
be understood, planned for and actively
managed.
At 8 Wing Trenton, DCC has retained PCL
Construction to manage an $850M program
to support their air cargo 昀氀eet, including
new hangars, aprons, fuel systems and training facilities. As noted above, similar work
is underway at Cold Lake and Bagotville to
support Canada’s future 昀椀ghter capability.
These projects are technically complex, but
the more signi昀椀cant challenge lies in how
they are being delivered.
DCC is increasingly using modi昀椀ed
design-build models and bundling multiple infrastructure components into single
contracts to accelerate timelines. This creates
e昀케ciency, but it also compresses the window
in which risk is identi昀椀ed and allocated.
Construction is often taking place in
active-runway environments, where work
must be carefully coordinated with ongoing
昀氀ight operations. Access can be restricted
with little notice. Security requirements can
alter sequencing. Delays may be driven by
operational priorities rather than construction performance.
In traditional commercial projects, many
of these risks would be clearly allocated or
mitigated through contract structure and
insurance. In defence environments, this
alignment is not always present. Contractors
can 昀椀nd themselves carrying exposure for
factors they do not fully control, while insurance policies need to be carefully worded
to ensure they respond as expected to these
constraints.
Northern projects
If residential and airbase projects stretch the
traditional model, “High North” defence
infrastructure fundamentally reshapes it.
36—RENEW CANADA – SEPTEMBER/OCTOBER 2026
Through NORAD modernization e昀昀orts,
Canada is advancing projects in locations
such as Inuvik, Yellowknife, Iqaluit and Goose
Bay. These include “Over-the-Horizon Radar
systems” and upgrades to forward operating
locations. Here, risk is dictated as much by the
environment as by the project itself.
Construction is governed by narrow seasonal windows. Missing a critical delivery
period can result in delays measured in
years, not weeks. Supply chains are long
and fragile. Weather is not a variable; it is a
constraint.
Ground conditions introduce another
layer of complexity. In regions a昀昀ected by
permafrost, buildings must be designed to
prevent heat transfer that could destabilize
the soil beneath them. This requires
specialized foundations and thermal
management systems. This is a design
challenge further exacerbated by the impact
of climate change. Working in the high
north also requires special consideration
regarding wildlife and migration corridors.
For example, linear infrastructure is heavily
scrutinized where remediation needs to be
budgeted for and detailed environmental
management plans need to be developed.
Failure to manage environmental impacts in
these sensitive areas can result in signi昀椀cant
昀椀nancial penalties, a risk that general
contractors without experience working in
the North are unaccustomed to.
In addition, procurement frameworks often require meaningful local Indigenous participation, adding an important but complex
dimension to project delivery. Engagement
must be genuine and integrated, not simply
a compliance exercise.
An insurance market that favours prepared
buyers
Insurance market conditions in Canada are
reinforcing the case for a more deliberate
approach. The builder’s risk market has
shifted meaningfully in the favour of buyers.
Capacity is available, and domestic and
international outlets are actively looking to
grow their construction portfolios, including
segments they hadn’t focused on previously.
RENEWCANADA.NET
DEPARTMENT OF NATIONAL DEFENCE
The Department of National Defence held a groundbreaking ceremony, in July 2025, at CFB Trenton to mark the start of
construction on a major infrastructure project that will support the Strategic Tanker Transport Capability (STTC) project.
Moving Upstream
Across all these project types, one theme is
consistent: risk decisions are being made too
late.
A risk control driven approach starts earlier, at the contract stage. Before insurance is
placed, the structure of risk allocation must
be tested against how the project will actually be executed. Thoughtful risk management
processes need to be integrated in the overall
approach from scoping and design through
construction, delivery and operations.
This means aligning indemnities with real
control of risk (ensuring that risk allocation
falls on those who are aligned to control
that risk), stress-testing delay provisions
against operational realities and ensuring
that insurance requirements are achievable
and meaningful. On defence projects, where
procurement frameworks are often 昀椀xed,
this step becomes even more important. If
gaps are not addressed early, they tend to
persist. For example, the development of “risk
matrix” is critical to identify top risks at the
early stages of the project and manage and
report against this rubric over all phases of
the project.
Once construction begins, the focus
shifts to operational risk control. Not all
risk can be transferred, particularly in
environments de昀椀ned by external constraints
such as international trade volatility, high
north weather conditions and military
activities. What remains must be actively
managed through planning, execution and
accountability.
This can take many forms: workforce
logistics strategies in constrained markets,
phased approaches to integrating new
systems into existing infrastructure and
introducing new technologies to help monitor risk or detailed sequencing plans that
account for restricted access on active bases.
The goal is to reduce the likelihood and
impact of loss before it occurs.
