Navigating COVID-19: Preparing for the future of construction YOUR - - PowerPoint PPT Presentation
Welcome to CONnected Navigating COVID-19: Preparing for the future of construction YOUR SPEAKERS KYLE HULME CHETAN SEHGAL JENNIFER LUCIER VP, Strategy & Operations Partner, Advisory Senior Manager, Domestic Tax Real Estate &
KYLE HULME
VP, Strategy & Operations Real Estate & Construction
CHETAN SEHGAL
Partner, Advisory Real Estate & Construction
JENNIFER LUCIER
Senior Manager, Domestic Tax Real Estate & Construction
ü Impacting Every Segment of the Construction Industry ü Significant Business Disruption à Project delays, supply chain ü Changing Operational Protocols – Workforce Mgmt, H&S, etc. ü Significant Cash-Flow & Financial Pressures
Circumstances are Changing Daily…
ü Review Elements of Strong BCP & Crisis Management Practices ü Discuss How to Mitigate Impact As We Move Forward ü Potential Cash-Flow Management Strategies
COVID-19 – PREPARING FOR THE FUTURE OF CONSTRUCTION
Crisis Management & Business Continuity
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EFFECTIVE RESPONSE
DEPLOY YOUR CRISIS RESPONSE TEAM CONDUCT A BUSINESS CONTINUITY RISK ASSESSMENT PLAN FOR IMPACT ($)
CRISIS MANAGEMENT & BUSINESS CONTINUITY PLANNING
COMMUNICATE EFFECTIVELY
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GOALS:
Executive Team Tactical Leads
Response Teams
Ongoing Communication
Operations Human Resources I.T. Legal Communications
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CHECKLIST ITEMS:
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Do you have Crisis Management guidelines and procedures to support timely and effective decision-making?
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Do you have response teams with defined roles & responsibilities?
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Do you have prepared crisis-communication messaging that can be readily deployed moving forward?
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Have you created construction-site crisis response teams? If so, have you defined their roles and 360* communication processes?
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GOALS:
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HEALTH & SAFETY PROTOCOLS
OPERATIONAL CONSIDERATIONS
PROJECT MANAGEMENT WORKFORCE & SUB-TRADE AVAILABILITY SUPPLY CHAIN & THIRD-PARTY RISK CONTRACT STIPULATIONS
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HEALTH & SAFETY CONSIDERA TIONS:
u Have you updated your health & safety policies (ex. fit for duty policy)
related to COVID-19 (while complying with legislation)?
staying home, and quarantine. u Immediately implement government measures and best practices pertaining
to hygiene on-site.
u Communicate, Communicate, Communicate
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CONTRACT STIPULATIONS:
Take inventory of your contracts (suppliers & customers) Review contracts Obligations
Understand Contract T&C and Governmental Directive
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CONTRACT STIPULATIONS:
Force Maj eure - Act of God Contract Frustration Duty to Mitigate Document – If not documented did not occur
Contracts in Negotiation – Learn and adapt
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RESTRUCTURING & FINANCIAL LIQUIDITY
PLAN FOR IMPACT ($)
GOVERNMENT SUPPORT CASH-FLOW MANAGEMENT SCENARIO ANALYSIS INSURANCE CLAIMS
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COVID-19 Fiscal Stimulus
CORPORATE AND PERSONAL INCOME TAX PAYMENTS u Businesses and individuals can defer income tax payments including instalments until S eptember 1st. u This deferral applies to corporate and personal income tax that became
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COVID-19 Fiscal Stimulus
u Eligible small employers can receive a temporary wage subsidy for
three months (between March 18, 2020 and June 20,2020.
u The subsidy will equal 75%
WAGE SUBSIDY – SMALL BUSINESSESS This program allows eligible employers to reduce the amount of payroll deductions required to be remitted to the Canada Revenue Agency.
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COVID-19 Fiscal Stimulus
u The program is available to both federally and provincially regulated
employers.
u The Government of Canada has extended the maximum duration of
Work-sharing agreements to 76 weeks and waived the mandatory waiting period.
u https:/ / www.canada.ca/ en/ employment-social-
development/ services/ work-sharing/ guide-applicant.html WORK-SHARING PROGRAM
This program is designed to help eligible employers avoid layoffs when there is a temporary reduction in the normal level of business activity that is beyond the control of the employer.
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COVID-19 Fiscal Stimulus
u The Business Credit Availability program will be managed by the
Business Development Bank of Canada (BDC).
u https:/ / www.bdc.ca/ en/ pages/ special-support.aspx?special-
initiative=covid19
u Working capital loans are available of up to $2 million. u Postponement of payments for up to 6months, free of charge, for
existing BDC clients with a BDC loan commitment of $1 million or less
u Reduced rates on new eligible loans BUSINESS CREDIT AVAILABILITY PROGRAM AND ADDITIONAL FINANCING
$10 billion in loans has been allocated to this program This is a new relief program effective March 18, 2020
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COVID-19 Fiscal Stimulus
OTHER TAX CONSIDERATIONS: u Capital Loss Planning u Capital Dividend Account u Estate Freeze u Transfer Past Instalment Overpayments to HS T or Payroll
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INSURANCE CLAIMS & COVERAGE
Review all insurance policies in detail
It is a contract, discuss with your broker, legal advisors
Policy Wording
They are all different
Put your insurance company on notice AS AP
Details to Follow
Document the impact
Accurate records
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Business Interruption
Damage
Contingent Business Interruption
upply chain impact (relying on suppliers/ cust omers)
Civil Authority
Infectious Communic- able Disease
pecific Coverage – Pandemic exclusion/ limit aions?
Ingress/ Egress
Builders Risk
t andard Insurance
INSURANCE CLAIMS & COVERAGE
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INSURANCE CLAIMS & COVERAGE
Mitigation Activities
Operational Modifications
Track Costs
Losses
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TOP PRIORITY FOR CRISIS COMMUNICATIONS Messaging –S afety & Wellbeing of workforce is paramount
EMPLOYEES COLLABORA TE à SEEK AND SHARE TIMELY INFORMATION Messaging –Communicate: Y
THIRD-PARTIES
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KYLE HULME
VP, Strategy & Operations Real Estate & Construction kyhulme@bdo.ca
CHETAN SEHGAL
Partner, Advisory Real Estate & Construction
csehgal@bdo.ca
JENNIFER LUCIER
Senior Manager, Domestic Tax Real Estate & Construction
jlucier@bdo.ca