In many Indigenous communities across Northern Canada, infrastructure is vital not just for daily life, but for long-term sustainability, health, and economic development. From schools and community centers to water treatment plants, fire halls, and public works buildings – these assets represent critical investments. And yet, many remain underinsured or inaccurately valued, leaving communities vulnerable in the event of damage or catastrophic loss.
Properly insuring these properties starts with one essential element: accurate, reliable replacement cost appraisals. Unfortunately, this is often easier said than done – especially in remote or hard-to-access communities.
The Unique Challenges of Remote Infrastructure Valuation
Unlike urban or suburban settings, northern Indigenous communities face a range of logistical and economic challenges that impact construction costs and asset values:
- Transportation Costs: Delivering building materials, machinery, and even basic supplies to remote areas often involve air, barge, or ice road transport – all of which add significant cost premiums.
- Short Construction Seasons: In much of the North, the window for major construction projects is limited to a few short months each year due to weather and ground conditions.
- Labour Constraints: Skilled labour shortages in remote areas can lead to increased contractor costs and longer build times, both of which drive up replacement costs.
- Custom-Built Solutions: Many facilities – particularly water and wastewater infrastructure – are designed with community-specific requirements, making “off-the-shelf” replacement estimates inaccurate.
Using generic benchmarks or regional averages for insurance values in these contexts can significantly understate true replacement costs, resulting in underinsurance that becomes painfully apparent after a loss event.
Why Accurate Appraisals Matter
For municipalities, First Nations, and insurance program administrators, undervaluing infrastructure can have serious consequences:
- Claim settlements may fall short, forcing communities to cover the funding gap or delay rebuilding.
- Premium allocations may be skewed, affecting equity in shared insurance pools or self-insured arrangements.
- Capital planning becomes more difficult, as outdated asset data does not reflect current replacement realities.
In contrast, a well-supported insurance appraisal provides not only a replacement cost estimate but a deeper understanding of each asset’s characteristics, condition, and risk profile – supporting better decision-making and financial planning.
How a Qualified Valuation Firm Can Help
At our firm, we specialize in appraising tangible assets for insurance and financial reporting purposes, with deep experience working in Canada’s northern and remote communities. Our services include:
- On-site inspections to verify asset condition, features, and current use.
- Detailed analysis of local cost factors, including remote construction logistics, labour availability, and seasonal considerations.
- Valuation of a wide range of assets, from community buildings and public works facilities to water and waste treatment infrastructure and heavy municipal equipment.
- Clear, defensible reports that meet the needs of insurers, auditors, and funding agencies.
We don’t rely on cookie-cutter models or unverified asset registers. Instead, we develop customized valuations based on real-world replacement scenarios – considering location-specific costs, regional contractor data, and current material pricing trends.
A Path Toward Resilience and Equity
Ensuring that Indigenous communities have access to accurate, high-quality insurance valuations is not just a technical issue – it’s a matter of resilience, equity, and long-term planning. Communities should never be forced to rebuild with inadequate resources simply because their insurance coverage was based on flawed data.
With the right expertise and a commitment to precision, valuation firms can play a crucial role in helping communities protect what matters most.
The global business environment is increasingly defined by volatility. Supply chains remain strained, raw material prices fluctuate, and tariff regimes shift with little warning, particularly between major trade partners like Canada and the United States. In this climate of uncertainty, valuation risk is emerging as a serious blind spot for many companies.
When costs are unstable and economic signals are mixed, business owners and CFOs often hesitate to make key investment or insurance decisions. But paradoxically, this is precisely the time when current, professionally supported asset valuations are most critical.
What Is Valuation Risk and Why Does It Matter Now?
Valuation risk is the exposure a business faces when the assumed value of its assets does not reflect reality. This could stem from:
- Outdated replacement cost data on insured assets
- Inaccurate book values of fixed assets used for financial or tax reporting
- Assumptions that no longer reflect market conditions, especially in the face of changing tariffs, materials shortages, and transportation bottlenecks
The result? Businesses may find themselves underinsured, overexposed to loss, or making decisions based on faulty asset values – undermining both financial reporting and strategic planning.
Tariff Volatility and Its Impact on Asset Values
Tariffs have become a powerful disruptor. When duties are imposed or lifted on construction materials, machinery, electronics, or raw materials, the cost to replace or acquire assets can change virtually overnight. This is particularly challenging for companies with international operations or cross-border supply chains.
These changes directly affect:
- Replacement cost values for insurance purposes
- Capital budgeting and investment planning
- Fair market value assessments in M&A or lending contexts
Without updated valuations that factor in current tariff structures and supply disruptions, businesses risk significant financial misstatements or gaps in coverage.
Why Updated Valuations Enable Better Decisions
In today’s climate, relying on historic cost data or internal accounting estimates is no longer sufficient. A professionally prepared valuation:
- Reflects current material, labour, and transport costs
- Accounts for location-specific challenges and market conditions
- Provides defensible data for insurers, auditors, lenders, and investors
- Transfers liability from internal teams to qualified valuation professionals
This last point is particularly important. When a certified third-party valuation is used, the risk of error and exposure shifts from the business to the valuation provider. For CFOs and asset managers, this not only improves compliance, it adds a layer of risk protection.
What Should Business Leaders Be Asking Right Now?
- When was the last time our major assets were independently appraised?
- Do our insured values reflect today’s replacement costs or yesterday’s?
- Are we relying on book value for decisions that require market value?
- How are tariff changes and supply disruptions affecting our asset base?
- Could a valuation help reduce our exposure or support better decisions?
These questions are not just for year-end audits or insurance renewals – they are strategic and operational. With so many moving parts in the global economy, clarity around asset values is essential for budgeting, financing, risk management, and corporate governance.
How We Can Help
Our firm specializes in both insurance appraisals and market value assessments across North America and internationally. Whether you’re reassessing replacement costs for insured property or establishing Fair Value for financial reporting, we apply real-world data, market-based methodologies, and on-the-ground expertise to ensure your valuations are accurate and defensible.
In a time of unpredictability, sound valuations aren’t a luxury – they’re a necessity. Let us help you move from uncertainty to confidence.
In today’s shifting economic landscape, mergers and acquisitions (M&A) continue to be a strategic tool for growth, diversification, and survival. However, as the uncertainty with tariffs and interest rates volatility continues, and markets cool, buyers and sellers are facing heightened scrutiny around transaction fundamentals, and one critical area where missteps are still far too common is in the valuation of tangible assets.
Whether part of a strategic acquisition or a distressed sale, tangible assets — including land, buildings, machinery, equipment, and specialized infrastructure — often make up a substantial portion of the transaction price. Yet, despite their importance, these assets are frequently undervalued or overvalued due to inadequate or outdated valuation methods.
Beyond the Ledger: Why Relying on Fixed Asset Records Isn’t Enough
Too often, tangible assets values are developed by indexing up original costs using accounting records to estimate current costs and then depreciating these based on the purchase date. While this might seem efficient, this is a risky manner to develop Fair Value, as it overlooks key realities:
- Fixed asset registers may be outdated, incomplete, or inaccurate.
- The cost on the records may be an allocated cost and not an actual original cost.
- Currency exchange fluctuations since the purchase date of the assets are not accounted for, in the instances where the assets that have been imported.
- Depreciation for book and tax purposes rarely reflects economic value or remaining utility.
- Book values do not equate to market-based Fair Value.
In an M&A context, using such shortcuts can materially distort the balance sheet and misrepresent the true worth of the acquired entity’s physical assets — creating risk for both buyers and their auditors.
Fair Value Requires Market Insight and On-Site Verification
Professional, independent valuation of tangible assets ensures that Fair Value — as defined under both IFRS and US GAAP — is determined based on real market data, not internal estimates or accounting entries. This means:
- Conducting physical inspections of the major assets to verify existence, condition, and functionality.
- Applying a market-based approach, often incorporating cost, income, and/or sales comparison methods depending on asset type.
- Considering obsolescence, utility, and economic trends that influence current and future value.
This approach provides a much clearer picture of what the acquiring entity is truly purchasing and helps justify the transaction price in a defensible way.
Why Useful Remaining Life Matters
Beyond establishing Fair Value, acquiring companies must also assign a Useful Remaining Life (URL) to each class of tangible asset. This is essential for:
- Accurate depreciation schedules post-acquisition,
- Financial reporting and audit compliance, and
- Ongoing capital planning and asset management.
The URL is not simply an accounting estimate — it must reflect physical wear, maintenance history, functional utility, and technological relevance. An experienced appraiser can provide a well-supported analysis that aligns with audit expectations and industry norms.
The Cost of Getting It Wrong
Failing to properly value tangible assets can have significant consequences:
- Overstated goodwill that may later trigger impairment losses,
- Increased audit risk due to lack of substantiation,
- Disputes during post-deal adjustments, and
- Misaligned investment assumptions that affect ROI calculations.
In contrast, a credible third-party valuation brings transparency, accuracy, and defensibility to the transaction — reducing risk and increasing stakeholder confidence.
Partner with the Right Experts
As a Canadian-based valuation firm with deep experience in tangible asset valuation, our team specializes in conducting detailed inspections and applying real-world market data to deliver reliable, audit-ready results. We support M&A transactions across a wide range of industries — ensuring our clients are equipped with the insights they need to make informed decisions and meet regulatory requirements.
In a market where every dollar counts, accurate valuation isn’t a formality — it’s a strategic necessity.
How Rising Costs Are Affecting Public Sector, Industrial, and Commercial Property Owners
With the recent reintroduction of tariffs between the United States and Canada, property owners across the country are facing a new layer of risk. These trade measures, designed to protect domestic industries, are having unintended consequences on construction costs, equipment pricing, and ultimately, insurance coverage. For public sector institutions, industrial facilities, and commercial real estate holders, it is now more important than ever to ensure their insurance values reflect current realities.
At the heart of this issue is the concept of replacement cost — the amount it would take to rebuild a property or replace equipment with materials of like kind and quality at today’s prices. When tariffs increase the cost of imported steel, aluminum, lumber, and machinery, the replacement cost of buildings and machinery and equipment also goes up. Without an updated insurance appraisal, property owners are at risk of being significantly underinsured.
- Tariffs Are Driving Up Replacement Costs
As of 2025, the U.S. has imposed 25% tariffs on Canadian steel and aluminum, and duties on Canadian softwood lumber are approaching 40%. These materials are foundational to construction and manufacturing. From structural steel and rebar to window frames, ductwork, and framing lumber, nearly every component of a building or piece of equipment is now more expensive to replace.
This impacts insurance in a very direct way: if your policy is based on outdated valuations, your coverage might not be sufficient to cover a total loss. This can result in significant out-of-pocket expenses for rebuilding or replacement.
- Avoiding Co-Insurance Penalties
Most commercial and public sector insurance policies include a co-insurance clause. This provision requires that the insured value of a property be within a certain percentage (often 90% or 100%) of its actual replacement cost. Failure to meet this threshold can result in penalties, even if the loss is partial.
In a tariff-inflated cost environment, many property owners may unknowingly fall below this threshold. An appraisal performed by a qualified firm ensures compliance and helps protect against these avoidable penalties.
- Accounting for Supply Chain Changes and Tariff-Related Costs
Tariffs have not only raised prices but also disrupted global supply chains. Contractors and equipment suppliers are now sourcing materials from alternate markets, often at higher prices and with longer lead times. These hidden costs — logistics, duties, expedited shipping, and procurement complexities — all factor into what it truly costs to rebuild or replace assets.
An accurate appraisal includes these updated cost considerations, helping property owners set realistic insurance limits.
- Industrial and Specialized Equipment Risks
Industrial operations face a unique set of challenges. Much of the machinery and equipment used in manufacturing, energy, and processing industries is imported or built with tariff-affected materials. Replacing this equipment is now significantly more expensive.
If you have not completed an insurance appraisal recently, there’s a good chance your coverage doesn’t reflect these increases. An appraisal can capture current values and protect against coverage gaps that could delay or hinder recovery after a loss.
- Public Sector and Commercial Real Estate Implications
Municipal buildings, schools, hospitals, and other public assets must also contend with rising construction costs. For government entities with tight budgets, being underinsured can have major implications for recovery and service continuity following a disaster.
Similarly, developers and commercial property owners operating on thin margins or under fixed-price contracts could find themselves severely exposed if their insured values are outdated. Appraisals are not just for insurance; they also support budgeting, capital planning, and financial reporting.
- Strengthening Insurance Placement and Claim Support
In today’s market, insurers are paying closer attention to insured values. A current, professionally prepared appraisal provides credibility and helps in securing favorable terms and conditions during renewals. It also improves claim outcomes by demonstrating that values were based on independent, up-to-date analysis.
The Bottom Line: Now Is the Time to Act
Tariffs are reshaping the cost landscape for construction and equipment across Canada. For property owners, staying ahead of these changes means ensuring your insurance coverage is accurate and defensible. A professional insurance appraisal is a proactive, cost-effective step that protects your assets, improves compliance, and provides peace of mind.
Whether you’re managing a municipality, running a manufacturing operation, or investing in commercial real estate, now is the time to reassess your property values. In a volatile trade environment, knowledge is not just power — it’s protection.
In recent weeks, British Columbia experienced earthquakes on February 24 and March 3, 2025. There were also seven earthquakes in 2024 with magnitudes ranging from 5 to 6.4. While the effects were not large, their frequency acts as a reminder of the critical role of emergency preparedness.
Earthquakes can strike without warning, leaving communities without essential services and supplies. Suncorp Valuations supports the belief that a well-stocked emergency kit can make a significant difference in ensuring your safety and well-being in the aftermath of a disaster.
Below, we have outlined a comprehensive checklist of essential items to help you and your loved ones stay prepared and resilient in the face of an earthquake emergency.
SURVIVAL ESSENTIALS
These items are necessary to sustain life immediately after an earthquake when help may not be readily available:
- Water: At least 4 liters per person per day for a minimum of three days (for drinking and sanitation)
- Food: Non-perishable food items with a long shelf life
- First Aid Kit: Basic medical supplies including bandages, antiseptic wipes, pain relievers, and prescription medications
- Emergency Blanket: Thermal blankets to retain body heat
- Multi-Tool or Knife: Useful for various tasks such as opening cans or cutting materials
- Flashlights: Battery-powered or hand-crank flashlights
- Extra Batteries: For flashlights, radios, and other essential devices
- Whistle: To signal for help
- Portable Phone Charger: Preferably solar-powered or battery-operated
- Cash: Small bills and coins in case ATMs and credit card systems are down
- Important Documents: Copies of identification, insurance policies, and emergency contact lists in a waterproof container
SAFETY & PROTECTION
These items help protect against hazards caused by the earthquake and ensure security:
- Dust Masks (N95 preferred): Protect against inhaling dust and debris
- Work Gloves: To handle debris safely
- Sturdy Shoes: Closed-toe shoes for navigating damaged areas
- Protective Eyewear: Shields against airborne debris
- Duct Tape & Plastic Sheeting: Useful for sealing off contaminated areas
- Local Maps: To find evacuation routes and emergency shelters
- Emergency Radio: Battery-powered or hand-crank radio to stay informed about updates and rescue efforts
MISCELLANEOUS/ADDITIONAL CONSIDERATIONS
- Personal hygiene/toiletries items: Such as an extra pair or glasses or contact lenses
- Stationery: Pen and paper or notepad
- Keys: House and car
- Store the kit in a durable, accessible container
- Check and update supplies every six months
- Customize the kit based on household needs (e.g. pet supplies, infant necessities)
- Consider keeping a smaller version in your car in case you are not home during an earthquake
By assembling a well-prepared earthquake emergency kit, you can improve your ability to stay safe and sustain yourself in the aftermath of a major earthquake.
SUNCORP’S RISK SERVICES GROUP
Being proactive is a key element to risk management for your business or personally. At Suncorp, our commitment extends beyond standard property appraisals. We offer specialized risk inspection services designed to:
- Identify Potential Hazards: Our detailed inspections help uncover risks that might not be immediately visible, ensuring no threat goes unnoticed.
- Provide Expert Analysis: Our experienced team analyzes potential risks and offers expert recommendations to mitigate them effectively.
- Enhance Property Safety: By addressing risks proactively, you can enhance the safety and security of your property, protecting both your investment and occupants.
- Ensure Regulatory Compliance: Stay ahead of regulatory requirements by addressing potential risks identified during our comprehensive inspections.
If you’d like to learn more about how our team can assist you with risk management, please don’t hesitate to reach out to Shamair Turner – Manager, Risk Management at Shamair.Turner@suncorpvaluations.com.
The recent imposition of tariffs by the United States on Canadian and Mexican imports, along with Canada’s retaliatory measures, is set to significantly affect construction costs in both Canada and the US, if a resolution is not found. These tariffs will increase the price of essential building materials and building services equipment, while ongoing skilled labor shortages on both sides of the border—exacerbated by the Trump administration’s intensified deportation policies—will further strain the industry. The combined impact of these economic and labor pressures could lead to substantial cost increases and project delays, with some regions being affected more than others.
Impact of Tariffs on Construction Costs
Regional Effects in the United States
The U.S. has implemented a 25% tariff on key Canadian imports such as softwood lumber and gypsum board—materials that are vital for residential and commercial construction. Since over 70% of these materials used in the U.S. come from Canada, this policy will create cost pressures that will vary by region:
- Northeast and Midwest: These regions are heavily reliant on Canadian lumber and gypsum. The tariffs will lead to significant price increases, making construction more expensive. Builders may struggle to find alternative suppliers, leading to delays and increased costs for homebuyers and commercial developers.
- Southern U.S.: This region has an active lumber industry, which could mitigate some of the tariff effects. However, if other regions shift their purchasing to local suppliers to avoid tariffs, demand could spike, driving up prices even in areas with a strong domestic supply.
- Western U.S.: While Western states import some materials from Canada, they also have access to Pacific Northwest lumber supplies. This could provide a partial buffer, though costs will still rise due to broader national demand shifts.
Regional Effects in Canada
Canada has imposed retaliatory tariffs on U.S. goods, including construction materials and industrial machinery, which will impact costs differently across the country:
- Central and Eastern Canada (Ontario, Quebec, Maritimes): These provinces import a significant portion of their construction materials from the U.S., such as steel, cement, insulation and plumbing products. Tariffs will raise costs for builders and developers, making housing and infrastructure projects more expensive.
- Western Canada (British Columbia, Alberta, Saskatchewan and Manitoba): This region has abundant timber resources and is more self-sufficient in construction materials. However, they do import construction materials such as steel and cement products. Also, interprovincial demand for lumber products could increase as other regions look for domestic alternatives, potentially raising local costs.
Impact of Skilled Labor Shortages on Construction
U.S. Labor Challenges
The construction industry in the U.S. already suffers from a skilled labor shortage, and the Trump administration’s push to deport undocumented workers could worsen this problem. A significant portion of construction workers in the U.S. are undocumented workers, and their removal would create severe labor gaps, leading to:
- Southwest and Southeast: States such as Texas, Arizona, and Florida rely heavily on immigrant labor. Deportations could cause major disruptions, leading to project delays and wage inflation as competition for legal workers intensifies.
- Northeast, Midwest and Northwest: While less reliant on immigrant labor, these regions will still feel the effects of a national labor shortage. With fewer available workers, construction timelines could lengthen, further increasing costs.
Canada’s Construction Workforce Crisis
Canada’s construction sector faces its own labor shortages, largely due to increasing housing demands and an aging workforce. With approximately 700,000 skilled tradespeople set to retire by 2028, the industry is struggling to attract new workers. The impact will vary by region:
- Western Canada (BC, Alberta, Saskatchewan & Manitoba): These provinces are experiencing rapid growth, increasing the demand for skilled labor. The shortage could lead to higher wages and project delays, further driving up construction costs.
- Central Canada (Ontario, Quebec): While facing similar challenges, these provinces have more extensive training programs and immigration strategies that could mitigate some of the labor shortages.
- Eastern Canada (New Brunswick, Nova Scotia, Newfoundland and Labrador, PEI): These provinces also have construction labour shortages, due to many factors including booming residential construction markets, such as Moncton’s and migration of skilled workers to other provinces.
Projected Cost Increases Due to Tariffs and Labor Shortages
If the tariff issue is not resolved in short order and the projected economic and labor trends persist, construction costs could rise substantially across North America over the next couple of years:
- United States: Regions heavily dependent on Canadian materials and immigrant labor (Northeast, Midwest, Southwest regions) could see construction cost increases of 15-20%. Other regions may experience slightly lower 10-15% cost hikes.
- Canada: Central and Eastern Canada, which relies on U.S. imports and is facing labor shortages, could see cost increases of 10-15%. Western Canada may experience 5-10% increases due to higher interprovincial demand for labor and materials.
Conclusion
The dual impact of tariffs and skilled labor shortages is creating significant headwinds for the construction industries in both the U.S. and Canada. While some regions will be more affected than others, overall construction costs are expected to rise, leading to longer project timelines and increased housing and infrastructure expenses. Addressing these challenges will require strategic policy responses, including investment in the workforce training, immigration reforms to bolster labor supply, and efforts to stabilize trade relations to ensure affordable material sources.
