The Ontario Road Builders’…

The Ontario Road Builders’ Association (ORBA) respectfully submits the following comments regarding the Ministry of Transportation’s proposed July 2026 OPSS.PROV 127 – Schedule of Rental Rates for Construction Equipment. These comments focus on equipment commonly used by specialty foundation contractors, including hydraulic drill rigs, universal piling machines, vibratory hammers, cranes, leads, rock drills, hydro excavation equipment, loaders, excavators, skid steers and related specialty attachments.

OPSS 127 plays a critical role in establishing Time and Material compensation for construction equipment. As such, the adequacy of the prescribed rental rates affects far more than individual contractor cost recovery. It directly influences market capacity, competitive bidding, emergency and owner-directed response work, and the willingness of contractors to continue investing in the modern specialist foundation fleets required to deliver Ontario’s bridge, highway, transit, Sewer, Watermain, retaining wall and noise wall infrastructure programs.

ORBA supports a transparent and evidence-based equipment rate methodology and supports the Ministry’s proposed change to classify Hydraulic Drill Rigs by torque rather than engine power, recognizing that torque is a more appropriate measure of rotary foundation drilling capability. However, ORBA believes the proposed 2026 schedule requires targeted adjustments before finalization, as several foundation-related categories have been reduced below 2025 levels, certain classifications remain structurally compressed, and the current practice of assigning the lower rate to equipment falling between listed categories does not appropriately reflect the ownership and operating costs associated with high-capital specialist foundation equipment.

ORBA recommends that the Ministry adopt a more accurate methodology for equipment that better reflects actual ownership and operating costs. The current approach does not sufficiently account for lower annual billable utilization, higher mobilization and set-up requirements, significant capital cost differences between equipment models, increased tooling wear, and the

use of project-specific specialty components.

Consultation Context

The proposed OPSS 127 schedule states that the calculated rate is intended to represent the cost of owning and operating equipment, including direct and indirect costs and profit,
and that rates are hourly and exclude the operator. It also states that, except for hoisting equipment, equipment falling between categories receives the lower rental rate.
That lower-rate convention may be manageable for many broad civil categories, but it is not suitable for specialist foundation equipment. Foundation rigs, vibratory hammers, tieback
rigs, rock drills, hydro-vac units and lead systems often have large capital-value differences within a single class, and they are routinely configured for project-specific ground, access,
casing, tooling and obstruction conditions

MTO-Aligned Modelling Approach

ORBA recommends that the Ministry review and refine its OPSS 127 methodology to ensure that equipment rental rates more accurately reflect the true costs of ownership and operation across the construction industry. While the existing methodology provides a transparent and consistent framework, it should be periodically calibrated to account for changing market conditions, evolving equipment technologies and the operational realities experienced by contractors.

The Ministry’s 2026 methodology calculates OPSS 127 rates using ownership and operating cost components, including interest, depreciation, overhead, repairs, fuel, diesel exhaust fluid (DEF), filters, oil and grease, together with a 20% schedule mark-up. The published 2026 global variables include off-road diesel at $1.3221 per litre, DEF at $1.4641 per litre, an interest rate of
5.16%, USD/CAD at 1.3820, EUR/CAD at 1.6016 and a Machinery and Equipment Price Index (MEPI) of 135.78.

ORBA does not take issue with the Ministry’s published global variables. Rather, ORBA recommends that the underlying methodology be enhanced to better reflect actual industry conditions. In particular, assumptions relating to annual billable utilization, equipment categorization, ownership costs, operating costs and the treatment of attachments and specialized components should be reviewed to ensure that the resulting rental rates provide fair and accurate compensation for the broad range of equipment used to deliver Ontario’s transportation infrastructure projects.

General Comments on the Proposed 2026 OPSS 127 Schedule

ORBA notes that numerous equipment categories within the proposed 2026 OPSS 127 schedule reflect decreases from the corresponding 2025 rental rates. This trend is inconsistent with prevailing market conditions and does not accurately reflect the economic realities faced by Ontario's heavy civil construction industry.

Over the past several years, contractors have experienced sustained increases in the costs associated with acquiring, financing, maintaining and operating construction equipment. While broader measures of inflation such as the Consumer Price Index (CPI) have moderated, construction specific inflation including equipment acquisition costs, financing costs, insurance, parts, labour and maintenance expenses has continued to outpace general inflation and remains elevated. In this environment, reductions to equipment rental rates are difficult to justify and risk understating the true cost of ownership and operation.

Accordingly, ORBA recommends that the Ministry adopt a principle that no equipment category should receive a rental rate lower than its corresponding 2025 value unless there is clear, objective and industry-supported evidence demonstrating that ownership and operating costs have materially declined. At a minimum, ORBA recommends maintaining 2025 rates for all equipment categories where the proposed 2026 schedule would otherwise result in a reduction.

ORBA further encourages the Ministry to carefully review any proposed rate decreases before finalizing the 2026 schedule. Given the continued cost pressures facing the construction industry and the significant reliance placed on OPSS 127 rates for Time and Material compensation, publishing reduced rental rates that do not reflect market realities could have unintended consequences for contractor cost recovery, fleet investment and overall project delivery. Taking additional time to validate categories showing decreases against current market data and industry input would help ensure that the final schedule is fair, evidence-based and reflective of actual ownership and operating costs.