From the desk of a Western Canada underwriter, the current construction market is being shaped by a surge in Federal infrastructure spending, resulting in an escalation in project size and complexity. We have seen advances in large-scale transportation, energy transition, critical minerals and defence-related initiatives. Many of these projects have put an increasing amount of pressure on contractors' historical operating capacity. The constraint we're seeing is not a lack of backlog or opportunities, but balance sheets that aren't scaling at the same pace as project growth. Underwriting tolerance is being put to the test.

At the same time, owner/GC risk transfer is intensifying. A common theme is the continued emergence of increasingly onerous contracts and bond forms. Contracts are coming with broader indemnity obligations, uncapped damages both for delay and hard-to-prove consequential damages. Standard, industry-accepted bond forms are increasingly being presented with diluted surety remedies, constrained subrogation rights, and higher bond penalties. This shift is creating more contract scrutiny and elevated loss severity for the surety industry.

While Federal funding has been a good news story, this alone is insufficient to ensure Canada's growth ambitions remain on track. Private investment remains essential for many contractors who depend on this source to fill backlogs. A lack of private work forces contractors into the unfamiliar public hard-bid space, where margin adaptation, different subtrades, and new contractual terms could be challenging. Conversely, additional competition in public work is better for us taxpayers, provided underwriting standards prevail!

The net result - disciplined underwriting is critical. The "Three C's" of surety have evolved into the "Five C's", including Contract & Conditions, which are equally as important as their three founding fathers. Balance sheet strength is no longer enough to drive contract success and more often we are seeing operational execution and contract risk management as keys to supporting program growth for our contractors.

This evolving landscape is exactly the environment Trisura is built for. As surety specialists, we partner with our brokers and contractors to add value in areas such as contract risk mitigation, flagging onerous bond language, and structure programs that flex with a contractor's growth. For our broker partners, we are a company that wants to lean in on complex accounts, present solutions and help their clients pursue bigger and more ambitious work with confidence.