Carillion Canada announced that it has sought and been granted protection from creditors under the Companies’ Creditors Arrangements Act this week, ten days after its UK-based parent company went into liquidation.
The collapse of Carillion, a multinational conglomerate that is responsible for most of the winter maintenance on the QEW and highways 407, 403, 401 and 400, could spell trouble for highway safety in Ontario.
Major Ontario cities that may be affected by the disruption include Bancroft, Chatham, Huntsville, Kingston, London, Peel, Simcoe and Thunder Bay. Carillion Canada holds nearly half of the 20 road maintenance contracts in Ontario, worth about $87 million per year.
The UK-based company, which employs 6000 people in Canada through its subsidiary Carillion Canada and has 43000 employees worldwide, went into liquidation on January 15th following decisions from major banks to withhold further financing from the company.
Officials from the government of Ontario met with executives of Carillion Canada immediately after the liquidation announcement. “They have advised us that winter maintenance services are continuing uninterrupted at this time,” said Minister Of Transportation Steven Del Duca in a statement. “Regardless,” he continued, “MTO is continuing to look at all of its options should this situation change. We will be meeting with Carillion Canada throughout this week and we will continue to provide updates to the travelling public as they become available.”
Following the creditor protection announcement, executives from Carillion Canada continue to claim that its Canadian operations for public services will remain unaffected. The liquidation of the parent company gave rise to “unexpected liquidity challenges” in Canada, the company said in a statement, but expects all of its operations will continue as usual.
In addition to winter highway maintenance, Carillion is also a major contractor for construction of roads, hospitals, military installations and other government buildings.
In Ontario, Carillion also has contracts with the Brampton Civic Hospital, Sault Area Hospital, Oakville Trafalgar Memorial, Etobicoke General Hospital, the Centre for Addiction and Mental Health and Royal Ottawa Mental Health Centre. The contracts cover a wide variety of services like maintenance, security, housekeeping, call centres, patient food, hospital laundry and general management.