Initial Capital Expenditure (ICE)

Issue

Alberta must reconsider its reliance on Initial capital expenditure (ICE) as the primary decision on the approval and advancement of built environment projects in Alberta. Initial Capital Expenditure is very shortsighted. While ICE is certainly an important consideration, the importance of life cycle costing and results in poor value for investment, with higher resultant long-term costs.

Background

In Alberta, decision-makers most often focus on ICE and not the life cycle costing, quality of the space, or long-term investment. The true economics of a built environment project are rarely considered. Considering the short lifespan of a building at 75 years, the ICE is a minor investment in the full capital expenditure to operate, general maintenance, and staff the building.

Recommendations

The Alberta Chambers of Commerce recommends the Government of Alberta:

1. Revise the decision process of approval for built environment projects to integrate long-term operational considerations into the initial decision-making process when considering lifespans and future requirements.