Steve Payne
Fair Construction campaign launched to stop construction labour monopolies on publically-funded construction
Canadian Contractor canada riskWith competition for publically-funded construction projects now restricted in the Region of Waterloo, ON, the pool of companies who qualify to compete on one of its publically funded projects has shrunk from 9 to 2.
Here is a press release we missed last week, that is from the Progressive Contractors Association of Canada…
MISSISSAUGA, ON (Nov. 20th, 2014) – The Fair Construction campaign launched today, to forewarn municipalities that could be targeted next by construction labour monopolies -‐ a growing and alarming trend in Southwestern Ontario.
“Our goal is to ensure municipalities know how to reduce their risk, so they aren’t forced to pay inflated construction costs,” said Karen Renkema, Chair of the Fair Construction campaign. “When labour monopolies drive up the cost of construction, it isn’t fair to anyone, especially taxpayers.”
The Fair Construction campaign is making stops across Southwestern Ontario to inform municipalities, associations, elected officials and industry about the issue and steps that can be taken to prevent a construction labour monopoly from taking hold in their town, city or region. A loophole in the Ontario Labour Relations Act has allowed construction unions to certify public sector employers, including Toronto, Hamilton, Sault Ste. Marie, and more recently the Region of Waterloo as “construction employers.” These municipalities are subject to a provincial wide collective agreement that forces them to restrict who they can contract and hire for construction projects.
These restrictions:
• Reduce competition. Up to 70 percent of qualified companies and workers are prevented from competing for local projects.
• Raise costs. With less competition, municipalities pay 20 to 30 percent more ($188 to $283 million annually) for construction projects, at a time when all levels of government are looking for ways to stretch their infrastructure dollars.
With competition now restricted in the Region of Waterloo, the pool of companies who qualify to compete on one of its publically funded projects has shrunk from 9 to 2.
“When all qualified companies and workers are allowed to compete on local projects, regardless of union affiliation, or lack thereof, we all benefit,” added Renkema. “Municipalities save money, and taxpayers get good value. That’s what Fair Construction is all about.”
The Fair Construction campaign is led by the Progressive Contractors Association of Canada. PCA is the voice of progressive unionized employers in Canada’s construction industry. Its member companies employ more than 25,000 skilled construction workers across Canada.
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The underlying position of the Fair Construction Campaign is that reduced costs would result in construction employers’ ability to procure services from non-union construction contractors. Yet I refuse to believe that “qualified” non-union construction contractors deliver their services through fair-market value discounts in employee wages. Further, “qualified” non-union construction contractors do not deliver their services by way of mark-downs on welfare, pension and training plans, estimating, overhead, insurance, WSIB premiums, bonding, taxes and profitability. All things being equal, the service delivery costs for union and non-union construction are comparable so no savings are to be found by procuring services from non-union construction contractors.
The premise of the Fair Construction Campaign is a distortion of the Cardus report, “Hiding in Plain Sight – Evaluating Closed Tendering in Construction Markets”, https://www.youtube.com/watch?v=GJ8IoW-_hE4 in that the issue is more complex than the simplicity presented by the Fair Construction Campaign. The “Fair Construction Campaign” should be re-labeled as “(I Believe) I’m Better Than You Campaign” with the clear understanding that the intent is not to assist construction employers to maintain openness, fairness, and transparency as the basic principles of public procurement while seeking value-for-money improvements of construction services.
Those interested in an intellectually honest discussion on improving procurement of construction services (and helping individual taxpayers from incurring the projected tax burden required to resolve the looming infrastructure deficit), I respectfully refer the following reports:
The Price Implications of Government Contracting Practices in the GTHA
http://www.rccao.com/news/files/rccao_sept10_report_lowres.pdf
Towards a Fair and Balanced Approach
http://www.rccao.com/news/files/rccaoreports10-2009lores.pdf
as a steamfitter, refrigeration mechanic, gas fitter, HVAC tech and retired biz owner for over 30 years who was union in the past and open shop in the last half I just want to say there is no good reason for governments to restrict projects to unionized only companies. The practice is politically motivated and only serves to drive up costs to the taxpayer. Most people do not know but unions also give large amounts of cash rebates back to unionized bidding firms to help them come in with lower prices to beat out open shop contractors. I have no issue with that practice as it is their money! however bids should be open to all as long as the firm has the insurance, bonding and licensed staff on hand to do the job.