The City of Sault Ste. Marie, Ont. has unanimously passed a motion to look into the impact of construction labour monopolies on the municipality and its taxpayers and open tendering advocates say it’s an important first step in the right direction.
The resolution, tabled by Councillor Matthew Shoemaker, calls on the city to look at the cost, administrative work and feasibility of pursuing a case at the Ontario Labour Relations Board (OLRB) to become a non-construction employer, which would allow the city to openly and freely tender all construction projects. Since the 1980s, the city has been limited by the OLRB to accept bids for city infrastructure from only two unions: the International Brotherhood of Carpenters and Joiners and the Labourers International Union of North America.
"This is not a union versus non-union issue, this is a union monopoly: one union, or two in our case, have a monopoly on our city construction work to the exclusion of both non-unionized and every other unionized workforce in the city and across the province," explained Shoemaker.
He added, "So we are prohibited from using other unions on city jobs and that's just not right. It means less competition and it means higher costs in my opinion. We're not trying to harm any particular unions...If we are decertified, I hope that they (the two unions they are bound to) continue to submit competitive bids and I hope if theirs is the best bid that they win the contract. But I'm not satisfied that we should just accept that we can only take their bids."
The Progressive Contractors Association of Canada (PCA), the voice of alternative unionized employers in Canada's construction industry, supports the resolution put forward by Shoemaker. Research from the Cardus think tank shows this lack of competition drives up construction costs by as much as 20 to 30 percent each year, said Karen Renkema, senior manager, public affairs for PCA. She added becoming decertified could provide two benefits for the city: cost savings and fairness.
"Sault Ste. Marie would be realizing 20 to 30 per cent cost savings on projects or be able to do more projects in the municipality that have been shelved or delayed because of the increased cost on projects," said Renkema. "The other part of this conversation that is very important is the fairness perspective and I don't think anybody would suggest it's fair that local contractors cannot bid on local work and local workers can't work on jobs that their tax dollars are paying for just because they chose to be a member of a different union or chose not to be a member of a union at all."
Sault Ste. Marie has a number of sizable infrastructure projects coming up in the next few years including a major sewage treatment plant refurbishment, slated to cost $40 million, and Shoemaker argues it is in the city's best interest to open up construction tendering.
"If you save even eight per cent on a $40 million project that's just under $4 million that is money that can be put back into our roads, can be put back into other city infrastructure projects to reducing the tax burden on taxpayers," explained Shoemaker.
While it's important to consider the costs of making an application to the OLRB, it's also important to consider the cost of not getting decertified, he said.
"If we didn't do it and the bids were eight per cent higher on the sewage treatment plant, the cost benefit there is pretty clear — it far outweighs the actual cost to bring the application," Shoemaker noted.
In September 2016, after years of contesting their construction employer designation, the Greater Essex and County District School Board received a successful ruling from the OLRB, freeing them to openly tender construction work to all who are qualified.
"The Essex decision last fall provided a pathway for other public entities to follow in order to be decertified," said Renkema, adding that a lot of time and money was spent going to the OLRB and getting decertified but they could fall back into construction employer status and all that work would be for nothing.
For years, PCA has urged the Ontario government to amend its labour laws so that all cities can openly tender construction work.
"The final fix has to be to declare provincially that municipalities and public entities are not construction employers, they're not construction contractors, they are public entities," Renkema stated. "We have been suggesting to the government for a number of years that this needs to be dealt with. Until that time, the best pathway for municipalities and public entities is to seek decertification at the OLRB."
Ian DeWaard, regional director for the Christian Labour Association of Canada (CLAC), said he too hopes the provincial government will take action.
"Overall we're pleased that council has put some weight into this," said DeWaard of Sault council's decision. "It's evidenced that the municipalities that are challenged by this have no easy path before them and can't easily resolve whether or not this is the path because the legislation is outdated and flawed."
The report from city staff is expected to come back in the fall.