REALITY CHECK: Fair and open tendering

THE CLAIM:

Kitchener-Conestoga Progressive Conservative candidate Michael Harris claims his Fair and Open Tendering Act would ensure municipalities would be exempt from collective bargaining rules that govern the construction industry and that would save the region and region residents money.

Any increase, in infrastructure [costs] here in our region because of a labour monopoly, is unacceptable, said Harris.

THE BILL:

Harris Bill 73, a private members bill tabled in May 2013, would have amended the provincial Labour Relations Act of 1995 to exempt certain public sector employers, in this case school boards and municipalities, from province-wide collective bargaining agreements that govern the construction industry.

The act was defeated in the Ontario legislature on September 19 last year, but Harris is vowing to table the bill again if he is re-elected on June 12.

HOW THE BILL WOULD APPLY TO WATERLOO REGION:

In December2012, two Region of Waterloo employees were assigned to build a shed. The workers filled out cards asking to join the United Brotherhood of Carpenters and Joiners of America. As they were the only two workers working that day, they made up an a complete work crew, so their application to join the Brotherhood meant theRegion of Waterloo could be certified as aconstruction employer bound by the province-wide agreement with the UBCJA. The collective bargaining rules specify that in cities and towns where a union is certified, only unionized contractors and sub-contractors are able to bid on construction contracts.

Region workers were also asked to do things in separate instances like fix a broken toilet handle at an addiction centre and install a sign at the Charles St. W. bus terminal in Kitchener, and those tasks were cited by the UBCJA when seeking certification with the Ontario Labour Relations Board.

"Municipalities and school boards, they're not construction companies. They don't do construction work for a profit.- Kitchener-Conestoga PC candidate Michael Harris

In April, the Region was deemed a construction employer by the labour board, so it will be required to use contractors in construction who belong to the UBCJA.

Harris says this will drive up the prices of those contracts, and limit competition. Currently Toronto, Hamilton and Sault Ste. Marie are deemed construction employers, as well as the Windsor-Essex School Board. The Region of Waterloo was ruled a construction employer in April, but is appealing.

"Municipalities and school boards, they're not construction companies. They don't do construction work for a profit. They provide infrastructure and services for taxpayers within the region, said Harris at a May 9 campaign event in Kitchener. So those rules that apply to private construction companies shouldn't apply to school boards and municipalities. That's it. Just make it clear."

"The labour board ruled that our region is now in fact a construction employer that will prevent people, contractors who hire tradespeople and who have worked on local infrastructure for decades, they will be shut out from even bidding on this type of work in the future if we don't close this gap," said Harris.

The Region is currently appealing the ruling at the OLRB. Because the case is still before the labour board, the Region declined to comment on the case.

CASE STUDIES:

During a debate in the legislature, Catherine Fife, the NDP MPP for Kitchener-Waterloo, cited a 2007 report from the City of Toronto,which had been a construction employer since the late 70s. It found that if the city were no longer designated as a construction employer, it would only save 1.7 per cent annually on total construction costs of $219 million in one sector, or $3.74 million for 2007.

The report also specified that because the City of Toronto has a fair wage policy in place, non-unionized workers are guaranteed pay at certain levels and are often paid as much as unionized workers, which means savings could be even less than 1.7 per cent annually.

That differs from a report by Hamilton city staff, also issued in 2007. The city was certified as a construction employer in 2005 and two years later a city staff report estimated that the cost to the city for construction work was somewhere between $4-10 million annually.

Hamilton city staff were able to compare bids on four city projects that saw both union and non-union bids and found that on average the union bids were 11.74 per cent higher. In addition to rising costs,the city had a list of 260 registered contractors who could bidon city tenders, but following certification in 2005 that list dropped to 17, or less than seven per cent.

"On our stadium construction we were actually able to test the union versus non-union market and the non-union market was significantly lower than the unionized bids," said Hamilton Coun. Lloyd Ferguson in an interivew.

"I've worked 32 years in the construction business. The more competition you have the better prices you're going to get. It's that simple. When you restrict competition you're going to pay more."

Ferguson was among the Hamilton city councillors who passed amotion to support Bill 73 last year.

It's that simple.When you restrict competition you're going to pay more.- Hamilton Councillor Lloyd Ferguson

"We don't have enough competition to make sure we buy the best value for the taxpayer," he said.

As a result of the estimated additional cost to Hamilton cited in the 2007 report, city staff suggested either increasing municipal taxesbetween 1 to 2 per cent, or reducing capital programs by the same amount as the increased construction costs.

SUPPORTS:

According to the Mayors and Regional Chairs of Ontario (MARCO), Ontario is the only jurisdiction in Canada where municipalities arent considered non-construction employers and as a result, the group endorsed a motion in June last yearsupporting an amendment to the Labour Relations Act, though it didnt endorse Michael Harris proposals in Bill 73.

Hamilton, Kitchener and Stratford city councils and the Region of Waterloo all passed motions supporting Bill 73, while the Association of Municipalities of Ontario and the Large Urban Mayors Caucus of Ontario also came out in support.

The opportunity to openly tender projects keeps costs efficient in a time where fiscal resources are being stretched, wrote AMO president Russ Powers in a letter to Michael Harris.

In September, Waterloo city council also voted to ask the province to amend the Labour Relations Act, but didnt endorse Bill 73. Sault Ste. Marie city staff recommended that council support Bill 73, but it the motion was tabled indefinitely after the bill was defeated.

Union workers who arent part of the UBCJA are also keeping a close eye on the case.

This is an issue of not only fairness to the worker but also fiscal responsibility. The cost inflation that's going to occur because of this certification on the region of Waterloo could be up to 20 to 40 per cent on certain projects, saidSean Reid, the federal and Ontario vice-president of the Progressive Contractors Association. That's something that's frankly irresponsible and blatantly unfair to the tax payers of this region."

Reids association represents members of the Christian Labour Association of Canada (CLAC), who also weighed in.

"Locally we know that 1200 of our members will be cut outof future [opportunities] to work on projects paid for by the region, simply because they've elected to be a part of a different union. The same will be true for thousands of other workers who've elected to be non-union," said Ian DeWaard, the regional director of CLAC.

CRITICISMS:

Among the MPPs who voted down Harris bill in September was Catherine Fife, the NDP MPP for Kitchener-Waterloo who is also seeking re-election in June.

"It would close a loophole but it would undermine and destroy collective bargaining rights in the province of Ontario,"Fife told CBC News.

One, it was premature because there were still issues before the Ontario Labour Relations Board and it was reactionary and it was looking to address a long-standing issue, which needs a holistic view if you will. And that's our position. I mean, there is no quick fix."

The Liberals also voted against the bill.

I voted against Bill 73 for three reasons. First of all, right now in the province of Ontario there is a process by which municipalities and other bodies can get an exemption, said Kitchener-Centre MPP John Milloy, noting those rules had been in put in place by former Ontario premier Mike Harris.

Second were talking about an issue which is currently before the Ontario Labour Relations Board, and when its somethings before the courts I think its prudent for legislators to allow that process to finish. And thirdly, there were a lot of flaws with his bill, a lot of technical problems there, said Milloy.

Milloy said he was concerned the bill would have ended the existing province-wide collective agreements that govern construction.

The United Brotherhood of Carpenters and Joiners says the Labour Relations Act was put in place to protect workers.

"The non-construction employer act was put in place by the Mike Harris government back in the late 90s. This was to prevent any union from getting a phony relationship with someone who wasn't doing business as a contractor. Now the carpenters have proven that the region is a contractor and the labour has ruled on the law that the labour board has originally set up," said Sean ODwyer, the spokesperson for the Waterloo region branch of the UBCJA.

"The media seem to have fixated on two examples that were used at the labour board and that was the toilet and the installation of the sign at the bus station. We selected those two but we could've gone on for years selecting examples where they are a construction company," said ODwyer,

THE VERDICT:

While it is difficult to say exactly how much more money it would cost Waterloo Region to be deemed a construction employer, comparable evidence suggests the region would face higher labour costs.