Bill C-227 (Historical)

An Act to amend the Department of Public Works and Government Services Act (community benefit)

This enactment amends the Department of Public Works and Government Services Act to provide the Minister with the authority to require an assessment of the benefits that a community derives from a construction, maintenance or repair project.

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

I'm calling to order meeting number 37 of the Standing Committee on Transport, Infrastructure and Communities. Pursuant to the order of reference of Wednesday, October 5, 2016, Bill C-227, an act to amend the Department of Public Works and Government Services Act, regarding community benefit.

Welcome to everyone who's here.

We have with us, Mr. Schwartz, director general, commercial and alternative acquisitions management sector. It seems we always have interesting names for sectors in our government.

I'm going to turn it over to you for some brief comments.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Okay, thank you.

As we have been saying from the beginning, Bill C-227 only applies to the contracts of Public Services and Procurement Canada.

Mr. McDonald spoke about drinking water or aqueduct projects, but they are excluded from this bill. He also mentioned that this was a first step. In my opinion, it is a rather dangerous step.

We all want federal government projects to provide significant local benefits. The government is presenting a minor bill that does not force the other levels of government to do anything but a study. Isn't there a risk that someday it may mention the fact that it adopted Bill C-227 as an excuse, and say that it has done its part for local benefits, and that we should come back to see it in four years? That is what I fear.

Local benefits are very important to the economy of all of our communities. I too was mayor, and I am familiar with the importance of those benefits, both for training workers and for the community. By tabling such a small, weak bill, are you not afraid that we will only be delaying the file, whereas we should demand a real piece of legislation on local benefits?

Mr. Varone, you could answer first.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Perhaps you'll be able to complete the answer you were giving when it comes to apprenticeships based on my question.

The sponsor of Bill C-227 stated that Ontario's Bill 6 was the inspiration for this bill. However, Bill 6 does not put the impetus on the contractor to consult when it comes to community benefits. Rather, Bill 6 lists exactly what the province considers the community benefits to be. The contractors must include in each bid how they will fulfill these criteria.

Bill 6 actually says, in subsection 9(2):

A bidder that enters into a procurement process for the construction or maintenance by the Government of an infrastructure asset shall, in the prescribed circumstances, provide to the Government as part of the procurement process a commitment respecting the intended use of apprentices in the construction or maintenance in the event of a successful bid.

The prescribed requirements are basically related to an apprenticeship plan. What other community benefits may be contemplated, and should they be defined by the department prior to seeking the bids?

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you.

Let me take advantage of your answer to segue into my next topic, because it seems obvious to me that there is a connection between the Ontario Infrastructure for Jobs and Prosperity Act of 2015 and the bill we are studying right now.

The Ontario act stipulates clearly that bidders on government tenders must indicate the number of apprentices they intend to hire, and the means they intend to use to employ women, aboriginal people, newcomers to the province, young people at risk, veterans, and so on. Do you think we should include this type of criteria in Bill C-227, which would clarify expectations?

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you, Madam Chair.

I want to welcome the two witnesses and thank them for being here and taking part in our study.

There is a consensus as to the objectives of Bill C-227, but the substance is very vague.

We tried to clear up a certain number of points with the witnesses who preceded you, such as the environmental aspect, which could be included, and the requirements the minister could impose. So I would like to explore a few other avenues with you.

I will begin with you, Mr. Cartwright.

We know that the successful realization of local benefits will in large part be due to communication among the unions, workers and community groups. But all communities are not that well organized.

Do you think that Bill C-227 should allow prior public consultations before any work is done?

[John Cartwright, President, Toronto and York Region Labour Council]

Good morning, committee. My name is John Cartwright. I'm the president of the Toronto and York Region Labour Council representing over 205,000 women and men who work in every sector of the economy. I'm a construction worker by trade, having started as a carpenter apprentice at the age of 18. I'm here to support the amendments that are contained in Bill C-227.

We feel that the billions of dollars in investment that's about to be made through the federal infrastructure program serves a multiple purpose.

For the last two and a half years, the Toronto Community Benefits Network, which I co-chair, has been working with the Government of Ontario and Metrolinx to create a community benefits model for the $8 billion of construction in the Toronto transit lines. That really focuses on ensuring that the prosperity that will come with that investment is shared adequately in our community, particularly among those who sometimes have been left out of prosperity in past economies. We're looking particularly at historically disadvantaged communities, equity-seeking groups, and military veterans to be included in the apprenticeship opportunities in that work as well as in the white-collar side, the professional, administration, and technical work unique in North America to ensure that graduates and internationally trained professionals can get opportunities for employment.

To create that model, we brought people from the United Kingdom, from the United States, and from British Columbia into a meeting to talk about the different experiences that had been involved in those different jurisdictions in community benefits. There are now over three dozen community benefits agreements working on major infrastructure programs in the United States.

We think we have it right. We have a whole series of commitments through the trades in Toronto to reach out to diverse communities to help engage people from diverse communities to come into our industry. We've already had several hundred young people from those different communities come into the trades, and with the Eglinton Crosstown, we anticipate hundreds more coming into those trades.

This is not a simple task, but we look at mirroring what happened around the health and safety agenda in the construction industry in the past decades. Originally when we created a health and safety regime under Bill 208 in 1990, there were some on the employer side among supervisors and contractors who were resistant to embracing those elements, but three decades later, there's not a major contractor in Ontario that doesn't talk about the importance of having a full health and safety regime as part of its culture. We believe that is a transformation we can do within the construction industry across Canada by helping to change the openness to first nations people, to newcomer communities, to young people, and to youth at risk, to ensure that they actually have a chance to have a decent career.

A similar parallel is really to be made around green construction. I remember when LEED was first brought up as a possible goal for building, and it was very much a small marginal effort at the time. Today there's not a major contractor, architect or engineering firm in Canada that doesn't have LEED specialists on its staff in order to achieve those goals, and every major project is trying to reach some form of LEED standards, including platinum when it can.

We believe that kind of transformation is possible by tasking the construction industry with embracing community benefits, by looking at the major projects that the federal government will invest in, and by making those choices.

We are going to spend billions of dollars. We have crisis levels of youth incarceration in first nation communities across this country. The Globe and Mail today talked about that being 25%. We have a crisis of young people in greater Toronto falling into violence and gang activity. The alternative, instead of spending money on prisons or on the health crisis of diabetes in first nations, is to spend the money on infrastructure and to make sure it gives double value, that is, by creating the infrastructure that our country needs for the 21st century and also by creating the job opportunities that so many young Canadians need in order to be part of a growing industry, and to have a career in an industry that values apprenticeships and training, that gives people portable skills they can take with them for the rest of their lifetime, an opportunity I was fortunate enough to have at the age of 18.

That's my presentation, and I'm happy to answer questions.

[Toni Varone, Past Chair, Business Development Committee of Downsview Park]

Madam Chair, distinguished members of the committee, my name is Toni Varone and I reside in the city of Toronto.

I appear before you in support of Bill C-227, an act to amend the Department of Public Works and Government Services Act (community benefit). In private life, I own and manage a hospitality company in Toronto as well as a real property business involved in the residential and commercial sectors. In public life, I've served on a variety of municipal, provincial, and federal boards, as well as on charitable non-profit boards. Both my private and public experiences lead me to conclude that the amendment being debated today is not only necessary but essential.

The community benefit mechanism allows for direct investment in local communities by the federal government, which is much too often perceived as being remote and insensitive to local issues. The funds being debated are new funds for the local communities and are not available through traditional means. The community benefit could manifest itself and lead to local improvements to infrastructure as well as benefits to the local environment, to parkland, or even to public art. I'm wishful to think that this community benefit could be as far-reaching as the setting up of local skills development offices or other federal service agencies that far too often seem remote to the local communities.

I understand full well that we are one taxpayer already burdened by taxes from principally all three levels of government. I also believe wholeheartedly that all levels of government should have some tangible focus on local issues, collaborating as much as they can to solve the issues that touch local residents.

In Toronto where I'm active in the business of real property development, I've been involved in what are called section 37 agreements, referring to section 37 of the Planning Act of Ontario. Through section 37, when we as developers exceed local zoning bylaws or impact a community through density or built-form change, we're required to compensate with a community benefit. This benefit can range from improvements to local infrastructure, parks, or public art, to a contribution to affordable housing. It is a local municipal councillor, in dialogue with a developer, that reaches an agreement on the benefit to be conferred to the local community. It is a practice that has yielded many communities benefits not otherwise affordable through their traditional tax bases.

Respectfully, I suggest that this can be emulated at the federal level, and as such, I support this amendment. The onus, however, will be on the local member of Parliament to sensitize himself or herself to the needs of his or her community. The burden will be to use the money wisely so it does not duplicate but enhances other community benefits from other levels of government.

Issues that need to be thought through if this amendment passes are many. I will name a few: whether the community benefit money should be pooled for greater impact or larger projects; whether a balancing mechanism should be adopted to ensure that the benefits reach all communities, since it is inevitable that some ridings or constituencies will have greater resources than others; whether the member of Parliament should be mandated to consult with the local community to search out the benefit; and whether audit and control procedures should be established to make certain that tangible benefits remain in the community.

I close by encouraging support for this initiative. I'm reminded of a saying from the U.S. House Speaker in the 1990s, Tip O'Neill, that all politics is local.

Thank you.

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you, Madam Chair.

I thank all of the witnesses for being with us this morning. It is a pleasure to have you here.

As for Bill C-227, of course it is difficult to be against motherhood. It would be like saying that I'm against apple pie.

That said, however, the bill seems very vague to me. I was, in fact, very happy to hear Ms. Murphy say earlier that new paragraph 20.1(2), the amendment proposed to the Department of Public Works and Government Services Act, should have more teeth. The minister should be using “must” rather than “may” when it comes to requiring local benefits.

I have not heard the other witnesses on this topic. I'm going to give them a chance to express their thoughts. If they do not agree with this amendment, I would like to know what criteria the minister could use to require such benefits or not.

In the same vein, I would go a bit further with you, Ms. Murphy. I will give you the floor first. In your opinion, should the bill also include penalties if these requirements are not respected?

[Colette Murphy, Executive Director, Atkinson Foundation]

Thank you very much.

Good morning everyone.

The Atkinson Foundation has been concerned about social and economic justice for more than seven decades. We put our resources into the people, organizations, and networks focused on decent work for all, including narrowing the income gap, creating employment, and building wealth for low-income communities.

Since 2013, Atkinson has been investing its own resources and working with partners from across sectors to advance community benefits in policies and practice. We believe Canada has a tremendous opportunity to make progress on social policy goals by improving its procurement processes. By requiring community benefits as part of certain government spending, it's possible to increase the impact of these dollars: more decent work, less precarious employment, great career ladders, fewer dead ends for workers, renewed public infrastructure, and stronger and more resilient communities.

I want to make four key points related to our support for the passage of Bill C-227. First, we believe community benefit policies enable a more strategic approach to procurement when linked to federal priorities of economic growth, social inclusion, poverty reduction, and environmental sustainability. For example, by targeting training opportunities for those who have difficulty accessing the labour market, such as youth at risk or veterans, community benefits target those hardest hit by the economy. By being deliberate about opportunities for local suppliers, in particular small and mid-sized ones, and social enterprises, community benefits build local economies, and attaching goals around GHG reductions helps reduce our carbon footprint.

To do this, the Government of Canada can build upon its own experiences, in particular, the procurement strategy for aboriginal businesses. Since 1996, the program has awarded more than 100,000 contracts to aboriginal firms totalling $3.3 billion in value. There are also potential synergies with Bill C-227 within the federal family. In addition to Public Services and Procurement Canada, other departments such as Infrastructure Canada, Employment and Social Development Canada and Veterans Affairs, which already have community benefits in their ministerial mandate letters, are likely strong contributors to a Government of Canada community benefit strategy which passing the bill would help advance.

Community benefits also provide measurable results, which is important to policy-makers. The University of Glasgow reviewed 24 public contracts with community benefit clauses in Scotland and found they had exceeded job opportunity targets, with more than 6,700 individuals from priority communities receiving training and 1,000 individuals from priority communities recruited for jobs. Community benefits associated with the Vancouver Olympic Village placed 120 disadvantaged workers in construction and led to $24 million in procurement for inner-city businesses, thereby surpassing targets.

Second, Canadian provinces and municipalities are already moving to adopt community benefits policies and practices. Federal requirements to include community benefit clauses in procurement would be consistent with these goals and changing practices. For example, the Ontario government has recently promulgated the Infrastructure for Jobs and Prosperity Act, which calls for community benefits, and mandates apprenticeships and training opportunities for targeted communities and public infrastructure projects. The Yukon government recently announced it will establish resources, policies, and processes to support the strategic role and importance of procurement.

Third, this is a value-for-money proposition. The cost is low in comparison to the returns. Embedding requirements for community benefits into procurement requires a change of approach, but it need not be costly either to government or to private contractors. It helps ensure public spending meets a range of policy objectives rather than treating those expenditures as one dimensional.

Capacity building resources will be needed for implementation, but current government programs already funded to support such things as workforce development, SMEs, or social enterprises can be leveraged and I'm happy to give examples of how this is done in other jurisdictions.

Finally, community benefits in procurement is a significant policy innovation. It needs to build upon good practice in how to do this successfully. Luckily we have excellent examples in Canada, the U.S., the U.K., and other jurisdictions of how to create effective community benefit policies and implementation practices. They share several traits. We have research reports that outline them, but I'll just flag one for you in closing.

Mandatory language is critical. Policies that require only that community benefits be considered seldom have impact compared to those that require action. Passage of Bill C-227 will help realize our ambition for Canada to be known as world class, because its economy is equitable, inclusive, and prosperous.

Thank you very much.

[Rosemarie Powell, Executive Director, Toronto Community Benefits Network]

Thank you.

It's my pleasure to be here this morning representing the Toronto Community Benefits Network.

We're a community labour coalition, and we envision Toronto as an inclusive, thriving city in which all residents have equitable opportunities to contribute to building healthy communities and a prospering economy.

TCBN uses the approach of negotiating community benefits agreements to bring diversity to Toronto's infrastructure projects, starting with the Eglinton Crosstown. The TCBN fully supports the passage of Bill C-227, an act to amend the Department of Public Works and Government Services Act (community benefit), to include community benefits agreements, put forward by the Ahmed Hussen, the MP for York South–Weston.

Community benefits are defined as tangible social and economic opportunities and outcomes for communities, especially historically disadvantaged groups. They include, but are not limited to, jobs training and apprenticeships, procurement from local businesses and/or social enterprises, neighbourhood and environmental improvements, and other benefits as determined in consultation with the local community.

Income inequality in Canada has increased over the last 20 years, and in many of our neighbourhoods, particularly in Toronto, we are also seeing the negative impacts of systemic poverty, such as violence, as in the case of Toronto's former priority neighbourhoods. As our society transitions into the green economy, there will be a shakeup in the type, quality, and quantity of jobs that are available, and this crisis can only get worse. Our society needs to develop a fair and equitable transition policy—we believe that community benefits agreements can be one such tool—for our youth and other historically economically disadvantaged groups that has the potential for creating good jobs while helping to address society's concerns about climate change. Putting our youth to work towards building up their communities and protecting the environment not only makes good sense, it also makes good economic and environmental sense. Jobs in the construction trades are good, well-paid jobs with benefits. They focus on safety, and they could also be green jobs. Most importantly, these workers have the opportunity to build up their communities with the sense of pride, ownership, and responsibility that engenders.

Professional, administrative, and technical job categories are part of every major construction project. Many newcomers to Canada have much-needed valued skills, but they may lack professional networks to find jobs in their fields. Equally, apprenticeships in the construction industry create both long-term careers and short-term jobs. As entry-level jobs, they offer opportunities to people who are beginning their careers. Specific reference should be made to these jobs as part of legally binding community benefits agreements in major infrastructure projects.

There are other compelling reasons, of course, to pass Bill C-227. Infrastructure projects that include community benefits leverage public dollars that are already being spent to benefit local communities, aligning government's infrastructure spending with other policy goals. In partnership with our allies in labour, philanthropy, and academia with our first-ever community benefits framework with Metrolinx, the Toronto Community Benefits Network is experimenting with a historic partnership that has an incredible potential to significantly advance the province's sustainable development strategy by enshrining support for community benefits in its policies and practices.

CBAs are built on the shared commitment by all parties to achieve the objectives of the CBA within the context of successfully delivering on project deliverables. In this project, specific roles and responsibilities should be defined. For example, the TCBN understands that to successfully deliver on community benefits, the contractor needs reliable skilled labour and they need to meet project deadlines and receive public support for the project and their company's role in the project. This is why, through the Metrolinx working group structure that includes all stakeholders, the community works with Metrolinx to support the implementation of the project agreement with the contractor and their subcontractors, ensuring a qualified cohort of apprentices and a range of social enterprise subcontractors. In so doing, we work with a broad range of stakeholder groups, including industry workers, community, non-profit, workforce development, etc.

When Metrolinx and the project contractors are responsive in the community benefits agreements and implementation, the TCBN and its partners—we are 63 members in our coalition of community organizations and groups—facilitate the buy-in from the community in the process and outcomes.

Over the next 10 years, we have an opportunity. Cities all across Canada will benefit from unprecedented spending on public infrastructure by all levels of government. Pass Bill C-227 and seize the opportunity to create meaningful change for your constituents at all levels of the economic ladder. Let's build our nation from the ground up.

Thank you.

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

I'm calling to order the Standing Committee on Transport, Infrastructure and Communities of the 42nd Parliament. Pursuant to the order of reference of Wednesday, October 5, 2016, we are considering Bill C-227, an act to amend the Department of Public Works and Government Services Act, in regard to community benefit.

We have some witnesses who have joined us today. From the Atkinson Foundation, we have Colette Murphy, executive director, by video conference. From Canada Lands Company, we have John McBain, president and chief executive officer; and Robert Howald, executive vice-president, real estate. As well, from the Toronto Community Benefits Network, we have Rosemarie Powell, executive director. Welcome to you all. Thank you very much for being here.

We'll open the floor to Mr. McBain.

[The Chair, Liberal, Judy Sgro]

Thank you very much to everybody.

Mr. LePage, Mr. Atkinson, and Mr. Smillie, thank you very much for your contributions today. Our time is up, but I think it has been a very interesting conversation for everyone as we go forward in reviewing C-227.

Thank you, folks. Have a good day.

The meeting is adjourned.

[Michael Atkinson]

Well, first of all, I suppose we're now not talking about C-227, because you mentioned the building Canada plan. It doesn't apply to that. But if I were to speculate, if it were to apply to the building Canada plan, the decision as to which delivery method to use would be up to the procuring government, so it would be a province or municipality in those circumstances. They are the ones best suited and best positioned to make a decision on how best to deliver that infrastructure in accordance with their asset management plan; I couldn't agree more with you. The community benefit aspect or how bidders might be able to leverage that is going to be determined by, in the case of a municipal project, the municipality. It is best positioned to understand its community and how that new piece of infrastructure and its construction can provide further and additional benefits. A community expects that; it puts it in its requirements and that becomes part of the contract. That's the way it would work in those circumstances.

I couldn't agree more with Mr. Smillie that what wouldn't work is having a voice from above, from the federal government, saying, “Community benefits shall be for all municipalities.” I'm sure municipalities themselves would have a problem with that because of their different needs and their different requirements.

I would see that decision being made by the procuring agency in those circumstances.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Thank you very much, Madam Chair.

I listened with great interest to the comments of our colleague who introduced his bill and to those of our witnesses. I have a lot of questions about the merits of Bill C-227 after what I've heard this morning.

I don't think this bill is being studied in the right place. It really should be studied by another committee. It talks about the rules for awarding contracts by the Department of Public Works and Government Services “for the construction, maintenance or repair of public works, federal real property or federal immovables”. All this is very far from our infrastructure investment plans.

Earlier, you made a comparison with the Ontario government's Bill 6, a very comprehensive bill. It probably enables Ontario to attain the objectives that our two witnesses mentioned, possibly even those of Mr. Atkinson.

The first clause of the explanatory note in Ontario's Bill 6 reads as follows:

The Government, and every broader public sector entity ... must consider a specified list of infrastructure planning principles when making decisions respecting infrastructure.

We see that this bill is comprehensive and helps to attain the objectives related to local economic benefits and hiring apprentices. If you take two quick seconds to read the bill, you'll see that it is indeed very comprehensive.

The bill before us indicates that the minister may seek information. Why does it read, “The Minister may ...”? Shouldn't she always do that? So that is one question.

According to the bill, this information that the minister would request would not enable her to demand accountability once the work is completed. She could do nothing else. She might request information before the work, and then she would ask whether what was promised was what was delivered. However, there is no obligation, no means in Bill C–227 that enables the minister to attain the objectives outlined by our witnesses.

My question is for Mr. Smillie.

Do you think Bill C–227 as drafted will lead to training more apprentices? Should we instead learn from Ontario's example and introduce a more comprehensive bill that would address the coming infrastructure plan?

[David LePage]

I think this bill is essential. I think Mr. Hardie has defined it as creating a platform.

When we see governments, whether municipal or provincial or federal, asking about the social impact that's going to come with this project, they're getting very creative responses from the community and industry working together to come up with creative solutions to address particular social problems.

I think we can look at the successes in Scotland. I think with the emerging international trade agreements, if Canada doesn't have something like Bill C-227, we're not going to be on a level playing field on the side of construction and industry. This is an international trend. Governments are setting these platforms; they're creating these arenas for industry, for construction, and for community to work together with government to use existing spending intentionally to create benefits. I don't think this is going on without the stimulus from government saying this is an important use of our taxpayer money.