Transport Committee on May 9th, 2013

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

Right.

[Michael Atkinson]

The investors have said, “Look, we don't have to do it here in Canada.”

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

The uncertainty drives the investor away, and the project doesn't happen period, which is a great loss.

[Michael Atkinson]

Correct.

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

Never mind whether it's done efficiently in the construction phase, it's—

[Michael Atkinson]

When it comes to the private sector and money, certainty is everything.

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

Yes. Very good.

I have a general question for each of you. We keep coming back to the fact that the open tendering and the open process.... I'm a big supporter of that process, going forward. However, would you also believe that the ability of the company to perform the work is obviously a very important component of it, and their ability to do that work safely should be an important component, and also their understanding of the...?

There's sometimes a historical context to why you would prefer a particular supplier. They may have historical knowledge of that particular field. You talked about waste water. In an expansion on a waste water facility, there may be a good reason that you may not go with the lowest tender; there may be a historical understanding of that particular facility that would give an advantage. Quite often it also gives a price advantage, but it may not necessarily be the case.

Is price the absolute bottom line on everything to you, or do you see that there has to be a need to look at the overall picture?

[Michael Atkinson]

There are many project delivery methods and many contracting methods, and not all of them are assessed or evaluated on price alone.

In fact, P3 projects are a perfect example of that. Essentially it's a design-build project from the point of view of the actual construction. Yes, it can involve operation, maintenance, and financing, but in a design-build situation, price is not the only criterion. You're looking also at the elements of the design that best fit the owner's needs with respect to the ongoing operation and maintenance of that facility.

The owners themselves can very much pick the criteria. We don't have a problem with that, provided the criteria are well known to the bidders and applied in an even and fair manner.

[Sean Reid]

I would add that this essentially is what a robust pre-qualification process is supposed to accomplish: is it a safe, reputable, experienced, otherwise competent firm to do this work? Once we've whittled the pretenders out, we then have a competition that may eventually get down to the lowest bid.

What you're talking about is essentially what any competent municipality or jurisdiction will do in a pre-qualification process.

[The Chair, Conservative, Larry Miller]

Thank you.

Mr. Sullivan, for five minutes.

[Mike Sullivan, NDP, York South—Weston, ON]

Thank you.

Mr. Kooy, what percentage of your collective agreements are voluntary certifications as opposed to board-ordered certifications with votes?

[Brendan Kooy]

I can't speak to those exact statistics at this time.

[Mike Sullivan, NDP, York South—Weston, ON]

Is it 25%, 40%? Do you have no idea? There are some.

[Brendan Kooy]

There are some. I would challenge you to look at other unions as well, because voluntary recognition is something that happens across the board.

[Mike Sullivan, NDP, York South—Weston, ON]

Okay.

Mr. Atkinson, you suggested there should be no limitation, except for, to use your words, “technical” or by a “law”, on how the federal government does its contracting.

What I'm hearing from the three of you is something to do with provincial or municipal laws, not federal laws. I don't think the federal government is going to put any limitations, although they have suggested that perhaps some of their hiring through apprenticeships should be attached to some of their money. But there are no federal laws or requirements that would limit the spending of federal money, are there?

[Michael Atkinson]

On the principle, we want open and free competition without restrictions. On the fine point of how you get there and how you would use infrastructure agreements to do that is where we introduce this caveat: be sure what you're doing in those circumstances. The City of Hamilton may be a perfect example. It's not by choice that the City of Hamilton finds itself in that situation.

Is the appropriate remedy there to cut off federal funding? That's the second question.

I think that's where your question was going, and that's why I answered it that way.

[Sean Reid]

Perhaps I might add that I don't think we would ever quibble with the federal government insisting on certain environmental standards on infrastructure projects. It seems to make perfect sense to me that it would also seek to uphold basic fairness when it comes to freedom of association.

[Mike Sullivan, NDP, York South—Weston, ON]

Well, except that this government has told us on a number of occasions that it is not in the business of telling the provinces and municipalities how to spend their money, or indeed how to spend the money the federal government gives them. On a number of occasions we have suggested a federal public transit strategy, for example, and it was rejected on the basis that the federal government is not going to tell the municipalities what to do and how to do it. How a municipality governs itself is up to that municipality, and I would assume it would take the same position.

It also takes the position that competing with foreign firms is something it is in fact seeking. In the comprehensive agreement on trade with Europe, the government seeks to correct the mistakes it made in the free trade agreement with the United States, whereby no competition is permitted from across the border on local or provincial contracting. It will correct that with the agreement with Europe, where European firms will be free to bid on municipal and provincial things, which flies in the face of one of the things you are looking for.

I would say that you have an uphill battle with this government.

[Sean Reid]

Our hope is that this committee will be united in believing that fairness and freedom of association is something for this federal government to stand up for. I would hope that everybody on this committee would agree with that.

[Mike Sullivan, NDP, York South—Weston, ON]

I think there is a different definition of what is fair and what is not fair. If a municipality determines that it's in its best interest to hire locally, which is something Mr. Atkinson suggested is not a good thing, that seems fair to the individuals who live in the area around the project that is being built.

In my humble riding of York South—Weston, which has the lowest wages in Toronto and the second lowest in all of Ontario, and the lowest family income, we have suggested to the province that if it's going to spend what was supposed to be $300 million, but because of cost overruns it's now at $2.5 billion for this project, and it's using non-union contractors, it should be spending some of that on training apprentices and on hiring people locally. It's not interested, and yet that's one of the good things the federal government has signalled it wants to do, but it's one of the things you've suggested, Mr. Atkinson—

[Michael Atkinson]

Not hiring locally.... We're opposed to regional preferences for businesses; in other words, a situation where it is indicated that if price is the only criterion, you still have to be 10% to 15% lower than the local guy. That could contribute to a situation in which you scare away non-local bidders completely, or you have a situation in which you're subsidizing local business, and all you're doing is subsidizing local businesses in a way that they can't compete, because they're going to find it awfully difficult when they get out in the real world.

[The Chair, Conservative, Larry Miller]

Your time is up, Mr. Sullivan. I know you were eager to go.

Mr. Watson, you have five minutes.

[Jeff Watson, Conservative, Essex, ON]

Thank you, Mr. Chair.

Thank you to our witnesses for appearing here.

Does closed competition occur in federally funded projects only, as opposed to those where we participate with lower jurisdictions of government, with the provinces and municipalities?

[Sean Reid]

It's occurring in federally funded and jointly funded projects.

[Jeff Watson, Conservative, Essex, ON]

Which federally funded projects are you aware of?