Transport Committee on May 9th, 2013

[Brendan Kooy]

I can't speak so much from a contractor point of view, but one aspect I would like to talk about is safety. To the question—and I know it hasn't come up yet—of whether CLAC is as safe as other unions, I can say wholeheartedly that it is absolutely. In terms of risk factors from that perspective, there is no greater risk with giving a job...and worrying about health and safety issues on a site, as opposed to giving a job to another contractor who's affiliated with another construction union.

[Joe Daniel, Conservative, Don Valley East, ON]

Mr. Atkinson, do you have any comments?

[Michael Atkinson]

Well, I know that our members, in some cases, have agreements both with traditional building trades and with CLAC. In some provinces they are non-unionized and in other provinces they are unionized. So, very much the same employer uses the labour relations situation, depending upon the jurisdiction, that puts them in the best competitive position.

If you're going to use a brush and say that all those are bad and all those are good, from the employer's perspective you're talking about the same group of individuals. They have a foot in all the camps.

Let's remember that at the end of the day, the quality, timeliness, and efficiency of the construction are all determined by independent third parties that don't particularly care what your union affiliation is.

[Joe Daniel, Conservative, Don Valley East, ON]

In reality there is no difference in terms of the risk of giving you the contract versus one of these restricted unions that would take up the job, yet they would be charging 20% to 40% more for the job.

[Michael Atkinson]

Yes, but our point is in restricting or limiting the competition, it doesn't matter who you limit or restrict it to, that's going to impact the price. It doesn't matter whether you're union-free, whether they're traditional building trades, or whether they're the CLAC union, if you restrict the competition to a few, you're welcoming that kind of situation.

[Joe Daniel, Conservative, Don Valley East, ON]

When we talk about CLAC, for example, are you collecting money on behalf of your employees that actually goes to political associations, to different groups or projects that have really nothing to do with the job?

[Brendan Kooy]

No, we do not, as a matter of conscience, send any money to political parties. We do not support any political parties, provincially or federally, and we do not give any sort of directive to our members as to whom to vote for.

[Joe Daniel, Conservative, Don Valley East, ON]

Are there any comments from the other side?

[Sean Reid]

CLAC is well known for not using member dues or member funds to support political causes of any sort.

[Joe Daniel, Conservative, Don Valley East, ON]

That is, in fact, your competitive edge. You're actually able to bring projects in at a lower price when you compete for some of those things for those sorts of reasons. Are there other things that affect the pricing you can bid for on some of these contracts?

[Sean Reid]

If I were selling our contractors to you today, I'd wax eloquent about all kinds of competitive advantages. But Michael is absolutely right when he says that actually this is simply the exercise of when you scale the number of bidders from ten to two you will get price inflation. It has proven out time and time again, and that could be two non-union contractors and you shut out all the CLAC and the building trades, and it could go the same way. It's the market monopoly influence that actually changes the price dramatically on these things.

[Joe Daniel, Conservative, Don Valley East, ON]

Do you want to talk a little bit about your competitive edge with regard to how you make these bid processes?

[Sean Reid]

We have fantastic contractors. One reason is the labour model that I talked about earlier, which has a significant productivity advantage over many of the competition, yet we have a strong labour partner that ensures our workers are well cared for, well compensated, and have a strong voice. We actually think our competitive advantage is we've taken the best of both the other sides and brought them together. That's what sets us apart from the rest.

Thank you for that chance to advertise our contractors.

[The Chair, Conservative, Larry Miller]

Thank you.

Mr. Poilievre, for five minutes.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

On the issue of competition, let's look at the Hamilton example. According to the City of Hamilton, the number of eligible bidders has dropped from 260 to 17 because those 17 are linked to the union monopoly.

Of those 17, Mr. Atkinson, would it be safe to assume that not all of them would be in a position to bid on every single project?

[Michael Atkinson]

That's probably a fair assumption, yes.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Some of them have work orders that mean they have no more capacity and therefore they're not in the next round of bidding for projects X or Y.

[Michael Atkinson]

Correct.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

That means we're not talking with 17 bidders in some cases and we could be talking about one or two because there is only a fraction of the 17 allowed that are in a position to bid.

[Michael Atkinson]

Yes.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Is there any guarantee that the one or two bidders in a scenario like this that charge the extra 20% or 40% on the project will pass that all on to the worker in higher wages and benefits?

[Michael Atkinson]

You're assuming that in those situations the inflated price comes completely from the pricing and not from something that's unique or strange about the job to begin with—

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

If I can—

[Michael Atkinson]

—and that the risk allocation is normal or traditional and isn't a situation in which they're throwing money at it because more risk is being put on the private sector. There are a lot of assumptions there.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Let me maybe be more precise.

I'll just quote again from Mr. Taylor, “With regards to a massive $1.1-billion waste-water treatment plan, the cost is estimated at an additional 20 per cent to 40 per cent.”

The price inflation is linked to reduced competition. Does that extra price inflation end up in the pockets of workers necessarily?