Thank you, Mr. Chair.
Good afternoon, everyone.
It's my pleasure to be here on behalf of the Progressive Contractors Association of Canada, to share our perspective on how competition can make infrastructure dollars go further.
PCA commends the committee for initiating this study, which addresses a topic of critical interest to our member companies and their employees. We believe it should also be an issue of great importance to every Canadian.
Let me start by introducing our organization. Progressive Contractors Association of Canada represents and supports progressive, unionized employers in Canada's construction industry. Our member companies employ over 25,000 skilled tradespeople across Canada, unionized primarily by the Christian Labour Association of Canada, a unique and modern union, not affiliated with the Canadian Labour Congress or the traditional building trade unions.
My colleague Brendan will speak more about them in a few minutes.
The goal of PCA as an association is to ensure that Canada has a fair and open construction industry, cooperative labour relations, and a robust, inclusive, and highly capable workforce. We believe in open competition in which no sector is given artificial or unfair advantage over another based on union affiliation or lack thereof.
PCA contractors are very much at the centre of infrastructure construction in Canada. Today our member contractors are building over 40 water treatment and waste water facilities across Ontario alone, and several more throughout western Canada.
Our members built the Sea-to-Sky Highway, the Port Mann Bridge, and the Pitt River Bridge in British Columbia. Much of the Anthony Henday Drive ring road in Edmonton was built by a PCA company. Our members account for 40% of all energy and resource sector construction in B.C. and Alberta. Several members of this committee may also be familiar with the work our member companies did in building the terminal buildings at Toronto’s city centre airport.
In short, our member companies are leaders in building Canada's economy and the infrastructure that supports it. Despite our clear qualifications, however, regulations and policies in several Canadian provinces and municipalities prevent our members and their workers from bidding on many federally funded infrastructure projects, not because we aren’t qualified to do the work, but simply because our unionized employees are not unionized by certain select privileged trade unions.
The scope of this issue is substantial. In Ontario, public infrastructure projects for the City of Toronto, the City of Hamilton, the City of Sault Ste. Marie, and the Greater Essex County District School Board are all off limits to PCA member firms.
In Manitoba, major infrastructure projects such as the Red River Floodway expansion project and the East Side Road project are off limits to PCA member firms.
In addition, projects for Ontario Power Generation, Hydro One, Bruce Power, and Manitoba Hydro are all the exclusive domain of a handful of trade unions and their affiliated contractors, not PCA members and our workers.
The committee has heard testimony over the last two weeks on the scope and cost of this issue of closed tendering. PCA would like to underline the following. First, this is not a static problem; it's one that is growing. This is not about fair wages and employee compensation. In addition to being an issue of fiscal and economic responsibility, it is also one of fairness for all Canadians. Let me elaborate.
The issue of closed tendering is not a static problem, but rather a problem that is growing. In Ontario, the first restrictions began in Toronto and Sault Ste. Marie decades ago. Then, in 2005 the City of Hamilton became subject to a tendering monopoly by the United Brotherhood of Carpenters and Joiners of America.
Today it appears that the Region of Waterloo will soon be subject to the same carpenters union-only restrictions. In December 2012, the carpenters union applied to the Ontario Labour Relations Board to certify the Region of Waterloo. If certification is granted, not only would the region’s employees become members of the union, but the region would also be prevented from contracting with any company whose employees were not members of the carpenters union.
While the matter is still before the board, industry consensus is that certification will be successful, and Waterloo will be the site of Canada’s newest construction monopoly. As a result, some $200 million of Waterloo’s annual capital budget will be subject to closed tendering, bringing the total scope of the closed tendering crisis in Ontario municipalities alone to approximately $1 billion annually.
Let me provide one other example of how closed tendering will impact Waterloo. Since December 2009 the region has tendered over $140 million in water and waste water infrastructure projects, of which 27 companies pre-qualified to bid on those highly specialized projects. If closed tendering had been in place over that same period, only two companies would have pre-qualified to bid on those projects.
As I am sure you know, when you shrink a potential market of bidders by over 90%, costs will inevitably go up, and they will go up dramatically. Unless something is done to permanently put a stop to this, we have every reason to believe that more municipalities in Ontario and in other regions of Canada will soon be closed off.
Contrary to the opinions of some, this is not about fair wages or employee compensation. The City of Hamilton had a fair wage policy in place prior to being certified by the carpenters union, yet once closed tendering began, city staff reported that the costs of major infrastructure projects such as water treatment plants would inflate by 40% simply because of dramatically reduced competition.
PCA members are ready to adhere to fair wage policies if necessary. We simply want the right to bid regardless of the union affiliation of our workers. Let me quote Hamilton city councillor Lloyd Ferguson, who's chair of the city’s public works committee. In a February news article about closed tendering, he said:
It's a huge issue; it’s a very difficult issue for us.... Less competition, higher price. It’s that simple.... Government money should be spent to the best-qualified, lowest-bid contractor, not because of any particular union affiliation.
We could not have said it better ourselves.
Finally, closed tendering is not only an issue of fiscal and economic responsibility, it's also one of fairness and equality for all Canadians. How can it be that in 21st century Canada, a taxpaying skilled tradesperson or small business owner in Hamilton can be systematically excluded from the right to bid on publicly funded projects in his or her own city? This is not because of lack of skill, not because of lack of experience, but because the person carries the wrong union card or no union card at all.
As Canada finds itself in the midst of mounting fiscal challenges for governments at all levels, PCA is asking the federal government to take action. It's time to address the needless cost inflation of closed tendering and construction labour monopolies. We are asking the federal government to help solve this growing problem once and for all by instituting a requirement that all federally funded projects be subject to fair and open tendering, regardless of union affiliation or lack thereof.
Thank you very much, and I'll be happy to answer any questions.