Evidence of meeting #72 for Transport, Infrastructure and Communities in the 41st Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was municipalities.
A video is available from Parliament.
Program Director, Cardus
We surveyed 44 municipalities. We didn't survey all the municipalities, because there were too many.
Program Director, Cardus
Out of the surveyed municipalities—out of the 44—of the total number of taxpayers surveyed, 38% were under closed bidding. If you extrapolate that number to that entire province and assume that the other municipalities are open—the smaller ones that we didn't study—then it's 26%.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
I understand. But it could be higher, given that some of the ones you didn't survey are also closed.
Program Director, Cardus
It could be. We don't know, because we don't use that—
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
It is a fairly large problem, if you take into account that we're talking about some fairly big municipalities, including Toronto and Hamilton.
Do you see future certifications in Ontario that could further ban union-free workers from competing on public projects?
Program Director, Cardus
I want to repeat the point I made at the beginning. This is not a question of union versus non-union. There are other models out there, other unions that are not—
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
Right, but do you see closed tendering expanding, based on the existing rules and the trajectory of events?
Program Director, Cardus
In fact it has, under our very eyes. Waterloo has recently had an application for certification. It is a problem that can potentially grow quite a bit more.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
On the issue of downloading, I want to point out that the federal government has massively uploaded costs for municipalities. Back in the early 1990s, there was no federal funding for municipal infrastructure. It was only in 1992 or 1993, roughly, that it even began. The one-third capital contribution to projects across the country represents an enormous uploading of capital costs, an uploading that has only grown with time and has reached a record high under the last two capital infrastructure programs that the Government of Canada has implemented.
One of the reasons for our needing this study is to examine how, given that the revenue side has been addressed, we can get the cost down. One way is to expand competition.
I wonder whether either of the two groups of witnesses has suggestions for increasing competition on projects, and I mean suggestions beyond just the open versus closed tendering, and beyond long-term versus short-term funding.
Are there, for example, restrictions on cross-jurisdictional bidding that could be eliminated? Is the system allowing for parochial policies whereby one municipality won't allow bidders from another municipality in order to protect local firms? Is there something in that area that we could look at?
Program Director, Cardus
It's interesting to note, and I think it should be noted, that various provincial municipal acts prevent monopolies of this sort. There was an attempt in, I think, Essex County—I'm not exactly sure—by one particular trade union that would have disqualified some of their brother or sister unions, with whom they normally work quite closely. It was an attempt to close the bidding. They were prevented from doing so because the Ontario Municipal Act prevented them from doing so. There is that.
I also want to note, though, that this is a federal issue. It's not simply a municipal or provincial issue. It's affecting big dollars in Manitoba and potentially affects big dollars on other major infrastructure projects as we try to responsibly extract our resources in this country and build the infrastructure needed to get them to market. It is a concern across the country, not simply for municipalities.
Conservative
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
Chair, Mr. Buda did not get a chance to address the question. Would it be possible?
Conservative
The Chair Conservative Larry Miller
Yes, I think we can do that.
If you would, respond briefly to that.
I'm sorry, Mr. Sullivan. I'll be back to you. We won't lose any of your time.
Director, Policy and Research, Federation of Canadian Municipalities
I was going to agree with Mr. Dijkema that in fact there are various provincial rules. In fact, the Agreement on Internal Trade ensures that these kinds of monopoly practices are theoretically illegal.
Because we don't become involved in this detail in municipal operations, we can't say for sure, but we certainly know that in discussions around TILMA—which is called the new west partnership now, I think—between various western provinces, and CETA, the Comprehensive Economic and Trade Agreement, these kinds of practices are already rather baked in to municipal procurement. As Mr. Dijkema pointed out, these kinds of practices are already not permitted.
NDP
Mike Sullivan NDP York South—Weston, ON
Thank you.
This is for the folks from FCM. Part of your initial presentation was to the effect that with a $100-million floor for P3 projects, rural and smaller municipalities generally don't ever go that high, so they don't have that problem of having to go through a P3 screen.
But you said that P3s are not generally an efficient way for them to do business anyway in the rural areas. That in turn, then, means that there's $2 billion of federal infrastructure money that's really not available to rural and smaller municipalities.
Am I correct in that assumption?
Director, Policy and Research, Federation of Canadian Municipalities
The new P3 fund is worth $1.25 billion.
Director, Policy and Research, Federation of Canadian Municipalities
I mean for every rule of thumb there are exceptions.
Director, Policy and Research, Federation of Canadian Municipalities
Certainly one of the recommendations we made to the federal government and to PPP Canada was that a portion of the P3 Canada fund be set aside or dedicated to actually investing and building a municipal capacity to consider and possibly use P3s. So it's really around capacity building and part of that envelope be designed and really customized for access by rural communities who in fact do have those exceptions to the rule.
But otherwise, generally speaking, you're right. But as I said, I think the P3 fund and PPP Canada are really about experiment and looking for ways to expand the use of P3s where it makes sense. I guess that's where our position is. If it makes sense, then municipalities should be the ones making the decision because they are the ones who will be held accountable. The P3 fund can play a role in really building the capacity and resources and expertise to do that.
NDP
Mike Sullivan NDP York South—Weston, ON
Municipalities also like to employ local people. One of the things the federal government has signalled that they're going to do is attach conditions to some money that will require local training, local apprenticeships on big municipal projects. I think that will dovetail with something that municipalities—at least my municipality—has been trying to do, when unemployment is 8% and 10% and 12%, to try to use the money that's being spent to create employment in the municipality, which seems to be a good thing.
In fact, in the City of Toronto they made sure that people in Thunder Bay stayed employed by sole-sourcing with Bombardier against quite a bit of controversy, but at the end of the day they're getting a good product for a good price and the province of Ontario is keeping a whole lot of people employed.
But you mentioned CETA. I know that the City of Toronto is very worried about CETA in that it may prevent them from having these local hiring policies that would in fact force them to take their own infrastructure money and spend it somewhere else, even though it doesn't make economic sense for the city. Can you comment on that?
Director, Policy and Research, Federation of Canadian Municipalities
FCM developed seven principles to help guide the federal government's negotiations with the European Union to ensure that the subnational procurement provisions of CETA treated municipal procurement as fairly and reasonably as possible. One of those provisions, for instance, was that there should be an allowance for exempting certain strategic or regionally important sectors from that particular rule. Indeed most provinces are forwarding to the federal government sectors that they believe are of regional significance or of strategic importance.
The reports, because all of the negotiations are secret, are that the province of Ontario would be certainly seeking to exempt its transit industry from the provisions of CETA, so our principles are designed to protect municipal accountability and responsibility for procurement in a fair and reasonable manner, understanding that freer trade will also benefit all communities as well. So we're trying to seek a balance there. Thus far the Minister of International Trade has been fairly firm that he believes our principles are in fact fair and reasonable and he intends to adhere to them.
Thus far, we're pretty happy with the progress, but of course the final agreement will tell the tale.
NDP
Mike Sullivan NDP York South—Weston, ON
I have a question for Mr. Dijkema. There are certain sectors of our economy that I as a private citizen can't get involved in even though it's publicly funded. What you're advocating, and others before you have advocated, is that if the public funds it anybody should be able to do it, essentially. But I think of things like the Supreme Court, the Court of Appeal for Ontario. Unless I'm called to the bar and spend $200,000 to get my union ticket to be a lawyer, I can't appear there. I am barred. Do you have anything to say about that?