I'd like to thank the committee for the invitation to participate in this important study to ensure Canadians are receiving maximum value for their tax dollars.
Merit Contractors Association of Manitoba is the voice of open-shop construction in our province. Our members are primarily engaged in commercial, industrial, and institutional construction projects. Similar to most other Canadian jurisdictions, approximately 70% of Manitoba construction is performed by open-shop companies and their workers.
Our presentation will focus on the need for open tendering on all contracts that involve federal funding. It is our firm belief that all infrastructure projects funded by taxpayers' dollars should be open to all qualified contractors to bid, with no preconditions to join a union or pay union dues.
Open shop fundamentally means freedom of choice and fairness in the workplace. It's a term that describes a workplace where membership or non-membership in a union is not a condition of employment. In the construction sector, it specifically refers to a situation whereby owners, developers, and general contractors do not consider the union status of a contractor's employees when awarding a project.
Despite the fact that most contractors and workers in the construction arena in Canada are open shop, far too many jurisdictions across Canada continue to practise closed tendering policies. In Manitoba our provincial government has instituted the practice of open tendering on closed projects. If it sounds like semantics, it is. The result is the same as other closed tender projects: reduced competition, increased costs, and the violation of workers' charter rights.
It is this differentiation we would like to bring to the committee's attention, as there are those who would suggest that Manitoba Hydro's floodway project, east side road project, Manitoba Hydro generation projects, and the Bipole III transmission line projects are open. They are not. All these projects combined for approximately $24 billion of construction are technically available to all contractors, however, they are subject to traditional building trades unions collective agreements and in reality, the provisions in these agreements essentially close the project to open-shop contractors.
I'll provide a couple of examples for the committee to consider. The Burntwood/Nelson Agreement for hydro development projects, section 12.2.1, “Union Security and Check off”, states:
...all employees shall, as a condition of employment and/or continuing employment, be members or obtain membership in the appropriate Union of the Council, and maintain such membership in good standing.
For the hydro transmission line collective agreement, article 9.2, “Hiring Procedure, Union Security and Check-Off”:
The Contractor shall advise persons who are not members of the Unions at the time of being hired that they shall be required, as a condition of employment, to secure membership in the appropriate Union and maintain such membership in good standing.
So a company need not be union to bid the work, but employees must be union to do the work. It's closed and it's wasteful. Open-shop companies do not bid and when the competition is removed, costs are driven up. In addition, agreements that force workers to join a union against their will deny freedom of choice, and the imposition of mandatory union dues on those workers are violations of the Canadian Charter of Rights and Freedoms.
Our association, along with five individual workers incensed by these agreements, filed a statement of claim in the Manitoba Court of Queen's Bench on July 9, 2012. The claim states that the requirement to secure and maintain union membership as a condition of employment, as contained in the Burntwood/Nelson Agreement and the transmission line collective agreement infringes on sections 2(b) and 2(d) of the Canadian Charter of Rights and Freedoms, the sections on freedom of expression and freedom of association.
The Manitoba floodway and east side road project management agreement, in article 12, “Union Security”, 12.2:
All Employees employed by Contractors who are not members...shall not be required to join the Union but shall be required to pay an amount equal to the amount normally required to be paid by a Union member in respect of [Manitoba Building Construction Trades Council] assessments and applicable Union dues....
Although a segment of the competition was forced out of the bidding due to the union provisions in the floodway and east side road agreements, general contractors bidding on the project found that in some instances there was a sole-source bid and profoundly higher costs.
Open-shop contractors forced to deduct union dues from their non-union employees were obligated to increase employees' pay to offset those costs and fees required by the workers. Other companies did not bid simply because their employees requested that they not bid. Rather than improving labour relations, the removal of workers' choice was seen by workers as driving a wedge between them and their employers. While there is no apparent value to open-shop employees, these costs all contributed to higher costs for the project, money that would have been better spent on Manitoba's infrastructure needs.
More appalling to many of our contractors and their employees is that open-shop companies are paying dues that are subsequently used to take jobs away from open-shop construction. The IBEW December 2011 newsletter contains the following:
This past Summer, we were very aggressive working with our contractors streamlining our Market Recovery Program to go after some large scale projects.... Our largest non-union competitors have been forced to scale back their workforce and transfer employees to other shops as a result of targeting jobs....
In a fair and just construction climate, all contractors should be treated equally. If owners believe that a project management agreement is warranted, the conditions of employment should not be seen to violate the charter rights of workers.
Our ask is simple. When government funds infrastructure, all qualified contractors should be allowed to bid on those projects and tender documents must be written to respect the rights of open-shop, single-company employee associations, any alternative unions, and the traditional building trades unions.
Thank you. I look forward to answering questions.