Transport Committee on Nov. 3rd, 2016

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

I'm calling to order the Standing Committee on Transport, Infrastructure and Communities of the 42nd Parliament. Pursuant to the order of reference of Wednesday, October 5, 2016, we are considering Bill C-227, an act to amend the Department of Public Works and Government Services Act, in regard to community benefit.

We have some witnesses who have joined us today. From the Atkinson Foundation, we have Colette Murphy, executive director, by video conference. From Canada Lands Company, we have John McBain, president and chief executive officer; and Robert Howald, executive vice-president, real estate. As well, from the Toronto Community Benefits Network, we have Rosemarie Powell, executive director. Welcome to you all. Thank you very much for being here.

We'll open the floor to Mr. McBain.

[John McBain, President and Chief Executive Officer, Canada Lands Company]

Good morning, Chair Sgro and members of the committee. Thank you for inviting Canada Lands Company to appear today.

In order to provide more detail and perspective, I am accompanied today by Mr. Robert Howald, executive vice-president of real estate at the Canada Lands Company.

Canada Lands' mandate was confirmed in a 2001 review as an arm's-length crown corporation with the principal role to manage the disposal of real estate with the best value to the taxpayer. We are also tasked with holding and managing certain properties at the request of government.

The Canada Lands Company helps the government to manage its surplus real estate. When properties are no longer useful to the government, the Canada Lands Company purchases them at market value.

CLC acts as the master developer of properties: we engage, consult, and obtain development plan approvals. We then sell to the private sector, which builds and markets the final product.

I'd like to return to the phrase “best value to the Canadian taxpayer”. We define “best value” to include non-financial benefits as well as financial return. We require the latter because we are self-funding and receive no appropriations from government, but it is by no means our sole focus. What makes Canada Lands unique is that, in addition to profitability, our projects provide auxiliary benefits to Canadians and the communities in which we work. Allow me to describe this aspect of our value proposition.

We handle complex properties. We enable surplus, underutilized properties to be reintegrated in productive ways into communities.

We engage and consult extensively. Our engagement process is really our hallmark. We are dedicated to fully understanding and collaborating with the communities in which we work.

We comply with all municipal and provincial planning requirements. We operate in the context required of any developer, and in that regard, accommodate the planning preferences of the communities.

We enable the creation of affordable housing. In concert with municipalities, Canada Lands integrates affordable housing as part of its development plans. To date, CLC has facilitated the implementation of 2,180 affordable housing units in our projects.

We incorporate parks, commemoration, and recreation in our projects. Canada Lands' contributions to green space amount to 28% of our holdings.

We build business partnerships with first nations. We've established agreements of participation and joint ventures with first nations at six sites in British Columbia and Ontario, and are finalizing joint development agreements at two more.

Canada Lands' projects serve as economic engines. In addition to reintegrating surplus properties in communities, our projects generate contracts and employment for studies, planning, and construction.

Those are some of the major criteria we use to assess the community benefits of our work. As we understand, this committee is studying a proposed bill that would require the inclusion of community benefit assessments in federally funded construction, repair, or maintenance projects.

Allow me to share one specific example of how we further define community benefits.

CLC has developed employment programs ingrained in initiatives with first nations. As an example, in our 50/50 joint venture with the Musqueam, Squamish, and Tsleil-Waututh nations in Vancouver, a joint employment, contracting, and training committee drives efforts to put nations' businesses in a position to compete for contracts, requiring bidders to establish employment and training opportunities.

With respect to the content of the bill as it stands now, I would observe that it is for the proponent, and in that regard I would say the government, to identify the overall benefit of a project to the community, but I would ask the contractor to identify the benefits to the community from how it will deliver the work, how it will execute the contracts.

I would also offer comment on the timing requirements that are included in the bill, if the committee is interested.

We hope this information has been helpful. We look forward to questions you may have regarding our presentation.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Ms. Powell.

[Rosemarie Powell, Executive Director, Toronto Community Benefits Network]

Thank you.

It's my pleasure to be here this morning representing the Toronto Community Benefits Network.

We're a community labour coalition, and we envision Toronto as an inclusive, thriving city in which all residents have equitable opportunities to contribute to building healthy communities and a prospering economy.

TCBN uses the approach of negotiating community benefits agreements to bring diversity to Toronto's infrastructure projects, starting with the Eglinton Crosstown. The TCBN fully supports the passage of Bill C-227, an act to amend the Department of Public Works and Government Services Act (community benefit), to include community benefits agreements, put forward by the Ahmed Hussen, the MP for York South–Weston.

Community benefits are defined as tangible social and economic opportunities and outcomes for communities, especially historically disadvantaged groups. They include, but are not limited to, jobs training and apprenticeships, procurement from local businesses and/or social enterprises, neighbourhood and environmental improvements, and other benefits as determined in consultation with the local community.

Income inequality in Canada has increased over the last 20 years, and in many of our neighbourhoods, particularly in Toronto, we are also seeing the negative impacts of systemic poverty, such as violence, as in the case of Toronto's former priority neighbourhoods. As our society transitions into the green economy, there will be a shakeup in the type, quality, and quantity of jobs that are available, and this crisis can only get worse. Our society needs to develop a fair and equitable transition policy—we believe that community benefits agreements can be one such tool—for our youth and other historically economically disadvantaged groups that has the potential for creating good jobs while helping to address society's concerns about climate change. Putting our youth to work towards building up their communities and protecting the environment not only makes good sense, it also makes good economic and environmental sense. Jobs in the construction trades are good, well-paid jobs with benefits. They focus on safety, and they could also be green jobs. Most importantly, these workers have the opportunity to build up their communities with the sense of pride, ownership, and responsibility that engenders.

Professional, administrative, and technical job categories are part of every major construction project. Many newcomers to Canada have much-needed valued skills, but they may lack professional networks to find jobs in their fields. Equally, apprenticeships in the construction industry create both long-term careers and short-term jobs. As entry-level jobs, they offer opportunities to people who are beginning their careers. Specific reference should be made to these jobs as part of legally binding community benefits agreements in major infrastructure projects.

There are other compelling reasons, of course, to pass Bill C-227. Infrastructure projects that include community benefits leverage public dollars that are already being spent to benefit local communities, aligning government's infrastructure spending with other policy goals. In partnership with our allies in labour, philanthropy, and academia with our first-ever community benefits framework with Metrolinx, the Toronto Community Benefits Network is experimenting with a historic partnership that has an incredible potential to significantly advance the province's sustainable development strategy by enshrining support for community benefits in its policies and practices.

CBAs are built on the shared commitment by all parties to achieve the objectives of the CBA within the context of successfully delivering on project deliverables. In this project, specific roles and responsibilities should be defined. For example, the TCBN understands that to successfully deliver on community benefits, the contractor needs reliable skilled labour and they need to meet project deadlines and receive public support for the project and their company's role in the project. This is why, through the Metrolinx working group structure that includes all stakeholders, the community works with Metrolinx to support the implementation of the project agreement with the contractor and their subcontractors, ensuring a qualified cohort of apprentices and a range of social enterprise subcontractors. In so doing, we work with a broad range of stakeholder groups, including industry workers, community, non-profit, workforce development, etc.

When Metrolinx and the project contractors are responsive in the community benefits agreements and implementation, the TCBN and its partners—we are 63 members in our coalition of community organizations and groups—facilitate the buy-in from the community in the process and outcomes.

Over the next 10 years, we have an opportunity. Cities all across Canada will benefit from unprecedented spending on public infrastructure by all levels of government. Pass Bill C-227 and seize the opportunity to create meaningful change for your constituents at all levels of the economic ladder. Let's build our nation from the ground up.

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Ms. Powell.

Next, from the Atkinson Foundation, we have Ms. Murphy.

Welcome.

[Colette Murphy, Executive Director, Atkinson Foundation]

Thank you very much.

Good morning everyone.

The Atkinson Foundation has been concerned about social and economic justice for more than seven decades. We put our resources into the people, organizations, and networks focused on decent work for all, including narrowing the income gap, creating employment, and building wealth for low-income communities.

Since 2013, Atkinson has been investing its own resources and working with partners from across sectors to advance community benefits in policies and practice. We believe Canada has a tremendous opportunity to make progress on social policy goals by improving its procurement processes. By requiring community benefits as part of certain government spending, it's possible to increase the impact of these dollars: more decent work, less precarious employment, great career ladders, fewer dead ends for workers, renewed public infrastructure, and stronger and more resilient communities.

I want to make four key points related to our support for the passage of Bill C-227. First, we believe community benefit policies enable a more strategic approach to procurement when linked to federal priorities of economic growth, social inclusion, poverty reduction, and environmental sustainability. For example, by targeting training opportunities for those who have difficulty accessing the labour market, such as youth at risk or veterans, community benefits target those hardest hit by the economy. By being deliberate about opportunities for local suppliers, in particular small and mid-sized ones, and social enterprises, community benefits build local economies, and attaching goals around GHG reductions helps reduce our carbon footprint.

To do this, the Government of Canada can build upon its own experiences, in particular, the procurement strategy for aboriginal businesses. Since 1996, the program has awarded more than 100,000 contracts to aboriginal firms totalling $3.3 billion in value. There are also potential synergies with Bill C-227 within the federal family. In addition to Public Services and Procurement Canada, other departments such as Infrastructure Canada, Employment and Social Development Canada and Veterans Affairs, which already have community benefits in their ministerial mandate letters, are likely strong contributors to a Government of Canada community benefit strategy which passing the bill would help advance.

Community benefits also provide measurable results, which is important to policy-makers. The University of Glasgow reviewed 24 public contracts with community benefit clauses in Scotland and found they had exceeded job opportunity targets, with more than 6,700 individuals from priority communities receiving training and 1,000 individuals from priority communities recruited for jobs. Community benefits associated with the Vancouver Olympic Village placed 120 disadvantaged workers in construction and led to $24 million in procurement for inner-city businesses, thereby surpassing targets.

Second, Canadian provinces and municipalities are already moving to adopt community benefits policies and practices. Federal requirements to include community benefit clauses in procurement would be consistent with these goals and changing practices. For example, the Ontario government has recently promulgated the Infrastructure for Jobs and Prosperity Act, which calls for community benefits, and mandates apprenticeships and training opportunities for targeted communities and public infrastructure projects. The Yukon government recently announced it will establish resources, policies, and processes to support the strategic role and importance of procurement.

Third, this is a value-for-money proposition. The cost is low in comparison to the returns. Embedding requirements for community benefits into procurement requires a change of approach, but it need not be costly either to government or to private contractors. It helps ensure public spending meets a range of policy objectives rather than treating those expenditures as one dimensional.

Capacity building resources will be needed for implementation, but current government programs already funded to support such things as workforce development, SMEs, or social enterprises can be leveraged and I'm happy to give examples of how this is done in other jurisdictions.

Finally, community benefits in procurement is a significant policy innovation. It needs to build upon good practice in how to do this successfully. Luckily we have excellent examples in Canada, the U.S., the U.K., and other jurisdictions of how to create effective community benefit policies and implementation practices. They share several traits. We have research reports that outline them, but I'll just flag one for you in closing.

Mandatory language is critical. Policies that require only that community benefits be considered seldom have impact compared to those that require action. Passage of Bill C-227 will help realize our ambition for Canada to be known as world class, because its economy is equitable, inclusive, and prosperous.

Thank you very much.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Ms. Murphy. We appreciate your comments very much.

Now we go to questioning by our members.

We'll start with Mr. Rayes.

[Alain Rayes, Conservative, Richmond—Arthabaska, QC]

I sincerely thank the witnesses for their presentations and the time they have taken this morning to speak to us about this bill.

I am going to begin with you, Ms. Powell. In your presentation, you indicated that the bill should make consideration of community benefits mandatory.

The bill grants that power to the minister, but it does not make it an obligation. What do you think of the statement that is in the bill?

[Rosemarie Powell]

You are talking about the difference between... What are the two words?

[Alain Rayes, Conservative, Richmond—Arthabaska, QC]

Excuse me, I made a mistake. I mentioned your name, but the question was addressed to Ms. Murphy.

[Some hon. members]

Oh, oh!

[Rosemarie Powell]

I understand.

[Alain Rayes, Conservative, Richmond—Arthabaska, QC]

She was the one who made that statement.

[Colette Murphy]

Absolutely. We would encourage stronger language. We understand from looking at policy in the U.K. The U.K. government passed its own legislation, the Public Services (Social Value) Act in 2012, and it spoke to consideration of community benefits. Therefore, it leaves it very wide open to interpretation. In the case of Scotland and the passage of its own act, the language is much stronger, as well as the practice behind it and the regulations that enable staff to understand how to actually implement it and when.

[Alain Rayes, Conservative, Richmond—Arthabaska, QC]

That's fine, thank you.

Mr. McBain, you said that your organization already takes local communities into account. In fact, all of the witnesses told us that in their presentations. You all gave many examples showing that that was already being done.

I want to understand properly. You said that in your projects you incorporate parks, commemoration and recreation, and that you work with first nations communities. You are all able to do that already since you provide work.

The bill proposes rather that promoters and entrepreneurs who conduct projects take communities into account. What will this bill allow you to do that you are not already doing? Listening to you, it seems you all take local communities into account already in your projects.

[John McBain]

Thank you for the question. It's an excellent point. It's something that I see in the wording of the bill as it stands now, and please understand my comments are about improvement.

As the proponent, whether it's Canada Lands or the government, we will identify the benefits that a project we're about to undertake will bring to a community, whether, as you've described, it's green space, or a park network, or school sites. Asking the contractors to identify them, is, to me, an additional piece, and that would involve asking them about the benefits of how they will implement the contract. Will they be using, for example, women in non-traditional occupations as part of their workforce? Will they be using youth at risk as part of their workforce? Will they have an aboriginal set-aside in their procurement practices? These are things that we as the proponent, the government, or, in our case, Canada Lands, may choose not to specify to allow the private sector to bring their best offer, but we would also ask the private sector to identify the benefits of the way in which they would execute the work.

[Alain Rayes, Conservative, Richmond—Arthabaska, QC]

We heard witnesses on Tuesday, and one of them said something interesting. He said that in any case, everything that is being asked for in this private member's bill could already be done by the government and the Department of Public Services and Procurement. In his opinion, all the the government has to do is ask that this be included in the project. So I am sincerely wondering about this.

The member replied that in practice it would not cost the government more. In his opinion all that is required is an additional line in the specifications where the promoters would have to indicate whether their project would provide economic and social benefits for the communities.

Do you agree with me that in order to verify that claim, we would need people to validate the information, so as to ensure that this really happens?

[John McBain]

It's an interesting question. It depends on how auditable, I suppose, one would want the indication of the benefits to be.

In my experience, and in my prior position as a senior assistant deputy minister in the government as well, we wrestled with the question when we let a contract how many jobs were going to be created. We can't forecast that. We can use a rule of thumb, but it's the contractor who needs to tell us how they're going to deliver that project. While I would say that the government and the proponent can prescribe community benefits in their approach, you need to engage the bidders or the contractors in them telling us how they're going to deliver the work, and then we quantify that.

[Alain Rayes, Conservative, Richmond—Arthabaska, QC]

So we would have to do some checking to ensure that there is a fair and equitable process for all of the bidders, and that what is written down really gets done. I imagine that staff will have to do these verifications, which will necessarily mean additional costs for the state. According to the member, this line that would be added would not cost one cent more and these projects would provide more community, social and economic benefits.

Do you agree that the implementation of this bill would not cost a penny more?

[John McBain]

An additional penalty is an interesting question.

There would need to be some time expended. I think we would all agree on that. Could they do it in-house? Could they indicate to us simply in their bid how many jobs they are going to employ to execute the work? I think that would be pretty simple for them to do, because they're going to be doing that as part of their bid preparation in any event.

It's a question, in my opinion, of degrees. How far do you want to go in defining the benefit and having it verifiable?

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. McBain.

[Alain Rayes, Conservative, Richmond—Arthabaska, QC]

Thank you very much.

[The Chair, Liberal, Judy Sgro]

Mr. Hardie, for six minutes.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Good morning to everyone.

The categories of benefits would include things like skills workforce development and community amenities. We've heard those two, and I've certainly been involved in some large activities in metro Vancouver like the Canada Line, where mitigation was also something we wanted to work into whatever the contractor was going to provide.

Are there other categories of community benefits beyond those that you could think of? When it comes time to put a project out, the government should have some kind of agenda, or the local community should have some kind of agenda, as to what they want to see coming out of this. Beyond those three—skills development, community amenities, and mitigation—are there other categories of benefits that we should look at?

I will start with you, Rosemarie.

[Rosemarie Powell]

We believe there are potentially other categories that should be looked at, as it's important that it's in consultation with the local communities. Every neighbourhood is different, and every neighbourhood has different situations that they're facing. It's in consultation with the local people, the residents, and the citizens there that you'll be able to learn about the additional things they would like to see happen.

For example, in Weston-Mount Dennis with the Crosstown coming through, who would have thought that the community felt it was really important to preserve the Kodak building, the one building that was left after all the economic activity out of their community had been drained? This was the one space that was left.

What Metrolinx was able to do, instead of destroying that building, in consultation with the community, was they moved the building. They're going to be putting it back in place afterwards. That meant so much to the community, and that also gave Metrolinx and Infrastructure Ontario so much more credibility in that community in the work they're doing.