Transport Committee on Nov. 3rd, 2016

[Sean Fraser, Liberal, Central Nova, NS]

I have a little less than a minute left to go, so I'll wrap up quickly.

Obviously, not every project worth 10¢ needs to have this applied, but where's the appropriate threshold before we start requiring the government to go through this process with bidders?

[John Cartwright]

I think it's in the larger projects of $40 million and above. You want to build a practice with larger projects, and then, as that becomes the culture, you can start to move down a little bit smaller.

[Sean Fraser, Liberal, Central Nova, NS]

We heard previously it was in the range of $5 million in other jurisdictions.

Mr. Varone, what are your thoughts on the appropriate threshold?

[Toni Varone]

I think you can implement it at $5 million quite easily.

I just want to make one comment with respect to how you dissect the benefits. LEED is a points-based system. When you construct a LEED building—and Mr. Cartwright, you'll know this—you may not be able to do an envelope a certain way, and you'll lose points for that, but if you do a mechanical system another way, then you'll gain points for that. I think community benefits can be scored on a points-based system, and whether the benefits go to job creation or to job training or to the environment, they're still all relevant points to be assessed and monitored.

I'll leave it at that.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Varone.

Mr. McDonald.

[Ken McDonald, Liberal, Avalon, NL]

I have just one question, for both our witnesses this morning.

I'm a former community leader, a mayor of a small town. This bill talks about federal infrastructure and putting a lens on that when it comes to community benefits. Do you think it should be broadened to be even wider than that? The federal government, as everyone knows, partners with provincial governments, municipal governments, or not-for-profit organizations to do various projects at different price tags, in the millions of dollars most of the time, whether it be a water treatment facility, or a new municipal depot, or a fire department building. Do you think we, as a partner in those projects, and sometimes the main partner, putting up the biggest amount of money to see that project done and completed, should be looking at those projects down the road under this lens as well to see what community benefits and social benefits can be attributed to those projects that are part of the work we're doing as a government?

[John Cartwright]

I wouldn't want to see this program become too big and entangled in some of the federal-provincial negotiations that are already bedevilling much of what happens in our country. I think the thing to do is stick to the knitting originally of the federal department getting this done right; help to show other levels of government that it is achievable; learn from best practices, and then start to create that culture within the bidding industry, as both I and Mr. Varone have talked about, so that provincial levels of government can then say, “Hey, you've been able to achieve this working directly for federal infrastructure; now we have some joint work, and we'd like you to incorporate that.”

A number of provinces already have elements of a community benefits scale within some of their programs. I'm just worried that if we insist that it go to the entire gamut of federal, provincial, and municipal infrastructure joint ventures, we'd get tied up and people would not be embracing this, because they would be looking at the complexity.

[Toni Varone]

I would respectfully agree. The last thing you want is an infrastructure project that requires funding from the local to the provincial and the federal levels. You have three different definitions of community benefits, and you are going to strangle the contractor going in.

Over time, I'm sure those definitions will be improved upon and fleshed out so that everybody is under one understanding of what they mean. Until that time, I think it might be premature.

[Ken McDonald, Liberal, Avalon, NL]

I have one final question to end off with. We are talking about community benefits and whatnot. How would each of you describe community or local?

[Toni Varone]

Local...?

[John Cartwright]

Local communities reflect the diversity of the population, the reality of the history of that economy, and the local contractors, as well.

[Ken McDonald, Liberal, Avalon, NL]

Thank you.

[The Chair, Liberal, Judy Sgro]

Mr. Hardie, go ahead.

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

I appreciated what you said about this being a stepping stone, an iterative process, as we kind of infuse a culture into the whole process.

Small businesses represent the majority of employers in the country but, as one of you noted, smaller communities have capacity issues with the ability to actually take on some of this. Do we need a small business strategy to help the smaller businesses make similar contributions?

[Toni Varone]

Yes, absolutely.

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

What would that look like?

[Toni Varone]

I happen to be in an inverse situation, where I benefit greatly from my local community. It's the other way around in our hospitality business, because we are fully dependent on our community contributing to us. Reaching out is something we do as a matter of fact. We are part of the Jane and Finch community, and we constantly have workshops to engage people to come in and work in the hospitality sector, because it's a hard sector to find people to work in.

I don't think that's going to burden any small business contractor finding additional capacity in the workforce. I think it's a good thing.

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

One of the examples given the other day was that in Germany they have people who would come out and work with an apprentice operating, say, for a plumber, an electrician, or a carpenter, and they would take some of the burden of having to supervise and mentor that person off that small business. At the same time, it would open up an opportunity for that person to get work with a small contractor working on a medium to large project.

Mr. Cartwright, would you see something like that as a capacity-building process that could be nested in with community benefits?

[John Cartwright]

We've looked at the social enterprise side of things, because those are small businesses, trying to ensure that they have a chance to move forward.

One of the issues that has come up around large infrastructure projects in the past is the bundling together of projects so they are very large. For instance, with the hospital that was built in Sudbury, there was real concern that the project was so big that local contractors weren't able to have the bonding to bid on the mechanical, the electrical, or any of the subtrades.

That's part of the question of how you design your ongoing infrastructure works, and I think it's one of the weaknesses of the “biggest is best” approach. I think there has to be attention paid to—

[The Chair, Liberal, Judy Sgro]

Mr. Cartwright, I have to interrupt you.

[John Cartwright]

—small business, ensuring that they hire apprentices, not just trainees.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Ms. Block.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Perhaps you'll be able to complete the answer you were giving when it comes to apprenticeships based on my question.

The sponsor of Bill C-227 stated that Ontario's Bill 6 was the inspiration for this bill. However, Bill 6 does not put the impetus on the contractor to consult when it comes to community benefits. Rather, Bill 6 lists exactly what the province considers the community benefits to be. The contractors must include in each bid how they will fulfill these criteria.

Bill 6 actually says, in subsection 9(2):

A bidder that enters into a procurement process for the construction or maintenance by the Government of an infrastructure asset shall, in the prescribed circumstances, provide to the Government as part of the procurement process a commitment respecting the intended use of apprentices in the construction or maintenance in the event of a successful bid.

The prescribed requirements are basically related to an apprenticeship plan. What other community benefits may be contemplated, and should they be defined by the department prior to seeking the bids?

[John Cartwright]

The reason we're focusing on apprenticeships is that we have an aging construction workforce. A lot of them are my age and are ready to retire at some point in time. We want to make sure that we're replenishing the highly skilled trades we have. That's a reason for our focus. It is also to ensure that the construction standards, including safety, are met by having properly trained people.

As I said earlier, we are starting a journey here. We've sought the best advice from people who've been at this for two decades in the United States and for one decade in the United Kingdom. Much of that advice has been that you can prescribe many things, but success comes when the actors involved embrace it because they actually feel that it's right. That becomes part of a cultural shift.

As we explore what “right” can be, we start with the key areas that are easy to look at, such as apprenticeships or the number of people from diverse communities actually brought into a project. Because they come into a project in an apprenticeship system, when the project is finished, they're not just discarded and thrown on the trash heap. They're part of an ongoing apprenticeship process. How we start to define social enterprise, small business access, and environmental impact, I think, has to be a work in progress.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

One of the criticisms of this bill is the vagueness it tends to embrace. Certainly when the sponsor was here, I didn't get a real sense of whether it should be limited to what is contemplated in Bill 6 or whether he envisages something else.

With that, Madam Chair, I'm going to turn the rest of my time over to Mr. Berthold.