After years of contesting their construction employer status, the Greater Essex and County District School Board (GECDSB) received a successful ruling from the Ontario Labour Relations Board (OLRB), freeing them to openly tender construction work to all who are qualified.
"It gives us the opportunity, like all other school boards, except one in Ontario, to go out to union and non-unions for construction work, we have that flexibility," said Al Cook, manager of facility services for the GECDSB. "It opens the door wider than it did before. We were restricted by who could bid on our projects and now that restriction has been removed."
Up until this ruling, under the Ontario Labour Relations Act (OLRA), the school board, which serves students in Windsor and Essex County in southern Ontario, was forced to restrict tendering exclusively to contractors who were certified and affiliated with select unions, thereby excluding a number of qualified companies from the bidding process and limiting which companies could work on projects.
Cook explained that years ago the Greater Essex board was certified by several trade unions as a construction employer.
"Once you have internal construction trades that were affiliated with these specific construction unions, it made you vulnerable to certification," said Cook.
The 78-page decision was handed down by OLRB chair Bernard Fishbein last month, three months after hearings concluded.
Launched in 2013, this was the school board’s third appeal of its construction employer status. The school board applied for non-construction employer status for carpentry in 2001 and received the declaration in 2003. In 2004, they appealed the status for the remaining five unions and learned they were unsuccessful in 2009.
Section 126 of the OLRA defines a non-construction employer as "an employer who does no work in the construction industry for which the employer expects compensation from an unrelated person."
The board had to demonstrate it met that definition. As soon as it was proven that the board had done construction work for an unrelated third party and was compensated for it, they fell outside of the definition.
The issue, Cook added, is that the act’s definition of construction and the school board’s definition are not always the same and differentiating maintenance from construction is not easy.
"We had to make an application to decertify, saying we meet the definition of a non-construction employer," said Cook. "(Prior to this ruling) we fell outside of the definition in a very unique and a very specific area. We basically stopped doing what we were doing way back when… so we could fall within the definition again."
Darrel Reid, vice-president of policy and advocacy at the Progressive Contractors Association of Canada (PCA), said this is an important step in the right direction, making construction tendering fair and competitive. "Our message has been that competition is what’s best for construction, especially for public institutions like school boards," said Reid. "The way things were before, only a select group of companies and organizations were allowed to bid and that restricts competition and that restricts our members from access to that work."
One study, Reid said, showed that if Ontario allowed all qualified contractors to bid on public works, it would free up anywhere from $188 million to $283 million a year.
"Our members, when and if they get access to bid on these things, they’re going to win some contracts and they’re going to lose some contracts and that’s the way it should be. It makes for better value when bidders are able to come up with their very best price for the taxpayers and the number of dollars that can be saved are just immense," said Reid.
According to the Christian Labour Association of Canada (CLAC), the construction employer status is unfair as it prevents about 70 per cent of contractors from bidding on construction work and could drive up costs by as much as 40 per cent.
"As a matter of public policy, we didn’t think that non-construction industry employers should be considered construction industry employers, given the fact that all these institutions are taxpayer funded," said Hank Beekhuis, CLAC Ontario director.
"I think ultimately the traditional building trades have been using the legislation for purposes for which it was really never intended."
The school board is not sure how much money will actually be saved by opening up its tendering. According to Cook, it will all depend on which companies come to the table, but the potential for savings is there.
"I think it does open up the door for a reduction in wages," said Cook.
"We should see some impact if prequalified, non-union (contractors) come to the table. I think you’re going to see some financial impact on the bids."
Cook hopes the GECDSB can continue to have a good relationship with union contractors.
"They’re still very involved in our organization, we still expect them to be involved, we still want them to be involved," said Cook.
"I still think we have a good, solid relationship with our union contractors and we want to continue to maintain that."
The Toronto District School Board and several municipalities such as Toronto, Hamilton, Sault Ste. Marie and the Region of Waterloo continue to fall under construction employer status.
CLAC is looking to get decision-makers at Queen’s Park to recognize that the OLRA needs to be amended and tendering restrictions need to be lifted on all school boards and municipalities affected.
Reid says PCA will continue to encourage amendments to the OLRA through the Fair Construction Campaign.
"In legal terms, a decisive ruling like this is a precedent. We celebrate that and we’re encouraging the government to amend the labour code so that all municipalities don’t have to go through this every time," said Reid.
"It’s in a lot of people’s interests to ensure fair competition."