A new report by the public policy think-tank Cardus argues the procurement of construction work has become significantly less competitive in the Region of Waterloo since the regional government was certified as a construction employer in 2014 and became bound to the Carpenters’ Union for ICI work.
There are fewer bidders on the Region’s ICI work, costs are higher and the non-union sector and taxpayers are all the worse off, argues the Cardus paper, titled No Longer the Best: The Effects of Restricted Tendering on the Region of Waterloo.
“The big thing that surprised me, one, was the speed with which Waterloo went from being one of the most competitive places in Ontario to being one of the most middling,” said report author Brian Dijkema, a program director at Cardus, who noted the report was undertaken in the public interest and with no sponsorship.
The report said almost 84 per cent of construction firms were shut out of the region’s construction work.
In response, a representative of the Carpenters’ Union has called the report’s language inflammatory and offensive, said the numbers used are statistically invalid, and argues the system is going smoothly, with the Carpenters’ and the Region working co-operatively to deal with competition and other issues that critics such as the Progressive Contractors Association of Canada (PCA) have identified.
Carpenters’ District Council of Ontario general counsel Mark Lewis said there were numerous flaws with the report. Among them, he suggested Dijkema was biased in that he was a former director at the Christian Labour Association of Canada (CLAC), a rival to the Carpenters’ union and aligned with the PCA. The PCA has lobbied Waterloo Regional Council on the bidding issue.
The language is inappropriate. They know full well it is not our decision
— Ken Seiling
Waterloo Regional Chair
“This report is what you get from Cardus,” said Lewis.
“You get the unbelievably inflammatory headline. ‘No longer the best,’ and then when you go through the report, the statistical analysis they claim to have done, it doesn’t bear any of that out.
“One, they admit their sample size is too small to draw any conclusions. Two, their methods of statistical analysis are generally not accepted within the field.”
The stance taken by the Region has also been contentious. A media statement issued to launch the report said the “Region of Waterloo’s policy of favouring one particular union for its construction contracts leaves taxpayers and most of the local construction industry out in the cold.”
PCA senior manager of public affairs Karen Renkema acknowledged the Region fought the original certification in 2014 but said, “Now that they are certified, they are no longer advocating in their best interests of their residents.
“There are a lot of options available to them. First and most obvious is to be more vocal to portray the effects to the provincial government.”
Waterloo Regional chair Ken Seiling said he “took exception” to the Cardus statement.
“The language is inappropriate. They know full well it is not our decision,” he said.
“We work in a legal system where we have to operate within Ontario labour laws…We fought the good fight at the labour relations board and we lost. We see no opportunity for the question to be reopened at the present time.”
The report said there was an average of 8.14 bids per Regional project among the 30 projects in the pre-certification period, with the highest number of bidders being 19.
But in the post-certification period, Cardus found there was an average of 3.68 bids per project among the 22 projects, representing less than 50 per cent of the number of bids in the pre-certification period.
Lewis said the statistics were based on an average of only six bids surveyed per year, and reflected a large initial drop the first year, which was to be expected.
“Any change would cause a chain reaction,” he said. “But since that time, the situation has been improving with more and more contractors bidding.”
Both Renkema and Dijkema addressed the issue of scope creep, which the PCA charges has resulted from the Region being concerned the Carpenters’ will grieve contracts that they figure should rightly be in the ICI sector and so contracts are becoming misclassified as ICI when there might be only three per cent carpentry work in it, said Renkema.
Lewis said, on the contrary, the Carpenters’ are working with the Region to carve out contracts that ensure competitiveness. It is “insulting” to accuse them of featherbedding, he said.
“One, we are certainly not trying to expand our ICI agreements into other sectors,” Lewis said. “Two, we are not trying to do the work of other trades. Three, we are working with the Region and with our contractors, non-union contractors and with the joint ventures, we enter into, to try to ensure that on certain contracts where there is only a small amount of carpentry work, that the Region has options and that contractors that may not be bound to us have options in terms of getting the carpentry work performed such that they can still bid it.”