The Progressive Contractors Association of Canada (PCA) says municipal budget time is the right time for the City of Toronto to reconsider its construction procurement policies and take steps to introduce open tendering on projects.
It’s an issue the PCA has raised multiple times before, including during the mayoral byelection campaign last spring, but with Toronto homeowners facing a possible 10.5-per-cent municipal tax increase in 2024 and Toronto’s rising construction costs highlighted in a recent global report, PCA executive Karen Renkema said it’s time for a re-evaluation.
“The issues haven’t changed. The dynamic really hasn’t changed,” said Renkema, the PCA’s vice-president for Ontario.
“What has changed is the significant tax increase that’s being proposed at the city and it’s just kind of more of the same, like, how much more are we going to continue to ask taxpayers to pay?”
The city currently has collective agreements with 10 building trades unions for city projects, with a 20-4 council vote in 2019 confirming it would opt out of reforms to the Labour Relations Act that would have opened up tendering to contractors unattached to the traditional trade unions.
PCA member contractors, aligned with the Christian Labour Association of Canada (CLAC), remain on the outside.
Renkema, who wrote a blog on the issue published Jan. 10, commented, “We’re just taking the opportunity to point out, again, efficiencies that could be found by everybody sharpening their pencils and adding some competition into the Toronto construction market.”
Toronto is the only municipality in Ontario that does not permit open bidding. Renkema’s blog noted research by Cardus shows Toronto could save taxpayers $347 million each year through open tendering.
The global ranking of cities with the greatest increases in construction costs by Australia-based Compare The Market put Toronto at number two, behind Prague. Toronto construction prices have increased 40.5 per cent since 2020.
Compare The Market columnist James McCay said in his analysis Toronto’s closed shop has contributed to elevated building cost increases for years, well before the pandemic began.
“The lack of open tendering is a major factor to high building costs, just as much as increases in material costs, labour costs and supply chain delays, if not more so,” said McCay.
During the mayoral campaign, leading candidates Olivia Chow, Ana Bailao and Josh Matlow said they supported the current ICI collective agreements as structured. Chow went on to win the election. Her office confirmed she continues to support the existing collective agreements with the building trades.
Sean McFarling, legal counsel for the LIUNA Ontario Provincial District Council, pointed out the City of Toronto is legally bound to the ICI collective agreements. The city could not opt out of the collective agreements without provincial legislation.
“When the Progressive Contractors Association and CLAC talk about open tendering, what they are really saying is that the City of Toronto should disregard its collective agreement obligations and violate the bargaining rights of tens of thousands of Toronto citizens who are members of the building trades,” stated McFarling.
“The suggestion is absurd and offensive to the rights set out in the Labour Relations Act and we, quite frankly, don’t understand why it continues to be a topic of discussion.”
The PCA and supporters say with opening tendering employees would still be paid on par with building trades workers given Toronto’s fair wage policies, and that concerns safety would suffer are off base given Toronto requires all of its contractors to be COR safety certified or the equivalent.
Sean Strickland, Canada’s Building Trades Unions’ executive director, said the City of Toronto long ago established the savings on projects would be minimal under open tendering and that councillors understand the benefits of a well-trained trade union workforce that brings reliability to the jobsite.
“Construction costs are rising, regardless of industry, because the costs of materials have increased across the board and interest rates have gone up,” said Strickland. “Open bidding can only achieve cost savings by reducing spending on desperately needed apprenticeship training and underpaying workers.
“The City of Toronto has rightly recognized that worker safety, fair wages and investments for training our skilled trades workforce and apprentices from diverse communities greatly outweighs any marginal savings from allowing non-union contractors to bid on taxpayer funded work.”
Coun. Brad Bradford, who supported opening tendering during his run for mayor, commented, “Under Mayor Olivia Chow, Toronto is staring down the highest property tax increase in our city’s history. In these circumstances, residents expect us to look for any opportunity to reduce costs while protecting city services.
“I’ll be keeping an open mind to finding ways to reduce this historic tax hike.”
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