Sault Ste. Marie’s review of its infrastructure buying power, as described in the June 2 Daily Commercial News article “Sault Ste. Marie to examine open construction tendering,” has generated much attention from labour leaders and employer groups.
At issue is the City of Sault Ste. Marie’s designation as a "construction employer," which effectively grants a monopoly on municipal construction work to contractors whose employees are represented by either the International Brotherhood of Carpenters and Joiners and the Labourers International Union of North America. Employees who are represented by other unions or are non-union are excluded from performing that work.
In letters to the editor, labour leaders Tom Cardinal (June 8) and Pat Dillon (June 13) argue for preservation of this monopoly, which benefits their members, while Hank Beekhuis (June 23) presses for open tendering so that his members too can access municipal work.
Employer associations are also at odds, depending on whether the monopoly benefits them or not. Karen Renkema of the Progressive Contractors Association of Canada, whose member contractors are hurt by the restrictions in Sault Ste. Marie, makes the case (June 15) that tendering on municipal projects should be open.
Ron Johnson, of the Interior Systems Contractors Association, whose members thrive because of the construction monopoly, supports maintaining the status quo (June 14). In defending restricted procurement, he makes the incredible claim that competitive bidding will not improve value for the city.
Intuitively, we know that he is wrong. An increase in bidders logically will increase competiveness.
Far from being "outlandish," claims that fair tendering will stretch Sault Ste. Marie’s infrastructure dollar are supported by credible studies cited in the June 2 story. Johnson misses the point when he refutes the claim — which no one had even made — that costs will increase if the construction employer designation sticks.
Construction costs won’t skyrocket if the current union obligations are not lifted. But we can expect costs to plummet — in the range of 10 to 30 per cent — if the city is unsaddled from its "construction employer" designation. Many more firms and workers will then be able to perform municipal work and this open competition will reduce the costs.
Using a low-end estimate of eight per cent savings through open competition, the think-tank Cardus claims that the City of Sault Ste. Marie could save over $2.5 million over two years on the city’s central library, museum, police building and administration board building projects combined.
The city and citizens will appreciate being able to spend those savings on other priorities without impacting workers or infrastructure.
Monopoly supporters warn that fair competition will result in a "race to the bottom" in wage rates, unsafe work sites and inferior workmanship. Such fear mongering ignores a more logical argument.
Sault Ste. Marie, like most cities in Ontario, has sophisticated procurement policies to vet bidders. These policies and the city’s prequalified bidder lists are in place to ensure that the city awards construction projects to qualified, safe, experienced contractors.
It is simply false to suggest that membership in a specific union is a more effective guarantee than Sault Ste. Marie’s own carefully developed selection criteria. While union members, including the Christian Labour Association of Canada’s (CLAC), benefit from high quality worker training, excluding companies not tied to a specific craft union is not a logical or fair means of quality assurance.
Exclusion from work in municipalities like Sault Ste. Marie is due to a loophole in Ontario labour legislation, not for safety reasons.
The City of Sault Ste. Marie is seeking information that some union leaders don’t want the city to have. Its in-depth investigation of the impact of closed tendering will consider evidence, including that from municipalities such as the Region of Waterloo, which has most recently become subject to a closed tendering monopoly.
We applaud city leaders and know that their investigation will prove conclusively that the impact of closed tendering has meant higher costs for the city, exclusion of reputable construction companies and unfair treatment of hardworking local taxpayers.
The Ontario legislature is improving conditions for workers. Cities can too. When each Ontarian has equal access to construction work purchased with public money, including in Sault Ste. Marie, we can say we have achieved fairness, improved livelihoods and achieved maximum value for money that will help communities to flourish.
Andrew Regnerus is the Ontario construction co-ordinator with CLAC. Send comments and Industry Perspectives column ideas to editor@dailycommercialnews.com.
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