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Possible project labour agreements a concern to open shop

Richard Gilbert

The open shop contractors association in B.C. is concerned an New Democratic Party (NDP) government will use project labour agreements to allow trade unions to dominate major public sector construction projects, but others argue this view is nonsense.

“It’s clear that the NDP will impose these project agreements and that means provincial construction work – and even municipal infrastructure projects that get provincial funding – will be tilted towards union-only,” said Philip Hochstein, president of the Independent Contractors and Businesses Association.

“In the construction business, a project agreement is a tool used almost exclusively by the building trade unions to eliminate competition from the more competitive open shop sector.”

In the run up to the election on May 14, the B.C. NDP recently launched its jobs and economy platform.

One of the components of this platform is a promise to expand the use of project labour agreements (PLAs), in order to maximize the benefits of public sector investment on local and regional economies.

In response to this promise, Hochstein is raising concerns that an NDP government will use PLAs to interfere with the process of free and open tendering and promote trade union dominance on public sector projects.

A B.C. trade union leader strongly disagrees with Hochstein’s concerns.

“Mr. Hochstein needs to address the people that he purports to represent because there are a lot of private contractors that are saying the playing field is not level for anyone anymore,” said Tom Sigurdson, executive director of the B.C. and Yukon Territory Building Construction Trade Council.

“These private contractors have indicated that with the PLAs they can bid fairly and competitively under the established rules.”

According to Sigurdson, PLAs have been used by various B.C. governments for several decades to facilitate stable labour relations on major construction projects.

“Some of the very first project labour agreements did not come from the NDP,” he said.

“The PLAs have been in place since the days of the W.A.C. Bennett government and were used to secure a stable supply of labour. After Bennett, there have been 11 premiers that have had the opportunity to get rid of PLAs and none of them have.”

The construction of the W.A.C. Bennett Dam between 1961 and 1968 involved more than 20 unions that were bound by 10 year contracts guaranteeing B.C. Hydro there would be no lockout or strike action, in exchange for standard construction wage rates, safety practices, as well as local training and job opportunities.

Despite the long history of using PLAs to complete major projects in B.C., Hochstein is concerned that all contractors, whether they are unionized or not, will be subjected to unionization in order to work on a government-funded construction project.

“It’s a bit of a stretch to call this an expansion – there hasn’t been a project agreement on a government project since the Island Highway in the 1990s,” Hochstein said.

“That deal ended up inflating labour costs on the highway by $73 million. Those runaway costs for taxpayers are why project agreements are avoided by the private sector, which can’t count on taxes to cover the extra costs.”

According to a report by the B.C. auditor general in 1996, the cost of the Vancouver Island Highway Project (VIHP) was $1.3 billion, but preliminary estimates were about $600 million.

The report said cost escalation was caused by a reshaping of the scope of the project, which was a response to public input and emerging needs.

The project was composed of 163 independent projects of which 127 were highway construction projects and 36 were bridge and tunnel projects.

Since these investments were carried out across Vancouver Island and at different times, they were assumed to be independent of each other relative to planning and costs.

The PLA negotiations provided for explicit employment equity hiring focused on women and First Nations.

After signing a project labour agreement in 2008, Rio Tinto Alcan decided to go ahead with plans for a $2.5 billion replacement of the aging smelter in Kitimat, B.C., which is one the largest private investments in an industrial construction project in B.C. history.

The collective agreement contains the standard no-strike, no-lockout condition for projects and is based on the standard industry package of wages and benefits for all 16 unions.

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