Saskatchewan tendering provisions ‘building walls’ around the province: MHCA president

Contractors in Manitoba maintain that the Government of Saskatchewan is including provisions in tender documents that make it difficult for out-of-province contractors to bid on construction projects.

“Alberta and Manitoba have level playing fields,” says Chris Lorenc, president of the Manitoba Heavy Construction Association. “That, sadly, is not the case in Saskatchewan. They have a series of provisions in their tender documents which are intended to dissuade extra-provincial companies from bidding work.”

Manitoba contractors wrote to Saskatchewan Premier Scott Moe and were told the situation is temporary and due to the pandemic. Contractors are also in discussions with Alberta and B.C. as well as the Canadian Construction Association in an effort to find a way to convince Saskatchewan to change course.

“10 little kingdoms”

Lorenc says the provisions break with the spirit of co-operation that exists between western provinces under the Canadian Internal Free Trade Agreement (CIFTA) and the New West Partnership Trade Agreement (NWPTA).

“We’re concerned that this can become the thin end of the wedge and, instead of moving forward with free trade, which is of obvious advantage and benefit to the country, we will revert back to 10 little kingdoms.”

The Journal of Commerce reached out to the Saskatchewan Ministry of Highways for a response. The ministry indicated in a statement that its public procurement process is fair, that the province accepts bids from all provinces, and bidders do not incur penalties unless they deviate from their submitted proposal.

“The Government of Saskatchewan is committed to a transparent public procurement process that treats suppliers fairly while ensuring best value and outcomes for Saskatchewan taxpayers,” reads the statement.

However, Lorenc says provisions have been inserted into public infrastructure and building projects tendered by Saskatchewan that discourage Manitoba, Alberta, B.C. and Ontario companies from bidding on projects. They include such things as awarding points to a company that hires only local workers.

“It makes it impossible for a company that is based in Manitoba or Alberta or British Columbia or Ontario to be competitive in terms of cost or productivity because it doesn’t know what its workforce is going to be like,” he notes. “So, you have to bid risk and the risk then becomes sufficiently significant.”

Companies can also be awarded points for a good safety record, he notes, however the catch is that the company has to have previously worked in Saskatchewan to get them.

“How do you get any points if you can’t get work in Saskatchewan?” he asks.

On that matter, the Saskatchewan Ministry of Highways statement notes that work zone safety is of critical importance and points are based on results of work zone traffic audits that are completed by independent auditors.

“Any company that does not have a work zone audit safety score already logged with the ministry is awarded an average score to ensure companies that have not done work are able to compete.”

Saskatchewan open to bid on work in Alberta and Manitoba

According to Lorenc, the competitive bidding process is deliberately designed to favour awards to resident Saskatchewan companies and there have also been a significant numbers of contracts where Saskatchewan companies have been selected even though their bids were higher than out-of-province companies.

“Nothing stops the Saskatchewan industry and contractors from bidding work in Alberta and Manitoba and we have no worries about that,” he says. “That’s just the nature of the business and our industry. But it is intellectually dishonest to say that you are a free trader when you build walls around your province but assume that you should be able to continue competitive bidding in other jurisdictions.”

In 2016, Saskatchewan tried to impose restrictive provisions and, at one point, the province also declared that workers who had out-of-province licence plates on their vehicles would be deemed illegal.

“That dustup resulted in Saskatchewan retracting that provision but then it moved into other provisions in its tender documents which make it very clear that what they are trying to do is introduce both subjective assessments of bids and preferential provisions which clearly advantage Saskatchewan-based and Saskatchewan-resident companies,” claims Lorenc. “That began to rear its head in late 2019 and certainly by mid-2020 it was in full-steam-ahead mode.”

The intent of CIFTA and NWPT was to open the doors to more free trade across the country, he says.

“There is an obligation by the signatories to the agreements to support procurement practices which encourage labour and material mobility unimpeded by restrictions to free and unfettered and competitive bidding.”

Companies from Manitoba and Alberta regularly seek work in Saskatchewan. The downturn in Alberta’s oil and gas industry has resulted in significant reductions in public sector infrastructure budgets so many contractors are now looking east and west to bid on work. In Manitoba, the City of Winnipeg has reduced its budget for street renewal in 2021 which will result in work being sought elsewhere.

Lorenc says that trade amongst the provinces is what allows Canadians to enjoy a good standard of living.

“We didn’t become the country we are by building walls that prevent the movement of goods, products and services either within our country or with other markets around the world.”