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PCA against government imposing ‘artificial’ wage, benefit rates for green energy projects

Angela Gismondi
PCA against government imposing ‘artificial’ wage, benefit rates for green energy projects

The federal government recently announced details for moving forward with a Green Energy Tax Plan and the Progressive Contractors Association of Canada (PCA) says it favours certain unions over others.

Paul de Jong, president and CEO of the PCA, said the association recently learned the federal government is moving forward with tax incentives ranging from 15 to 40 per cent for capital investments in low-carbon energy generation and technology.

PCA supports the green energy transition but is against the government imposing “artificial” wage and benefit rates of the Building Trades Unions. Businesses must comply with these rates in order to qualify for the full Investment Tax Credit (ITC).

“As we began to learn more about the ITC, the investment tax credit that the federal government was creating, we learned that they had a particular stance on a portion of the tax credit which ranges fairly widely depending on the project, as high as 30 to 40 per cent tax credit. Ten per cent of that tax credit is contingent upon workers being paid according to Building Trade Union wage and benefit rates,” de Jong said.

“On the one hand PCA supports…the rationale that workers should get paid well in the construction industry. There is no issue with that. But we do have concerns with the government stepping in to create that standard.”


These projects will end up costing more even though there is a subsidy because the wage and benefit levels are inflated to an artificial level,

— Paul de Jong
Progressive Contractors Association of Canada


De Jong said PCA is particularly concerned with the idea 10 per cent of the tax credit would be contingent on “a rigid application of an abstract wage benefit measurement.”

“The reason for our concern is that there is likelihood that across that sector alone, but also sectors that are parallel like the heavy industrial sector, infrastructure, even commercial, institutional and homebuilding, that those wage and benefit levels would begin to migrate and that we would have an inflationary effect. That’s not helpful right now when we’re trying to attract investment,” he said.

“These projects will end up costing more even though there is a subsidy because the wage and benefit levels are inflated to an artificial level.”

In a statement to the Daily Commercial News, Sean Strickland, executive director of Canada’s Building Trades Unions (CBTU), said it supports the federal government’s definition of prevailing wage based on union compensation and benefits as a measure that will directly benefit unionized and non-unionized skilled tradespeople working on eligible projects for employers who follow labour requirements, including a minimum of 10 per cent work hours performed by registered apprentices.

“Employers who adhere to these labour requirements will be able to receive tax credits of up to 30 per cent on eligible projects in clean technology, clean electricity, hydrogen and carbon capture,” he stated. “

“If implemented, this would be a monumental policy for Canada, and would allow us to remain competitive with the U.S. following the introduction of the Inflation Reduction Act. This policy benefits all construction workers in Canada — union, and non union.”

PCA repeatedly met with the federal government to express concerns, not objecting to workers getting paid well or even that unions would be used as a proxy, but that only one group of unions is being used as a proxy, de Jong said.

“There are other unions that are involved in this sector, so the idea that one union or group of unions would be picked made no sense to us,” he pointed out. “It kind of sparks to us the idea that the Trudeau government is picking winners and losers in this transition, and it really should be open to all.”

The legislation was tabled recently and PCA has been reviewing it and learning what it means for members.

“We’re asking the government and we’re asking leaders in opposition to endeavour to review the legislation before it is passed so that it is more even handed and treats all industry players with due consideration,” he said.

“We’d love to come to the table with some solutions. We think the Building Trades should be at that table, PCA should be at that table, CLAC (Christian Labour Association of Canada) and other progressive unions. The non-union sector should be at that table. If this is good for all of industry it should be good for all the stakeholders as well.”

He added, “Our desire is to meet with the government to help them to understand that picking one form of labour delivery is narrow minded and that they should be consulting all the industry.”

The federal department of finance issued the following statement in response to requests for comment: “The federal government is making over $120 billion in historic investments to grow Canada’s clean economy, including by creating clean technology investment tax credits that encourage employers to pay prevailing union wages and create apprenticeship opportunities. This was done deliberatively to ensure that the tax credits, by design, create and sustain good, high-paying jobs in Canada.”

Follow the author on Twitter @DCN_Angela.

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