Open Mind National 2013

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PM #40020055

A FORUM ON OPEN SHOP CONSTRUCTION

Labour Law: The dilemma of how construction rules vary from one jurisdiction to another

CONSTRUCTIONOWNERSHIP EVOLUTIONCanadian companies sharelessons learned

CHARTER

CHALLENGEDo open shop workershave the same rights as

unionized employees?

Volume 21 • Issue 2 • 2013

PLUS: Detailing the purposeof productivity in business

Levelling the Playing Field



| H E A V Y I N D U S T R I A L | B U I L D I N G S | C I V I L I N F R A S T R U C T U R E |

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partners who are passionate about what we do

and about our partners’ success.

Watch us build at PCL.com



OPENMIND 2013

ON THE COvEr

National AgendaBill C-377 makes waves across the

country and Merit Canada’s role in

levelling the playing field

By Terrance Oakey

Illustration by Isabelle Cardinal

25 The Demographic CliffThe federal government retools its former

programs, addressing the country’s shortage

of skilled tradespeople

By Bill Stewart

30 Quiet RevolutionQuebec’s corrupt construction industry takes

the country’s headlines by stormBy Ben Freeland

36 Productivity and PurposeIt’s about more than working harder.

Companies are realizing the benefits of

investing in efficiency

By Elizabeth Chorney-Booth

38 By the NumbersCanadian construction statistics

30

5 Message From MeritCanada’s ChairBy Curtis Monsebroten

6 ConstructionOwnership EvolutionLeadership styles and ownership

transitions set the stage for a

company’s success or failureBy Carissa Halton

12 The State of Labour LawConstruction labour laws vary by jurisdiction

and current government

By Peter Pilarski

16 Charter ChallengeOpen shop workers challenge the legality of

mandatory union membership requirements

on construction projects

By Nicholas Malone

20

12


6

Contents

16 25



That’s a Merit Contractor.

Merit contractors give you the best value and ensure your job is completed efficiently – with quality,

budget, safety and on time delivery as the top priorities.

Merit contractors

• complete your projects on time and on budget

• handle any size project, of any design

• have the qualified manpower to get your project done to your specifications

• are flexible and dependable

• have excellent safety records

Representing the voice of open shop construction in Canada, the eight provincial associations that

make up Merit Canada focus on the human resource needs of contractors by offering employee

benefits, training, retirement programs, tuition refunds, and more. Member companies work in all areas of the construction industry including residential, commercial, institutional, civil, and industrial.

www.meritcanada.ca1.877.41MERIT (63748)



Message From Merit Canada’s Chair

Publisher Ruth Kelly

Executive Editor Stephen Kushner

Associate Editor Suzanne Pescod

Editor, Contract Magazines Michelle Lindstrom

Production Manager Betty-Lou Smith

Production Technician Brent Felzien

Production Technician Brandon Hoover

Circulation Manager Sharlene Clarke

Vice-President Sales Anita McGillis

Advertising Representative Shane Kelly

Sales Assistants Karen Crane,Jennifer Rush

Art Director Charles Burke

Associate Art Director Andrea deBoer

Assistant Art Director Colin Spence

Contributing WritersElizabeth Chorney-Booth, Ben Freeland,Carissa Halton, Nicholas Malone, Terrance Oakey,Peter Pilarski, Bill Stewart

Contributing Illustrators and PhotographersSteve Adams, Michael Byers, Isabelle Cardinal,Dushan Milic, Heff O’Reilly

Open Mind is published two times per year by VenturePublishing Inc. for Merit Contractors Association.

Venture Publishing Inc.10259-105 Street,Edmonton, Alberta T5J 1E3Tel.: (780) 990-0839Fax: (780) [email protected]

Merit Contractors Association103-13025 St. Albert Trail,Edmonton, Alberta T5L 4H5Tel.: (780) 455-5999 or 1-888-816-9991Fax: (780) [email protected]

Merit Contractors Association is a non-profitorganization that offers human resource servicesto the open shop construction industry.

Printed in Canada by Transcontinental LGM Graphics

The opinions conveyed by contributors toOpen Mind magazine may not be indicativeof the views of Venture Publishing Inc. orMerit Contractors Association. While everyeffort is made to ensure accuracy, neither

Venture Publishing Inc. nor Merit ContractorsAssociation assume any responsibility orliability for errors or omissions.

Canadian Publications Mail Product Agreement#40020055

Copyright © 2013 by Merit Contractors AssociationNo part of this publication should be reproduced withoutexpress permission of Merit Contractors Association.


OPENMIND 2013 5

On behalf of Merit Canada,welcome to the 21st anniversaryedition of Open Mind magazineand the third edition for MeritCanada.

Curtis Monsebroten

CHAIR

MERIT CANADA

Open Mind is Canada’s only magazine dedicate

to the open shop construction sector,

focusing on issues that affect the livelihood

of an industry employing over one million

across Canada.

Terrance Oakey has been leading Merit

Canada’s advocacy since 2011. The past year

has been an interesting and progressive one for changes to national legislation

and the construction industry. In the article “Merit Canada’s Progress”

(page 20), Oakey breaks down the advancements in Bill C-377, changes to

outdated wage legislation, the issues of open tendering and the updates to theFederal Skilled Trades Program. Mr. Oakey’s time spent meeting with federal

representatives is one of the reasons Canada is seeing these new progressive law

take shape.

Does the Canadian Charter of Rights and Freedoms protect the rights

of open shop or non-unionized construction workers? Merit Manitoba is

supporting a group of construction workers who have led a Charter challeng

against Manitoba Hydro for requiring them to associate with a designated

union in order to work on government projects. Read about the journey that

has brought these workers to court to ght for their right to work in the article

“Charter Challenge” (page 16).

“The Demographic Cliff” (page 25) takes a look at the changes to federalimmigration policy in order to accommodate Canada’s need for a sustainable

labour force. With an estimated shortfall of hundreds of thousands of

tradespeople, how are the policy makers and the construction industry

working together to address this concern?

“Construction Ownership Evolution” (page 6) is an article that looks at the

ways contractors are either building, buying, selling or passing down their

businesses. With retirement just around the corner for many founders and

CEOs, what are the challenges they face when taking those next steps?

Productivity affects a company’s ability to remain competitive and the

article “The Importance of Productivity” (page 36) outlines the strategies

some companies use to increase their productivity through communication,planning and scheduling tools.

We hope you enjoy the 2013 edition of Open Mind , and as always we encourag

you to give us feedback or suggestions on future topics.

From all of us at Merit Canada, have a great 2013!


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ByCarissaHalton

I L L U S T R A T I O N

B Y : d U S h A N

m I L I c

Construction

Ownership



OPENMIND 2013

Expansions, mergers and retirements meancompanies may experience signifcant

changes in the workplace. How are thesechanges being handled by various frms?

lot can happen to a company in the span of a century. In 1912, when oil wells were dug by hand at thestart of the Texas oil rush, Bill Flint Sr. starteda company building wooden barracks in the

oilfield. His company grew and when oil gushed fromthe ground in Leduc, Alberta, the Flint family moved its

operations north of the border.One of the rst in energy eld construction, Flint Energy

Services Ltd. expanded and, in 1998, caught the interest of a venture capital company, SCF Partners. These wealthy,Texas oilmen were consolidators; they bought the Flintfamily’s Canadian operation and went on to makenumerous acquisitions. In 2001, Flint Energy went publicon the Toronto Stock Exchange and a hundred years afterFlint’s first sales in the Texas hinterland, the company was acquired for $1.25 billion by U.S. engineering company URS Corp.

Ownership changes are often an integral, strategic partof growth for the construction industry. “It’s a very dynamicsector. This is the normal business model,” says GuyCocquyt, vice-president of communications and researchfor URS Flint. “Companies are constantly being acquiredconsolidated or spun off.”

Changes in leadership also represent a natural trans-formation for a company. “A company’s evolution ofownership and governance happens often by default,” saysDr. Lloyd Steier, vice-dean and faculty at the University of Alberta’s School of Business.

“Usually in response to the challenge of succession, therecomes a time when all owners/founders must confront thisimportant issue. They then seek ways and means to pass it on.”

Sometimes these founders have a son or daughter who isinterested in taking the company on. Sometimes foundersturn to employees to buy them out. Others seek companies

A



with whom they might merge or partnerwith, or they take the company public.

No matter whether the impetus forchange is strategy or opportunity, every ownership transition presents differentopportunities and challenges irrespective of

a company’s own strengths, weaknesses andobjectives. A company’s evolution is uniqueto its position in the local marketplace, thestatus of the global marketplace, and itscompany goals and culture.

Three Companies,

Three Ownership Transitions

Don Daly started up Territorial Electric Ltd.in 1980 and based it in Edmonton, Alberta.More than a decade ago, he wondered abouthow he would transition into retirement.

“A lot of companies I associate with are inthe same state as we are,” he says. “The ownersare getting close to retirement and lookingfor ways to sell off their company. At least a half dozen of my competitors have wanted totalk to me about what we’ve done.”

Daly wanted to recognize the work of loyal employees that had stuck with himin good times and bad. After reviewing theoptions, he presented employees with whathis accountant called “golden handcuffs.”Initially, he sold a quarter of the company toeight employees, after devaluing the company

so it was easy for employees to buy in.Within a couple years, the employees’ initialinvestments were fully paid out in dividends.

“It’s been a success,” says Daly. Twelveyears after the process began, the employeesreorganized themselves and are now in thestages to buy Daly out completely.

Clark Builders started in Yellowknifein 1974 with two primary partners. As thecompany grew, it moved to Edmontonand the initial partnership was extendedto senior staff with an offer to buy shares

in the company. As the company expandedfurther, the employees sought to buy outthe initial two partners. After reviewingall the options, a strategic partnership waspursued, which allowed the employees tomaintain the company brand, managementcontrol and employee ownership modelthey liked. A partnership with U.S.-basedTurner Construction Company wascompleted in January 2012 when Turnerbought 51 per cent of the company, and 49per cent remained employee-owned. The

Construction Ownership Evolution

deal provided Turner with a strong presence

in the Canadian marketplace. Addition-ally, Clark Builders has access to additionalhuman resource support, staff developmentopportunities, expertise in different markettypes, and emerging technologies.

While Clark Builders sought a partnership with another similar company,Flint Energy Services sought a way toexpand its expertise to broader projectswithin the oil and gas market. Flint sharedno overlapping services with URS Corp.when it was acquired in 2012.

At the point of acquisition, Flint wason target to hit $2 billion in revenue. Evenat the size and scope of Flint’s operations,the oil and gas company found itself shutout of many larger oilsands projects whereEngineering, Procurement and Construc-tion (EPC) contracting was increasingly being used. EPC contracts requirecontractors to bid on the whole project:design, build and commission. “The only way to do that is with a large engineeringcompany,” says Cocquyt. “Flint couldn’t do

this alone, so we looked at different options

mergers, joint ventures.” At the same time,URS Corp. began looking for new oppor-tunities in the energy sector. A year after theownership change, Flint URS has alreadybegun to introduce Flint customers to theadditional suite of services URS brings to Alberta and, as hoped, the company is nowbidding on EPC projects.

Keys to Success

When it came to its strategic partnership,Clark Builders spent approximately two

years on due diligence, “We took a deep diveinto each other’s business to get an under-standing of what is ‘below the clothes,’ ”says Brian Lacey, vice-president construc-tion at Clark Builders.

In this “deep dive” Clark didn’t just lookat nancials, legal and safety issues; it alsobroadened the scope to include a review ofcompany culture. “You run a real risk bylooking at the nancial deal and not payingattention to the cultural concerns,” Laceysays, noting such risks include a company

8 OPENMIND 2013





that they were all working towards a common goal,” says Lacey. “That gave usa good feeling for the pulse of the projectand the company.”

Lacey is confident that the transitionhas gone so successfully because they addressed company culture as being animportant symmetry. He does caution,“It is a demand on the business – the

time and resources required need to befully recognized and the time set aside. Itcould be a year, year-and-a-half, of majordisruption, but the investment is in the

future success of the company.”Territorial Electric’s Daly stresses

one thing to people who ask him aboutthe success of his company’s ownershiptransition, “If you think it’s going to takefive years, double it. Everyone is busy running a business. If something is goingto get pushed to the back burner, this is it.”

Successful ownership changes taketime, not only for due diligence, but also forthe transition of new people, processes andexpectations. For instance, Cocquyt now

coming in and changing things overnight.Both companies sent staff to visit the

other’s sites. Clark Builders brought a range of people, from upper managementto day-to-day operators, to Turner projectsin Chicago and Seattle. “The day-to-day operators are the ones who have to livewith outcomes. They ask the questions thatsenior management aren’t considering,”

says Lacey. “They see the workthrough a different paradigmand I think it is critical companies value that perspecti ve.” Staff members were also encouraged togo out for dinner, exchange storiesand “let their guard down.”

Clark Builders shared itsemployees’ feedback regarding key symmetries in safety, schedule, quality andbudget that was assessed on score cards ona Turner Construction job site. “You can get

a good idea of a company’s approach after just a half hour on a job site,” says Lacey.On site, they asked: What is the level of control and management that’s supplied? Iseveryone getting along? Are superintendentsgetting phone and radio calls about thingsthat could have been organized throughplanning? It was important to Clark Buildersto indicate to its partnering company whatwas important to its existing staff.

“We found that any one of their peoplecould tell us the end date, which told me

ConstructionOwnershipEvolution

Successful ownership changes taketime, not only for due diligence,but also for the transition of new

people, processes and expectations.

has a new ownership team to report to andthere is extra work required in educatingnew people to the business. Also, nomatter how much or how little operationaloverlap there is, it takes time to integrate

large accounting and data systems. Flint’saccounting team, for instance, had toconvert its reporting system from IFRS(the system for publicly traded companiesin the Canadian industry) to the AmericanGAP system. “It went really smoothly,” saysCocquyt, “because we have good people.”

People cannot be overlooked in thesuccess or failure of a transition. Daly hired,retained and rewarded employees whoshowed passion and trustworthiness. Healso relied heavily on his accountant and

lawyer so that the ownership transition wasdone properly.When it comes to actually making the

changes, the key to a successful transitionis managing these changes carefully. “Werecognized it can be very disruptive,” saysCocquyt. “What I liked about this transitionwith URS is that Flint’s employees woke upand experienced no management or systemchanges. With very little distraction, we wereable to focus on customer service.”

Poorly managed transitions can threatenthe very thing that made a company

successful in the rst place, suchas positive relationships withclients and the community. Inthe event of making big changes,like integrating operations,Cocquyt recommends doingthem as quickly as possible.Of course, less overlap or

redundancy makes for less change in thecompany, its staff and client experienceCocquyt says the successful mergers tend tobe the ones with little to no redundancy.

It is a Global Marketplace

Alberta’s construction industry is dynamicand growing and, with further instabilityin global markets expected, companies canbe certain that even more internationalcompanies will invest in Alberta’s construc-tion industry. “We’ve really been shelteredfrom recession in Alberta,” Lacey says. “Whenrms realized loss of opportunity in the U.Sor Europe, everybody has focused on Alberta(and Canada) as a land of opportunity.”



GOLDEN HANDCUFFS

Employee-owned companies represent some o Alberta’s largest constructionorganizations, like PCL and Graham Construction.

Dr. Lloyd Steier, vice-dean o the University o Alberta’s School o Business,says, “It is oten in a company’s best interest to share the profts o a company

with those who helped make the profts. It’s simply good business (and) a greatway to motivate people who, in turn, work hard and stay with you.”

Oten used as a human resources strategy, employee ownership can alsorepresent a growth opportunity. “Look at the example o WestJet,” says Steier.“Their proit-sharing may have been a HR strategy but it is pivotal to theirsuccess in the marketplace.”

For Don Daly, ounder o Territorial Electric, sharing the company ownershipwith his employees ensured that his hardest-working employees didn’t leaveto start their own companies, eectively becoming competition. “I wanted mylong-term, loyal employees to be rewarded. They all demonstrated over theyears that they had gone over and above their call o duty. They showed passionand were absolutely trustworthy.”

By keeping senior leaders, the company was able to ramp-up quickly andeectively. “We had trusted people to run feld ofces on the larger projects,”says Daly. Thanks to the golden handcus, this capacity or growth positivelyimpacted the employee-shareholders at the most basic level: fnancially. Foreveryone, ounder and sta-owners, it made good dollars and sense.

“Globalization is a fact of life,” Dr. Steiersays. “Our industry has to be resourcefuland resilient to survive.” Lacey and ClarkBuilders know this first-hand. “Thereis no option; we must be economical and

efficient in order to compete,” says Lacey,adding that the partnership with Turnerstrategically positions Clark to achievethis goal.

When it comes to Daly’s goal to retire,he’ll soon realize it … sort of. He was askedby the new owners to stay on to make coffeeand steer the ship every once and a while. “Idon’t think I can go from 100 miles an hourto one overnight,” he says.“Besides, my wifetold me I better not plan to sit across thetable from her all day: she says one of us

won’t survive.”No matter how retirement treats Daly, atleast he knows that his company has beenleft in good hands. It is owned by people hetrusts who will not only see that TerritorialElectric survives, but thrives.

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B Y : H E F F O R E I L L Y



OPENMIND 2013 13

By Peter Pilarski

Provincial governments playa signifcant role in shapingthe construction industry.How do the political intentionsaect the market?

anada’s labour laws are dierent provincially and

federally, with the construction industry generally falling under provincial jurisdiction. As such, laws aresubject to change depending on the shifting politicalpriorities of the government of the day. It is not unusual

to see labour laws change signicantly when a new party is electedand forms government.

When the House of Commons debated and eventually passedBill C-377, the issue of union financial disclosure became a hottopic in Canada. The bill, “An Act to Amend the Income Tax Act

(requirements for labour organizations)” was a private member’sbill introduced by Russ Hiebert, Conservative MP for SouthSurrey – White Rock – Cloverdale. Assuming its approval by theSenate, Bill C-377 makes it mandatory for unions and relatedorganizations to file an annual standardized set of financialstatements and schedules with the Canada Revenue Agency.

This degree of transparency will al low Canadians access tocrucial information in a manner similar to that found in theU.S., U.K., Australia and many other countries where unions areheld to higher degrees of accountability. Canadians will f inally be able to see, in online statements, how more than $4 billion intax-free dues are spent.

BRITISH COLUMBIA

B.C’s political f luctuations have jeopardized the province’s posi-tive advancements made in its labour code provisions. Althoughwe don’t know which party will form the next B.C. government Adrian Dix, the leader of the B.C. NDP, said in a November 2012speech, “I want to make it clear that I am proud of the work I’vedone for years, side by side with labour unions.” He continued,“The labour movement and NDP have done great things, butour best days are still ahead of us.”

In December 2012, Dix supported eliminating the secret bal-

lot when workers vote on whether to join a union. Abolishingthis practice eliminates a worker’s ability to fairly express hisopinion without fear of intimidation.

ALBERTA

The Alberta government has not changed its labour code since2008 when Bill 26, the Labour Relations Amendment Act waspassed. It dealt with unfair union organizing and job targetingbid-subsidy schemes.

Since then, a group of Alberta’s leading industrial contractorsformed the Construction Competitiveness Coalition (CCC) toanalyze Alberta’s labour environment and provide recommen-

C



bargaining in construction and health-care sectors.

The “Saskatchewan Employment Act”has yet to be passed.

MANITOBA

A group of construction workers support-ed by Merit Manitoba is currently taking

Manitoba Hydro to court to challenge thelegality of project labour agreements beingimposed on all major hydroelectric con-struction projects.

The court challenge argues that theManitoba Hydro agreements violate theCanadian Charter of Rights and Freedomsby requiring workers who have not selecteda union, to join a union and pay uniondues as a condition of employment.

The court proceedings are at anearly stage, and it will take time before a decision is rendered.

ONTARIO

Liberal leader and Premier DaltonMcGuinty announced his resignationshortly after winning a minority gov-ernment, and prorogued the provinciallegislature. His government is supportedby Working Families, a coalition of unions.It brought in legislation that revoked thesecret ballot vote on unionization elec-tions for the construction industry. TheOntario Liberal Party selected Kathleen

Wynne as its new leader. At this time, it’stoo early to know her planned approachon labour legislation.

The Ontario Liberal government, alsoat the behest of unions, introduced leg-islation creating the Ontario College of Trades – perceived by industry as turningcontrol of apprenticeship over to the prov-ince’s unions.

Ontario’s Official Opposition Pro-gressive Conservative caucus released a white paper in June 2012 titled “Paths toProsperity – Flexible Labour Markets,”

which contained a series of compellingrecommendations on labour reform. Itsuggests that no clauses in any provin-cial legislation, regulation or collectiveagreement, should require a worker tobecome a member of a union or pay uniondues as a condition of employment. Alsoincluded is that union leaders should be

more accountable for how union dues arespent. Further, employers should no lon-ger collect union dues through paychequedeductions and should not have to collectdues on behalf of the union. The paperrecommends amendments to legislationensuring unions provide transparentdisclosure on union revenues and unionspending.

The PC white paper encourages the res-toration of secret ballot voting to ensureworkers are shielded from potentialintimidation from union organizers and

employers – a right taken away in construc-tion by the provincial Liberal governmentin 2005.

QUEBEC

It is still il legal in Quebec to operate anon-union construction company, eventhough the province’s high-profile Char-bonneau Commission continues toexpose the corruption and scandal thatdefines the way organized crime operatesin the construction industry.

The Charbonneau Commission isscheduled to hear evidence for years tocome, and it seems unlikely that anychanges will be introduced before thecommission concludes its work.

NOVA SCOTIA

In 2011, Nova Scotia’s NDP governmentpassed Bill 100 and 102. Bill 100, an “Actto Establish a Unified Labour Board,”effectively guarantees successor rights topublic sector unions. And Bill 102 allowsan arbitrator or the Nova Scotia Labour

dations to reform A lberta’s labourrelations rules, improving the competi-tiveness of its construction industry.Some of these recommendations formedpart of the PC election platform.

During the 2012 provincial election,

the PC party’s election campaign pro-posed amending Alberta’s Labour Code.This included introducing the “PaychequeProtection, Transparency and Freedomto Choose Act”, making it mandatory forunions to provide members with annualfinancial statements disclosing unionspending, providing members the ability to opt out of paying the portion of duesspent on activities unrelated to collectivebargaining and grievance administration.

The PC party platform promised to

amend the Labour Code banning theimposition of fines against memberswho work for non-union employers oremployers with a non-signatory unionand enabling parties to negotiate singlecollective agreements for all company workers or projects, rather than separateagreements for each trade group.

Since the election, the PC governmenthas not implemented any of these pledges.

SASKATCHEWAN

On May 2, 2012, the Government of Sas-

katchewan issued a call for submissions,in response to a consultation paper onreforming provincial labour legislation.The government’s consultation paperasked stakeholders for feedback on 15pieces of legislation, governing every-thing from employment standards tooccupational health and safety to collec-tive bargaining legislation and the “TradeUnion Act.” The government receivedmore than 3,800 submissions.

On December 4, 2012, the Govern-

ment of Saskatchewan introduced the“Saskatchewan Employment Act,” whichconsolidated 12 acts into one updated andcomprehensive act. The new act includedthe ability of employers or employees todecertify a union that has been inactivefor three or more years and made it morediff icult for a union to fine a member forcrossing a picket line. Following an unsuc-cessful application to decertify a union,and after waiting 12 months, employeescould apply to decertify the union again.The new law will maintain province-wide

TheStateofLabourLaw

Assuming its approval by the Senate, Bill C-377makes it mandatory or unions, and related

organizations, to fle an annual standardizedset o fnancial statements and schedules with

the Canada Revenue Agency.



quickly passed Bill 37 in July 2012, whichdenies workers basic democratic rights to a secret ballot vote in a unionization election.

Newfoundland and Labrador’s new card-check certification removes the requirementfor a secret ballot vote if the union submitsevidence that 65 per cent or more of employ-ees in the bargaining unit sign a unionmembership application.

Bill 37 included a one-time final offer bal-lot option, giving an employer the right torequest that its final offer be put to the mem-

bership in a provincially supervised vote.The bill introduced potential access to firstcontract interest arbitration at the labourboard’s discretion. Section 25 of the codewas changed to give employers the right toengage in non-threatening and non-coercive

speech, and to give the labour relations boardremedial powers to deal with unfair labourpractices.

These changes came as a surprise toemployers in Newfoundland and Labradorand were introduced quickly after very littleconsultation.

CONCLUSION

Employee or employer rights can be easilystripped with changes to legislation. Gov-ernments need to take time to listen to all

stakeholders before considering labourlaw reform. As we have seen, an electioncan mean costly changes, and the ever-shifting political priorities of those inpower have a signif icant affect on indus-try and the individual.

Relations Board to impose a first collec-tive agreement. Merit Nova Scotia fiercly opposed both pieces of legislation asdid the rest of Nova Scotia’s businesscommunity.

Nova Scotia’s business community isunited in its opposition to first contract

arbitration and has urged the NDP gov-ernment to reconsider its legislation.

Progressive Conservative Party leader Jamie Baillie promised that, if elected, hewould focus on economic and job creationmeasures while eliminating the harmfullabour legislation brought in by the NDP.

Liberal leader Stephen McNeil statedthat first contract arbitration is “againstthe spirit of the collective bargaining pro-cess, slanting it in favour of the union,”but he has not committed to any changes

should his party form government afterthe next election.

NEWFOUNDLAND AND LABRADOR

Newfoundland a nd Labrador Con-servative Premier Kathy Dunderdale

Merit Contractors Association, Alberta Venture and the Alberta Roadbuilders and Heavy ConstructionAssociation extend their thanks to the generous sponsors and to everyone who attended theContractor of the Year Awards Gala!

THANK YOU

CONGRATULATIONS TO ALL THE FINALISTS AND WINNERS OF THIS YEAR’SCONTRACTOR OF THE YEAR AWARDS!

Presented by Sponsored by Dessert Sponsor

The State of Labour Law

It is not unusual to see labour lawschange signifcantly when a new party is

elected and orms government.



ILLUSTRATION

BY:mIchAeLBYeRS



OPENMIND 2013 17

Mitob costructio workrsqustio vi to joi d pyuio dus to b b to work oovrmt ydroctric projcts

o wt xtt c ovrmt rquir individual to become a member of a union, and topay dues to that union, as mandatory conditions

of employment? Does the Canadian Charter of Rightsand Freedoms protect the right of open shop or non-unionized construction workers? Does it allow them towork on hydroelectric projects without being compelledto join and lend nancial support to a union they havenever belonged to? These questions are at the core of a legal action filed in the Manitoba Court of Queen’sBench last summer.

T

By Nicholas MaloNe

CharterChallenge



Five local construction workers, withthe support of the Merit Contractors Association of Manitoba as co-plaintiff,are challenging Manitoba Hydro’s author-ity to require them to join and pay dues to

a union in order to work on hydroelectricconstruction projects.

Although focused on the provisionsof two collective agreements imposedby Manitoba Hydro on open shopcontractors and their employees,the case should serve to highlight a widespread and deeply entrenchedlabour policy in Manitoba thatputs the interests of trade unionsover the charter-protected rightsof workers who chose to remain

non-unionized.

The Floodway Expansion ProjectThe case can trace its origins to theManitoba government’s decision toimpose a collective agreement on a con-struction project known as the Floodway Expansion project in 2005. The originalproposal attempted to force open shop con-tractors to have their employees sign unioncards and pay union dues as a conditionof employment. The government justied

its decision by asserting that these clauseswere necessary to complete the project “ontime and on budget” by preventing strikesor lockouts. However, faced with prolongedmedia attention and lobbying efforts by local industry partners, the governmenteventually agreed to remove the mandatory union membership clause from the agree-ment. As much as they found the remain-ing provisions of the agreement distastefulwith respect to the mandatory payment of dues, a number of open shop companiesnevertheless decided to bid on the project.

Unfortunately, this relatively success-ful challenge to the terms of the Manitoba Floodway scheme failed to produce any long-term change in the government’s labourpolicy agenda. In fact, as recent develop-

ments have shown, the use and impositionof restrictive Project Management Agree-ments (PMAs) are likely to continue to affectlarge-scale public infrastructure projectsin the province for years to come. Of evengreater concern to open shop contractors isthe lack of any meaningful con-sultations or compelling jus-tifications for these policies,which, to a large extent,primarily impact therights and employment

prospects of thousandsof open shop or non-unionized workers inthe Manitoba construc-tion industry.

The East Side Road ProjectDecisions surrounding the East Side RoadTransportation Initiative illustrate the on-going concerns and frustration that openshop contractors and their employeesexperience on this issue. With a budget of

approximately $3 billion, and with morethan $50 million in awarded tenders, theEast Side Road project will lead to the con-struction and maintenance of an all-sea-son road running 156 kilometres along theeast side of Lake Winnipeg. This project isamong the most signicant and ambitioustransportation initiatives in recent Mani-toba history, both in scale and by referenceto the extent of public and environmen-tal consultations involved. This projectundoubtedly holds significant opportu-nities for a wide range of Manitoba com-

panies and workers, whether union oropen-shop, and should have attracted bidsby a number of open shop contractors.

It was only after the tendering docu-ments for some of the initial East Side

Road projects became available in 2011that contractors first became aware thatanother PMA (largely modelled on theFloodway agreement) would again subjectopen shop contractors and their employ-ees to mandatory union dues and fees as acondition of employment.

Manitoba HydroBy 2011, open shop contractors and theiremployees learned that another govern-ment-directed collective agreement would

apply to the Bipole III Transmission LineProject, a project Manitoba Hydro under-took for the construction of converter sta-tions and a new transmission line spanningover 1,300 kilometres from the Lower Nel-

son River generating stationto southern Manitoba. The

constructionand maintenance of Bipole

III is expected to create economic oppor-tunities for local and out-of-province com-panies for years to come. The Bipole IIIPMA not only requires its workers to payunion dues and fees but also forces them,as mandatory conditions of employment,to join either IBEW Local 2034 or IUOE

Local 987. The government made thedecision to impose this collective agree-ment on open shop contractors and theiremployees, once again, without any priorconsultation.

Open shop contractors immediatelyexpressed their concern that, absent anycompelling justification, these offensiveand restrictive provisions amounted to abreach of their employees’ charter rightsMerit Manitoba urgently requested to meetwith the premier or the minister responsiblefor Manitoba Hydro, but the government

CharterChallenge

Does the CanadianCharter of Rights andFreedoms protect therights of open shopor non-unionized

construction workers?



denied the request. Instead the govern-ment provided a letter stating its rationalefor requiring open shop or non-unionizedworkers to join IBEW or IUOE, and topay dues to these unions, as conditions of

employment on the Bipole III project. Asidefrom an unequivocal position that thispolicy was simply “good business” forManitoba, the letter also disclosed a famil-iar set of justifications, namely to ensureworkplace safety and to prevent strikes orlockouts. Needless to say, these purported justifications proved even more perplex-ing to open shop contractors. Manitoba contractors, whether union or open-shop,are all subject to the same Certicate of Rec-ognition safety standards program, which

is administered by the Manitoba Construc-tion Safety Association.Both in form and substance, the Bipole

III collective agreement is not without prec-edent. Beginning in the late 1960s, majorhydroelectric projects in northern Mani-toba were traditionally subject to manda-tory (and similarly restrictive) collectiveagreements. These ad-hoc agreements, asnegotiated between local trade unions andthe Hydro Projects Management Asso-ciation (a negotiatingand contracting agent

for Manitoba Hydro)are now embodied in a model PMA known asthe Burntwood Nel-son Agreement (BNA),providing for unionmembership and thepayment of dues asmandatory conditionsof employment.

The practical and intended effectof the BNA and Bipole III agreement

on open shop contractors and theiremployees became clear when employ-ees reported to a BNA-covered projectlast spring. One of these employees, a co-plaintiff in the case launched last sum-mer, signed a union membership cardonly under threat of being removed fromthe worksite if he didn’t. Mirroring theexperience of most, if not all open shopcontractors who worked on the Floodway project, the employee’s refusal to consentto the deduction of union dues from hiswages also forced his employer to make

these payments on his behalf.The legal action led in June 2012 will

focus on the provisions of the BNA andthe Bipole III PMA. The action puts for-ward two principal arguments.

The rst argument is that the require-ment to join a designated trade union inorder to work and/or to remit dues tothat union, whether or not the employeewishes to be a member of that union vio-lates the affected employee’s freedomof association under section 2(d) of thecharter. This argument follows a 2001decision by the Supreme Court of Can-ada (R. v. Advance Cutting & Coring Ltd.,[2001] 3 S.C.R. 209, 2001 SCC 70), whichrecognized that the freedom of associa-

tion guaranteed under section 2(d) of thecharter includes an individual’s right notto associate.

The second argument is that, hav-ing been compelled to join a union orto remit union dues in order to workon the project, the employee’s freedomof expression, protected under s. 2(b) of the charter, is violated. This is becauseunions publicly support political partiesor policies that employees do not nec-

essarily support. Employee-compelledunion dues sometimes provide nancialsupport to political or ideological causes

not supported by the employee.Preliminary motions filed by Mani-

toba Hydro and other co-defendants arescheduled for May 2013. The law rm of Heenan Blaikie LLP is representing theplaintiffs, including Merit Manitoba,with a team of counsel led by Peter Gall,Q.C., who appeared before the SupremeCourt of Canada representing open shopcontractors from outside Quebec in the Advanced Cutting and Coring Case.Open shops are eagerly awaiting theresults.

A co-plaintiff in the casesigned a union membership

card only under threat ofbeing removed from the

worksite if he didn’t.

Elan Construction Limited

#100, 3639-27th St. N.E.

Calgary, AB T1Y 5E4

Tel: (403) 291-1165

Fax: (403) 291-5396

elanconstruction.com

General Contracting

Project Management

Butler Building Systems

Design/Build Contracting




B Y : I S A B e L L e c A R d I N A L



OPENMIND 2013 2

By Terrance Oakey

Reviewing the progress of Canada’s open shop sectorand Merit Canada’s work

Union Financial Transparency

The House of Commons passed an impor-tant piece of legislation in December 2012:Bill C-377 (An Act to Amend the Income Tax Act – Labour Organizations). It was sponsored

by British Columbia MP Russ Hiebert and willrequire unions and other labour organizationsin Canada to le annual public reports detailingtheir financial statements, salaries paid to topemployees, time spent on lobbying and politicalactivities, and certain information about expen-ditures over $5,000. If this legislation is passedby the Senate, it will shine a light on the morethan $4 billion that unions collect annually inforced contributions from workers and bringCanada’s union nancial disclosure laws in linewith those in Australia, New Zealand, Germany,

France, Ireland, the U.K. and the U.S.Canada’s union leaders spent vast amounts

of money trying to defeat this bill – a massivelobby that is expected to continue as the Senatereviews the legislation. This is despite the fact

that the House of Commons already amendedBill C-377 to address most of the concerns unionleaders raised. The interventions from unionleaders that resulted in amendments made ita better piece of legislation, and contrary tounion rhetoric, the reporting requirements arenot onerous and will be easy to implement withbasic accounting practices. Yet union leadersstill oppose the bill, suggesting the real motivation for their campaign against it is a refusalto concede that they need to operate in a moretransparent manner.

he open shop sector and the forces of free enterprisesaw another year of substantial progress in 2012. Merit

Canada’s progress was met with opposition at every turn by the leadership of the building trades unions and their alliesin the broader left-wing labour movement. Positive reformstook place dealing with immigration reform, union nancialdisclosure, the Federal Fair Wage Act and open tendering.



1930s to regulate the wages and hours of labour for construction workers engagedin projects funded by the Government of Canada. Back then, there were few, if any,laws and regulations in place at any level to

protect the interests of workers. The worldis much different today and there are a hostof provincial and territorial measures inplace to enhance and protect working con-ditions, employment standards, labour rela-tions, wages and hours of labour.

There is no longer any valid need forfederal government regulation in thisarea. According to Statistics Canada, con-struction workers are paid an average rateof $28.35 per hour in our country. This

makes them the second-highest-paidworkers, exceeding the national average by some 30 per cent.

After 80 years, the Fair Wages Act wasoutdated, created unnecessary adminis-trative costs for the government and theconstruction industry, infringed on the

jurisdiction of the provinces and territories,and signicantly increased the burden onCanadian taxpayers.

The Fair Wages Act obliges companiesto establish dual-wage structures for private- and public-sector work. Many smalland family-run open shop constructioncompanies simply refuse to bid on federalprojects because of this costly and burdensome legislation. And what is the result? Lowerlevels of competition and

increased construction costsfor the government.

Repealing the Fair Wagesand Hours of Labour Actsets the stage for millionsof dollars in savings for gov-ernment and taxpayers. Theantiquated wage regulationsneedlessly increased the mar-ginal cost of labour. This, inturn, discouraged employ-ers from hiring additionalworkers, even during times

MeritCanada’sProgress

of peak demand. Who gets hurt here? New job seekers, in particular, young people andother groups under-represented in the con-struction trades, such as women and FirstNations. The construction industry is vital

to Canada’s economic health. We need com-petition governing legislation that reectsthe society and market conditions in whichwe live today – conditions far different thanthose of the Great Depression.

Open Tendering

What rules should the federal governmentuse when spending federal monies on infra-structure projects? As governments acrossthe country face nancial pressures, thereis a renewed need to take action on out-

dated regulations and red tape that increaseconstruction costs. While the federal gov-ernment requires open and competitive bid-ding for its own infrastructure projects, thesame is not true for all jurisdictions acrossthe country.

Instead of allowing open tendering,many jurisdictions have rules that allowonly certain companies, with agree-ments with pre-selected unions, to get allof the contracts. Non-union constructioncompanies or companies with membersof the wrong union aren’t even allowed

to bid.In Hamilton, Ontario, of approximately

260 contractors, only 17 contractors hadworkers registered with the proper unionthat city rules require. Ninety-four percent of the available companies aren’t evenallowed to bid on projects. In one case, thecity disqualied four out of seven bids for a

Repealing the Fair Wages and Hours of Labour Actsets the stage for millions of dollars in savings for

government, open shop companies and taxpayers.

While union leaders applied intensepressure on MPs who supported the legis-lation to change their position, those MPsrecognized something that labour leadersdid not: 86 per cent of unionized workers

support greater nancial transparency forunions. Therein lies the fundamental dis-connect between union leaders and BillC-377. The disclosure provisions of thelegislation should empower union lead-ers since their members will easily be ableto see how the union spends their dues.In fact, the whole union model of forcedcontributions and generous tax breaks willbe enhanced when the general public isable to see how unions spend their money.

If unions want to continue to benet fromthe public trust, they need to earn it by operating in a transparent manner.

We should applaud the members of Parliament who voted in favour of BillC-377 for their support of transparency and accountability. They recognize that

unions cannot benet from the public trustthrough forced contributions from workerswhile simultaneously receiving generoustax breaks worth more than $400 millionannually. To argue that unions have nopublic disclosure obligations simply deescommon sense.

Federally Regulated Wage Rates

In the 2012 spring budget, the Harpergovernment repealed the Fair Wages andHours of Labour Act, better known as the

Fair Wages Act. This was a long overduepolicy change that treats the constructionindustry like any other industry that doesbusiness with the federal government. Itwas a good policy change for workers, gov-ernments and taxpayers.

Merit Canada is a strong supporter of thegovernment’s decision as Merit believes thatconstruction contracts, employment andindividual compensation in the construc-tion industry should be based on merit,regardless of employee afliation.

The Fair Wages Act was adopted in the



multimillion-dollar construction contractbecause bidders weren’t afliated with theproper union.

This also creates problems for workers.If the companies they work for aren’t even

allowed to bid on construction projects,how can their company compete and keepworkers? As Penny Allen, the Greater EssexCounty District School Board’s super-intendent of business argues: “It’s notfair. All contractors pay taxes, but we, as a publicly funded body, can only put ourtenders out to certain contractors thatare unionized.”

It is surprising that in 2012, so many Canadian cities still have rules on thebooks that allow contracts to only be bid

on by those afliated with certain unionsand exclude all others. Cities such asToronto, Hamilton, London, Oshawa,Thunder Bay, New Westminster andBurnaby, and provincial agencies suchas Ontario Power Generation and Hydro

One, and even school boards have rules inplace that restrict open bidding.

Recent media reports on the TorontoDistrict School Board’s problems withrepair work show all too well the conse-

quences of such restrictive bidding proc-esses. Costs are inated ($143 to install a pencil sharpener), productivity is reduced(bills were inflated to cover workers whodid not show up), and who is left with thebill? The taxpayer.

Canadians know that allowing only one pre-selected bidder on every singleconstruction contract is not the best way to go. No Canadian family would operatethat way with their own home renovationprojects. Opening up bidding allows for

competition and leads to lower costs andhigher productivity.The Canadian government is invest-

ing $2.275 billion under the Provincial-Territorial Base Fund. Consideringthat labour costs amount to as much as

40 per cent of a construction projectand that open-shop contractors offer thesame services at up to 10 per cent lowercosts, savings to Canadian taxpayersfrom this policy could amount to up

to $91 million – and that’s just oneinfrastructure agreement.

U.S. studies suggest that closed tender-ing rules increase the cost of constructionbetween 12 and 18 per cent. The City ofHamilton estimates that restrictive clausesinflate the prices of its constructionprojects by up to 40 per cent. By allowingprovinces and municipalities to spend fed-eral funds through their closed tenderingprocesses, the costs of projects increasefewer projects get funded and fewer jobs

are created. Higher costs mean lost oppor-tunities and wasted tax dollars. Providingequal opportunity for all contractors tosubmit their best bids will increase com-petition and ensure that Canadian taxpay-ers receive the best value for their money



Merit Canada’s Progress

Federal rules would ensure that local gov-ernments would behave more equitably when spending federal tax dollars.

Federal Skilled Trades Program

According to the Construction SectorCouncil, there will be a shortage of over300,000 skilled tradespeople in Canada by the end of the decade. Merit Canada strongly supported the new Federal Skilled

Trades Stream announced by Citizenshipand Immigration Minister Jason Kenney.This change is long overdue.

Canada’s immigration system mustrespond better to the needs of employers toensure those immigrating to Canada havethe skills required to obtain long-term sta-

ble employment. It is sound public policy to have an immigration system that worksto ensure long-term growth and prosperity for Canada.

Merit also welcomed announcedchanges to the Skilled Worker Program.Changes to the criteria for acceptance of admission outlined by Minister Kenney ensures immigrants will have jobs waitingso they can provide for their families.

The nal changes to the Federal SkilledWorker Program selection criteria include:

• Minimum official language thresh-olds and increased points for officiallanguage prociency, making languagethe most important factor in the selec-tion process;

As governments across the country ace fnancial

pressures, there is a renewed need to take action

on outdated regulations and red tape that increase

construction costs.

• Increased emphasis on younger immi-grants who are likelier to acquireCanadian experience, likelier to adapt tochanging labour market conditions, andwho will spend a greater number of years

contributing to Canada’s economy;• Introduction of the EducationalCredential Assessment (ECA), so thateducation points awarded reect the for-eign credential’s true value in Canada;

• Changes to the arranged employmentprocess, allowing employers to hire appli-cants quickly, if there is a demonstratedneed in the labour market; and

• Additional adaptability points forspousal language ability and Canadianwork experience.

Merit Canada’s Ottawa ofce has beenoperating for almost two years, yet itsimpact to industry has already been sub-stantial. Merit Canada will continue toliaise with government officials on theseand other priorities of concern to the openshop contractor.



OPENMIND 2013 25

Fd mmgon foms cn hp h consuconndusy cop h shog of skd oks

espite the best efforts of governments, business associationsand contractors to promote apprenticeship programs, improveproductivity and reach out to under-represented communities,

orecasts continue to indicate that there is an imminent and signifcantshortall in domestic human resources. In short, Canada’s labour orce isdangling on the edge o a demographic cli.

According to Human Resources and Skills Development Canada (HRSDC), the median age o Canada’s population in 1971 was 26.2 yearsold. As o 2011, the median age was 39.9 years. Our working-age populationis expected to decrease by 13 per cent over the next ew decades.

by Bill Stewart

Cliff D



More than 20 per cent of the currentconstruction industry workforce isexpected to retire over the next sevenyears. According to the ConstructionSector Council, this will contribute toa nationwide shortage of 300,000construction workers, and ourindustry will feel the impacts.

The Construct ion Owners As so ci at io n of Al be rt a (C OAA)is a major group of purchasers of construction services – many of

which are involved in developingoil- sands in northern Alberta. Theindustry estimates current andintended investment to be $250billion, and COAA members havea significant interest in constructionworkforce issues. In 2011, they estimatedthat industry would need almost 160,000offshore construction workers overthe next seven years to meet projectedconstruction needs.

For years , most of the 250,000permanent immigrants coming to Canada

annually came in under the FederalSkilled Worker sub-category. Changesin immigration legislation in 2002established selection criteria based onthe theory that the more education an

immigrant had, the more likely he or shewould be to succeed in resettling.

Consequently, 46 per cent of admissionsunder the Skilled Worker program held a master’s degree or PhD whereas only threeper cent of admissions held a formal tradecertificate. The result for constructionwas that fewer than 700 immigrants with

The Demographic Cliff

trades training were admitted to Canadaannually while countless numbers offoreign-trained doctors, accountants andnuclear physicists were underemployedas janitors, caretakers or taxi drivers. The

law at the time also stipulated that allapplications be processed in the orderin which they were received, whichresulted in a backlog of hundreds ofthousands of applications.

With apprenticeship trainingprograms running at unprecedented

levels and the industry experiencingfull employment, many contractorswere forced to resort to short-terminternational recruitment throughthe controversial federal Temporary

Foreign Worker (TFW) program. However,this program was fraught with bureau-cratic red tape and delays too.

Many of the problems associated withthe TFW program are attributed to itbeing jointly administered by two federaldepartments. Prior to offering temporaryemployment to a foreign national,

Our wOrkINg-agE POPulatION

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13 PEr cENt OvEr thE NExt

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the employer must obtain a Labour MarketOpinion (LMO) from HRSDC. HRSDC’srole is to certify that the employer made

reasonable efforts to recruit within Canada rst and that the terms and conditions of employment are not fraudulent and inaccordance with prevailing local wagerates and employment standards.Once the employer obtains theLMO, the employer and prospectiveemployee must then satisfy both CICand provincial regulatory authoritiesresponsible for accreditation, thatthey are eligible to work temporarily in Canada.

Employers experienced tremen-dous difficulty with the TFW program. The Auditor General of Canada (AGC) delivered a scathingcritique of how the LMO processwas administered. An audit noted,“We found that directives on how to assess whether employers meet someor all of the factors outlined in theregulations are not clear or incomplete;interpretations vary from one regionaloffice to another and even within thesame ofce.”

That Was Then, This is Now

In spring 2012, the federal governmentbegan retooling its policies and procedures

for permanent and temporary workers.To reduce a backlog of 300,000 applica-

tions, Immigration Minister Jason Kenney

announced that all applications receivedprior to February 28, 2008, under theFederal Skilled Worker program, would bereturned to applicants. This paved the way for the Immigration Department to processapplications based on labour market needs,

instead of their place in the queue.In April 2012, HRSDC Minister Diane

Finley announced the Accelerated LabourMarket Opinion (A-LMO) programto expedite the processing for targetedTFW applications. The program enabledemployers with a positive compliancerecord of two years to have new applicationsfast-tracked. This new approach is workingexceedingly well.

In July 2012, Minister Kenneyannounced the extension and expansionto the Alberta Pilot Project. Employersno longer need HRSDC approval and

an LMO to recruit internationally forskilled workers in seven high-demandoccupations. This move signicantly helpscompanies – particularly construction andmaintenance companies – to respond morequickly to the needs of resource developers.In most cases, TFWs brought in underthis stream are allowed to move betweenemployers in Alberta over a two-yearperiod – a feature unavailable in other TFWstreams. While the pilot project providesmuch-welcome relief in expediting inter-national recruitment, it is for the most part

only available to construction companiesand not other industries experiencingacute shortages. Moreover, it is restricted

to Alberta operations only. Industryis also critical of provincial regulatoryrules that create different credentialrecognition streams and the processand length of time it takes to recognizetrade credentials for optional andcompulsory certied trades.

To deal with the bias in the FSWprogram favouring applicants with

university education over thosewith trades skills and experience,a new, dedicated skilled tradesclass was created in 2012 withinthe permanent immigrant streamRather than having to qualify underthe “points” system, applicants in

this class are now assessed on whetherthey have a valid long-term employmentoffer or appropriate working credentialsand experience in a trade. They must alsodemonstrate that they have languageskills appropriate for their occupation

The Demographic Cliff

ThE C.D. hOwE INsTITuTE

rECENTly CalCulaTED ThaT

IMMIgraTION NuMbErs wOulD

NEED TO INCrEasE TO bETwEEN

625,000 TO ONE MIllION

aNNually TO fully aDDrEss

CaNaDa’s agINg wOrkfOrCE

aND ThE shOrTagE Of wOrkErs.



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In December, Minister Kenney announcedthat 3,000 spots were being allocated to

applicants under this stream.The introduction of this new and

distinct category coincides with a seriesof other proposed changes to the FederalSkilled Worker program point-systemgrid the government implemented in January 2013. The changes included:• Making language the most important

selection factor including introducingminimum language uency thresholdsand increasing the number of pointsawarded for linguistic ability;

•

Increasing points for youngerimmigrants on the basis that youngerimmigrants are more likely to “gain valuable Canadian experience” and willbe in the workforce and contributingto Canada’s economy for longer;

• Increasing points for Canadian workexperience and reducing pointsawarded for foreign work experience;

• Simplifying the arranged employmentprocess to prevent fraud and allow employers to more quickly f i l l vacancies;• Awarding additional points for spousal

language ability and Canadian workexperience.

While both temporary and permanentimmigration are important tools inhelping employers meet their humanresource needs, immigration is not a stand-alone “silver bullet” solution tosolving the shortage of skilled workersin Canada. The C.D. Howe Instituterecently calculated that immigrationnumbers would need to increase

to between 625,000 to one millionannually to fully address Canada’saging workforce and the shortage of workers. While other strategies andpolicies, in terms of apprenticeship,improving productivity and outreachengagement are all key to solvinghuman resource problems, 2012 will beseen as a watershed year since the federalgovernment made remarkable progressin reforming our immigration system tomaking it more responsive to the needsof Canada’s changing labour force.



i l l u s t r a t i o n b y : s t e v e a d a m s

30 OPENMIND 2013



TheComing

Quiet

OPENMIND 2013 3

Revolution

n October 2010, Maclean’s magazine released an issue with an inammatory cover image that caused all hell to break loose in the

province of Quebec. The cover featured the beloved BonhommeCarnaval snowman carrying a briefcase overowing with money; theheadline read: “The Most Corrupt Province in Canada.”

The backlash in Quebec was fierce, prompting Rogers Publishing toissue an apology. At the same time, however, a small but vocal chorus of Quebecers, including a number of prominent journalists, came to thedefence of Maclean’s journalist Martin Patriquin and his report on thestate of institutionalized corruption in Canada’s second-largest province.For the locals, the allegations were not only undeniable, but also old newsthat the rest of the country needed to hear.

I

By Ben Freeland

For nearly half a century, Quebec’s construction industryhas been held hostage by overregulation, opacityand heavy-handed big labour machinations. For most

Quebecers, an open shop revolution is long overdue


http://slidepdf.com/reader/full/open-mind-national-2013 32/4032 OPENMIND SPRING2012

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OPENMIND 2013 33

The Maclean’s exposé did much to draw national attention to Quebec’s deepeconomic and political dysfunction. It alsocorrectly identied the major driving forcesbehind the corruption: the enormousinf luence wielded by the province’s large

construction unions and an extraordinary level of intrusion into the industry by theprovincial government.

Since 1968, union membership has beenmandatory for construction workers inQuebec, making it the only jurisdictionin North America with such regulations.Coupled with legislation passed in 1976,which gave the provincial governmentsweeping power over labour supply at thebehest of the province’s ve big construc-tion unions, this resulted in a closed and

rigged system characterized by inflatedcosts and a lack of transparency permitting a deep penetrationof organized crime.

In 2011, the embatt ledLiberal government of JeanCharest final ly took decisiveaction against this culture of corruption with the launch of the Charbonneau Commission.Meanwhile, recent legislativemoves in and out of the prov-ince give fresh hope to Quebec-

ers who view the province’s domineeringunions with the same acrimony they oncereserved for the heavy-handed clergy of pre-Quiet Revolution Quebec.

The roots of this closed system are notdifficult to comprehend. At the dawn of Quebec’s Quiet Revolution in the 1960s,support for organized labour was wide-spread in the wake of autocratic regimeof Maurice Duplessis and his UnionNationale party. The period after Dup-lessis was characterized by the wholesale

transfer of authority over education andhealth care from the Catholic Churchto the provincial government, as well asthe rapid expansion of unions. But whileunionization offered workers better work-ing conditions than before, it did nothingto ensure industrial harmony. Union fac-tionalism lead to well-publicized spatesof violence at many mega-projects andthreatened to derail the province’s break-neck industrialization.

Prior events all led to the 1976 creationof the Commission de Construction du

Québec (CCQ) – a special governmentdepartment charged with overseeingconstruction industry manpower. Theprovincial government essentially estab-lished itself as a tributary to the Quebec’sfive main construction unions, institut-

ing wage schedules and controlling thenumber of union cards issued. In doing so,the provincial government al lowed itself “to be taken hostage by the disreputableelements of the trade union movement,”

journal ist and political sc ient ist L. IanMacDonald wrote.

The arrangement curbed building-site violence and decreased work stoppages ,yet this labour peace was a straight-jack-eted industry characterized by the CCQ’sintimidation. (Between 1978 and 1996, the

CCQ levied close to $25 mill ion worth of

fines for work done without the requiredunion card.) The resulting system alsomade it virtually impossible for skilledtradespeople outside of Quebec to work inthe province since it barred out-of-provincerms from bidding on building projects.

Alter nately, ma ny ski lled tradespeoplewithin Quebec were forced to seek oppor-tunities outside the province while starv-ing the province’s industry of fresh talentand competition.

Michel Kelly-Gagnon, president and

CEO of the pro free market Montreal Eco-nomic Institute said in his presentation atthe 2012 International Open Shop Confer-ence in Ottawa, “Quebec’s constructionindustry is special, and not in a good sense.It’s a shame because Quebec’s construc-tion workers actually have an excellentreputation in terms of actual skills andwork ethic.”

The formation of Alberta’s Merit Con-tractors Association in 1986 started theopen shop model of construction from a small movement widely perceived as a tem-

porary blip to the sector. The Merit phe-nomenon did not go unnoticed in La BelleProvince, leading a small, but vocal, con-tingent of contractors to publicly questionwhy the “freedom of association” guaran-tee outlined in the Canadian Charter of

Rights and Freedoms was systematicallydenied for Quebec workers.

Finally, the issue came to a head withthe initiation in 1993 of the R. v. AdvanceCutting and Coring et al. Supreme Courtcase. The case was led by Jocelyn Dumais,a Gatineau concrete contractor wellknown for his acts of civil d isobedienceagainst Quebec’s closed shop systemDumais also briefly ran as a candidatefor the centre-right Action Démocratiquedu Québec party but withdrew from the

political scene in order to focus on his lob-bying efforts. The plaintiffs in Advanced Cutting and Coringargued that Quebec’s policy ofmandatory union membershipfor construction workers con-travened their constitutionalright to freedom of associa-tion. The court heard the legalarguments in March 2000, anddecided after 18 months by a

vote of five to four, that Que-bec’s turbulent labour relations

history made its mandatory unionizationlaw a justiable and permissible exceptionto the Charter.

For a decade after that ruling, lit-tle changed on the labour reform frontdespite the many scandals besetting theprovince’s construction industry. In 2011,prospects of change resurfaced with thelaunch of a massive public inquiry intothe management corruption of a publicconstruction contract: the Commissionof Inquiry on the Awarding and Man-

agement of Public Contracts in the Con-struction Industry or the CharbonneauCommission. In the midst of this highlypublicized inquiry, Quebec’s then LabourMinister Lise Thériault took an unchar-acteristically bold step by introducingBill 33 in December 2011. The bill’s aimwas to end the practice of union placementof employees (or placement s yndicale) andforce the CCQ to actually assign workersbased on employers’ needs.

In the same year, B.C. Conservative MPRuss Hiebert tabled a groundbreaking

For a decade after that ruling,little changed on the labour

reform front, despite the manyscandals besetting the province’s

construction industry.

The Coming Quiet Revolution



private member’s bill that, if passed, wouldrequire unions to publicly open theirbooks. Bill C-377 found vocal championsin Quebec, most notably the Montreal Eco-nomic Institute and the Quebec Employ-ers Council. While Quebec’s construction

unions rallied against the bill,a Quebec Employers Councilsurvey (conducted by LégerMarketing) indicated that a staggering 97 per cent of Que-becers believed that unionsshould be legally required todisclose their spending.

For the time being, a wholesalerepeal of Quebec’s mandatory unionization law remains unlikely. The cur-rent Parti Québécois government remains

steadfast in its defence of the labour statusquo: current PQ Labour Minister AgnèsMaltais took a vocal stance against BillC-377 and Minister Maltais articulatedsimilar feelings in a December 2012 letter tofederal Labour Minister Lisa Raitt.

Nevertheless, Quebec’s advocates forworker freedom in the construction indus-try are more optimistic now than they havebeen in a long time. “Public opinion is onour side,” asserts Duma is. “The unionshave lost a lot of public support in Quebec

and, as a result, you’re hearing a lot less outof them.” He contends that if the issue were

brought before the Supreme Court onceagain, the results would be quite different.“I think the time is right for another run atoverturning the law,” he says, adding thathe has spoken with experienced legal coun-sel who supports this view as well.

Dumais asserts that the impact ofovert urning Quebec ’ s union-onlylegislation would be felt well beyond

just Quebec. “In my opinion, overturn-ing this legislation would bring to anend attempts like the heavy-handed

union tactics li ke we’re see-ing with Manitoba Hydro atthe moment,” he says. “A lot ofthese union leaders think thatas long as they have the upperhand in this province, there’sstill hope for the same kind ofthing elsewhere. Breaking theirlock in Quebec would send apowerful message.” As for the

“labour harmony” canard forever trottedout by defenders of Quebec’s closed shop

construction regime, Dumais dismissesthe argument as ridiculous and insultingto Quebecers. “It’s 2013. We’re waybeyond all that. The issue of labour-related

violence is in the past. It’s the future we’reconcerned about.”

The Coming Quiet Revolution

For the time being, awholesale repeal of Quebec’smandatory unionization law

remains unlikely.



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ByElizabEth ChornEy-booth

’s sece pepe e

constructionindustrthatacom-

pan’ssuccessdependsonitspro-

ductivit.Aterall,eicientand

eectiveworkpracticesdirectlimpact

abusiness’sbottomline,soincreasing

productivitstandardsisessentiallano-brainer.Butasobviousastheneed

orincreasedproductivitstandards

isorancompan,actuallachieving

thosestandardsandidentiingareas

thatneedtobetweakedcanbecome

difcultandcomplex.

i

The

of

ProductivityImportance

tition.Manfrmsevenbuildproductivit

measuresintotheircontractsasawato

assureclientsthatthewilldowhatever

ittakestocompletejobsefcientland

cost-eectivel.Toevenbeconsidereda

contenderorthebestjobsavailable,itis

essentialorallorganizationstoraisethe

barorproductivitstandards,oratleast

keepupwithrivalcompaniesthatdo.

“Saou’reupintheoilsandsin

Alberta,themarkethasbeensomewhatsot[because]themarginsarebeing

squeezed,”Magnussas.“Foran

organizationtomakeasmuchmone

asthehaveinthepast,the’vegotto

igureoutproductivitissues.It’sthe

onlplacetogotofgureouthowtodo

ajobasterandmoreefcientl.”

WhenMagnusconsultswithclients,

heencouragesthemtolookatthebig

pictureoproductivitbeoregetting

miredinthedetails.Oncethatoverviewis

inplace,hehelpsorganizationstomodel

aproductivitplanandsettangible

behavioursthatwillresultinincreased

efcienc.Thosebehaviourscaninclude

strategiestoenhanceplanningand

scheduling,andtacticstorectisome-

thingassimpleasunnecessartripsbacktotheshoptopickupequipmentthat

hasn’tbeenbroughttotheworksite.

Magnussasthattheroadtoimproved

productivitstartswithanattitudeshitat

Canadian construction companies fnd their

competitive edge in efciency processes

thetopleveloanorganization,whether

it’salargefrmorasmallcontractorwith

onlaewemploees.Imanagement

takesabig-pictureapproachandencour-

agesacultureoproductivitthroughout

thecompan,emploeeswillmorelikel

adapttotangiblechangesthataectthe

wathework.

JanakaRuwanpura,vice-provost(inter-

national),ormerCanadaresearchchair

RonMagnus,managingdirectoro

FMI’sCenterorStrategicLeadership

inDenver,Colorado,sasthatwithour

stalledeconompushingcompaniesto

competeorthesamejobs,increased

productivitismorethanjustawato

managecosts–it’sawaorcompanies

tosetthemselvesapartromthecompe-

Even if you’rebusy, take time

to step back andevaluate yourprocesses.

If the owners/managers feeltoo close to the processes

to see the problems,then connectwith a consult-ant – they’re out

there.

Know that eachcompany has itsown needs andsolutions. A planof action for onecompany may notwork for yours,

and that’s OK.



OPENMIND 2013 37

and proessor in project management

systems, Schulich School o Engineering

at the University o Calgary, studies 10

speciic targets that he says construc-

tion company leaders should examine

because they can aect company output.Some o those targets include employee

motivation/satisaction, the relationship

between subcontractors and main

contractors, material management to

reduce wasted trips, “tool time” (actual

hands-on, working time) optimization,

oice to on-site communication and

weather-related issues.

Another problem, Ruwanpura says,

is that most companies ocus so much

on working quickly and taking on as

many jobs as possible that they don’t

see the obvious internal productivity

problems they would i they took a step

back or sel-examination. “Productivity

is not about working hard and ast. It’s

about how you really analyze where theproblems lie,” he says. “When you’re

in a chaotic environment, you don’t

pay attention. You just run projects.

You don’t have time to make changes;

you’re just running.”

For some companies, Ruwanpura

suggests they place a dedicated per-

son on the ground to communicate

productivity needs – called a construc-

tion productivity improvement ofcer.

“They use this person as a acilitator

or the entire team so they can identiythe problems and mitigate the solu-

tions, and then measure the output,”

he says, adding that, at the end o the

day, companies need to measure two

things: how much they produce and

how much tool time is being netted.

Ruwanpura suggests company

leaders question how communication

occurs within their organization; how

they determine employment skill sets

or uture sta; and how they deal

with existing employee motivation and

morale. It also helps i the harder aspects

are examined, like the management o

material resources and the accuracy o

estimates. I any o the indings aren’t

satisactory, adjustments and changesmust be made.

Each company has dierent specifc

needs, and Ruwanpura agrees with

Magnus that productivity is not about

the small details, but rather the bigger

picture improvements involving com-

munication and organization. Since

the solutions vary rom company to

company, improvements come rom a

series o changes and tweaks rather than

a single magic bullet.

Ethan Cowles, senior consultant

at FMI, works directly with contractors

looking to make productivity improve-

ments. He says that it can be tricky

to implement productivity measures

because construction proessionals are

notoriously reluctant to change. “Con-

struction is one o those industries

where, or whatever reason, people are

wired to think that planning is a waste o

time,” Cowles says. “Many people think

that i they’re not actively installing work,

then they must be goofng o.” Activity

then gets conused with productivity.Cowles says that raising productivity

standards in the feld includes the impor-

tant step o management empoweringits oremen. Managers accomplish this

through eective communication in

which they state job expectations clearly.

It also means proactive measures are

required to ensure required materials

and resources will be on site, and on

time. When the project begins, responsi-

bility and accountability must be shared

so everyone on the site eels a part o the

process to complete their jobs as ei-

ciently and budget-riendly as possible.

Companies should develop a clear

plan o what needs to be accomplished

weeks beore a job even starts, says Cow-

les, so crews can hit the site with a sense

o momentum. Aiding that momentum,

employees also need proper training,

appropriate work materials, and hard

copies o the overall plan and checklists.

It’s imperative, once the job is in progress,

that oremen and crews track relevant

progress (such as completion dates, mate-

rial use/waste, unoreseen/unbudgeted

challenges) or productivity measure-

ments to be recorded and adjustments to

be made to the plan, i needed.

Modiying long-standing company

procedures requires managerial ore-

thought as well as a buy-in rom ield

employees. Both Cowles and Ruwanpura

say it is possible to get all the players on

the same page and signifcantly increase

productivity by setting clear expectations,defning processes and developing eec-

tive channels o communication. “Inter-

nally, a company needs to know that

productivity is valuable and it’s got to be

somebody’s responsibility,” Cowles says.

“Sometimes it’s a combination o people,

but somebody needs to eel the weight

and the responsibility to know that

they’re ollowing their own best prac-

tices.” I nobody has the responsibility

to create a successul culture, the impor-

tance o the idea alls by the wayside.Productivity is obviously a game-

changer in construction and is not

something to be swept aside. For

companies who are struggling with

proits and just don’t know why, there

are consultants out there who can point

out issues that company leaders are just

too ar into the processes to see. Taking

a step back every now and then may be

all an organization needs to do in order to

move orward.

Improved productivity comes from allstaff levels being on board with change.

Change requires bigger-picturethinking and changing thecompany culture.

Productivity can and should be used togive companies a competitive edge inthe construction industry.



38 OPENMIND 2013(Source: Statistics Canada)

Capital expenditures for construction in Canada (in $ millions):

205,373.9 243,866.6 260,919.4 280,887.9 283,618.0

Construction price index forapartment buildings in:

2008 2009 2010 2011 2012

Halifax 128.9 130.4 131.8 135.7 138.8

Toronto 139.9 136.8 136.7 141.7 144.4

Calgary 174.4 160.7 156.6 160.1 166.4

Vancouver 159.9 136.0 134.1 138.9 144.0

2009 2010 2011 2012P 2013 (est.)

Wholesale merchants’sales by industryunadjusted ($ millions)across Canada

2008 2009 2010 2011 2012

Building Supplies 77,235.9 66,932.4 73,935.3 78,723.3 81,522.1

Metal Products 18,972.7 13,163.1 15,022.7 17,750.4 18,827.8

Lumber and Millwork 34,099.6 31,986.1 35,666.7 35,811.8 37,033.4

Machinery and equipment 115,358.6 103,460.8 110,411.2 123,189.8 128,177.2

Average number of employees coveredunder the Merit Hour BankBeneft Plan:2007 2008 2009 2010 2011 2012

33,875 38,314 38,187 39,371 43,089 48,015

Total man-hours worked

under the Merit HourBank Beneft Plan:

2007

2008

2009

2010

2011

2012

69,743,223

77,595,931

74,140,547

79,583,013

87,908,004

96,729,350

BY THE NUMBERS

(Source: Merit Contractors Association)(Source: Statistics Canada)

New housing price index ($ thousands)

2008

2009

2010

2011

2012

St. John’s

119.6

133.3

141.2

146.9

147.2

Saint John, Moncton,Fredericton

102.5

105.8

107.5

108.1

108.0

Halifax

107.9

109.1

110.1

112.0

114.4

Toronto

103.6

103.4

106.1

111.0

116.7

Winnipeg

110.2

113.0

118.4

124.1

129.3

Saskatoon

120.6

111.4

114.6

116.2

118.8

Calgary

100.6

93.9

95.6

95.5

97.1

Vancouver

102.3

95.8

99.0

98.7

90.7

Yearly value of all buildingpermits by province ($ million):

2008

2009

2010

2011

2012

Newfoundland& Labrador

802.5

766.4

1,205.2

1,057.3

1,184.6

Nova Scotia

1,326.7

1,368.7

1,633.8

1,464.6

1,551.1

NewBrunswick

1,113.8

1,148.2

1,133.3

965.9

968.5

Ontario

25,414.6

21,880.5

28,138.6

28,024.4

29,547.5

Manitoba

1,636.7

1,560.7

1,757.4

1,842.1

2,485.7

Saskatchewan

2,185.8

1,890.3

2,077.0

2,613.9

3,114.1

Alberta

13,141.2

11,276.9

11,425.4

12,768.1

14,662.9

BritishColumbia

10,577.2

7,629.9

9,723.8

9,249.8

10,759.6



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Open Mind National 2013