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Provincial projects must be built with union labour, B.C. government says

Billions of dollars of provincial government projects, starting with Metro Vancouver’s Pattullo Bridge, will be built using union-only labour, under new rules announced by Premier John Horgan.
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B.C. Premier John Horgan, centre, and Minister of Transportation and Infrastructure Claire Trevena, back left, tour the Ironworkers Training Facility at the British Columbia Institute of Technology, in Burnaby, B.C., on Monday July 16, 2018. THE CANADIAN PRESS/Darryl Dyck

Billions of dollars of provincial government projects, starting with Metro Vancouver’s Pattullo Bridge, will be built using union-only labour, under new rules announced by Premier John Horgan.

The new “community benefits agreements” were billed by Horgan on Monday as prioritizing local hirings, better wages and more opportunities for apprenticeship training, but also mark a throwback to 1990s-era construction rules that forced workers on government projects to join trades unions.

“Within 30 days of employment on the job site, any non-union worker or a worker from another affiliation will be required to join the union for work specific to the project,” the B.C. government said in a statement.

Horgan glossed over that detail in a news conference in Vancouver, preferring to play up the potential benefits to the first two projects to fall under the new model: The new $1.4 billion Pattullo Bridge and a four-lane highway project between Kamloops and Alberta.

“Community benefit agreements ensure projects will be on time, on budget, fair wages are paid to everyone and importantly that legacy of new workers for the future,” said Horgan.

The changes were immediately hailed by unions as a way to fix B.C.’s shortage of skilled tradespeople, as well as give women and Aboriginal peoples more opportunities to enter construction. But independent non-union contractors, who represent more than 80 per cent of the industry workforce, said those justifications are just a smokescreen for a return to union-only sites, labour halls and favouritism for building trades that will cause projects to be more expensive and cumbersome.

Horgan rejected those arguments, saying B.C. needed to solve its labour shortage and be competitive in attracting workers.

“The cost of making sure we’re training the next generation of workers is one, I think, British Columbians understand,” he said.

Horgan hailed it as “a new way of doing business in British Columbia.”

However, the new rules are quite similar to how the NDP handled public construction projects in the 1990s. At that time, the party was criticized for providing lucrative incentives to unions that donated to the NDP and organized to its election campaigns.

In the 1990s, the government created Highway Constructors Ltd. to employ workers building the Island Highway expansion project. Though it allowed non-union companies to bid and win contracts, any of the workers who entered the site had to join a union within 30 days, as well as set a “fair wage policy” mandating union pay. An analysis by the Vancouver Board of Trade estimated that added $70 million in additional costs to the project.

Under the new Horgan proposal, Highway Constructors will be resurrected as a Crown corporation called B.C. Infrastructure Benefits Inc., that will also set pay at “industry rates.”

Construction sites will have ratios and other rules, with union dispatch halls providing qualified members where required, said Tom Sigurdson, president of the B.C. Building Trades, which represents construction unions.

The new Crown corporation will help enforce the goal that 25 per cent of jobs are available for apprentices who need to complete on-the-job training, something the previous Liberal government tried to set in 2015 but failed to actually achieve, said Sigurdson.

“Given the skill shortage we are about to face we need to have a procurement model that is going to help the apprentice get their work hours,” said Sigurdson.

Program details will be set out this week, when the government is expected to release the full detailed agreement between B.C. Infrastructure Benefits Inc. and the Allied Infrastructure and Related Construction Council — a new organization that acts on behalf of 19 trades unions representing such skills as carpentry, bridgework, sheet metal, boilermakers, electrical, engineering, bricklayers, cement masons, plumbers and office staff. In the 1990s, a similar group was called the Highway and Related Construction Council.

Mandatory union membership for employees of non-union companies will expire once their government contract is finished, said Sigurdson.

There is not much difference in pay for union and non-union trades workers in the current market, said Sigurdson, but where the union-only model will pay big dividends is in the defined benefit pension plans and more generous health and benefits packages.

“We’re very concerned,” said Chris Gardner, president of the Independent Contractors and Businesses Association, which represents non-union construction companies. “It’s a real slap in the face to the 85 per cent of the workforce in this province that is non-union or open shop.”

He said a new Crown corporation overseeing a construction workforce will be bureaucratic and inefficient.

“It boggles the mind why their thinking is we need to create a new Crown corporation and creating a Crown corporation will make this process more efficient and cost less. Nothing could be further from the truth. We’ve all experienced that the less government is involved the better things are.”

The industry is already doing a good job delivering 20 per cent of construction today by apprentices, argued Gardner. But Sigardson said that rate is less than two per cent on construction of the Site C hydroelectric dam, which Horgan has already promised to fix.

The Opposition B.C. Liberals called the changes a “payoff for past donations to the NDP” for unions who have contributed millions to the B.C. New Democratic Party over the years. One of the Liberal government’s first acts after taking over from the NDP in 2001 was to eliminate union-only building projects, a move the NDP criticized as a payoff to Liberal donors in the business and development communities.

The Progressive Contractors Association of Canada’s regional director for B.C. said there were portions of the proposal that were very good, including community benefits, preference for local workers and opportunities for under-represented groups such as Indigenous people, women and people with disabilities.

“I think those are things that the construction industry as a whole can get behind and we support wholeheartedly,” said Rieghardt van Enter.

However, they’re nervous about the lack of details and the fact a Crown corporation would be acting as the employer entity for the agreement.

“We think that’s a way of being restrictive,” van Enter said. “It doesn’t allow (companies) to build projects under circumstances and conditions that they know.”

He said the fact that organizations like his were not consulted about the framework is also suspect.

“This seems like this is a backroom deal,” he said.

Cardus, a “faith-based think-tank and registered charity,” released a report on Monday looking at the potential cost of imposing project labour agreements on infrastructure projects.

The report estimates that the province has $25.6 billion in bridge, road, hospital, school and hydro projects planned for the next three years — such as the Site C dam, Highway 1 upgrades and the George Massey Tunnel replacement — and cites research that restricted bidding blocks eight out of 10 contractors from bidding on projects. As a result, contract prices could go up between two and 25 per cent, or in B.C.’s case, $512 million to $6.4 billion.

“Restricted bidding isn’t in the public interest,” said report author Brian Dijkema. “It plays favourites with a small group of firms, placing specific corporate interests over the interests of the public paying for the projects, the interests of construction workers and the interests of the construction industry.”