Re­stricted labour bids cost­ing tax­pay­ers

Winnipeg Sun - - COMMENT - Gra­ham Lane leads Man­i­toba For­ward, man­i­to­bafor­ wpg­sun.let­ters@sun­ GRA­HAM LANE win­nipeg­sun

In­vest­ment in pub­lic as­sets re­quires bil­lions from tax­pay­ers. World-wide, the con­struc­tion trade ex­ceeds Cdn$12 tril­lion, rep­re­sent­ing about 13% of an­nual world out­put. Much of an­nual ex­pen­di­tures are for pub­lic works. Yet, while the pub­lic in­ter­est seeks value for money spent, too rarely it oc­curs.

Too of­ten, pub­lic works are un­der­taken with­out suf­fi­cient re­search to en­sure they are needed now, as op­posed to another project, and af­ford­able. Too of­ten, fi­nal costs ex­ceed the es­ti­mated cost by a ‘coun­try-mile’ — Win­nipeg’s new po­lice head­quar­ters, Hy­dro’s pala­tial head­quar­ters, Keeyask dam, etc.

Gov­ern­ment, which in­cludes Crown cor­po­ra­tions, reg­u­larly use re­stric­tive ten­der­ing prac­tices, driv­ing up costs. Ac­cord­ing to Bea­con Hill In­sti­tute, re­strict­ing ten­der­ing prac­tices by re­quir­ing union­ized work­ers pushes costs up 12-18%, Other stud­ies sug­gest re­quir­ing only union work­ers drive up costs 20-30% (Mon­treal, On­tario). One thing is clear, by not al­low­ing all qual­i­fied bid­ders qual­ity goes down and costs go up.

Con­sider Hy­dro’s mas­sive once-in-a-life­time ex­pan­sion. Only mem­bers of build­ing trade unions can work on most of it. As an ex­am­ple, Bipole III trans­mis­sion projects re­quire not only that project work­ers are union mem­bers pay­ing union dues, but their hourly rates are set for each worker classification (with built-in yearly in­creases). Chal­lenged in court as un­con­sti­tu­tional — Hy­dro re­quir­ing work­ers be in a union in or­der to work on the project — the Bipole con­tracts have sur­vived, with­out the ba­sic mer­its of the sit­u­a­tion even be­ing ad­ju­di­cated.

Dur­ing the 2016 pro­vin­cial elec­tion, Brian Pal­lis­ter promised to open up con­tract ten­der­ing by al­low­ing non-union­ized firms to bid on all pro­vin­cial con­tracts. In his Al­ter­na­tive Throne Speech of Novem­ber 13, 2015, Pal­lis­ter promised to bring about “mod­ern­iz­ing gov­ern­ment ten­der­ing pro­ce­dures by re­duc­ing bar­ri­ers to par­tic­i­pa­tion such as forced union­iza­tion for gov­ern­ment con­tracts which is un­fair and hurts small busi­ness and tax­pay­ers.”

Yet, at last look, open-shop con­struc­tion firms and firms whose work­ers are not rep­re­sented by a des­ig­nated build­ing trade union are still not able to bid on many ma­jor pub­lic-sec­tor projects. In Man­i­toba, ap­prox­i­mately 70% of the con­struc­tion in­dus­try is “open shop.” By shut­ting out the ma­jor­ity of the con­struc­tion in­dus­try from bid­ding, the pub­lic in­ter­est, and value for money, can’t be se­cured.

It is not only nonunion firms and their work­ers that are dam­aged and dis­ap­pointed, but, largely, and some­times with­out re­al­iz­ing it, tax­pay­ers and util­ity ratepay­ers. The re­stric­tive pro­cure­ment prac­tices of the for­mer NDP gov­ern­ment — com­ing into, tight­en­ing, and stay­ing in force dur­ing the party’s 17 years in power — should have dis­ap­peared un­der the new PC gov­ern­ment. Also, there re­mains con­jec­ture about bush clear­ing and other non­tech­ni­cal con­tract work in north­ern Man­i­toba, where, al­legedly, sin­gle-sourced con­tracts were preva­lent, un­fair and re­sult­ing in very high costs.

A Jan­uary 2016 poll (NRG re­search group) re­vealed that a solid ma­jor­ity of Man­i­to­bans op­pose open-shop con­struc­tion firms be­ing shut out of bid­ding for pub­lic works. Brian Pal­lis­ter should lis­ten and break the mo­nop­oly union-shop con­trac­tors have, and then move on to re­con­sider long-stand­ing but ques­tion­able prac­tices such as hav­ing gov­ern­ment set­ting wage lev­els for the con­struc­tion in­dus­try.

Cur­rent gov­ern­ment-set con­struc­tion reg­u­la­tions and prac­tices push costs un­nec­es­sar­ily high. What is now and has been for some time is far from be­ing tax­payer-friendly and “free en­ter­prise.”

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