Infrastructure: a.k.a. the big ripoff
No matter which political party is in power in the various Canadian jurisdictions, all are agreed on one issue — that Canada needs to urgently address the deterioration of our basic infrastructure. Whether it be potholed roads, crumbling overpasses, inadequate mass transit systems, long wait times for vital health care services or whatever, one would be hard- pressed to find any Canadian who would disagree that significant investment in infrastructure is needed.
A key issue that you won’t hear from governments in this discussion, however, is the guaranteed reality that Canadians will be paying much more for infrastructure refurbishment than they should have to as a result of a simple policy. That policy is that virtually all Canadian governments have over the past few decades enacted laws to restrict bidding on government projects to companies that are either unionized, or that effectively pay inflated union wages in some other fashion. Research has shown that this restriction means that Canadians will overpay for these projects by as much as 40 per cent. And when tens of billions of taxpayer dollars are at stake, this is a significant overpayment indeed.
Union- only, or closed- tendering, procurement policies also have the perverse effect of excluding the majority of legitimate taxpaying businesses from bidding on government work. Currently in Canada, about 17 per cent of the private sector is unionized, and this percentage has been falling over the last few decades as unions find themselves unable to cope in an increasingly competitive business environment. Unions are well aware that they cannot earn these contracts based on their own inferior performance so they seek laws to skew the playing field in their favour to the detriment of everyone else. And complicit governments collude with them to prop up their inefficiencies on the taxpayer dime with foolish policies that bar the efficient, competitive non-union companies from participating in the government work their taxes pay for.
How did such a blatantly wasteful and unfair practice come to pass? Basically, weak, ill- informed governments have caved in to selfish union interests over the years. Unions naturally favour these policies as they not only put lots of tax dollars in their pockets, but because businesses who want to compete for these projects might consider becoming unionized when it is otherwise against the best interests of the business to do so.
It is also worth questioning why our infrastructure has been neglected for so many years. It is certainly not because governments have been short of money, as Canadians continue to furnish our governments with healthy and increasing amounts of taxes. When we look at where our growing tax burden has been going, however, an excessive amount is continually streamed to ever more generous salaries, rich pensions, early retirements and other benefits for government workers. These costly perks are not enjoyed by the 80 per cent of us who do not work for government. A study recently published by the McDonald- Laurier Institute showed that federal government employees take about twice as many sick days as do private sector workers. Why? Because government managers turn a blind eye to this abuse and they have zero incentive to use our tax dollars efficiently. Other research has shown that something as simple as government employees taking the same number of sick days as their private sector counterparts would in and of itself free up billions that could go to much better uses, such as legitimate infrastructure and other tangible improvements to public services. Many more billions would be available if government employees were compensated comparable to workers doing the same job in the private sector.
Most governments in Canada are now being very creative in cooking up new “revenue tools” — read new taxes — to pay for so-called infrastructure. Government unions are salivating at the prospect of these new monies, seeing a good proportion of them going to hike their already excessive pay and benefits. The bottom line is that if governments would quit wasting tens of billions of our money on stupid, unfair policies such as union-only procurement and excessive pay, benefits and sick leave for government workers, Canada would have untold billions to devote to real benefits for Canadians without having to raise any taxes and further hobble our struggling economy.