CANADIAN
CUSTOMERS FROM HELL page 46
Ontario WSIB
SURVIVING AN AUDIT page 22
Quebec Innovation
STEEL STRUT HOMEBUILDING page 16
ISLAND RETREAT
THE MAGAZINE FOR PROFESSIONAL RENOVATORS AND CUSTOM HOMEBUILDERS
Online Contest Winners
Design-build brilliance in British Columbia by architect-contractor A.W. Peters + Associates page 32
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CONTENTS
CONTENTS
32
features
COVER STORY
creative
WSIB Wants You! 22 If you live in Ontario and you’re in this industry, the WSIB is highly likely to audit you one day. John Caulfield looks at the pitfalls of a process that can be costly and intimidating.’
eye
“They’re not too big to fight.” 30 An update on Ontario drywall contractor Sean Keane’s $6-million lawsuit against the WSIB.
“They’re not too 30 big to fight”
Larry Arnal Photography
Sean Keane: Suing the WSIB for $6 million
The Creative Eye 32 A contractor-turned-architect shows us the very pinnacle of design-build brilliance, West Coast style.
Customers From Hell 46 The gold, silver and bronze medal-winners from our recent online contest in which we asked you to tell us about customers that teed you off.
departments
S CUSTOMER
FROM HELL
Online 6 Highlights of the great stuff we have online for contractors right now. Editorials 8 Rob on why partnerships work; Steve looks at ones that don’t.
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CONTENTS
CONTENTS
16
no nails
departments
Voices 10 Readers respond to Koci’s support of Rob Ford, share tips on collecting from deadbeats and speak out against the Ontario College of Trades. Plus, spray foam safety and bathroom ventilation questions.
stuff
we like
Site Notes 16 A steel-frame housing manufacturer that wants to transform our industry.
39
Contractor U 20 Mike Draper talks about resolving disputes with homeowners, including the difference between mediation and arbitration. Maxwell’s Stuff We Like 39 Steve Maxwell on killing mold safely. Plus, three cool tools you’ll want to own.
mold: 39
kill it
Bureaucrat of the Month 50 A painful examination of a new paperwork empire under construction down on Bay Street. The Ontario College of Trades wants your money to prove you’re ‘legit’.
www.canadiancontractor.ca
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VIDEO:
HOW TO GENERATE MORE LEADS Interview with Mike Draper, Renovantage.com In this video clip, Mike talks to Rob Koci about an important topic: generating more work. Conventional marketing wisdom says that you should “build your brand.” But what does this really mean? Mike says that spending a lot of money to spread your name far and wide isn’t nearly as important as having a consistent method of generating leads. Type “Coaches Corner” in the search bar at canadiancontractor.ca to find this and similar coaching videos.
VIDEO:
THE WSIB CASH GRAB Rob Koci and Steve Payne, Canadian Contractor Rob and Steve recap Canadian Contractor’s most-viewed news items of the past year. 2013 was a sorry tale of governments and their agencies extending their reach into contractors’ pockets – usually to pay for their own mismanagement, bureaucratic empire-building, or both. Type “WSIB” into the search bar at canadiancontractor.ca to find this and similar videos.
VIDEO:
A CONTRACTOR FIGHTS BACK Sean Keane, Keyon Drywall This is the most-watched video in the history of CanadianContractor.ca. Here, Rob interviews Sean Keane, Keyon Drywall, about his $6-million legal action against Ontario’s WSIB. As detailed on page 30 in this issue, Keane defeated WSIB’s attempts to squeeze him for a staggering $340,000 in back premiums, and now is suing the agency for what he alleges was a punitive audit.
CANADIAN
Type “Keane” into the search bar at canadiancontractor.ca to find this and similar videos.
CONTRACTOR.ca BUILD | GROW | PROFIT
Volume 15, Number 2 February 2014 canadiancontractor.ca | Tel: 416 442 5600 |
Editor: Steve Payne spayne@canadiancontractor.ca
80 Valleybrook Drive, North York, ON, M3B 2S9
Contributing Editors: Mike Draper, Brynna Leslie, Steve Maxwell
Canadian Contractor, established in 2000, is published 6 times a year by BIG Magazines LP, a division of Glacier BIG Holdings Company Ltd.
Art Director: Mary Peligra mpeligra@bizinfogroup.ca
ISSN 1498-8941 (Print) ISSN 1929-6495 (Online)
Publisher: Rob Koci rkoci@bizinfogroup.ca Production Manager: Gary White gwhite@bizinfogroup.ca
Business Information Group
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February 2014
Circulation Manager: Beata Olechnowicz bolechnowicz@bizinfogroup.ca
www.canadiancontractor.ca
BIG Magazines LP Corinne Lynds, Editorial Director Tim Dimopoulos, Executive Publisher Alex Papanou, Vice-President of Canadian Publishing Bruce Creighton, President of Business Information Group Subscriber Services: To subscribe, renew your subscription or to change your address or information contact us at 416 442 5600 x3547 Subscription Rates: Canada $45.95 per year, Outside Canada $83.95US per year, Single Copy Canada $9.95. Privacy Notice: From time to time we make our subscription list available to select companies and organizations whose product or service may be of interest to you. If you do not wish your contact information to be made available, please contact us via one of
the following methods: Tel: 1-800-668-2374 Fax: 416-442-2191 Email: privacyofficer@ businessinformationgroup.ca Mail: Privacy Office, 80 Valleybrook Drive, North York, ON, M3B 2S9. Contents of this publication are protected by copyright and must not be reprinted in whole or in part without permission of the publisher. Publications Mail Agreement No. 40069240 We acknowledge the financial support of the Government of Canada through the Canada Periodical Fund of the Department of Canadian Heritage.
EDITORIALS
Voices
WHY YOU NEED A BUSINESS PARTNER By Rob Koci
W
”
I am sure we prospered together more than we would have alone.
Rob Koci Publisher
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rkoci@canadiancontractor.ca
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hatever successes I can claim as a renovator, I attribute to good partnerships. My first business partner was Paul Mackey. We were shipwright apprentices at a firm called Yacht Artisans in the mid 70s until that company went out of business. We paired up on renovation jobs in Scarborough, Ont. and then just kept on going. We stuck together for a while. Paul was the site guy and I was the business guy. It worked well. Paul preferred building and was happy to shed the client stuff. I took Paul’s lead on site, as I was not as skilled a builder. We parted ways when we started framing for Canada Homes. He hated the monotony and the lousy money. I like the hard physical effort and was willing to live with the lousy money until I got better at it. I framed alone for a while (another story), until Jose came along. Just landed in Canada from El Salvador, he was the perfect partner. He liked the hard work and I had learned enough to lead a crew. After him was Guillermo, who was by far the best I ever teamed up with. I eventually sold the business to him. He then partnered with another El Salvadorian, Pedro. They did very well. When I went back to renovations, it was a guy from New Zealand that I relied on to keep the sites going while I sold the jobs. Smart, cheerful and always mindful of the bottom line, he, too, was an excellent partner. When the pressure was on, he reminded me of the bigger picture. In each case, the partnerships helped me where I fell short and allowed me to do what I did best. I am sure we prospered together more than we would have alone. The partnerships were healthy while they lasted, and amicable when they parted. Partnerships, in my estimation, are the secret to success.
EDITORIALS
Voices
IN PARTNERSHIPS, THREE’S A CROWD By Steve Payne
G
ot a business partner? Great! Rob is right: The arguments for business partnerships, rather than sole proprietorships, are compelling. Although most of us associate Microsoft Inc. with Bill Gates, it was, of course, Bill Gates and Paul Allen who invented that enterprise. Bill Hewlett and Dave Packard founded Hewlett-Packard. Steve Jobs and Steve Wozniak created Apple Computer. Richard and Maurice McDonald started McDonalds. J.W. and A.J. Billes set up Canadian Tire. Arguably Canada’s most successful construction company, Ellis-Don, was established by Don Smith and David Ellis Smith, on April Fool’s Day, no less, in 1951. With no money, it should be added. (The company now does $3-billion in projects, globally, annually.) In our business, sole proprietorships and partnerships seem to represent the vast majority of ownership types. Where are the three- and four-person firms? They are few and far between. And I think there’s a reason for that. I believe that business partnerships of more than two individuals can too easily fall victim to (a) triangulation (in the case of threeperson entities) or (b) management-by-committee (in the case of entities of four or more people). In a two-person partnership, because major disagreements will always end in stalemates, one partner or the other must always buy in to the final direction of the firm. Or break the partnership. In business partnerships of three people, the urge is always there for two of the parties to coerce the third one on important decisions. And that third party’s disagreement can be ignored – it can’t break up the firm. But it can create a toxic atmosphere. In companies of more than three owners, decisions become that much more complex, conservative and risk-averse. We don’t see too many multi-owner firms in our business. Let us know what you think about ownership structures – and what’s working for you.
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In our industry, business partnerships of three or more individuals can be a tough proposition.
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Steve Payne Editor
spayne@canadiancontractor.ca
www.canadiancontractor.ca
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VOICES
RESPONSES TO ROB FORD EDITORIAL Publisher Rob Koci’s sympathetic editorial on Rob Ford in our last issue uncorked a deluge of comments online. Many of our readers disagreed fervently (“Fail. I ain’t even a contractor but I URGE you all to FIRE ROBERT KOCI,” wrote one reader, “Vinnie.”) But about half of all the comments on our website agreed with Koci. And at time of writing, our online poll (441 responses) shows that 42 per cent of readers “would vote for Rob Ford if he was your mayor.” 58 per cent would not. We’ve always known that many contractors see themselves as renegades in a world of bureaucrats and stuffed shirts. And so it seems like many of our readers see a kindred spirit in Toronto’s mayor. Here’s are some of the comments we received.
police officers. But it is not as if facts have ever meant anything meaningful to Ford Nation. Ben Smith Posted at canadiancontractor.ca
Response to Ben Smith Look friend, the TTC needed this raise done: it’s an essential service, so no more leaving my teenaged daughter stranded on the subway at 1 a.m. in the morning. So far as the police go, time you do some proper research. The only reason they got a raise is because of all that is wrong with the union construct. And more importantly, it was because of the huge raise that (former Ontario premier) Dalton McGuinty gave to the Ontario Provincial Police. Gary Posted at canadiancontractor.ca
“We need politicians like Rob Ford that are able to fight for us”
“Why should everyone else have to reduce their expectations except executives?”
Well said! Rob Ford is one politician that is fighting the unions and other government privileged. The interesting thing is that more and more people are starting to recognize the unfair situation that now exists. People in the private sector are starting to grasp the costs of salaries, benefits and pension plans that the public sector workers enjoy at the expense of our tax dollars… and the reality that the cost of these programs is not sustainable. There was a time when many would consider the benefits that public sector employees were getting and think, “Good for them!” But now, most people don’t have these kinds of perks in their employment anymore and are often struggling just to make ends meet. So now the sentiment is,” Why should my tax dollars give them so much, when I can’t get any of those benefits myself?” And, hopefully, that is the beginning of a turning tide. We need politicians like Rob Ford that are able to fight for us and our tax dollars… and say, ‘We can’t afford that!’ Denis Charron Posted at canadiancontractor.ca
@Dennis Charron: We just learned this week that CEO salaries are 171 times the average Canadian’s salary. The ratio used to be more like 50:1. That is why private sector employees do not have the wages and benefits they used to. Executives are keeping it for themselves. Why not go after them? They can afford to share. Why should everyone else have to reduce their expectations except executives? TO Person Posted at canadiancontractor.ca
Facts not meaningful to Ford Nation Except despite his hard stance, many unions actually got raises out of Rob Ford. Most notably TTC employees and 10
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Ford voted in to save a beautiful city from bankruptcy Rob Ford was voted in on a platform of reform, no different than (former Ontario premier) Mike Harris was. His job is to stop the hemorrhaging of city monies from this corrupt bunch of… stuffed white shirts and unions! Who, in fact, don’t give a damn where the money comes from, even if it’s borrowed and impossible to pay back. He’s here to save this otherwise beautiful city from bankruptcy. That was his mandate! If anyone can prove that Ford hasn’t done his job because he was smoking crack, I’d certainly love to hear from them! Very, very well articulated comment, Mr. Koci! Robert Gabriele, Sr. Posted at canadiancontractor.ca
VOICES
DEADBEATS, COLLECTIONS, COURTS Canadian Contractor reader Jim Brown, a roofing contractor posted this request for collections advice in early January. (We’ve not disclosed Jim’s location to better protect his – and his customer’s – identity.) We asked for tips from other contractors and got a lot of them. Hopefully, Jim has been able to collect his money by now. “I just had my most difficult customer. After completing work, going on three months, customer will not accept calls, e-mails, etc. However, he has threatened to sue over the lien I placed on his home for $7,100 for work performed. Small claims court (in my jurisdiction) only allows for $5,000. To litigate will costs thousands more. As contractors we have very little support or protection against unscrupulous homeowners. However you never hear about this – only about bad contractors! Any suggestions on how to proceed, short of legal action? Can I report them to any credit agencies?” Jim Brown Posted at canadiancontractor.ca And here are some of the replies to Jim’s request for assistance…
“Go to small claims for the maximum you are allowed” It is unfortunate you are not in British Columbia. Some time ago they raised small claims up to $25,000 here and are looking at putting that up to $50,000. This allows for more selfrepresentation and works very well. I have been through a proceeding myself with positive results. Anyway – you don’t have that luxury. I strongly suggest that you go to small claims for the maximum $5,000 you say you are allowed – and be ready to kiss the balance goodbye. If you have a legitimate, well-documented case you shouldn’t have any problems. You can also suggest to the client that they take you to the Better Business Bureau where you can start the process and, hopefully, get into arbitration. This sucks as the client is the only one that can start the process. Good luck! John Friswell Posted at canadiancontractor.ca
“We are taking two clients to small claims court” In Ontario, the small claims court limit is $25,000. We are also
in the roofing business and are currently taking two clients to small claims court. Unfortunately we let the 45-day lien rule lapse as we were promised the money. It is very timeconsuming to file a small claims action but it is worth it in the end. One of our clients will have a warrant for his arrest soon as he did not attend his examination hearing. We are fine if he has to spend five days in jail for contempt of court. Diana Brown Posted at canadiancontractor.ca
“Amazing how much a homeowner is willing to screw a contractor” Well Jim, it depends where you are. Here in Ontario the small claims has been raised to $25,000. However, if you keep the lien on the property they cannot close on the house in case they sell it. However this is good for 90 days only. The lien will expire but this will also take a lawyer with fees to deregister the lien. I have one coming up on Feb. 5. This would be a classic case for a The 5th Estate eposode. It is amazing how much a homeowner is willing to screw a contractor. Leo Post Posted at canadiancontractor.ca
“This type of client is a bully… so stand firm and push back.” I have been there, done that. Some of the above comments have noted options for you. This type of client is a bully… the only way I know how to deal with them is to treat them the same way. So stand firm and push back. Once they realize you are not going to roll over, most will settle. Something else to keep in mind is to send it off to collections: you are going to take a hit with your local maximum for small claims court anyway. If you send it off, you get the satisfaction of messing up their credit rating also. Rob Wright Posted at canadiancontractor.ca
“Ask if you can divide the total amount into separate cases.” Also, I would suggest you contact Small Claims and ask if you can divide the total amount into separate cases: i.e., So much for taking off the original roofing; so much for new shingles; so much for the installation. Hopefully you will find there is www.canadiancontractor.ca
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VOICES
provision for this sort of thing. I feel for you. I’ve had a few like that over the years as well. I find surprising how some of these parasites are capable of walking upright. Henry Vroom Posted at canadiancontractor.ca
“Register the account with the credit bureau… Customer will think you have attacked his credit rating.” “It’s doubtful he will sue: it’s very expensive for him, too, and then the court will look at the whole case and he would probably have to pay anyway. Have you perfected the lien in the courts? If not let it remain. If and when he sells the house or tries to take a mortgage on it, he will have to settle the account before proceeding. Register the account with the credit bureau: that usually gets a response. That typically costs 35% of the invoice. You can get 21 day credit bureau letters. The bureau will send a letter demanding payment but you have an option of ceasing action at 21 days, so no additional cost to you, but the customer will think that you have attacked his credit rating. The other option is to leave the credit bureau action intact, which affects his credit rating long term, but will cost you the 35% charge if and when he does pay. By the way, you can place and retract a lien on your own as an officer of the company. Fees are about $80 to $100 for the Land Registry Office. You just need a lawyer or paralegal sign off on the paperwork. Much cheaper.” Dave Templeton Posted at canadiancontractor.ca
Trying to get paid in Quebec court when you don’t speak French As a general contractor in Quebec we find that there seems to be no justice with the civil courts in this province. We had a claim against a client because she did not pay us the balance of our money. We took legal proceedings but it took some time before it was to go to court for trial. In a court of law you must provide proof not hearsay. But we lost this case because I was not able to plead in French. The client hired an architect 95 years old and he had no proof or documents to back up his testimony. The judge accepted the verbal testimony without written proof, only hearsay. If you don’t have a French name in Quebec and the judge’s 12
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first question is “Do you speak French?” and you don’t – your court case is lost. This is a big problem in Quebec. The work we had done was perfect as our company has 50 years of construction experience. (It seems) the client did not have the balance of the money so they paid this old architect $500 to save the $55,000 still owing. Abie
ONTARIO COLLEGE OF TRADES “Stand together and stop this nonsense!” I have been a licensed electrician for over 20 years and am just sick at all of this! Who exactly is “the industry” that was appointed to govern our trade? I didn’t receive a ballot (for the Ontario College of Trades board of directors) nor was asked to vote for who I thought would be a good choice for this position. Going through a listing of OCOT members to find a reputable contractor is such a joke! It would only prove that they have paid their extortion money to the OCOT and not that they will do the job right. I would gladly produce my Certificate of Qualifcation wallet card if a customer requested it to prove I am qualified but it comes down to my reputation in the end. Just because the OCOT says that someone is a member doesn’t mean anything in the real world. Who came up with the ($120 annual) OCOT “membership” fee amount? I think it’s about a 400 per cent increase in fees (on maintaining a C of Q before OCOT was established) and I’m just not good with that! Most of the other trades I work with don’t have to pay anything or even join but I don’t have a choice. That’s just not right! The OCOT will only backfire and make the cash jobs increase because contractors’ rates will go up to cover the fees – and why wouldn’t they? It’s hard to scratch out a living now and any excuse to raise rates across the board because of this would be welcomed by most contractors. Questionable people doing under the table work will still be there and will look better to consumers trying to save a buck! I’m tired of getting railroaded by people that think they know what’s best for us while they have their hand in our pockets. We need to stand together and stop this nonsense before it gets out of hand. Mike Schulz
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VOICES
HEALTH AND SAFETY Using spray foam insulation safely Alec Caldwell, president of CARAHS (Canadian Association of Renovators and Home Services), posted an article about contractors applying spray foam unsafely. Here is one of the many responses.
the installer you’re checking on is the one who pulls the spray foam trigger! Richard Beyer Posted at canadiancontractor.ca
BATHROOM VENTILATION Can you vent a bathroom exhaust fan into an attic?
YouTube is loaded with videos of these contractors you are speaking about here. They promote themselves as very knowledgeable men and women. However, if consumers do not understand right from wrong in the processing of these chemicals, they will be easily fooled. These “professionals” are very convincing. CUFCA (Canadian Urethane Foam Contractors Association) and SPFA (Spray Polyurethane Foam Alliance) in the U.S. are the industry educators for spray foam. Additional resources can be found online by searching the data base of the American Chemistry Council and the Center for Polyurethanes Industry. Re-entry times during and after installation should be inquired upon from the chemical manufacturer selected. All spray foam is not created equal. Consumers and builders alike need to fully investigate their installer. There are many variables that go into the proper installation procedures of spray polyurethane foam insulation. Insurance requirements are not mandatory in this industry. A quick request from your contractor for insurance and a simple investigation to verify the policy is valid will save you years of headaches if something goes wrong. In Canada, Error’s and Omission insurance (according to CUFCA) will cover damage to property when things go wrong. In the United States the same coverage plus Contractors Pollution Liability Insurance will help get a consumer back on their feet if their contractor fails to get it right. Consumers really need to understand these are chemicals. Men/women are bringing chemicals to your home. Your home becomes the laboratory. A few steps in research is well worth the effort before you enter into a contract with just any insulation company. Definitely verify the number of years your sprayer has in the spray foam industry and their ongoing training. This can be verified through the chemical manufacturer, Canadian Urethane Foam Contractors Association (Canada) or Spray Polyurethane Foam Association (United States) and make sure 14
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I live in a row of condos that are 25 years old. It has come to my attention that the bathroom exhaust fan exhausts into the attic and not to the outdoors. Is this against the building code taking into when the condos were built? Thanks. Patrick Dugal Posted at canadiancontractor.ca
No you can’t, ventilation supplier replies Patrick, I am not sure exactly when the code came into place, but in the Ontario Building Code Act 1992, Section 9.32.3.10.2, it clearly states that, “Exhaust ducts shall not discharge into heated or unheated enclosed spaces.” I know that this is also been in place for many years in other jurisdictions throughout Canada through the BC Building Code, Alberta Building Code and the National Building Code. With an exhaust fan terminating inside the attic, and not outdoors, there is a potential for the moisture and humidity to gather in the wood and insulation which can lead to mold, mildew and even structural damages to the wooden trusses and drywall ceilings. This needs to be addressed as soon as possible, and you may even consider having an assessment done to see if there is any mold issues in the attic or insulation. I hope that this information is of help to you. If you need to trace the codes back, I believe that most libraries will have copies of the local Building Codes where you can review the requirements – Section 9 deals with ventilation. Glenn Curtis Soler Palau Canada Posted at canadiancontractor.ca
HAVE YOUR SAY! Go online to canadiancontractor.ca and give us a piece of your mind
SITE NOTES
Courtesy: Bone Structure
Quebec-based steel-frame housing manufacturer wants to transform the homebuilding industry
BONE Structure has built 150 of its patented steel-strut units in its home province of Quebec. Now, it is looking across Canada and internationally, for more customers – and contractors. “Zero nails,” the company’s promotional video boasts. “Zero cuts, zero waste, zero mold, zero load-bearing walls.” Not only that, but the video, which shows time-lapse photography of one of its light-steel homes being constructed, tells us that this took a “First time crew of four, four days.” There’s no doubt about it, BONE Structure, the Laval, Que.based firm that is promoting its light-steel “strut” housing structures heavily across Canada, certainly knows how to get media attention. “BONE Structure’s goal is to literally change the housing market, one light steel frame at a time,” the company press release says. Right as this issue of Canadian Contractor was going to press, BONE Structure was just about to tour journalists around one of its newest buildings outside of Quebec – this one in Caledon, Ont. “The BONE philosophy is one of assembly and technology rather than construction. Structures can be put together in less than a week using only a drill,” the company says. 16
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In various interviews he’s done since founding the company in 2005, BONE Structure president Marc Bovet often takes time to explain that his firm is not in the prefab housing business. His technology involves shipping light-steel struts that are assembled by certified builders (more on that in a minute) by clicking, them bolting the steel members together. Once the steel structure is in place, it’s clad with other modular elements (structural insulated panels and insulated concrete forms, as required) and then finished inside. The company touts the time savings that this form of construction can offer: “From schematic design to construction, completion of a 3,000 square-foot home takes around 12 to 14 weeks.” Of this, as indicated, the actual framing can be up in as little as four days (averaging 5 to 15 days, the company says). The interior finishing can proceed in “30 per cent” less time than with wood stickframe construction, largely because the routing of electrical, plumbing, heating and ventilation is already taken care of with precut openings. Bovet came up with the idea for BONE Structure when he was an executive at Bombardier, one of Canada’s most successful aircraft manufacturers. He wondered why his industry, aerospace, had started out with wood construction but soon left wood behind, as had the automotive industry. The residential construction industry has not widely embraced steel. “There are currently more than 150 BONE Structure homes in Quebec and a few more across the country with options that currently include single-family dwellings, multiplexes, and light commercial jobs. BONE Structure is now expanding its network into Ontario and the rest of Canada, with growing interest in the U.S. and Europe,” the company says. “With already three licensed manufacturing plants in Ontario and seven in Quebec, BONE Structure plans on adding an additional three in Alberta and two more in British Columbia in the next year. Combine this with an ever-expanding network of authorized builders and BONE Structure is destined to achieve its goal of becoming a 'household' name in the construction industry. Readers interested in becoming certified BONE Structure contractors will find a lot of information on how that process works at www.bonestructure.ca. – Steve Payne cc
SITE NOTES
The day we repossessed the windows
This entertaining and thrilling story of a contractor’s revenge was posted online at canadiancontractor.ca by John Cummings, an Ontario-based windows and doors contractor. Fifteen years ago we delivered windows and doors for a 6,500 square foot house being built by a 'contractor' in a remote area for his own family. He had previously taken delivery of three smaller orders, one of which one was paid and two were just over 30 days. I began checking with other suppliers and trades and found out the guy was a crook. I dispatched five employees to the site to retrieve the product. Nobody was there; the house was under construction and all the doors were open. Our guys cut through the vinyl brickmould from inside with reciprocating saws and loaded the windows into the truck. Just before my men left the site with the second truckload, one of the contractor’s men showed up on site. I got a call from the contractor. He said the police were on their way. Our vehicle, loaded with windows, headed up the highway with the contractor following close behind in his truck. An OPP cruiser came down the highway and did a U-turn and dropped
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in behind the caravan with his lights flashing. The contractor and the police cruiser pulled over and our guys kept on trucking. Later that day the officer paid a visit to our warehouse and took photos of the repossessed goods. He said this guy wants to lay charges. I showed him the order which states that “all goods remain the property of the supplier until they are paid for in full." A few days later, the same OPP officer called and asked me to send the five men to a village which was halfway between our location and the OPP dispatch location. I told him I could only send three because the others were at a remote job site. The three received trespassing charges. The officer communicated through the three that his supervisor wanted the other two to come to the OPP dispatch location to pick up their charges because he was not coming all the way to our location to serve my men. A month or so passed and the three employees received subpoenas to appear in court. A week before the court date, I told this story to an OPP officer that I know and he spoke to the Crown Attorney and the bogus trespassing charges against my men were dropped. The following year on the anniversary of the “repo,” we were served with a lawsuit. I turned it over to my lawyer. A couple of weeks later my lawyer called and said the suit is dead because the plaintiff’s lawyer was unable to collect a retainer from the plaintiff. This lawsuit hoax was repeated for two more years on the anniversary with the same outcome. Six months later, a roofer that had done work for the con(artist)-tractor was in our office on unrelated business and told me the con-(artist)-tractor has fled to the US and that he was wanted by the police – and biker gangs were after him due to some drug dealings, allegedly. I haven’t heard from the con artist since. My men tell me the day they repossessed the windows was the most fun they had ever had at work. I would not recommend this method of dealing with bad accounts. We now use a more civilized approach. cc
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CONTRACTOR U
Resolving disputes with clients through mediation and arbitration By Mike Draper www.renovantage.com
M
any contactors will, eventually, have a dispute with a client that appears unsolvable without going to court. It’s a sad reality about our business but that’s what it is – reality. To help you frame your thinking a little the next time you find yourself a situation like this, let’s look at how Renovantage has become a front-runner in resolving contractor-homeowner disputes. What exactly is mediation? Simply put, it’s an alternative to going to court. In mediation, all parties involved in a dispute meet and try to settle the matter with the help of an independent mediator. The mediator is trained to help people settle conflicts collaboratively and has no decision-making power. Together, the parties participate in the negotiation and design of a settlement. The dispute is settled only if all of the parties agree to the settlement. Mediation is often confused with arbitration. Let’s look at the advantages and disadvantages of each of these methods of dispute resolution. The advantages of mediation is that it can be faster, less expensive and the parties share control over both the process and the outcome. Mediation is a private matter and the results will remain confidential. The main disadvantages of mediation are that it does require both parties to co-operate and the results are not binding. Arbitration does not have to depend on the cooperation of both parties, which is an advantage. And the results are binding. But a disadvantage of arbitration is that it does become more costly as it involves a lawyer and legal fees. Results might not always remain confidential and decisions cannot normally be appealed. Enter Renovantage. As a Certified Renovantage Contractor, deciding what type of dispute resolution mechanism is necessary for your situation becomes a much more straightforward experience. Renovantage has devised a fast and cost-effective process for resolving these matters. 20
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As part of our standard agreement, both the homeowner and contractor agree beforehand to utilize the Renovantage Dispute Resolution Service if they get into a conflict they cannot solve independently. And the parties agree to share equally in the expenses of any appointed mediator and/or arbitrator. Here’s how it works. If a problem arises, Renovantage will appoint an independent mediator who will visit the jobsite and meet with the contractor and client, within three business days, to discuss the issues. The mediator will be either a licensed engineer or an architect who is an expert in home renovations. If a resolution to the issue(s) can be agreed upon, the mediator will document it and the contractor and homeowner will proceed to implement the solution. The mediator will file a report with Renovantage. However, if the parties do not agree on problem resolution following a mediation meeting, a binding arbitration meeting will be scheduled to occur within two weeks, assuring a speedy resolution. The independent arbitrator will review the mediator’s report, listen to each party’s position, and issue a judgement. Following an arbitration ruling, it is expected that the contractor and client will agree to complete the project per the original contract terms or as amended as a result of the arbitration ruling. If one or both of the parties do not agree to proceed with project completion then, in the event that a ruling is in favor of the homeowner, Renovantage will ensure the work is completed as per the original contract or as amended by the arbitration ruling. Ultimately, the project is complete and the homeowner is satisfied with the outcome.
Watch Mike Draper’s “Coach’s Corner” video segments at www.canadiancontractor.ca. Scroll down to the bottom of the site to the Contractor U section, or type “Draper” in the search bar at the top of the site.
WSIB
FACT: Ontario WSIB audits can be triggered by: • Random selection • Information you supply to Canada Revenue Agency • Your WSIB reporting patterns
WSIB
WANTS YOU!
Or, how Ontario contractors can prepare for an inevitable WSIB audit without losing their minds By John Caulfield n Nov. 29, at about 7 p.m., two installation technicians with AIM Chimney Sweep & Stove in Midland, Ont., were on their way home from their last job of the day when a drunk driver slammed into their vehicle, causing soft-tissue injuries to both employees. If they thought at the time that things couldn’t get much worse, the workers soon found themselves within the gravitational pull of Ontario’s Workplace Safety and Insurance Board (WSIB) to whom AIM made a claim. First came the paperwork. The hospital was required to fill out WSIB’s Form 8. The employer and the workers filled out Forms 6 and 7. “And we had to make sure that everyone was saying the same thing,” recalls Yvette Aube, AIM’s operations manager. After Aube remitted those forms, WSIB sent them back to be filled out again. Upon receipt of those documents, WSIB informed the company that processing would take between two and six weeks. “Meanwhile, who’s going to take care of their physio and lost wages?” Aube remembers asking the WSIB. The employees decided to use their own insurance to cover their physical therapy bills, and 22
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FACT: In the past five years WSIB has conducted about 11,000 audits annually.
FACT: The WSIB’s thirst for new funds is related to its unfunded liability of $15-billion, which the government has pledged to eliminate by the end of 2027. Ontario Bill 119, extending WSIB’s mandatory coverage, is part of an effort to register an additional 90,000 contractors.
FACT: Receiving an audit notice from the WSIB doesn’t automatically mean you have done something wrong.
FACT: The average WSIB premium is $8.68 per $100 of earnings.
WSIB
the company paid them their holiday Contractors who were previously bonuses and vacation pay early to exempt from mandatory WSIB – “If a person or company carry them over until WSIB’s coverage including independent operators, kicked in. partners in partnerships, and executives already has [private] All of this was déjà vu to Aube, who who don’t work in the field – are insurance, WSIB, which in the 2000s tangled with the government understandably anxious about what’s for five years over compensation related next for them and their companies. is just another insurance to an injury she sustained after the wheel Many contractors, fearing retribution company, should be of a transport truck flew off and hit her from WSIB, requested anonymity car while she was driving. A WSIB doctor before they would speak with an option, not the first insisted her injuries didn’t prevent her Canadian Contractor. choice that’s mandated. from returning to work, even though she Fear and ignorance was experiencing pain whenever she sat That’s double hitting; “There’s an educational component to or stood for extended stretches. Aube’s that’s bullying.” all this, because we had a lot of sole claim got passed around to several proprietors and independent operators WSIB adjudicators, until finally she Yvette Aube, who were unaware they were required received $5,000 “but only because the last AIM Chimney Sweep & Stove, Midland, Ont. to register and have [WSIB] coverage,” adjudicator I had was the same as the says Michael Dauncey, health and first one, and he was retiring.” safety manager for Oakville, Ont.-based As of January 1, most owners, Mattamy Homes. contractors and subcontractors engaged Fear and ignorance, though, are no longer excuses for in construction in Ontario are now required by law to pay into inaction. “Don’t put you're your head in the sand; you’re going WSIB or risk penalties and fines up to $100,000. What Aube – to get audited eventually,” cautions Len Williams, owner of and countless other contractors – are now asking, is why? Rosemount Construction in West Hill, Ont., which four years “If a person or company already has [private] insurance, ago went through a costly audit that exposed deficiencies in his WSIB, which is just another insurance company, should be company’s bookkeeping and subcontractor due diligence. an option, not the first choice that’s mandated,” says Aube. Forewarned is forearmed, and the following advice – “That’s double hitting; that’s bullying.” culled from interviews with renovators, homebuilders, lawyers, WSIB’s new powers consultants and the WSIB itself – lays out what you should Complaining about insurance companies is a time-honored prepare for if you receive a WSIB audit notice; and what you tradition among North Americans. But the extension of WSIB’s can do if you disagree with an assessment against you. powers by Ontario Bill 119, which aims to bring as many as Who gets audited 90,000 more payees into WSIB’s fold, is being assailed by many An audit notice doesn’t automatically mean that you have done contractors as nothing more than a government cash grab something wrong or that your reporting is out of whack. to begin to pay back WSIB’s $15-billion unfunded liability. WSIB covers an estimated 4.2 million workers and 255,000 Regardless, WSIB is now a fact in almost every contractor’s companies in Ontario. The homebuilding and renovation life, and isn’t going away any time soon. sectors “have greater visibility” when it comes to being Over the past five years WSIB has conducted about 11,000 potential audit targets because of the high degree of subaudits annually across all of its rate groups. And enforcement contracted work in this industry, observes Laura Russell, a certainly won’t go down: WSIB has spent hundreds of partner and licensed paralegal with the law firm Mathews, thousands of dollars in advertising in recent months, warning Dinsdale & Clark, which specializes in workman’s comp issues. of the significant penalties or even jail time that non-compliant But contrary to popular belief, WSIB did not beef up its contractors will face. www.canadiancontractor.ca
February 2014
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WSIB
“It’s scary upfront, but our auditor was auditing staff in 2013. “It is not our intent flexible and fair,” recalls Anitra Hofstee, to increase audits in the construction “Don’t put your the bookkeeper for Guelph-based industry,” asserts Christine Arnott, the Rammik Renovations & Restorations, Board’s spokesperson. “However, when head in the sand. whose husband, Mark, is co-owner. auditing the 2013 year in this industry, Rammik received an audit notice on Jan. the field auditors will ensure that the You’re going to 28, 2012, and had roughly six weeks to Bill 119 compliance requirements have get audited pull together its documentation. When been adhered to.” It’s worth noting that the auditor found that the company’s in any given year, about 50 audits result eventually.” files didn’t include WSIB clearance in court-ordered penalties, according to certifications for several subs, “she gave WSIB documents. Len Williams, us a chance to find their clearance The Board’s website notes that an Rosemount Construction, West Hill, Ont. numbers,” says Hofstee. audit can be triggered by information Gabriel Gal, a former builder, three WSIB shares with the Canada Revenue years ago branched out into infrared Agency, as well as by analyses of an energy inspections. He recently was employer’s reporting patterns compared hired to inspect a UPS building, but did to the norm in that employer’s industry. not have a clearance certificate from That being said, WSIB’s claim, that its WSIB to present to his employer. The audits are mostly random, is credible, employer was able to open Gal’s old say those who have dealt with the Board, account with WSIB, and Gal simply although it occasionally will home in on specific industries started paying premiums. When Gal was audited in 2012, and or rate groups. A few years ago, for example it targeted the auditor found that he owed some GST, he and the auditor dry cleaners. More recently, it went after firms in the city of made adjustments to his account by computer. “Dealing with Brantford, Ont., says Richard Fink, a partner in the law firm the government lately has been really easy,” he says. Bornstein & Fink, who has been sparring with WSIB for four decades. Russell notes that WSIB has the legal right to audit any person or company. But the process itself isn’t always like a visit to the dentist.
Second rule: remember the auditors aren’t there to educate you On its website, WSIB emphasizes that auditors are expected
Rulings against the WSIB One of the highest levels of appeal against a WSIB ruling is at the Workplace Safety and Insurance Appeals Tribunal – (WSIAT) whose adjudicators are appointed by the province. WSIAT has overruled the WSIB on numerous occasions. In its Decision 382/06 (January 2007) which involved the independent status of installers working for Canac Kitchens and its franchisees, the Tribunal ruled that questionnaires used by WSIB to determine an installer’s independence and compliance were “confusing” and “convoluted,” and did not constitute WSIB policy. In Decision 643/10 (June 2012, nearly five years after a WSIB appeals resolution officer decision!), the Tribunal ruled that all but six of 39 masons whom WSIB auditors had determined were employees of one company were, in fact, independent operators. “Contracting with only one company over a time period at issue does not in my view determine that individual is [an employee],” wrote the Tribunal’s vice chairman.
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to “treat employers with fairness and assessments, but only after a threerespect” and to “conduct themselves in a year-long ordeal during which his case “There’s no question professional and business-like manner.” passed through several auditors and two But WSIB’s management is also arbitration hearings. “WSIB used one the [WSIB] collections committed to shrinking its bloated interpretation of the law and wouldn’t people are aggressive unfunded liability. In June 2012, a deviate from it,” says Keane, who is now regulation added to the Workplace Safety suing WSIB, which he claims ruined his and difficult. They look and Insurance Act of 1997 mandated business. “WSIB made up their own rules at [assessments] as debt that the “sufficiency ratio” of the Board’s as they needed.” (See our latest update insurance fund (assets divided by on the lawsuit, page 30.) past due, and there’s no liabilities) would be 60 percent by WSIB’s Collections division can be negotiating with them.” Dec. 31, 2017; 80 percent by Dec. 31, 2022; even more unyielding, say contractors and 100 percent by Dec. 31, 2027. and attorneys. “There’s no question Laura Russell, There is a palpable perception among the collections people are aggressive partner, Mathews, Dinsdale & Clark contractors and lawyers that the Board’s and difficult,” says Russell. “They look audit practices are primarily serving at [assessments] as debt past due, this regulatory timetable. For example, and there’s no negotiating with them.” one builder whose company constructs She says WSIB has the power to issue between 30 and 50 homes per year in search warrants and has any number of southern Ontario, is convinced that “seizure responses” to non-compliance. an auditor’s job security rests on his or Cronish believes Bill 119 strengthens her alacrity in finding mistakes or deficiencies in contractors’ those enforcement tools. “It will be like taking candy from a paperwork. “The problem is that the Board’s audit staff is not baby. An auditor’s decision triggers the WSIB’s ability to issue there to educate but to penalize,” says Fink. He and other a Writ of Execution upon a nonpaying party and its principal sources point out that WSIB has been known to change its customer, to the extent of issuing a Writ of Seizure and Sale. guidelines without putting those changes in writing. I have been involved in negotiations to try to save a client’s WSIB has exclusive jurisdiction over worker’s compensation business [from] WSIB’s collectors for many years.” insurance in Ontario, and can pretty much levy whatever fines it wants to within established parameters that can include a WSIB liened his house $22,000 minimum penalty and a 25 percent premium surcharge. Len Williams of Rosemount Construction corroborates these Robert Cronish, a lawyer with the firm JCY Law, has been comments when he says that Collections put a lien on his bumping heads with WSIB for decades, and has scored house and on property taxes he was paying. Auditors also put noteworthy victories in the appeals process. He’s seen auditors a “provisional assessment” on his advertising business. “It took who made assessments that bore little resemblance to the me forever to get these reversed,” says Williams, “and they’re Board’s policies, and auditors and appeals officers who still trying to charge me.” simply ignored evidence under the premise of “exceptional Indeed, WSIB’s collection methods at times can seem circumstances.” (That’s why he believes companies being downright petty. In early December, a renovator that operates audited should “immediately” hire legal counsel to protect just outside of Toronto filed an injury claim for one of its their interests.) employees. In its filing “we forgot to include some things,” The most notorious audit in the construction sector in recent admits the company’s owner. WSIB called him and said he years resulted in premium assessments totaling $340,000 would be fined $250 for not filling out the paperwork correctly, against Keyon Drywall to cover installers WSIB determined and threatened him with another $250 fine if WSIB didn’t were Keyon’s employees and not independent operators. Sean receive the completed documents within a few days. Keane, Keyon Drywall’s owner, successfully appealed those “I blew a gasket,” the owner recalls. After he argued with 26
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WSIB
four or five people at WSIB, a manager at the Board contacted him to apologize for how he was treated and to remove the penalty. “I just wonder how many other people are getting hit with that fine,” he asks.
Get your ducks in a row This contractor’s experience illustrates the importance of presenting WSIB auditors with documentation that is as bulletproof as possible. WSIB’s website provides ample detail about what documents its auditors want to see. Auditors will typically ask for records going back two years prior to the current year, but might go back five years if they uncover irregular reporting. Arnott, the Board’s spokesperson, adds that auditors review payroll information, verify the status of executive officers, and review business activities to ensure proper classifications. If all goes without a hitch, the audit process takes between 60 to 90 days, from the letter of notice to completion. And it’s not unheard of for an auditor to inspect a company’s documents in a day or two.
The level of friction a contractor encounters during an audit “boils down to due diligence: making sure the people you’ve retained to do the work are in compliance with the law,” says Lorenzo Lisi of the law firm Aird & Berlis. That means having on file WSIB clearance certificates showing that hired workers are registered with the Board and are current in their premiums; making sure that each employee and subcontractor is in the right premium rate group; and being able to prove that a contractor is an independent operator, which determines who pays for worker’s comp insurance. (There are 13 rate groups in construction, and the average premium in 2013 – excluding the new grouping for exempt executives – was $8.68 per $100 of earnings up to $84,100.) According to WSIB guidelines, an independent contractor – as opposed to an employee – is one who is contracted for service, owns their own tools and transportation, can hire their own subs, and is free to work for other companies. Compliance information is available online, too. As of mid-December, Mattamy Homes was tracking the status of
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WSIB
556 contractors on WSIB’s eClearance elaborate questionnaire to validate their portal, says Dauncey. He says WSIB independence. Contractors who sends out electronic notices when a contractor’s clearance – which lasts for 90 If you have to appeal, find themselves be committed days and is renewable – expires. on the wrong end Contractors who find themselves on Fink thinks that Bill 119 places the wrong end of an audit assessment more responsibility for compliance on of an audit assessment can appeal. But this option can be subcontractors. So it’s important for can appeal. cumbersome and potentially expensive. contractors to know where they can “You have to be committed to it,” contact subs and independent operators But this option says Lisi. if an auditor wants to interview them. can be cumbersome WSIB’s Appeal Services division Cronish advises contractors to make sure “determines its own practices and that their subs are incorporated, because and potentially procedures relative to applications, if they aren’t “it will become next to expensive. proceedings and mediation,” the impossible to get a status determination” Board’s website says. Its adjudicators from WSIB. “You can’t charge the cost of are WSIB employees, including Appeals a wage assessment for worker’s comp Resolution Officers (ARO) which render back to a sub that’s not incorporated. the final verdict. And without incorporation, the chances In its 50 pages of explanations about of getting a favorable decision from an the appeals process, WSIB mentions auditor or [an appeals] tribunal are the Workplace Safety and Appeals Tribunal only once. The de minimus.” Tribunal, which is the final stage of appeal, is separate from Perhaps the best advice any contractor can follow is to keep WSIB – with adjudicators appointed by the province. good employment and payroll records. Williams at Rosemount Russell says that it’s been her experience that the Tribunal Construction admits his greatest detriment when he was “looks at things somewhat differently” from the Appeals Board, audited was “my books were kind of a mess.” And while he especially in the area of independent worker status. Russell had been asking subs for clearance certificates, he hadn’t been says the Tribunal is less prone to rely solely on documentation following up to make sure those subs were actually paying and more open to hearing testimony. their premiums. While both Russell and Cronish think that hiring legal One of those subs, which WSIB determined didn’t have counsel is a good idea in these proceedings, it’s not required. clearance, was a roofer to whom Rosemount paid $60,000. In fact, until the latter stages of his appeal, Keane says he WSIB charged back $9,000 in premiums to the company, an represented himself. “They’re not too big to fight,” he says of assessment that was based on the entire job, not just the roofer’s WSIB and its assessments. service. Consequently, Williams now sends his subs WSIB forms However, anyone who takes on the government must be whenever he quotes jobs, and tries to get subs to itemize their ready for the long haul. Cronish says it can take anywhere from labor and materials on invoices, although he admits most subs nine months to two years to get a disputed assessment in front won’t do this. of the Tribunal. Wrestling with subcontractors However, time can sometimes be a company’s friend. For Builders and contractors continue to wrestle with getting example, in one of Cronish’s cases, a Tribunal decided in May subs to cooperate in the auditing process. Hofstee says that 2006 that a $104,956 assessment against a property manager Rammik decided it would be easier to pay WSIB $2,000 to settle wasn’t justified because WSIB’s audit branch had delayed Kilburn/KlixPix a dispute about its subs’ status than to Elaine get some smaller subs, issuing its final decision 14 months. which Rammik had used only once or twice, to fill out WSIB’s WSIB’s Appeals Board is not bound by legal precedent. 28
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WSIB
But there is plenty of case history that contractors can cite when appealing decisions about classifications and assessments. (See page 24: Rulings Against the WSIB). A foundational case has been the Supreme Court’s decision in Ontario Ltd. v. Sagaz Industries Canada, which found “there is no conclusive test which can be universally applied to determine whether a person is an employee or an independent contractor.”
The “renovator exemption”
Under Bill 119, homeowners are not required to obtain clearance certificates from renovators working on their one company over a time principal residences (renovators are period at issue does not not exempt when working on rental properties). However, owners could in my view determine be liable if an that individual is uninsured sub hired for a project gets [an employee].” injured on the job. “We tell our Appeals Tribunal vice-chairman, A more level playing field? clients this all the June 2012 In late 2012, Steve Heidebrecht decided time, because to register his company, Toronto-based WSIB’s ads don’t say Greenside Renovations, with WSIB. “It that,” says Aube wasn’t worth the risk” staying under of about the Board’s the Board’s compliance radar, he says. marketing campaign The five-year-old Greenside Renovations for Bill 119. Lisi of Aird & Berlis states generates between $200,000 and $250,000 further that homeowners “better be in annual revenue from residential and damned sure that the people they’ve commercial projects. Heidebrecht believes his company might contracted to work on their home are compliant. Otherwise, I have an advantage over larger competitors because it factored see this as potentially a tremendous black hole.” cc WSIB premiums into its overhead before Bill 119 took full effect. But he is in the minority among contractors in believing that this law will achieve one of WSIB’s presumed objectives: WANT MORE ON THE WSIB? to limit the ability of unregistered and noncompliant contractors to work under the table for cash. Go online to: canadiancontractor.ca to view: Estimates vary, but Ontario’s underground economy for construction and remodeling is thought to exceed $1 billion • A longer version of this story annually. Most contractors are skeptical that Bill 119 can make a dent in that number because they see scant evidence that • An audio interview with the WSIB is going after companies that aren’t already registered. author, John Caulfield They believe the WSIB’s enforcement will simply fuel the underground economy. • A video interview with Keane calculates that the price gap between compliant and Sean Keane, suing the WSIB noncompliant contractors in drywall installation is already 23 percent. And Cronish says the gap is as high as 50 percent in other construction classifications. “The question,” says Gal, the energy inspector, “is whether it’s worth being honest.” He still sees a lot of subs working for • Weekly WSIB-related updates cash and not providing receipts. Dauncey of Mattamy Homes also doubts that the threat of fines or incarceration will matter much to non-compliant subs.
“Contracting with only
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WSIB
“They’re not too big to fight”
- Sean Keane, Keyon Drywall, suing Ontario’s WSIB
An update on the David versus Goliath fight between Sean Keane, drywall contractor, and Ontario’s WSIB. Keane is seeking $6-million damages from the WSIB for, he claims, putting his firm out of business. By John Caulfield Photo: Larry Arnal Photography
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S
ometime this November, Sean Keane expects to finally get his day in court. That’s when a trial before the Ontario Superior Court of Justice is scheduled to begin, to determine whether actions by the province’s Workplace Safety and Insurance Board (WSIB) seven years ago were responsible for effectively putting Keane’s company, Keyon Drywall, out of business. On Aug. 16, 2010, Keane filed a complaint with the court against WSIB; five auditors, supervisors, and managers; and the United Brotherhood of Carpenters and Joiners of America, seeking $6 million in general and punitive damages. (He has since released the WSIB employees from his complaint “to speed things along,” he says.) In his suit, Keane alleges that WSIB’s Audit Department targeted employers in the construction industry “with the clear and cogent intention” of either collecting insurance premiums from independent operators working for these companies or to “render businesses that engaged independent operators unable to continue in business […] without regard to applicable law and precedent.” Keane accuses WSIB of “abusing” is own audit procedures. He accuses the carpenters and joiners union of attempting to influence the outcome of the audit to relieve its members and their insurance obligations. But central to Keane’s complaint is his claim that WSIB’s $340,000 assessment against Keyon Drywall,
WSIB
After hearing testimony from several installers, the ARO to cover union and nonunion workers the Board deemed to concluded that WSIB’s Employer Audit Services (EAS) had be employees of that company, forced Keyon Drywall to stop withheld installers’ tax returns and supporting documentation operating because it couldn’t afford to pay that assessment from Keane and his attorney, and that auditors “disregarded all upfront in order to stay open. the evidence that was before them that the installers could hire” “WSIB has created an appeals system where denial of other workers, an important criterion for determining whether a clearance procedures, delays of appeals, and seizing assets and person or company is an independent operator. bank accounts during the appeals procedure do not allow any Perhaps most damaging to WSIB was the ARO’s finding that its company any reasonable chance of surviving large assessments auditors “arbitrarily and without reasonable basis changed the such as these,” Keane states in his complaint. responses on the questionnaires [that contractors and subs fill out A hearing next November would be the latest chapter in to validate their independent status] to fit with a conclusion that a long and contentious saga that has pitted a contractor of 25 [installers] were workers.” years against a government agency with exclusive jurisdiction Keane says the appeals process found that over Canada’s workman’s compensation he actually had paid more in premiums than insurance apparatus. he was responsible for to cover two repairmen This David and Goliath tale began in late and two laborers whom the ARO determined 2006, when WSIB audited Keyon Drywall for the were his employees. He also says that he’s fiscal years 2004 and 2005. At the time Keyon, gotten back $9,000 of the $11,000 that WSIB had which Keane launched in 1993, was generating Keane’s lawsuit “seized” from him and his company. about $3.5 million in annual revenue providing against the WSIB Keane is currently an executive officer with installation services to builders and remodelers. D&S Contracting, a drywall contractor, although Keane told Canadian Contractor in December argues that the he’s pretty consumed by his battle with WSIB. 2013 that Keyon worked with a network of about agency “abused” He says he has read 360 cases relating to 100 subs, and used between 30 and 35 at a its own audit independent operators’ status. And he’s set up a given time. procedures website, www.wsibdefence.ca, to provide other WSIB auditors determined that 11 of those with a “clear and contractors with tools and information if they get installers qualified as employees of Keyon audited. He’s spent about $30,000 in defence of Drywall. Consequently, the auditors assessed the cogent intention… his company and to pursue his lawsuit. company $340,000 in premiums owed for those to render businesses Keane is the first to admit he faces a long road workers for the years 2004, 2005, and 2006. that engaged ahead to collect damages from the government, Keane objected to that assessment twice, in independent which he believes will attempt to prove, first and July and October 2007, after WSIB refused to operators out foremost, that Keyon Drywall never really went issue clearance certificates to his company that out of business. Keane acknowledges that when summer, “which effectively resulted in [Keyon] of business.” Keyon Drywall stopped operating it had $800,000 being unable to carry on business in the normal in payables and between $1.2 million and course,” his complaint states. $1.3 million in receivables, so it was able to meet its liabilities Keane appealed that ruling, and on March 17, 2009, a WSIB with suppliers “who are the best people on earth to deal with.” Appeals Resolution Officer (ARO) found that all but four of the What frustrates Keane most, though, is how out on a limb installers in question were, in fact, independent operators in he found himself until the ARO heard his appeal. Neither the terms of their ability to accept or refuse work, work for whichever province’s Attorney General nor its Labor Board would consider company they chose, and were not being supervised or his case. He also got nowhere with elected officials. “We had “controlled” by Keyon. contacted each separate level at one point or another requesting The ARO vacated the assessments, and rejected WSIB’s their assistance. And with what we uncovered one would think appeal three months later. In defending these rulings, the ARO one of the levels would have acted. They did not.” cc exposed significant deficiencies in WSIB’s auditing procedures.
Why he’s suing
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CREATIVE EYE
THREE STOREY HOUSE BOWEN ISLAND, B.C. A.W. PETERS AND ASSOCIATES
About Allan Peters Allan Peters started working in the renovations business more than 30 years ago, as a high school student in Victoria. A few years later, he started his own contracting company. A 20-minute ferry ride from Vancouver, the island’s pristine beaches and ocean coves surrounding a forest of Douglas fir have been a source of inspiration for Peters. “I had my own contracting business for two years but I was really interested in taking things to the next level,” says Peters. “I put myself through eight years of university while doing construction work and contracting work to get a degree in architecture.” It was while studying at the University of British Columbia that Peters became interested in green building. “By the early eighties people in the industry were starting to take energy efficiency more seriously,” says Peters. “And the ideas were all there in architecture school. The whole idea was to bring the practical realities of green construction together with the pursuit of artistic activity.” More than just energy-efficiency, as this month’s Creative Eye demonstrates, Peters has a keen talent for incorporating nature into his structures – using granite blasted from the building site as a decorative insulator; raw steel and glass to create naked structures so views and solar heat are optimized; designing roof lines to preserve forests. “You can still make an energy-efficient house in the lower mainland with a lot of glass and elemental materials,” says Peters. “It’s all about connecting the indoors and outdoors, connecting with nature.” By Brynna Leslie
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CREATIVE EYE
ISLAND
Photos: A.W. Peters + Associates
RETREAT
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CREATIVE EYE
THREE STOREY HOUSE BOWEN ISLAND, B.C. Continued
The owners of a 100-acre oceanfront peninsula lot on Bowen Island delivered Allan Peters clear direction: Build us an energy-efficient house with maximum views, but make it look like you were never here. Peters spent two years on the design. During construction, the only access to the house was a narrow road, carefully constructed to wind through and preserve the arbutus orchard. (This road would later disappear under the curved, elevated boardwalk. See our cover photo.) The three-storey house is embedded in a granite outcrop and framed with Douglas fir, a material also used for the interior beams and ceilings. The granite blasted out to form the foundation was used to form the six-inch thick facing for the exterior walls, the 18-foot-long wall in the living room and the interior core. The stair treads (see previous page) are three-inch solid black walnut (a local material), framed in raw steel and glass. “Very simple and elemental materials,” says Peters. The asymetrical roofline (see sunroom inset, far right) isn’t accidental. Each storey is rotated on a 45-degree angle to give the homeowners the optimum panoramic view from the peninsula. “It’s a 360-degree outlook,” says Peters. “We made use of every opportunity to make the house feel like it was growing out of the landscape.”
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Photos: A.W. Peters + Associates
CREATIVE EYE
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February 2014
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CREATIVE EYE
INSIDE OUT 12,000-SQ. FT. HOUSE VANCOUVER SOUTHLANDS A.W. Peters + Associates This 12,000-square foot house in Vancouver Southlands overlooks the Fraser River. But the views of the river were blocked (see before inset, below.) Peters’ challenge was to open up the house to make the 1.5 acre property and swimming pool accessible for the family on the south and west sides. Peters created a seamless indoor-outdoor living space (main image) by removing over 30-feet of exterior wall on two sides – replaced with two sets of 9ft by 24ft glass bi folding doors. The terrace addition (see “after” inset, far right) has a retractable awning and overhead infrared heaters. By Brynna Leslie
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BEFORE
Photos: A.W. Peters + Associates
CREATIVE EYE
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February 2014
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MAXWELL’S S t u f f We L i k e
Introducing a new regular section of Canadian Contractor, compiled by our tools editor Steve Maxwell.
INSIDE: • Mold removal • Paslode Framing Nailer • Festool Circular Saw • DeWalt Oscillating Multi-Tool
Steve doesn’t just write about the tools, products and building materials he features in our pages – he tests them, builds with them and is unflinching in his praise or criticism of them.
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February 2014
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PRODUCTS
MAXWELL’S NEW PRODUCTS
S t u f f We L i k e
Mold
Most of your clients are terrified of mold and this is a very good thing. Now you can be their hero. By Steve Maxwell
M
ost of your clients are terrified of mold and this is a good thing for two reasons. First, mold can sometimes be dangerous, so it’s wise to treat mold with caution when it’s discovered as you crack open renovation jobs. The second reason widespread moldophobia is a good thing is because it gives you a chance to be a hero. Heroes get respect, people seek heroes out, and heroes get paid better. And who wouldn’t want that? There are two tricks for turning mold into professional gains. Start by becoming an expert on killing mold safely. Next, to cash in on the hero potential, you need to become an expert at explaining how you kill and prevent mold. All else being equal, the contractor who can communicate better builds a reputation that future clients will seek. So here are your seven steps to glory as a mold-busting superhero.
Step 1: Size up the situation Let’s say you’re tearing out an old basement, or working in an attic somewhere, or cutting into a wall before adding in
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addition. Chances are pretty good that most homeowners are going to notice ugly black staining if it’s revealed, and even if they don’t you’d be wise to point it out. Full disclosure is always a great policy, and you’re wasting a PR opportunity if the people who sign your cheques don’t know they’ve got a mold problem that you’re saving them from. The main issue is how big and bad the mold growth is. With the proper know-how, precautions and the treatment strategies I’ll show you here, you’ll be good to tackle any situation up to the size of three or four sheets of plywood. If the problem is bigger than that, or if it seems to be associated with some kind of sewage leak, consider calling in a mold abatement professional.
Step 2: Eliminate the Moisture Source Mold never appears without moisture. That’s why you always need to start your work by finding and drying up the water causing the problem. Liquid water is easy enough to spot, but most hidden household mold is probably due to condensation or some other form of water
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vapor. You’ll almost always find mold in the fiber insulation stuffed into the rim joists where basement ceilings meet outside walls. Basements and crawl space walls and floors are also a common breeding ground for mold, but don’t make the mistake of thinking this is always because of a lack of ventilation. Fresh air is always great and necessary, but not when it’s warm and humid outside. The leading cause of mold and musty basements and crawl spaces is ventilation during hot summer months. When warm, moist, humid outdoor air makes its way into a cool basement, water condenses out, kickstarting the mold growth process. There are a thousand more possible sources of mold inducing moisture, but you get the picture.
when cool, not drier. And while it doesn’t sound like much, air circulation with simple household fans really boosts drying action. Just be patient about it. Don’t rush ahead and work with a damp situation just because it suits your schedule.
Step 5: Kill Mold
Step 3: Make Removal Decisions Not all moldy surfaces should be treated. Sometimes tearing out moldy materials and replacement is a better strategy. Moldy drywall, fiber ceiling tiles carpets, wood paneling and other non-structural materials are best removed rather than decontaminated. Just don’t be an idiot about the work. Not all mold is dangerous, but how do you know? That’s why you should always wear a HEPA-rated respirator when dealing with moldy areas. As a contractor your body is your livelihood, and there are certain kinds of molds that will cripple you for life if you’re not protected.
Step 4: Dry the Area Depending on the time of year, different drying strategies make sense. In wintertime adding heat to the situation makes a huge difference. The warmer the air is, the lower its relative humidity. And air with a low humidity is hungry to dry up wet areas quicker. Just don’t use any kind of propane heater for the work. Burning propane gives off tons of moisture which will make the air wetter than it was
Use a special mold-killer such as Concrobium, not bleach, which is only minimally effective.
Bleach is the first thing most people reach for when it comes time to nuke the mold in their life, but this is a mistake. There are three reasons why. First, bleach is actually only minimally effective when it comes to killing mold, especially mold growing on porous surfaces. That’s because bleach doesn’t have the ability to penetrate deeply enough into wood or concrete to kill the hidden roots of the mold that are growing below the surface. Another issue with bleach is that it makes surfaces lighter in color. This isn’t always a problem, but why risk making matters worse with spatters of light color where they’re not supposed to be? And finally, bleach stinks and is bothersome to some homeowners, especially when it’s used over a large area. The government is involved in just about everything
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February 2014
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S t u f f We L i k e
these days, including assessment of how well commercial mold killing products work. That’s why you’ll find registered fungicides on the market. Even though you’re probably not killing fungus, a registered fungicide is what you want to use for mold. It’s also part of the public relations work you should do with your clients. One way to look smart is to know what products to use and to explain why they work. The most widely available, non-toxic registered fungicide in Canada right now is Concrobium Mold Control (www. concrobium.com; 866.811.4148) It’s an odorless liquid that kills mold and mold spores by mechanical action, physically crushing all parts of the mold organism as it dries. This explains how something that’s non-toxic can still kill a tiny organism like active mold and mold spores. I’ve used this stuff before and it’s as pleasant as water. That’s one reason it’s become so popular with mold abatement professionals. It’s even thin enough to run through an electric fogger for treating really large areas, if you opt to do that.
Step 6: Stop Mold from Coming Back Concrobium Mold Control is also a proven fungistat, which means it stops mold regrowth, too. That said, it’s not magic. If areas of potential mold food do get moist again and stay wet, mold will grow back. That’s why you’ve got to steer your clients towards renovation details that boost the right kind of ventilation, while also eliminating places where wintertime condensation can occur. Most of this is very simple – ridge vents on roofs, keeping soffit areas open and free from insulation, dealing with basement leaks – but other mold problems aren’t so simple. The biggest single cause of mold in Canadian homes is insufficient wintertime ventilation. This accounts for everything
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Certain types of mold can cripple you for life if you don’t wear a HEPA-rated respirator when you encounter them.
from the mold growing along the bottom of windows, to moldy exterior wall corners and even internal mold growth within walls. Even though building codes almost always under emphasize the need for mechanical ventilation, a heat recovery ventilator is an excellent option, especially if the renovations you’re doing will be tightening the house up with new windows and air sealing strategies.
Step 7: Eliminate Mold Stains This isn’t always as easy as it looks. Mold stains can be almost impossible to get off with a scrub brush, and while bleach, hydrogen peroxide or oxalic acid all work to remove stains, they also lighten the colour of surrounding surfaces. The best option I’ve found so far for removing mold stains is a product called Mold Stain Eraser. It’s a white powder that you mix with warm water and let sit for 10 minutes before sloshing on the surface. Occasionally you might need to do a bit of scrubbing after the solution goes on, but most times it simply removes staining all by itself. And somehow it does this without lightning surrounding areas at all. I’ve even had excellent results using this product to remove grey weathering from exterior wood, without getting rid of the underlying woodgrain. Learning to control mold effectively and to explain how it’s done doesn’t take a long time, but the public relations value for you is pretty high. Like I said, it always pays to be a hero. cc
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NEW PRODUCTS
Stuff We Like . . . Stuff We Like
Products 1. Paslode IMLi325 Cordless Framing Nailer
1.
Why don’t I see this efficient, cold-resistant, low-hassle nailer more often on jobsites? I’m puzzled. Somehow air nailers still seem to be way more common than common sense dictates given alternatives like this one. I’ve been using Paslode gas nailers since the late 1990s. I liked them then, and I like the the IMLi325 even more than the previous CF325 that it evolved from. The biggest improvement is a lively lithium-ion battery. It takes a charge fast, holds that charge for months between uses, and has way more capacity than the previous nicad battery. This new battery also locks much more securely into the tool with a two-point mechanism – one click for storing the battery and another for use. Adjusting the nosepiece for nail depth is a tool-free operation that’s as easy as it gets, and the IMLi325 works great down to the -20ºC weather I’ve used it in.
Stuff We Like . . . Stuff We Like 44
February 2014
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NEW PRODUCTS
Like . . . Stuff We Like . . . Stuff 2.
2. Festool TS 75 EQ Festool is a German tool company with roots going back to 1925, and if you don’t know much about them yet, that’s probably going to change. Festool has seriously ramped up their outreach lately, so it now matches the impressive tool quality they’ve always delivered. I began using their TS 75 EQ track saw back in the summer, and it’s the best example of the breed I’ve seen so far. Track saws combine a precise-cutting hand-held circular saw with a metal guide track. The idea is to bring tablesaw quality cuts to a workpiece instead of the workpiece to a tablesaw, and it pays off in surprising ways. There’s no better tool for quickly and flawlessly trimming doors, and track saws make it possible to trim everything from veneered sheet goods to complicated, angled roof sheathing with speed and accuracy. Lee Valley now carries the Festool line, so us Canadians get excellent delivery and support. Festool Canada has also got the coolest tool video I’ve ever seen anywhere. Even with the audio in German, I couldn’t stop watching it: www.festoolcanada.com.
3. DEWALT DCS355 Oscillating Multi-Tool
3.
When multi-tools showed up in Canada in 2003, they had nothing to offer contractors. Now they do. The DEWALT DCS355 is the latest and best version of the cordless multi-tool so far, and when it comes to building work, tools like these are mostly about finesse cutting in close quarters. Typical jobs? A good mutli-tool can cut 2x rafters for installing a skylight, it precisely slice through baseboard while making a new doorway, or just about any other kind of stop-start cutting where precision matters. A higher oscillating frequency on the DCS355 gives it more power and 10% greater speed than the competition in my tests, and the tool-free blade change is way better than anything else in the world. The on-board headlight is just what’s needed for the kind of cutting this tools is intended for, and the variable speed trigger boosts control. The yellow guys also offer the widest variety of multi-tool blades on the market, including one for cutting asphalt shingles.
Like . . . Stuff We Like . . . Stuff www.canadiancontractor.ca
February 2014
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ONLINE CONTEST
The only way to benefit from dealings with customers who won’t pay you – or otherwise prove to be bad apples is to (a) learn from them or (b) win a power tool for telling us about them! We are sending a Milwaukee FUEL tool to Richart, who sent in the gold medal winner in our recent online Customers From Hell contest.
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M O T S CU
H M O FR DAL: ITUDE GOLD MAE TT YER WITH A -P THE SHORT
actors will ds that contr n ie fr r e h y en told b less owing. “She had be as $5,000 or w re e th if t n ayme not pursue p .” Ontario k her to court Wrong. I too r in Southern to a v o n re a y Richart, Submitted b t n a basemen do a quote o to e m ll ca u r me s abo t I had a custo ake decision o m g r a e rs h a lp e e y h to A few d a designer She had hire . n o ti a v o n re fixtures, as $500 light ch su s e finishes, etc. ri d luxu at is what ll the high en s on. Since th e o g She picked a st li e th tub and e in around eel laundry e quote cam h T . it a stainless st d te o u ards ay I q orked backw that is the w w , e d w te n so a – w h e sh that was hig a more ark. She felt got down to d n a s m e it the $50,000 m high end ut a lot of the and pulled o d s that we ha $30,000. e of the item m so reasonable in ck a e b e end d up arted to add e project. W th f o d n Day 1 she st e e nued to th off on each nd that conti ad her sign h I . g n ci pulled out. A ri p d job oing off inally quote d whistles g g n ri a o s e ll e th b to e back ecause of th ent back in b w y e th s a m ite
ONLINE CONTEST
S R E M O
L L E H M
ir. e was not fa at the invoic th lt fe e sh if y time the work or as wasting m w I t a th e m st told iends that She again ju h en told by fr g e u . b d ro d a a e th h h y e a y h w m S in ect. bout half as $5,000 or trying to coll r first draw a ue if there w She was rs t. u n p e t m o I submitted fo y n a l il p sues with contractors w nd had no is ssing. re g ro p s the project a a w e job less owing. h the way th it e w th y p in p t a n h d se very that it was schedule an Wrong! and he told made the work on r t e d o y e n h w s is a la n w y fi m e rk W nt for the wo I went to see ey as what is . The payme would get the mon e to sh ch n u e h m s w final invoice a ask ll claims going to cost I called her to e her in sma so su e s to y sh t a t n d a a th 30 w t id within ay no she again sa owed and I m t yment – and u a o p d g n n se ki a ld u m o be at. work and w because of th ppy with the a h ry e v s ! a w and Wrong again ly. small claims te to ia r d e e h m k rk o o im to t w – e wyer paymen ets for cheque for th I hired the la e sign off she th r I received a f o te y la lp b e t k h a e e e th w th g A with ached sayin at if I had won the case ith a note att ssured me th w a rk e 00 o g ,0 w d e $5 ju s th e u t h a T min uld s agreeing th of the extras. ras that it wo cheque I wa $5,000. all ts for the ext e e e th sh g ff in o tt e n cashing the g g si took t be not had the win. He also d I would no to n a r se ll e tt fu ca le lt in d e cu id fi ch was pa very dif bout the atta paying have been a r to ask her a er about not e h e h t a d m t e u to ll o d ca e sh n d on I the minutes to la quickly resp an $5,000. after a few 00. She very o ,0 g $5 to e e th m bill is less th ti d e n y a th m if h ck but rt rs o o w ct t contra that I got ba t it is no a 00 ,0 th ” $5 w e e e th n th d st “k an e almo that she of legal fees Yes, it cost m . ce because n la a on principle b e th r her fo ey. u have to go n o o y m e t m a ti th e g m so of collectin ith aggravation as an issue w w re e th if r d he I again aske
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February 2014
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ROX
ONLINE CONTEST
C
S R E M O T US
L L E H M FRO
SILVER MEDAL: THE HUMIDIFIER INSTALLATION FROM HELL He thought he was there to install a humidifier. He was turned into an unpaid babysitter – and given food poisoning. Submitted by Greg Paterson In the 70s, when I was an apprentice, a roommate’s brother asked if I would wire up his new furnace humidifier. I agreed and showed up after work the next day. His wife insisted I have supper. Spareribs in a black sauce were served. She forgot napkins so quickly fetched a roll of toilet paper! After supper I went to the basement to find that the humidifier was still in the box and the furnace was surrounded with dirty laundry. I began the installation. The husband came down the stairs and ask me to watch their two kids while he and his wife went to an Amway meeting (I was pissed). I finished the humidifier installation in a couple of hours then waited with their two unruly kids until they got home at 11 pm. When they arrived home I stormed out. That night around 3 am my guts began to boil and for the next few hours Montezuma had his revenge! I missed work the next day, losing a day’s wages. The guy never did pay me.
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BRONZE MEDAL: THE HOMEOWNER THAT DESTROYED THEIR WORK
“Some customers want a Jaguar for the price of a Chevette.” Such as this homeowner who drove this wet basement repair contractor crazy. Submitted by “Digger Dan” “Mike Holmes opens our eyes to a lot of trash work, but one must remember some customers/homeowners want a Jaguar for the price of a Chevette. Contractors need to be aware of homeowners deliberately trying to scam the contractor and get work done for free! Even worse are homeowners wanting to save money and then tamper with the contractor’s work. We had a case where the homeowner was a contractor and hired us to repair his wet basement. This individual was to finish capping his windows and regrade his property after his work was completed. Needless to say, the windows never got recapped and our membrane was ripped (by them). Then they made an absolute mess of the property with garbage from their renovations. The homeowner never once contacted us about having concerns and was very happy with our work after we left. Then, on the internet we find that this same individual is slandering our company and advertising wet basement repairs! Why not have a TV show on how to protect contractors from devious customers? We have been in business since 1982 and have thousands of happy customers. Thank God for those for whom we have saved thousands of dollars and are very happy. We love solving peoples’ wet basement issues while saving them money, if possible. Do your homework! Not all contractors or homeowners are bad.
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February 2014
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OVERHEADS
Bureaucrat Of The Month
David Tsubouchi Registrar and CEO, Ontario College of Trades (OCOT) and still a partner at the Toronto law firm Fogler, Rubinoff LLP.
David Tsubouchi Appointed: Sept. 9, 2013 Estimated annual salary including benefits: $170,000* for this position *Based on the compensation paid to the previous OCOT Registrar and CEO Robert Guthrie, according to the 2012 Ontario ‘Sunshine List.’
Tsubouchi’s previous posts • Ontario Minister of Consumer and Commercial Relations • Head of the Travel Industry Council of Ontario (TICO) • Head of Real Estate Council of Ontario (RECO) • Head of Ontario Motor Vehicle Industry Council (OMVIC) Tsubouchi’s “official” task “He has the vision and know-how to ensure the College of Trades continues the crucial work our members and stakeholders have begun, to ensure Ontario continues to build a workforce capable of meeting our economic needs well into the future.” Ron Johnson, Chair of the OCOT Board of Governors, in the press release issued when Tsubouchi was appointed last fall. His task as we see it To convince Ontario’s tradespeople that it’s not simply a cash grab by a new bureaucracy when they get invoices from OCOT forcing them, by law, to pay $135.60 a year (until the fees go up) to join this “College.” By paying this fee, you won’t see a damaging label such as “suspended,” “cancelled,” or “revoked” next to your name on a website searchable by the public. If you don’t pay the fee, goodbye to your Certificate of Qualification. Who runs the Ontario College of Trades? A 21-member board of directors, the majority of which are either union employees or union members. As a member, how do I vote to change the OCOT’s direction? You can’t. The OCOT is not a democracy. Key opponents of the Ontario College of Trades • Stop The Trades Tax Coalition (stopthetradestax.ca) • Ontario MPP Garfield Dunlop (garfielddunlopmpp.com). Dunlop is a licensed plumber. • Ontario MPP Randy Hillier (randyhilliermpp.com). Hillier is a licensed electrician. • Doug Leitch, Ontario Contractor and Small Business Association. Email: power_up@hotmail.ca. Leitch is an electrician.
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