Open Mind 2013 Alberta

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Contents Volume 21 • Issue 1 • Spring 2013

42 5 Executive Editor’s Column

42 Quiet Revolution

By Stephen Kushner

Quebec’s corrupt construction industry takes the country’s headlines by storm

By Ben Freeland

6 The State of Labour Law Construction labour laws vary by jurisdiction and current government

By Peter Pilarski

28 ON THE COVER Construction Ownership Evolution Leadership styles and ownership transitions set the stage for a company’s success or failure

By Carissa Halton Illustration by Dushan Milic

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11 A Test for Ethics The pros and cons of onsite drug and alcohol testing

By Kelley Stark

17 Women in Trades WBF helps change the face and statistics of the construction industry

By Michelle Lindstrom

22 Charter Challenge

47 Alberta’s Key Players This year’s Contractor of the Year Awards acknowledge innovative minds

By Alexandria Eldridge and Michelle Lindstrom

51 The Demographic Cliff The federal government retools its former programs, addressing the country’s shortage of skilled tradespeople

By Bill Stewart

54 By the Numbers Canadian construction statistics

Rights in the construction industry are challenged when mandatory union membership conditions are enforced

By Nicholas Malone

34 National Agenda Bill C-377 makes waves across the country and Merit Canada’s role in levelling the playing field

By Terrance Oakey

40 Productivity and Purpose

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It’s about more than working harder.

Companies are realizing the benefits of investing in efficiency

By Elizabeth Chorney-Booth

34 OPENMIND SPRING 2013

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Executive Editor’s Column

Volume 21 • Issue 1 • Spring 2013 Publisher

Ruth Kelly

Executive Editor

Stephen Kushner

Associate Editor

Suzanne Pescod

Editor, Contract Magazines

Michelle Lindstrom

Production Manager

Betty-Lou Smith

Production Technician

Brent Felzien

Production Technician

Brandon Hoover

Circulation Manager

Sharlene Clarke

Vice-President Sales

Anita McGillis

Advertising Representative

Shane Kelly

Sales Assistants

Karen Crane, Jennifer Rush

Art Director

Charles Burke

Associate Art Director

Andrea deBoer

Assistant Art Director

Colin Spence

Contributing Writers Elizabeth Chorney-Booth, Alexandria Eldridge, Ben Freeland, Carissa Halton, Nicholas Malone, Terrance Oakey, Peter Pilarski, Kelley Stark, Bill Stewart Contributing Illustrators and Photographers Steve Adams, Michael Byers, Isabelle Cardinal, Dushan Milic, Kelly Redinger, Heff O’Reilly Open Mind is published two times per year by Venture Publishing Inc. for Merit Contractors Association.

Venture Publishing Inc. 10259 -105 Street, Edmonton, Alberta T5J 1E3 Tel.: (780) 990-0839 Fax: (780) 425-4921 admin@venturepublishing.ca www.venturepublishing.ca Merit Contractors Association 103-13025 St. Albert Trail, Edmonton, Alberta T5L 4H5 Tel.: (780) 455-5999 or 1-888-816-9991 Fax: (780) 455-2109 meritedm@meritalberta.com www.meritalberta.com Merit Contractors Association is a non-profit organization that offers human resource services to the open shop construction industry.

Printed in Canada by Transcontinental LGM Graphics The opinions conveyed by contributors to Open Mind magazine may not be indicative of the views of Venture Publishing Inc. or Merit Contractors Association. While every effort is made to ensure accuracy, neither Venture Publishing Inc. nor Merit Contractors Association assume any responsibility or liability for errors or omissions.

On behalf of Merit Contractors Association, welcome to Open Mind magazine.

We are pleased to provide you with the 21st

edition of Open Mind. While Merit has been providing human resource solutions, like benefit, retirement and training plans for some 27 years, we are also very excited about our 21st edition of Open Mind.

Over many years, Open Mind has been a vehicle to discuss issues not dealt with in the mainstream media. This year is no different as we discuss the shifting political landscapes that affect labour legislation and union financial disclosure requirements under tax legislation and immigration reform.

It’s estimated that tens of thousands of skilled tradespeople will retire in the upcoming decade, as well as thousands of construction executives; Open Mind looks at the changing face of contractor ownership. From large companies to the family-run business, how are the organizations handling a shift in ownership? We explore buyouts, family succession and mergers that change the way a business operates.

As the demographics of the construction industry shift, women are entering the trades at higher numbers than ever before. Open Mind profiles a graduate of Women Building Futures (WBF) and examines the ways WBF helps women gain a foothold in what has previously been a male-dominated arena.

It’s no secret that unions have a close relationship to government leaders; how do these relationships affect the industry and the individual worker? This topic is explored through the “Charter Challenge” article by Nicholas Malone and “The Coming Quiet Revolution” article by Ben Freeland.

Alberta’s weather-affected construction season will always push the need for increased productivity. FMI provides insight into efficiency and productivity targets. Dr. Janaka Ruwanpura discusses the dynamics of creating more effective construction outcomes, giving tips on how to improve business.

For the third consecutive year, we celebrate the achievements of Alberta’s top contractors with the Contractor of the Year Awards. We are pleased to announce the winners in this edition.

Thank you for your interest in Open Mind, and as always we welcome suggestions for future topics.

We wish you the best in 2013!

Canadian Publications Mail Product Agreement #40020055 Copyright © 2013 by Merit Contractors Association No part of this publication should be reproduced without express permission of Merit Contractors Association.

Stephen Kushner PRESIDENT MERIT CONTRACTORS ASSOCIATION

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ILLUSTRATION BY: HEFF O’REILLY

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Provincial and federal politicians determine the future of the local industries based on the priorities and laws for which they lobby

By Peter Pilarski

C

anada’s labour laws are different provincially and

federally, with the construction industry generally falling under provincial jurisdiction. As such, laws are subject to change depending on the shifting political priorities of the government of the day. It is not unusual to see labour laws change significantly when a new party is elected and forms government.

When the House of Commons debated and eventually passed Bill C-377, the issue of union financial disclosure became a hot topic in Canada. The bill, “An Act to Amend the Income Tax Act (requirements for labour organizations)” was a private member’s bill introduced by Russ Hiebert, Conservative MP for South Surrey – White Rock – Cloverdale. Assuming its approval by the Senate, Bill C-377 makes it mandatory for unions and related organizations to file an annual standardized set of financial statements and schedules with the Canada Revenue Agency.

This degree of transparency will allow Canadians access to crucial information in a manner similar to that found in the U.S., U.K., Australia and many other countries where unions are held to higher degrees of accountability. Canadians will finally be able to see, in online statements, how more than $4 billion in tax-free dues are spent.

BRITISH COLUMBIA

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

In December 2012, Dix supported eliminating the secret ballot when workers vote on whether to join a union. Abolishing this practice eliminates a worker’s ability to fairly express his opinion without fear of intimidation.

ALBERTA

The Alberta government has not changed its labour code since 2008 when Bill 26, the Labour Relations Amendment Act was passed. It dealt with unfair union organizing and job targeting bid-subsidy schemes.

Since then, a group of Alberta’s leading industrial contractors formed the Construction Competitiveness Coalition (CCC) to analyze Alberta’s labour environment and provide recommenOPENMIND SPRING 2013

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The State of Labour Law dations to reform A lberta’s labour relations rules, improving the competitiveness of its construction industry.

Some of these recommendations formed part of the PC election platform.

During the 2012 provincial election, the PC party’s election campaign proposed amending Alberta’s Labour Code.

This included introducing the “Paycheque Protection, Transparency and Freedom to Choose Act”, making it mandatory for unions to provide members with annual financial statements disclosing union spending, providing members the ability to opt out of paying the portion of dues spent on activities unrelated to collective bargaining and grievance administration.

The PC party platform promised to amend the Labour Code banning the imposition of fines against members who work for non-union employers or employers with a non-signatory union and enabling parties to negotiate single collective agreements for all company workers or projects, rather than separate agreements for each trade group.

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

SASKATCHEWAN

On May 2, 2012, the Government of Saskatchewan issued a call for submissions, in response to a consultation paper on reforming provincial labour legislation.

The government’s consultation paper asked stakeholders for feedback on 15 pieces of legislation, governing everything from employment standards to occupational health and safety to collective bargaining legislation and the “Trade Union Act.” The government received more than 3,800 submissions.

On December 4, 2012, the Government of Saskatchewan introduced the “Saskatchewan Employment Act,” which consolidated 12 acts into one updated and comprehensive act. The new act included the ability of employers or employees to decertify a union that has been inactive for three or more years and made it more difficult for a union to fine a member for crossing a picket line. Following an unsuccessful application to decertify a union, and after waiting 12 months, employees could apply to decertify the union again.

The new law will maintain province-wide

Assuming its approval by the Senate, Bill C-377 makes it mandatory for unions, and related organizations, to file an annual standardized set of financial statements and schedules with the Canada Revenue Agency. bargaining in construction and healthcare sectors.

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

MANITOBA

A group of construction workers supported by Merit Manitoba is currently taking Manitoba Hydro to court to challenge the legality of project labour agreements being imposed on all major hydroelectric construction projects.

The court challenge argues that the Manitoba Hydro agreements violate the Canadian Charter of Rights and Freedoms by requiring workers who have not selected a union, to join a union and pay union dues as a condition of employment.

The court proceedings are at an early stage, and it will take time before they render a decision.

ONTARIO

Libera l leader a nd Premier Da lton McGuinty announced his resignation shortly after winning a minority government, and prorogued the provincial legislature. His government is supported

by Working Families, a coalition of unions.

It brought in legislation that revoked the secret ballot vote on unionization elections for the construction industry. The Ontario Liberal Party selected Kathleen Wynne as its new leader. At this time, it’s too early to know her planned approach on labour legislation.

The Ontario Liberal government, also at the behest of unions, introduced legislation creating the Ontario College of Trades – perceived by industry as turning control of apprenticeship over to the province’s unions.

Ontario’s Official Opposition Progressive Conservative caucus released a white paper in June 2012 titled “Paths to Prosperity – Flexible Labour Markets,”

which contained a series of compelling recommendations on labour reform. It suggests that no clauses in any provincial legislation, regulation or collective agreement, should require a worker to become a member of a union or pay union dues as a condition of employment. Also included is that union leaders should be more accountable for how union dues are spent. Further, employers should no longer collect union dues through paycheque deductions and should not have to collect dues on behalf of the union. The paper recommends amendments to legislation ensuring unions provide transparent disclosure on union revenues and union spending.

The PC white paper encourages the restoration of secret ballot voting to ensure workers are shielded from potential intimidation from union organizers and employers – a right taken away in construction by the provincial Liberal government in 2005.

QUEBEC

It is still illegal in Quebec to operate a non-union construction company, even though the province’s high-profile Charbonneau Commission continues to expose the corruption and scandal that defines the way organized crime operates in the construction industry.

The Charbonneau Commission is scheduled to hear evidence for years to come, and it seems unlikely that any changes will be introduced before the commission concludes its work.

NOVA SCOTIA

In 2011, Nova Scotia’s NDP government passed Bill 100 and 102. Bill 100, an “Act to Establish a Unified Labour Board,” effectively guarantees successor rights to public sector unions. And Bill 102 allows an arbitrator or the Nova Scotia Labour

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The State of Labour Law Relations Board to impose a first collective agreement. Merit of Nova Scotia fiercly opposed both pieces of legislation as did the rest of Nova Scotia’s business community.

Nova Scotia’s business community is united in its opposition to first contract arbitration and has urged the NDP government to reconsider its legislation.

Progressive Conservative Party leader Jamie Baillie promised that, if elected, he would focus on economic and job creation measures while eliminating the harmful labour legislation brought in by the NDP. Liberal leader Stephen McNeil stated that first contract arbitration is “against the spirit of the collective bargaining process, slanting it in favour of the union,” but he has not committed to any changes should his party form government after the next election.

NEWFOUNDLAND AND LABRADOR

New found la nd a nd Labrador Conservative Premier Kathy Dunderdale

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It is not unusual to see labour laws change significantly when a new party is elected and forms government. quickly passed Bill 37 in July 2012, which denies workers basic democratic rights to a secret ballot vote in a unionization election.

Newfoundland and Labrador’s new cardcheck certification removes the requirement for a secret ballot vote if the union submits evidence that 65 per cent or more of employees in the bargaining unit sign a union membership application.

Bill 37 included a one-time final offer ballot option, giving an employer the right to request that its final offer be put to the membership in a provincially supervised vote.

The bill introduced potential access to first contract interest arbitration at the labour board’s discretion. Section 25 of the code was changed to give employers the right to engage in non-threatening and non-coercive

speech, and to give the labour relations board remedial powers to deal with unfair labour practices.

These changes came as a surprise to employers in Newfoundland and Labrador and were introduced quickly after very little consultation.

CONCLUSION

Employee or employer rights can be easily stripped with changes to legislation. Governments need to take time to listen to all stakeholders before considering labour law reform. As we have seen, an election can mean costly changes, and the evershifting political priorities of those in power have a significant affect on industry and the individual.

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A Test for

ETHICS Canada’s construction industry weighs all that comes with onsite drug and alcohol testing

BY KELLEY STARK

I

magine you are sitting in your office, quietly doing the same job you’ve been doing for 25 years when out of the blue your supervisor walks in and says: “You need to be drug tested. Please go pee in this cup.” Would you be offended? What if the scenario was different and you were injured on the job because an impaired co-worker caused an accident? Would your concerns be less about offending anyone and more about why a safety issue involving impaired employees wasn’t solved before someone, possibly you, got hurt?

We trust our employers to protect both our privacy and provide us with a safe work environment, but alcohol and drug testing can mean that one of those rights diminishes. So which one is more important?

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A Test for Ethics

The Irving Pulp and Paper plant in New Brunswick tried to implement a random alcohol testing program in 2006. The CEP union, unimpressed with the new policy, took the company to court and, by December 2012, the case had gone all the way to the Supreme Court of Canada. A decision still awaits. Irving says it has a safety-sensitive workplace because the mill has had many alcohol-related incidents versus what the union claims: that random drug testing is unfair and invades the employees’ privacy.

More recently, in Alberta, a two-year random drug testing project was launched. The Drug and Alcohol Risk Reduction Pilot Project (DARRPP), which found encouraging outcomes in other jurisdictions, gathered a group of companies in the oilsands to try out the new policy. Since drugs and alcohol are prevalent in the industry, the project’s success relies heavily on the deterrent-value of random testing.

Suncor, one of the first oilsands companies to jump on board with trial testing was stopped by the CEP union before even starting because the tests were considered invasive. The decision on Suncor’s case also has yet to be heard.

“It all comes down to balance between

privacy of the individual and safety in the workplace,” Walter Pavlic, partner at MacPherson Leslie & Tyerman LLP, says.

“They’re always pushing the safety-in-theworkplace issue: ‘we can’t have people that are impaired; we can’t have people who use drugs’; and on the other hand it’s intrusive to ask people to pee in a cup, take blood or a breathalyzer if there’s no basis for it.”

All provinces can do random testing; it just seems more prevalent in Alberta.

“Every province is looking into it, but Alberta is the most inclined to allow it because we have these massive job sites,” Pavlic says.

Sean Evans is the safety manager for Enbridge and chair of the committee of the Construction Owner’s Association of Alberta’s (COAA) model for alcohol and drug testing. He has seen a real effort “to establish a fair and consistent approach to alcohol and drug testing programs, at least in the construction industry.”

The committee found that its model was adopted by other industries because it is well-tested and fair. It ensures that a number of checks and balances are in place so that people are treated in a manner that’s consistent with their human rights. “While it may have originated with a group that was centred in the construction industry in Alberta, we see that model being applied across Canada,” he says. (The entire model can be viewed at www.coaa.ab.ca.)

The model explains in detail the expectations of the employee, employer and union. It also offers resources for education and rehabilitation, and spells out what is considered to be above the limit of drugs or alcohol in an employee’s system.

Descriptions are also included of where and how random testing should be administered, based on guidelines set out by the United States Department of Transportation Workplace Drug and Alcohol Testing Programs.

It’s interesting to note that random drug and alcohol testing is very common in the United States. “At Enbridge,” says Evans, “we operate pipelines that cross the border. Our employees that operate that pipeline, some of them based in Edmonton, have to be part of the random testing because the pipeline crosses the border and operates in the U.S.” The Canadian government has yet to force drug and alcohol test regulation on companies as the American government has.

“It all comes down to balance between privacy of the individual and safety in the workplace.”

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- WALTER PAVLIC, PARTNER AT MACPHERSON LESLIE & TYERMAN LLP There are different times that a company can choose to test its employees: preemployment or pre-placement testing is widely accepted, as is post-incident testing.

It’s common to randomly test individual employees after they re-enter the workplace following a rehabilitation program, or if there is cause to believe that an employee is currently impaired.

“Random testing is a bit of the issue,” says Pavlic. “When and why and how depends on the circumstances. It becomes a problem when the employer random tests just because they can.”

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Tom Ross, partner at McLennan Ross LLP adds, “It frustrates (American companies) when they are sometimes told in Canada ‘that may not be legal or enforceable here in Canada.’ With construction, that’s certainly the case. In transportation, you have drivers that operate in both countries; they have to comply with the U.S. rules and it affects them in Canada, whether they like it or not. But for people who work in Canada on a major construction project, they’re subject to the rules of Canada, regardless of where their employer is from.� The U.S. influence impacts policy in companies that also operate in Canada.

Employees have issues with the actual data from drug testing. A breathalyzer, used for alcohol testing, is conclusive. If an employee blows over a certain number, there is little room to argue that he is not impaired. Drug testing is a different story. “Dealing with drugs in the workplace is more of a technical issue, a scientific issue.

The problem with some drugs is they have the capacity to stay in your system for some period of time,� Ross says, “You may have used drugs a couple of weeks ago, and you’re capable of working but you’re going to test positive on a random, or any kind of drug test. That’s been one of the challenges of drug testing in the workplace.� “Even still, it’s a relevant piece of information; it just may not be a conclusive piece of information. And that’s the general issue with drug and alcohol testing,� he says, “You should not rely upon that as the sole answer to everything. It should only be a component of a comprehensive approach to safety in the workplace.�

Addiction is another major issue affecting companies and their decisions on drug testing. The Human Rights Commission of Alberta treats alcoholism and drug addiction as a disability. That means that an employee suffering from a dependency cannot be terminated without accommodations first being made by the employer.

Does a disability excuse the fact that an employee showed up for work drunk and caused an accident at the workplace? “Many programs provide the opportunity for people to be rehabilitated,� Ross explains. “And if people can rehabilitate

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A Test for Ethics

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themselves then they have an opportunity to return to the workplace. And if they can’t, or they don’t make the effort to rehabilitate themselves, then there’s only so much an employer can or should do.�

Pavlic is unequivocal. “Bottom line, firing someone who drinks alcohol and shows up drunk is fine if it’s an onsite policy,� he says. The problem arises when you fire someone who’s an alcoholic, because it’s his or her disability. Alcohol and drug addiction is treated like cancer. It’s a recognized disability and it’s hard to wrap your mind around.�

Employers then have to figure out how to avoid being sued for either breach of privacy or discrimination against a disability. “You have to be prepared to take a certain amount of risk. You have to say, ‘I’m going to take the position that I will take on whatever litigation might be out

there, because it serves my greater purpose of having a safety-sensitive workplace, a drug-free workplace,’ � says Pavlic.

And that works right up until someone

tions,� he says. The case decisions can go either way based on peculiar facts.

The real concern then becomes the balance between safety and privacy. Ross concludes that the answer really would be a program that has safeguards in it, such as the ability for people to have the opportunity to rehabilitate themselves or have their disability accommodated, then there’s a good argument that random testing ought to be permitted.

It’s uncertain where the whole industry stands on the subject, but the upcoming Supreme Court decisions may sway a lot of companies. Pavlic says, “The trend seems to be shifting towards allowing more intrusive testing, more random testing.�

Workplace impairment is much less tolerated than it was in the past, but the decision to test or not is still currently made company by company.

“The problem arises when you fire someone who’s an alcoholic, because it’s his or her disability. Alcohol and drug addiction is treated like cancer.

It’s a recognized disability and it’s hard to wrap your mind around.�

14

– Walter Pavlic complains. “If it’s not a safety-sensitive position, you’re going to have a problem justifying having that kind of testing because there’s a balance that the courts put into place between the rights of the individual and the right of the employer to have a safe workplace. It’s a fine dance that goes on back and forth between them and the problem is the consistency of the posi-

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Trade In for a

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Photography BY: KELLY REDINGER

By Michelle Lindstrom

Women get a better chance at success in the construction industry with specialized training

J

ust a few years ago, Charlotte Doerksen lived in and worked just outside

of a small town south of Camrose called Ferintosh. Yes, Ferintosh.

“People always ask, ‘Where?’ when I say Ferintosh,” says Doerksen. The small town nestles in a neat grid between Little Beaver Lake and Highway 21. But it was a pit stop for Doerksen in a few ways. She worked in housewares at a local tire and general goods store – a job really meant to just pay the bills.

Her boyfriend lived in Edmonton so there was a commute to see each other.

And Doerksen wanted to provide a world of opportunities to her daughter Emilie, then four years old.

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Trade In For a New Career

In a moment of serendipity or maybe now 33, acutely aware that her career it was just time, but Doerksen’s mother decisions affected more than just her. She told her about what she’d found in an needed to switch gears. She had taken Alberta Works office while on her own English and theatre at the University personal job hunt: a posting about the of Alberta, Lethbridge and Ottawa.

Journeywoman START Program, offered “Why three universities?” she asks. “Life through Women Building Futures (WFB). happens.” And, she tended to move “She knew I wasn’t happy in my job and around a lot. She also did night classes, she thought trades might be something primarily, at the U of A Camrose campus I’d think of doing,” says Doerksen.

It wasn’t a far stretch since Doerksen had some experience in “I like jobs where you can the trades before enrolling in WBF. “My first job ever was cleaning the think but they also keep you machines in my dad’s shop,” she physically active; I think says. Her dad is a machinist and her brother is an electrician. “I like sitting behind a desk all jobs where you can think but they day, I’d get really bored.” also keep you physically active; I – Charlotte Doerksen, 2011 WBF grad think sitting behind a desk all day, I’d get really bored.”

Of her retail experience, Doerksen says she worked really hard and after having Emilie, but left the degree got little in return. The jobs she could with one semester still to complete. She attain after completing just some of the didn’t know then that it would be releJourneywoman START program started vant to her future career, but the basic her pay at four dollars more per hour electrical knowledge she gathered during than she was earning in retail. Hard-to- her university theatre tech experience please customers, willing to voice their helped Doerksen choose a trade at WBF. opinions loudly, were job perks Doerksen “The trades are not for everybody,” was happy to leave behind as well. says JudyLynn Archer, president and Having a young child made Doerksen, CEO of WBF. A group of social workers,

concerned about the number of women in Edmonton living in or near poverty, founded WBF, a not-for-profit organization, in 1998. The group arrived at the idea of pairing these women with an industry that paid well and was in need of skilled workers. Archer joined the organization around 2002 and helped expand the founders’ ideas and build the organization to what it is today: a growing and trusted source for employers to find knowledgeable, hardworking tradeswomen.

Employees from WBF travel throughout Alberta and talk to women at scheduled group information sessions. Last year, 3,000 women in 40 communities heard what WBF had to offer. These types of sessions show women what opportunities are out there in the trades that they may not consider otherwise. The information session is followed by career decision-making workshops for those women who want to take the process to the next level and learn more about the trades. “The workshop helps women take a close look at the good, the bad and the ugly and really make an informed decision about coming into this type of career.” Archer says.

“We accept women into our programs

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who have thought it through, who are committed to this type of work and who have the right stuff to do it.�

Women fill less than 10 per cent of Canada’s trades workforce, and Doerksen, now a second-year electrical apprentice with Muth Electrical Management Inc., is among that percentage.

It’s still a predominantly male industry, but “non-traditional� doesn’t mean the roles are impossible to fill. An employer like Muth, an electrical company for multi-family residential, commercial and industrial projects as well as a recipient of the Merit Contractors Association Employer of Excellence Award, willingly hires competent tradespeople regardless of their gender. The company currently has eight female employees out of about 75 total in the field. Anecdotally, Doerksen says the ratio of women on the job is higher at Muth than she sees with other trades-related companies.

Gender has not been a challenge for Doerksen on the job. She’s more concerned about finding enough space to work with so many trades milling about on one site.

And, of course, the cold can be an issue since most job sites are not in finished or heated spaces – all common workplace challenges most electricians face.

Continued on page 20

Lenora Forseth, WBF student employment co-ordinator, and Charlotte Doerksen are no strangers to the trades and hard work.

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Trade In For a New Career

“I really don’t question any female that comes out of that program,” says Heather Beltran, human resources, health and safety at Muth. “Prior to hiring Charlotte, I hired two other females from the (WBF) program and what I liked was that they had all their training, certificates and CSTS (Construction Safety Training System).”

The CSTS alone saves employers the cost and time of sending new employees out to do the required eight-hour online course and quiz.

As part of the Journeywoman START program, “students will get hands-on training – but they will also get their safety certifications that will take them through to any employer because safety is such an important part of the industry,” says Lenora Forseth, the student employment coordinator at WBF. The Journeywoman START program is 17 weeks long and includes hands-on training in a variety of construction trades: carpentry, electrical, plumbing, sheet metal, welding, pipefitting and blueprint reading. It’s divided into week-long segments of specific trades training. While they learn some basics in several trades, at the outset of the program the women indicate which one they want to pursue after graduation. As applicants, they interview active tradespeople and write a career investigation report as part of the process.

There are varying prerequisites on the WBF website, but the idea is to generate a willingness and eagerness to work during

OPENMIND_13_p16-21.indd 20

training and in the field after graduation.

“Most of the trades are anywhere from three to four years (of training),” Forseth says, adding that it’s a long process from application to journeyman status. WBF students need to be aware of the timeline and commit to the program for success.

Forseth says Doerksen falls into the

“We recruit women who have thought it through, who are committed to this type of work and who have the right stuff to do it.”

– JudyLynn Archer, president and CEO of Women Building Futures

“typical” graduate of WBF’s Journeywoman START Program. She has a good work ethic, is prompt, shows up and does so with commitment. “I think it’s a win-win for the employer and Charlotte,” she says. “They’re in that partnership together because that’s the process. She’s found an employer who appreciates her and what she brings to the table.”

If Doerksen’s daughter one day shows interest in the trades, she’d tell her: “Find a good company. That makes a big difference – the people you’re working with.” Doerksen determined Muth was the right company for her because she asked a lot of questions

during the interview pertaining to what kind of work they do, and policies on sick days, family emergencies and safety. “Just ask lots and lots of questions,” she says.

“We have a really good work-life balance here at the company,” says Beltran. It’s something she’s proud to tell prospective employees during an interview for a position at Muth. That balance and understanding can be hard for tradespeople to find in today’s industry.

Staggered between months of on-the-job training and work at Muth, Doerksen still needs to complete three more segments of studies at NAIT before she can then take the journeyman exam.

She’ll always be connected to WBF throughout her trades career, as the organization remains a go-to resource for grads searching for work at any point in their careers. Providing even more backup, Merit Contractors Association is a supporter of WBF and has a long history of linking graduates with firms looking to hire apprentices.

But Doerksen’s place is quite secure at Muth as she continues to impress the likes of Beltran with her NAIT marks, which the institute sends to Muth as part of the apprenticeship process.

“She got 95 per cent on her exam and most of her coursework was 95 per cent and higher,” Beltran says. “She’s got a young daughter, and I know she’s got a significant other in her life, and it’s a lot of responsibility to pull off those kind of marks. That always impresses me.”

The Journeywoman START Program doesn’t find and make committed graduates overnight, Forseth says.

That’s why the applicants are put through a lengthy application process and students are taught to stay focused – because it will be worth it.

It definitely has been worth it for Doerksen, since she can happily consider full-time retail, and all it entails, to be a distant memory.

(See sidebar on next page for program details.)

4/3/13 4:07:23 PM

mAnAging ComPlexity

BUILD A FUTURE WITH WBF For 15 years, WBF has helped women confidently find a place in the trades, and the not-for-profit organization continues to expand its reach. Here is what it has to offer today, and what it’s working towards.

Journeywoman START Program • Takes about 12 to 20 new students every two months, year-round.

• Requires min. six weeks to complete all preliminary stages (info session, career investigation, etc.) before women enrol for 17-week training.

• Provides hands-on training with basic tools, one week each of six core trades, academic studies (math, science and English), seven safety certificates, Workplace Culture Awareness and work experience.

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WBF Heavy Equipment Operator Program • Has one time, early spring enrolment.

• Co-ordinates graduation when seasonal work begins and employment opportunities are high.

• Suggests applying in August of the year prior to acceptance due to high demand for program spots.

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WBF partnership programs: Partner organizations provide resources and prerequisites for specific training programs geared to their organization.

Employment is not guaranteed, but the chances are good that competent students will be hired on with partnering companies. For example, Imperial Oil partnered with WBF to train women for potential hires as heavy equipment operators at its Kearl oilsands project.

Three- to six-week programs Students are prepared for entry-level employment in a specific trade or occupation. Programs introduce students to basic training in carpentry, electrical, welding and ready-mix driver training (in partnership with Lafarge).

For more information visit: www.womenbuildingfutures.com

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ILLUSTRATION BY: michael byers

22

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4/3/13 9:10:40 AM

CHARTER

CHALLENGE Manitoba construction workers question having to join and pay union dues to be able to work on hydroelectric projects

BY NICHOLAS MALONE

T

o what extent can a government require an

individual to become a member of a union, and to pay dues to that union, as mandatory conditions of employment? Does the Canadian Charter of Rights and Freedoms protect the right of open shop or nonunionized construction workers? Does it allow them to work on hydroelectric projects without being compelled to join and lend financial support to a union they have never belonged to? These questions are at the core of a legal action filed in the Manitoba Court of Queen’s Bench last summer.

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Charter Challenge

Five local construction workers, with the support of the Merit Contractors Association of Manitoba as co-plaintiff, are challenging Manitoba Hydro’s authority to require them to join and pay dues to a union in order to work on hydroelectric construction projects.

Does the Canadian Charter of Rights and Freedoms protect the rights of open shop or non-unionized construction workers?

Although focused on the provisions of two collective agreements imposed

by Manitoba Hydro on open shop contractors and their employees, the case should serve to highlight a widespread and deeply entrenched labour policy in Manitoba that puts the interests of trade unions over the charter-protected rights of workers who chose to remain nonunionized.

The Floodway Expansion Project The case can trace its origins to the Manitoba government’s decision to impose a collective agreement on a construction project known as the Floodway Expansion project in 2005. The original proposal attempted to force open shop contractors to have their employees sign union cards and pay union dues as a condition of employment. The government justified its decision by asserting that these clauses were necessary to complete the project “on time and on budget” by preventing strikes or lockouts. However, faced with prolonged media attention and lobbying efforts by local industry partners, the government eventually agreed to remove the mandatory union membership clause from the agreement. As much as they found the remaining provisions of the agreement distasteful with respect to the mandatory payment of dues, a number of open shop companies nevertheless decided to bid on the project.

24

Unfortunately, this relatively successful challenge to the terms of the Manitoba Floodway scheme failed to produce any longterm change in the government’s labour policy agenda. In fact, as recent developments have shown, the use and imposition of restrictive Project Management Agreements (PMAs) are likely to continue to affect large-scale public infrastructure projects in the province for years to come. Of even greater concern to open shop contractors is the lack of any meaningful consultations or compelling justifications for these policies, which, to a large extent, primarily impact the rights and employment prospects of thousands of open shop or nonunionized workers in the Manitoba construction industry.

The East Side Road Project Decisions surrounding the East Side Road Transportation Initiative illustrate the ongoing concerns and frustration that open shop contractors and their employees experience on this issue. With a budget of approximately $3 billion, and with more than $50 million in awarded tenders, the East Side Road project will lead to the construction and maintenance of an all-season road running 156 kilometres along the east side of Lake Winnipeg. This project is among the most significant and ambitious transportation initiatives in recent Manitoba history, both in scale and by reference to the extent of public and environmental consultations involved.

This project undoubtedly holds significant opportunities for a wide range of Manitoba companies and workers, whether union or

open-shop, and should have attracted bids by a number of open shop contractors.

It was only after the tendering documents for some of the initial East Side Road projects became available in 2011 that contractors first became aware that another PMA (largely modelled on the Floodway agreement) would again subject open shop contractors and their employees to mandatory union dues and fees as a condition of employment.

Manitoba Hydro By 2011, open shop contractors and their employees learned that another government-directed collective agreement would apply to the Bipole III Transmission Line Project, a project Manitoba Hydro undertook for the construction of converter stations and a new transmission line spanning over 1,300 kilometres from the Lower Nelson River generating station to southern Manitoba. The construction and maintenance of Bipole III is expected to create

economic opportunities for local and out-of-province companies for years to come. The Bipole III PMA not only requires its workers to pay union dues and fees but also forces them, as mandatory conditions of employment, to join either IBEW Local 2034 or IUOE Local 987. The government made the decision to impose this collective agreement on open shop contractors and their employees, once again, without any prior consultation.

Open shop contractors immediately expressed their concern that, absent any compelling justification, these offensive and restrictive provisions amounted to a breach of their employees’ charter rights.

Merit Manitoba urgently requested to meet with the premier or the minister responsible for Manitoba Hydro, but the government denied the request. Instead the government provided a letter stating

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Charter Challenge

its rationale for requiring open shop or non-unionized workers to join IBEW or IUOE, and to pay dues to these unions, as conditions of employment on the Bipole III project. Aside from an unequivocal position that this policy was simply “good business” for Manitoba, the letter also disclosed a familiar set of justifications, namely to ensure workplace safety and to prevent strikes or lockouts. Needless to say, these purported justifications proved even more perplexing to open shop contractors. Manitoba contractors, whether union or open-shop, are all subject to the same Certificate of Recognition safety standards program, which is administered by the Manitoba Construction Safety Association.

Both in form and substance, the Bipole III collective agreement is not without precedent. Beginning in the late 1960s, major hydroelectric projects in northern Manitoba were traditionally subject to mandatory (and similarly restrictive) collective agreements. These ad-hoc agreements, as negotiated between local trade unions and the Hydro Projects Management Association (a negotiating and contracting agent for Manitoba Hydro) are now embodied in a model PMA known as the Burntwood Nelson Agreement (BNA), providing for union membership and the payment of dues as mandatory conditions of employment.

he didn’t. Mirroring the experience of most, if not all open shop contractors who worked on the Floodway project, the employee’s refusal to consent to the deduction of union dues from his wages also forced his employer to make these payments on his behalf.

The legal action filed in June 2012 will focus on the provisions of the BNA and the Bipole III PMA. The action puts forward two principal arguments.

The first argument is that the requirement to join a designated trade union in order to work and/or to remit dues to that union, whether or not the employee wishes to be a member of that union violates the affected employee’s freedom of association under section 2(d) of the charter.

This argument follows a 2001 decision by the Supreme Court of Canada (R. v.

Advance Cutting & Coring Ltd., [2001] 3 S.C.R. 209, 2001 SCC 70), which rec-

A co-plaintiff in the case signed a union membership card only under threat of being removed from the worksite if he didn’t.

The practical and intended effect of the BNA and Bipole III agreement on open shop contractors and their employees became clear when employees reported to a BNA-covered project last spring.

One of these employees, a co-plaintiff in the case launched last summer, signed a union membership card only under threat of being removed from the worksite if 26

ognized that the freedom of association guaranteed under section 2(d) of the charter includes an individual’s right not to associate.

The second argument is that, having been compelled to join a union or to remit union dues in order to work on the project, the employee’s freedom of expression, protected under s. 2(b) of the charter, is violated. This is because unions publicly support political parties or policies that employees do not necessarily support.

Employee-compelled union dues sometimes provide financial support to political or ideological causes not supported by the employee.

Preliminary motions filed by Manitoba Hydro and other co-defendants are scheduled for May 2013. The law firm of Heenan Blaikie LLP is representing the plaintiffs, including Merit Manitoba, with a team of counsel led by Peter Gall, Q.C., who appeared before the Supreme Court of Canada representing open shop contractors from outside Quebec in the Advanced Cutting and Coring Case. Open shops are eagerly awaiting the results.

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ILLUSTRATION BY: dushan milic

Construction

Ownership

By Carissa Halton

28

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4/3/13 9:28:38 AM

The handover of a company to another organization can be a successful and healthy experience. Merit members share their lessons learned

A

lot can happen to a company in the span of a century.

In 1912, when oil wells were dug by hand at the start of the Texas oil rush, Bill Flint Sr. started a company building wooden barracks in the oilfield. His company grew and when oil gushed from the ground in Leduc, Alberta, the Flint family moved its operations north of the border.

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

Ownership changes are often an integral, strategic part of growth for the construction industry. “It’s a very dynamic sector. This is the normal business model,” says Guy Cocquyt, vice-president of communications and research for URS Flint. “Companies are constantly being acquired, consolidated or spun off.”

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

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

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

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4/4/13 1:50:30 PM

Construction Ownership Evolution with whom they might merge or partner with, or they take the company public.

No matter whether the impetus for change is strategy or opportunity, every ownership transition presents different opportunities and challenges respective of a company’s own strengths, weaknesses and objectives. A company’s evolution is unique to its position in the local marketplace, the status of the global marketplace, and its company goals and culture.

Three Companies, Three Ownership Transitions

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Don Daly started up Territorial Electric Ltd. in 1980 and based it in Edmonton, Alberta. More than a decade ago, he wondered about how he would transition into retirement. “A lot of companies I associate with are in the same state as we are,� he says. “The owners are getting close to retirement and looking for ways to sell off their company. At least a half dozen of my competitors have wanted to talk to me about what we’ve done.�

Daly wanted to recognize the work of loyal employees that had stuck with him in good times and bad. After reviewing the options, he presented employees with what his accountant called “golden handcuffs.� Initially, he sold a quarter of the company to eight employees, after devaluing the company so it was easy for employees to buy in. Within a couple years, the employees’ initial investments were fully paid out in dividends. “It’s been a success,� says Daly. Twelve years after the process began, the employees reorganized themselves and are now in the stages to buy Daly out completely.

Clark Builders started in Yellowknife in 1974 with two primary partners. As the company grew, it moved to Edmonton and the initial partnership was extended to senior staff with an offer to buy shares in the company. As the company expanded further, the employees sought to buy out the initial two partners. After reviewing all the options, a strategic partnership was pursued, which allowed the employees to maintain the company brand, management control and employee ownership model they liked. A partnership with U.S.-based Turner Construction Company was completed in January 2012 when Turner bought 51 per cent of the company, and 49 per cent remained employee-owned. The deal provided Turner with a strong presence in the Canadian marketplace.

Additionally, Clark Builders has access to additional human resource support, staff development opportunities, expertise in different market types, and emerging technologies.

While Clark Builders sought a partnership with another similar company, Flint Energy Services sought a way to expand its expertise to broader projects within the oil and gas market.

Flint shared no overlapping services with URS Corp. when it was acquired in 2012.

At the point of acquisition, Flint was on target to hit $2 billion in revenue. Even at the size and scope of Flint’s operations, the oil and gas company found itself shut out of many larger oilsands projects where Engineering, Procurement and Construction (EPC) contracting was increasingly being used. EPC contracts require contractors to

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bid on the whole project: design, build and commission. “The only way to do that is with a large engineering company,” says Cocquyt. “Flint couldn’t do this alone, so we looked at different options: mergers, joint ventures.” At the same time, URS Corp. began looking for new opportunities in the energy sector. A year after the ownership change, Flint URS has already begun to introduce Flint customers to the additional suite of services URS brings to Alberta and, as hoped, the company is now bidding on EPC projects.

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When it came to its strategic partnership, Clark Builders spent approximately two years on due diligence, “We took a deep dive into each other’s business to get an understanding of what is ‘below the clothes,’ ” says Brian Lacey, vice-president construction at Clark Builders.

In this “deep dive,” Clark didn’t just look at financials, legal and safety issues; it also broadened the scope to include a review of company culture. “You run a real risk by looking at the financial deal and not paying attention to the cultural concerns,” Lacey says, noting such risks include a company coming in and changing things overnight.

Both companies sent staff to visit the other’s sites. Clark Builders brought a range of people, from upper management to day-to-day operators, to Turner projects in Chicago and Seattle.

“The day-to-day operators are the ones who have to live with outcomes. They ask the questions that senior management aren’t considering,” says Lacey. “They see the work through a different paradigm and I think it is critical companies value that perspective.” Staff members were also encouraged to go out for dinner, exchange stories and “let their guard down.”

Clark Builders shared its employees’ feedback regarding key symmetries in safety, schedule, quality and budget that was assessed on score cards on a Turner Construction job site. “You can get a good idea of a company’s approach after just a half hour on a job site,” says Lacey. On site, they asked: What is the level of control and management that’s supplied? Is everyone getting along? Are superintendents getting phone and radio calls about things that could have been organized through planning? It was important to Clark Builders to indicate to its

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Construction Ownership Evolution partnering company what was important to its existing staff.

“We found that any one of their people could tell us the end date, which told me that they were all working towards a common goal,” says Lacey. “That gave us a good feeling for the pulse of the project and the company.”

Lacey is confident that the transition has gone so successfully because they addressed company culture as being an important symmetry. He does caution, “It is a demand on the business – the time and resources required need to be fully recognized and the time set aside. It could be a year, yearand-a-half, of major disruption, but the investment is in the future success of the company.”

Territorial Electric’s Daly stresses one thing to people who ask him about the success of his company’s ownership transition, “If you think it’s going to take five years, double it. Everyone is busy running a business. If something is going to get pushed to the back burner, this is it.”

Successful ownership changes take time, not only for due diligence, but also for the transition of new people, processes and expectations. For instance, Cocquyt now has a new ownership team to report to and there is extra work required in educating new people to the business. Also, no matter how much or how little operational overlap there is, it takes time to integrate large accounting and data systems. Flint’s accounting team, for instance, had to convert its reporting system from IFRS (the system for publicly traded companies in the Canadian industry) to the American GAP system. “It went really smoothly,” says Cocquyt, “because we have good people.”

People cannot be overlooked in the success or failure of a transition. Daly hired, retained and rewarded employees who showed passion and trustworthiness. He also relied heavily on his accountant and lawyer so that the ownership transition was done properly.

When it comes to actually making the changes, the key to a successful transition is managing these changes carefully. “We

recognized it can be very disruptive,” says Cocquyt. “What I liked about this transition with URS is that Flint’s employees woke up and experienced no management or system changes. With very little distraction, we were able to focus on customer service.”

Poorly managed transitions can threaten the very thing that made a company successful in the first place, such as positive relationships with clients and the community. In the event of making big changes, like integrating operations, Cocquyt recommends doing them as quickly as possible. Of course, less overlap or redundancy makes for less change in the

Successful ownership changes take time, not only for due diligence, but also for the transition of new people, processes and expectations.

32

company, its staff and client experience.

Cocquyt says the successful mergers tend to be the ones with little to no redundancy.

It is a Global Marketplace

Alberta’s construction industry is dynamic and growing and, with further instability in global markets expected, companies can be certain that even more international companies will invest in Alberta’s construction industry. “We’ve really been sheltered from recession in Alberta,” Lacey says.

“When firms realized loss of opportunity in the U.S. or Europe, everybody has focused on Alberta (and Canada) as a land of opportunity.”

“Globalization is a fact of life,” Dr. Steier says. “Our industry has to be resourceful and resilient to survive.” Lacey and Clark Builders know this first-hand. “There is no option; we must be economical and efficient in order to compete,” says Lacey, adding that the partnership with Turner strategically positions Clark to achieve this goal.

When it comes to Daly’s goal to retire, he’ll soon realize it … sort of. He was asked by the new owners to stay on to make coffee and steer the ship every once and a while. “I don’t think I can go from 100 miles an hour to one overnight,” he says.“Besides, my

wife told me I better not plan to sit across the table from her all day: she says one of us won’t survive.”

No matter how retirement treats Daly, at least he knows that his company has been left in good hands. It is owned by people he trusts who will not only see that Territorial Electric survives, but thrives.

GOLDEN HANDCUFFS Employee-owned companies represent some of Alberta’s largest construction organizations, like PCL and Graham Construction.

Dr. Lloyd Steier, vice-dean of the University of Alberta’s School of Business, says, “It is often in a company’s best interest to share the profits of a company with those who helped make the profits. It’s simply good business (and) a great way to motivate people who, in turn, work hard and stay with you.”

Often used as a human resources strategy, employee ownership can also represent a growth opportunity.

“Look at the example of WestJet,” says Steier. “Their profit-sharing may have been a HR strategy but it is pivotal to their success in the marketplace.”

For Don Daly, founder of Territorial Electric, sharing the company ownership with his employees ensured that his hardest-working employees didn’t leave to start their own companies, effectively becoming competition. “I wanted my long-term, loyal employees to be rewarded. They all demonstrated over the years that they had gone over and above their call of duty. They showed passion and were absolutely trustworthy.”

By keeping senior leaders, the company was able to ramp-up quickly and effectively. “We had trusted people to run field offices on the larger projects,” says Daly. Thanks to the golden handcuffs, this capacity for growth positively impacted the employee-shareholders at the most basic level: financially. For everyone, founder and staff-owners, it made good dollars and sense.

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4/3/13 9:36:09 AM

Step back to review the progress of the open shop sector.

Its lessons can help predict the challenges ahead

By Terrance Oakey

he open shop sector and the forces of free enterprise

saw another year of substantial progress in 2012. Merit Canada’s progress was met with opposition at every turn by the leadership of the building trades unions and their allies in the broader left-wing labour movement. Positive reforms took place dealing with immigration reform, union financial disclosure, the federal fair wage act and open tendering.

Union Financial Transparency

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

by British Columbia MP Russ Hiebert and will require unions and other labour organizations in Canada to file annual public reports detailing their financial statements, salaries paid to top employees, time spent on lobbying and political activities, and certain information about expenditures over $5,000. If this legislation is passed by the Senate, it will shine a light on the more than $4 billion that unions collect annually in forced contributions from workers and bring Canada’s union financial disclosure laws in line with those in Australia, New Zealand, Germany,

France, Ireland, the U.K. and the U.S. Canada’s union leaders spent vast amounts of money trying to defeat this bill – a massive lobby that is expected to continue as the Senate reviews the legislation. This is despite the fact that the House of Commons already amended Bill C-377 to address most of the concerns union leaders raised. The interventions from union leaders that resulted in amendments made Bill C-377 a better piece of legislation. Contrary to union rhetoric, the reporting requirements are not onerous and will be easy to implement with basic accounting practices. Yet union leaders still oppose the bill, suggesting the real motivation for their campaign against it is a refusal to concede that they need to operate in a more transparent manner.

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Repealing the Fair Wages and Hours of Labour Act sets the stage for millions of dollars in savings for government, open shop companies and taxpayers.

While union leaders applied intense pressure on MPs who supported the legislation to change their position, those MPs recognized something that labour leaders did not: 86 per cent of unionized workers support greater financial transparency for unions. Therein lies the fundamental disconnect between union leaders and Bill C-377. The disclosure provisions of the legislation should empower union leaders since their members will easily be able to see how the union spends their dues. In fact, the whole union model of forced contributions and generous tax breaks will be enhanced when the general public is able to see how unions spend their money. If unions want to continue to benefit from the public trust, they need to earn it by operating in a transparent manner.

We should applaud the members of Parliament who voted in favour of Bill C-377 for their support of transparency and accountability. They recognize that unions cannot benefit from the public trust through forced contributions from workers while simultaneously receiving generous tax breaks worth more than $400 million annually. To argue that unions have no public disclosure obligations simply defies common sense.

Federally Regulated Wage Rates

In the 2012 spring budget, the Harper government repealed the Fair Wages and Hours of Labour Act, better known as the Fair Wages Act. This was a long overdue policy change that treats the construction industry like any other industry that does business with the federal government. It was a good policy change for workers, governments and taxpayers.

Merit Canada is a strong supporter of the government’s decision as Merit believes that construction contracts, employment and individual compensation in the construction indus-

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try should be based on merit, regardless of employee affiliation.

The Fair Wages Act was adopted in the 1930s to regulate the wages and hours of labour for construction workers engaged in projects funded by the Government of Canada. Back then, there were few, if any, laws and regulations in place at any level to protect the interests of workers. The world is much different today as there are a host of provincial and territorial measures in place to enhance and protect working conditions, employment standards, labour relations, wages and hours of labour.

There is no longer any valid need for federal government regulation in this area.

According to Statistics Canada, construction workers are paid an average rate of $28.35 per hour in our country. This makes them the second-highest-paid workers, exceeding the national average by some 30 per cent.

After 80 years, the Fair Wages Act was outdated, created unnecessary administrative costs for the government and the construction industry, infringed on the jurisdiction of the provinces and territories, and significantly increased the burden on Canadian taxpayers.

The Fair Wages Act obliges companies to establish dual-wage structures for privateand public-sector work. Many small and family-run open shop construction companies simply refuse to bid on federal projects because of this costly and burdensome leg-

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islation. And what is the result? Lower levels of competition and increased construction costs for the government.

Repealing the Fair Wages and Hours of Labour Act sets the stage for millions of dollars in savings for government and taxpayers. The antiquated wage regulations needlessly increased the marginal cost of labour. This, in turn, discouraged employers from hiring additional workers, even during times of peak demand. Who gets hurt here? New job seekers, in particular, young people and other groups under-represented in the construction trades, such as women and First Nations. The construction industry is vital to Canada’s economic health. We need competition governing legislation that reflects the society and market conditions in which we live today — conditions far different than those of the Great Depression.

Open Tendering

What rules should the federal government use when spending federal monies on infrastructure projects? As governments across the country face financial pressures, there is a renewed need to take action on outdated regulations and red tape that increase construction costs. While the federal government requires open and competitive bidding for its own infrastructure projects, the same is not true for all jurisdictions across the country.

Instead of allowing open tendering, many jurisdictions have rules that allow only certain companies, with agreements with pre-selected unions, to get all of the contracts. Non-union construction companies or companies with members of the wrong union aren’t even allowed to bid.

In Hamilton, Ontario, of approximately 260 contractors, only 17 contractors had workers registered with the proper union that city rules require. Ninety-four per cent of the available companies aren’t even allowed to bid on projects. In one case, the city disqualified four out of seven bids for a multimillion-dollar construction contract because bidders weren’t affiliated with the proper union.

This also creates problems for workers.

If the companies they work for aren’t even allowed to bid on construction projects, how can their company compete and keep workers? As Penny Allen, the Greater Essex

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County District School Board’s superintendent of business argues: “It’s not fair. All contractors pay taxes, but we, as a publicly funded body, can only put our tenders out to certain contractors that are unionized.”

It is surprising that in 2012, so many Canadian cities still have rules on the books that allow contracts to only be bid on by those affiliated with certain unions and exclude all others. Cities such as Toronto, Hamilton, London, Oshawa, Thunder Bay, New Westminster and Burnaby, and provincial agencies such as Ontario Power Generation and Hydro One, and even school boards have rules in place that restrict open bidding.

Recent media reports on the Toronto District School Board’s problems with repair work show all too well the consequences of such restrictive bidding processes. Costs are inflated ($143 to install a pencil sharpener), productivity is reduced (bills were inflated to cover workers who did not show up), and who is left with the bill? The taxpayer.

Canadians know that allowing only one pre-selected bidder on every single construction contract is not the best way to go. No Canadian family would operate that way with their own home renovation projects. Opening up bidding allows for competition and leads to lower costs and higher productivity.

The Canadian government is investing $2.275 billion under the ProvincialTerritorial Base Fund. Considering that labour costs amount to as much as 40 per cent of a construction project, and that open-shop contractors offer the same services at up to 10 per cent lower costs, savings to Canadian taxpayers from this policy could amount to up to $91 million – and that’s just one infrastructure agreement.

U.S. studies suggest that closed tendering rules increase the cost of construction between 12 and 18 per cent. The City of Hamilton estimates that restrictive clauses inflate the prices of its construction projects by up to 40 per cent.

By allowing provinces and municipalities to spend federal funds through their closed tendering processes, the costs of projects increase, fewer projects get funded and fewer jobs are created.

Higher costs mean lost opportunities

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Merit Canada’s Progress and wasted tax dollars. Providing equal opportunity for all contractors to submit their best bids will increase competition and ensure that Canadian taxpayers receive the best value for their money. Federal rules would ensure that local governments would behave more equitably when spending federal tax dollars.

Federal Skilled Trades Program

According the Construction Sector Council, there will be a shortage of over 300,000 skilled tradespeople in Canada by the end of the decade. Merit Canada strongly supported the new Federal Skilled Trades Stream announced by Citizenship and Immigration Minister Jason Kenney.

This change is long overdue.

Canada’s immigration system must respond better to the needs of employers to ensure those immigrating to Canada have the skills required to obtain long-term stable employment. It is sound public policy to have an immigration system that works to ensure long-term growth and prosperity for Canada.

As governments across the country face financial pressures, there is a renewed need to take action on outdated regulations and red tape that increase construction costs.

Merit also welcomed announced changes to the Skilled Worker Program.

Changes to the criteria for acceptance of admission outlined by Minister Kenney ensures immigrants will have jobs waiting so they can provide for their families.

The final changes to the Federal Skilled Worker Program selection criteria include: Minimum official language thresholds and increased points for official language proficiency, making language the most important factor in the selection process; Increased emphasis on younger immigrants who are likelier to acquire Canadian experience, likelier to adapt to changing labour market conditions, and who will spend a greater number of years contributing to Canada’s economy;

• •

of the Educational • Introduction Credential Assessment (ECA), so that education points awarded reflect the foreign credential’s true value in Canada; Changes to the arranged employment process, allowing employers to hire applicants quickly, if there is a demonstrated need in the labour market; and Additional adaptability points for spousal language ability and Canadian work experience.

Merit Canada’s Ottawa office has been operating for almost two years, yet its impact to industry has already been substantial. Merit Canada will continue to liaise with government officials on these and other priorities of concern to the open shop contractor.

• •

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4/3/13 9:46:39 AM

The

Importance of

Productivity Canadian construction companies find their competitive edge in efficiency processes

BY ELIZABETH CHORNEY-BOOTH

I

t’s no secret to people in the construction industry that a company’s success depends on its productivity. After all, efficient and effective work practices directly impact a business’s bottom line, so increasing productivity standards is essentially a no-brainer. But as obvious as the need for increased productivity standards is for any company, actually achieving those standards and identifying areas that need to be tweaked can become difficult and complex.

Even if you’re busy, take time to step back and evaluate your processes.

Ron Magnus, managing director of FMI’s Center for Strategic Leadership in Denver, Colorado, says that with our stalled economy pushing companies to compete for the same jobs, increased productivity is more than just a way to manage costs – it’s a way for companies to set themselves apart from the compe40

If the owners/managers feel too close to the processes to see the problems, then connect with a consultant – they’re out there. tition. Many firms even build productivity measures into their contracts as a way to assure clients that they will do whatever it takes to complete jobs efficiently and cost-effectively. To even be considered a contender for the best jobs available, it is essential for all organizations to raise the bar for productivity standards, or at least keep up with rival companies that do.

“Say you’re up in the oilsands in Alberta, the market has been somewhat soft [because] the margins are being squeezed,” Magnus says. “For an organization to make as much money as they have in the past, they’ve got to figure out productivity issues. It’s the only place to go to figure out how to do a job faster and more efficiently.”

When Magnus consults with clients, he encourages them to look at the big picture of productivity before getting mired in the details. Once that overview is

in place, he helps organizations to model a productivity plan and set tangible behaviours that will result in increased efficiency. Those behaviours can include strategies to enhance planning and scheduling, and tactics to rectify something as simple as unnecessary trips back to the shop to pick up equipment that hasn’t been brought to the work site.

Magnus says that the road to improved productivity starts with an attitude shift at Know that each company has its own needs and solutions. A plan of action for one company may not work for yours, and that’s OK. the top level of an organization, whether it’s a large firm or a small contractor with only a few employees. If management takes a big-picture approach and encourages a culture of productivity throughout the company, employees will more likely adapt to tangible changes that affect the way they work.

Janaka Ruwanpura, vice-provost (international), former Canada research chair

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and professor in project management systems, Schulich School of Engineering at the University of Calgary, studies 10 specific targets that he says construction company leaders should examine because they can affect company output.

Some of those targets include employee motivation/satisfaction, the relationship between subcontractors and main contractors, material management to reduce wasted trips, “tool time” (actual hands-on, working time) optimization, office to on-site communication and weather-related issues.

Another problem, Ruwanpura says, is that most companies focus so much

Improved productivity comes from all staff levels being on board with change. on working quickly and taking on as many jobs as possible that they don’t see the obvious internal productivity problems they would if they took a step back for self-examination. “Productivity is not about working hard and fast. It’s about how you really analyze where the problems lie,” he says. “When you’re in a chaotic environment, you don’t pay attention. You just run projects.

You don’t have time to make changes; you’re just running.”

For some companies, Ruwanpura suggests they place a dedicated person on the ground to communicate productivity needs – called a construction productivity improvement officer.

“They use this person as a facilitator for the entire team so they can identify the problems and mitigate the solutions, and then measure the output,” he says, adding that, at the end of the day, companies need to measure two things: how much they produce and how much tool time is being netted.

Ruwanpura suggests company leaders question how communication occurs within their organization; how they determine employment skill sets for future staff; and how they deal

with existing employee motivation and morale. It also helps if the harder aspects are examined, like the management of material resources and the accuracy of estimates. If any of the findings aren’t satisfactory, adjustments and changes must be made.

Each company has different specific needs, and Ruwanpura agrees with Magnus that productivity is not about the small details, but rather the bigger picture improvements involving communication and organization. Since the solutions vary from company to company, improvements come from a series of changes and tweaks rather than a single magic bullet.

Ethan Cowles, senior consultant at FMI, works directly with contractors looking to make productivity improvements. He says that it can be tricky to implement productivity measures because construction professionals are notoriously reluctant to change. “Construction is one of those industries where, for whatever reason, people are wired to think that planning is a waste of time,” Cowles says. “Many people think that if they’re not actively installing work, then they must be goofing off.” Activity then gets confused with productivity.

Cowles says that raising productivity standards in the field includes the impor-

Change requires bigger-picture thinking and changing the company culture. tant step of management empowering its foremen. Managers accomplish this through effective communication in which they state job expectations clearly.

It also means proactive measures are required to ensure required materials and resources will be on site, and on time. When the project begins, responsibility and accountability must be shared so everyone on the site feels a part of the process to complete their jobs as efficiently and budget-friendly as possible.

Productivity can and should be used to give companies a competitive edge in the construction industry.

Companies should develop a clear plan of what needs to be accomplished weeks before a job even starts, says Cowles, so crews can hit the site with a sense of momentum. Aiding that momentum, employees also need proper training, appropriate work materials, and hard copies of the overall plan and checklists.

It’s imperative, once the job is in progress, that foremen and crews track relevant progress (such as completion dates, material use/waste, unforeseen/unbudgeted challenges) for productivity measurements to be recorded and adjustments to be made to the plan, if needed.

Modifying long-standing company procedures requires managerial forethought as well as a buy-in from field employees. Both Cowles and Ruwanpura say it is possible to get all the players on the same page and significantly increase productivity by setting clear expectations, defining processes and developing effective channels of communication. “Internally, a company needs to know that productivity is valuable and it’s got to be somebody’s responsibility,” Cowles says.

“Sometimes it’s a combination of people, but somebody needs to feel the weight and the responsibility to know that they’re following their own best practices.” If nobody has the responsibility to create a successful culture, the importance of the idea falls by the wayside.

Productivity is obviously a gamechanger in construction and is not something to be swept aside. For companies who are struggling with profits and just don’t know why, there are consultants out there who can point out issues that company leaders are just too far into the processes to see. Taking a step back every now and then may be all an organization needs to do in order to move forward.

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illustration by: Steve Adams

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The

Coming

Quiet

Revolution

For nearly half a century, Quebec’s construction industry has been held hostage by overregulation, opacity and heavy-handed big labour machinations. For most Quebecers, an open shop revolution is long overdue

By Ben Freeland

I

n October 2010, Maclean’s magazine released an issue with

an inflammatory cover image that caused all hell to break loose in the province of Quebec. The cover featured the beloved Bonhomme Carnaval snowman carrying a briefcase overflowing with money; the headline read: “The Most Corrupt Province in Canada.”

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

The Maclean’s exposé did much to draw national attention to Quebec’s deep economic and political dysfunction. It also correctly identified the major driving forces behind the corruption: the enormous influence wielded by the province’s large construction unions and an extraordinary level of intrusion into the industry by the provincial government.

Since 1968, union membership has been mandatory for construction workers in Quebec, making it the only jurisdiction in North America with such regulations. Coupled with legislation passed in 1976, which gave the provincial government sweeping power over labour supply at the behest of the province’s five big construction unions, this resulted in a closed and rigged system characterized by inflated costs and a lack of transparency permitting a deep penetration of organized crime.

In 2011, the embattled Liberal government of Jean Charest finally took decisive action against this culture of corruption with the launch of the Charbonneau Commission. Meanwhile, recent legislative moves in and out of the province give fresh hope to Quebecers who view the province’s domineering unions with the same acrimony they once reserved for the heavy-handed clergy of pre-Quiet Revolution Quebec.

The roots of this closed system are not difficult to comprehend.

At the dawn of Quebec’s Quiet Revolution in the 1960s, support for organized labour was widespread in the wake of autocratic regime of Maurice Duplessis and his Union Nationale party. The period after OPENMIND SPRING 2013

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The Coming Quiet Revolution Duplessis was characterized by the wholesale transfer of authority over education and health care from the Catholic Church to the provincial government, as well as the rapid expansion of unions. But while unionization offered workers better working conditions than before, it did nothing to ensure industrial harmony. Union factionalism lead to well-publicized spates of violence at many mega-projects and threatened to derail the province’s break-neck industrialization.

Prior events all led to the 1976 creation of the Commission de Construction du Québec (CCQ) – a special government department charged with overseeing construction industry manpower.

The provincial government essentially established itself as a tributary to the Quebec’s five main construction unions, instituting wage schedules and controlling the number of union cards issued. In doing so, the provincial government allowed itself “to be taken hostage by the disreputable elements of the trade union movement,” journalist and political scientist L. Ian MacDonald wrote.

The arrangement curbed building-site violence and decreased work stoppages, yet this labour peace was a straight-jacketed industry characterized by the CCQ’s intimidation. (Between 1978 and 1996, the CCQ levied close to $25 million worth of fines for work done without the required union

card.) The resulting system also made it virtually impossible for skilled tradespeople outside of Quebec to work in the province since it barred out-of-province firms from bidding on building projects. Alternately, many skilled tradespeople within Quebec were forced to seek opportunities outside the province while starving the province’s industry of fresh talent and competition.

did not go unnoticed in La Belle Province, leading a small, but vocal, contingent of contractors to publicly question why the “freedom of association” guarantee outlined in the Canadian Charter of Rights and Freedoms was systematically denied for Quebec workers.

Finally, the issue came to a head with the initiation in 1993 of the R. v. Advance Cutting and Coring et al. Supreme Court case. The case was led by Jocelyn Dumais, a Gatineau concrete contractor well known for his acts of civil disobedience against Quebec’s closed shop system.

Dumais also briefly ran as a candidate for the centre-right Action Démocratique du Québec party but withdrew from the political scene in order to focus on his lobbying efforts. The plaintiffs in Advanced Cutting and Coring argued that Quebec’s policy of mandatory union membership for construction workers contravened their constitutional right to freedom of association. The court heard the legal arguments in March 2000, and decided after 18 months by a vote of five to four, that Quebec’s turbulent labour relations history made its mandatory unionization law a justifiable and permissible exception to the Charter.

For a decade after that ruling, little changed on the labour reform front, despite the many scandals besetting the province’s construction industry. In 2011, prospects

For a decade after that ruling, little changed on the labour reform front, despite the many scandals besetting the province’s construction industry.

Michel Kelly-Gagnon, president and CEO of the pro free market Montreal Economic Institute said in his presentation at the 2012 International Open Shop Conference in Ottawa, “Quebec’s construction industry is special, and not in a good sense. It’s a shame because Quebec’s construction workers actually have an excellent reputation in terms of actual skills and work ethic.”

The formation of Alberta’s Merit Contractors Association in 1986 started the open shop model of construction from a small movement widely perceived as a temporary blip to the sector. The Merit phenomenon

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of change resurfaced with the launch of a massive public inquiry into the management corruption of a public construction contract: the Commission of Inquiry on the Awarding and Management of Public Contracts in the Construction Industry or the Charbonneau Commission. In the midst of this highly publicized inquiry, Quebec’s then Labour Minister Lise Thériault took an uncharacteristically bold step by introducing Bill 33 in December 2011. The bill’s aim was to end the practice of union placement of employees (or placement syndicale) and force the CCQ to actually assign workers based on employers’ needs.

In the same year, B.C. Conservative MP Russ Hiebert tabled a groundbreaking private member’s bill that, if passed, would require unions to publicly open their books.

Bill C-377 found vocal champions in Quebec, most notably the Montreal Economic Institute and the Quebec Employers Council. While Quebec’s construction unions rallied against the bill, a Quebec Employers

Council survey (conducted by Léger Marketing) indicated that a staggering 97 per cent of Quebecers believed that unions should be legally required to disclose their spending.

For the time being, a wholesale repeal of Quebec’s mandatory unionization law remains unlikely. The current Parti Québécois government remains steadfast in its defence of the labour status quo: current PQ Labour Minister Agnès Maltais took a vocal stance against Bill C-377 and Minister Maltais articulated similar feelings in a December 2012 letter to federal Labour Minister Lisa Raitt.

Nevertheless, Quebec’s advocates for worker freedom in the construction industry are more optimistic now than they have been in a long time. “Public opinion is on our side,” asserts Dumais. “The unions have lost a lot of public support in Quebec and, as a result, you’re hearing a lot less out of them.” He contends that if the issue were brought before the Supreme Court once again, the results would be quite different.

“I think the time is right for another run at overturning the law,” he says, adding that he has spoken with experienced legal counsel who supports this view as well.

Dumais asserts that the impact of overturning Quebec’s union-only legislation would be felt well beyond just Quebec. “In my opinion, overturning this legislation would bring to an end attempts like the heavy-handed union tactics like we’re seeing with Manitoba Hydro at the moment,” he says. “A lot of these union leaders think that as long as they have the upper hand in this province, there’s still hope for the same kind of thing elsewhere. Breaking their lock in Quebec would send a powerful message.”

As for the “labour harmony” canard forever trotted out by defenders of Quebec’s closed shop construction regime, Dumais dismisses the argument as ridiculous and insulting to Quebecers. “It’s 2013. We’re way beyond all that. The issue of labour-related violence is in the past. It’s the future we’re concerned about.”

THANK YOU

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

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

Presented by

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Sponsored by

Dessert Sponsor

4/3/13 2:01:09 PM

FEW THINGS ARE THIS

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Merit’s superior service will provide your company with an immediate competitive advantage and the certainty of long-term stability.

Don’t miss a sure shot.

www.meritalberta.com EDMONTON: 780.455.5999 or 1.888.816.9991 CALGARY: 780.455.5999 or 1.888.816.9991

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8:13:43 AM

Key Players in

Alberta

Construction The 2013 Contractor of the Year Awards recognize those who raise the bar erit Contractors Association, Alberta R o a d bu i ld e r s a nd Heavy Construction Association (ARHCA) and Alberta Venture magazine present this year’s Contractor of the Year Award winners and finalists. The finalists are companies and individuals that strive for efficiency, innovation and practicality, and their success in their journey is why they are recognized as leaders in the industry.

Public and private companies that have a regional office in Alberta can be eligible entrants for these awards. The organizations also need to sell construction services, employ trades people, and/or contract out labour supply in the industrial, commercial, institutional, residential, civil, road building or oilfield construction sectors.

The six award categories include: General Contractor Under $50 Million, General Contractor Over $50 Million, Trade Contractor Under $15 Million, Trade Contractor Over $15 Million, Heavy Civil and Construction Person of the Year.

Keep reading to find out which companies were chosen by this year’s adjudication panel and why.

By Alexandria Eldridge and Michelle Lindstrom

General Contractor Under $50 Million WINNER Rockwood Custom Homes, based in Calgary, builds or renovates 10 homes worth between $1.2 and $20 million each year. Rockwood prides itself on delivering both the dream home and the dream experience and co-founder and CEO Allison Grafton says their clients come first in everything. Customers rarely have a big budget surprise at the end of the project because the builder carefully estimates costs, tracks spending and keeps customers in the loop monthly. In fact, 98 per cent of Rockwood homes have come in on or under budget. To end the project with a bang, Rockwood owners give clients an engraved iPad loaded with warranties and manuals. This builder is all about making the client experience the best it can be.

An example of Rockwood’s custom mastery

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Key Players in Alberta Construction FINALIST For more than 22 years, Seagate Contract Management has specialized in contract management for interior commercial spaces in Edmonton. It has renovated countless spaces in West Edmonton Mall, including the 25,000-square-foot Gold’s Gym that opened in 2006. Seagate also specializes in salons and spas, professional spaces (medical offices), and has done extensive work renovating Edmonton’s NorQuest College.

FINALIST K&D Turnaround Services is an expert in the installation of mass transfer equipment for the petrochemical and refining industries. With offices in both Houston and Nisku, the company has done work across the world for companies such as Suncor Energy, BP Oil, Imperial Oil and others.

FINALIST WorleyParsonsCord is a major industrial construction contractor and one of the largest providers of industry modules in Western Canada. In 2012, the company delivered more than $750 million in project work for clients such as Suncor, TransCanada and Enbridge. Part of the global WorleyParsons corporation, WorleyParsonsCord has a detailed safety framework and has won numerous awards for its outstanding safety practices.

TRADE CONTRACTOR UNDER $15 MILLION WINNER

GENERAL CONTRACTOR OVER $50 MILLION WINNER Founded in 2004 and based in Calgary, Strike Energy Services is an oil and gas construction and services company with 800 employees spread out over 14 different locations. Strike’s low turnover rate directly relates to its focus on employee engagement and company culture. Stephen Smith, Strike’s CEO, began the company as an employee-owned venture from the beginning because “we wanted the management to have a stake in the game,” he says. Additionally, employees are encouraged to share the non-profit organizations in which they are involved within their communities and Strike will add it to the over 100 charitable organizations it already supports. Strike School of Business also offers employee training in everything from safety to leadership development. “We treat our employees as we’d like to be treated ourselves,” Smith says.

FINALIST PCL Construction Management Inc., a well-known Alberta builder, has many projects under its construction belt: bridges, light-rail transit, pipelines, and more for clients such as the City of Calgary and the City of Edmonton. As an employee-owned company, PCL prides itself on its corporate culture, and also provides extensive learning opportunities for staff with an in-house college offering both leadership and technical training.

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Demolition at its finest by R3

Edmonton-based demolition company R3 Deconstruction builds people up. Travis Blake, the company president says an offer is made to prospective employees (typically unskilled labourers): If they commit one year to R3 first, training and leadership opportunities will be offered, allowing the employees the chance at a career instead of a short-term job. R3, which has 23 full-time staff members, prides itself on caring about its people, offering free legal services and banking education. The company was only incorporated in 2010, but made over $2 million in revenue for 2012, which can be partially attributed to R3’s unique approach to demolition. Employees carefully plan a structure’s deconstruction and then sort out materials that can be reused or recycled.

FINALIST B&B Demolition was founded in 1999, and has since created a name for itself as a company dedicated to customer service and environmental consciousness. Although the company began as a specialist in commercial interior demolition, it expanded its services to become one of Edmonton’s most diverse demolition companies. B&B’s list of completed projects include residential, commercial, and industrial sectors, as well as over 700 projects in West Edmonton Mall.

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Finalist Founded in 2012, EverLine Coatings and Services is a property maintenance company that began specializing in parking lot line marking, but now offers services such as parking lot sweeping, snow removal and more. The company won the 2012 Calgary Chamber of Commerce Breakout Business Award and prides itself on being different than other contractors in its approach to client relationships. Some of EverLine’s major clients include Chinook Centre, Foothills Medical Centre and the Calgary Airport.

Trade Contractor Over $15 Million

Finalist Edmonton-based NCSG Crane & Heavy Haul Services has the equipment and geographic reach to meet almost any heavy haul or crane rental need with its nine branch offices across Western Canada and Western U.S., and over 600 pieces of machinery. In 2012, the company’s strong commitment to safety had it named 10th among the top 100 crane-owning companies in North America according to American Cranes and Transport magazine.

Heavy Civil Winner

Winner Vertex is a $110-million resource sector service provider in Sherwood Park offering everything from scaffolding to environmental consulting to oilfield hauling. Vertex has 12 branch offices across Western Canada and the U.S. and over 750 employees in its three divisions of construction, professional services, and oilfield rentals and hauling. Vertex CEO Terry Stephenson says, “It does seem a little spread out, but if we branched out into something it’s because it fits with what our customers need or want.” Recently, the company implemented 3-D modelling, which will soon feed into their computerized cutting tables for a quicker and more accurate drafting process. But no matter what area the innovation is in, Vertex always does it in an effort to satisfy their customers.

Sprague-Rosser’s Fort McMurray project: Rainbow Creek Drive Extension

Sprague-Rosser Contracting Co. Ltd. began as an excavation subcontractor 45 years ago in Edmonton. When new CEO Jeff Jessamine took over in 2009, the focus changed to becoming a civil contractor, bidding against companies like PCL and Graham for projects. “We re-engineered the culture,” Jessamine says. “We had to get everyone singing the same song and set new visions and values.” The company had 13 recordable workplace incidents in 2009 and slashed that to zero the following year and have held a record of zero incidents for the past 15 months.

Safety really boils down to planning and education, says the CEO. As a result, Sprague-Rosser developed a program to go into schools and educate children and parents about the hazards of a worksite and what to expect.

Vertex’s insulation work helped this gas processing facility in northeastern B.C.

Finalist Founded in 1964, M. Pidherney’s Trucking has operated throughout central Alberta and worked in civil construction and oilfield services for more than four decades. During peak season, over 400 employees assist Pidherney’s function as a diverse general contractor for everything from gravel delivery to remediation services. It also is quite active in the community, supporting numerous charities and events throughout the province.

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Key Players in Alberta Construction

of the

Year

WINNER Bill Knight, the founder and CEO of B&B Demolition, stumbled into Edmonton’s demolition industry nearly two decades ago and has been a key figure in building the reputation of the demolition trade in Alberta. “Anybody that has a sledgehammer and a half-ton thinks they can be a demolition contractor,” Knight says. “We try to put a different face to it.”

He was the first demolition contractor in Canada to receive a gold seal certification for estimating and has piled on the accolades ever since. As a Grade 9 dropout, Knight came to Alberta at 16 and worked odd jobs until he got into demolition.

“I’ve done everything from milk cows to build pallets to work in a Styrofoam cup factory,” he says, adding he’s also been fired from most of them. B&B Demolition started in 1999 by gathering all of his money at the time – about $3,800 – and running it out of his basement with his mother as the receptionist. It was a rocky start, but the company has expanded to be worth $10 million, with approximately 70 team members working in demolition for commercial, industrial and more. Major clients for B&B include Wendy’s, Tim Hortons and West Edmonton Mall. “I’m not going to over-promise and underachieve and I think that’s why we’ve risen to the top,” he says. “I think business is very simple: do what you promise.”

And while the growth of B&B is incredible, Knight’s favourite part of his success is the ability to give back. Both Knight and his company have contributed to countless charities including the Lois Hole Hospital, Kids for Cancer and more.

It’s not easy to change the way an entire industry views demolition, but Knight doesn’t seem too intimidated by the prospect. For him, it just starts with what they’re doing at B&B – and that’s the best job they can. “You set a standard of quality that people expect,” he says. “Then contractors demand it and everyone else needs to change to catch up to that standard. That’s my theory.”

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PHOTO BY: CURTIS COMEAU

Construction Person

BILL KNIGHT, Founder and CEO of B&B Demolition

Merit, the Alberta Roadbuilders and Heavy Construction A s s o c iat io n and A l b e r t a Ve ntu r e magazine thank the adjudication panel for assisting with the Contractor of the Year Awards. This year’s judges include Bruce Moisey, former partner of Alberco Construction and a past chairman of the ARHCA, Carl Knowler, Canadian Western Bank, and Aminah Robinson, University of Alberta.

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Cliff

Federal immigration reforms can help the construction industry cope with a shortage of skilled workers

by Bill Stewart

D

espite the best efforts of

governments, business associations and contractors to promote apprenticeship programs, improve productivity and reach out to under-represented communities, forecasts continue to indicate that there is an imminent and significant shortfall in domestic human resources. In short, Canada’s labour force is dangling on the edge of a demographic cliff.

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

More than 20 per cent of the current construction industry workforce is expected to retire over the next seven years. According to the Construction Sector Council, this will contribute to a nationwide shortage of 300,000 construction workers. Industry will feel the impacts.

The Construction Owners Association of Alberta (COAA) is a major group of purchasers of construction services – many of which are involved in developing oilsands in northern Alberta. The industry estimates current and intended investment to be $250 billion, and COAA members have a significant interest in construction workforce issues. In 2011, they estimated that industry would need almost 160,000 offshore construction workers over

the next seven years to meet projected construction needs.

For years, most of the 250,000 permanent immigrants coming to Canada annually came in under the Federal Skilled Worker sub-category. Changes in immigration legislation in 2002 established selection criteria based on the theory that the more education an immigrant had, the more likely he or she would be to succeed in resettling.

Consequently, 46 per cent of admissions under the Skilled Worker program held a master’s degree or PhD whereas only three per cent of admissions held a formal trade certificate. The result for construction was that fewer than 700 immigrants with trades training were admitted to Canada annually while countless numbers of OPENMIND SPRING 2013

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The Demographic Cliff

foreign-trained doctors, accountants and and that the terms and conditions of on how to assess whether employers meet nuclear physicists were underemployed as employment are not fraudulent and in some or all of the factors outlined in the janitors, caretakers or taxi drivers. The law accordance with prevailing local wage regulations are not clear or incomplete; at the time also stipulated that all appli- rates and employment standards. Once interpretations vary from one regional cations be processed in the order office to another and even within the in which they were received, which same office.” resulted in a backlog of hundreds of OUR WORKING-AGE POPULATION thousands of applications.

That Was Then, This is Now IS EXPECTED TO DECREASE BY With apprenticeship training In spring 2012, the federal programs running at unprecedented government began retooling 13 PER CENT OVER THE NEXT levels and the industry experiencing its policies and procedures for FEW DECADES. full employment, many contractors permanent and temporary workers. were forced to resort to short-term To reduce a backlog of 300,000 – Human Resources and international recruitment through applications, Immigration Minister Skills Development Canada the controversial federal Temporary Jason Kenney announced that all Foreign Worker (TFW) program. applications received prior to February However, this program was fraught with the employer obtains the LMO, the 28, 2008, under the Federal Skilled Worker employer and prospective employee must program, would be returned to applicants. bureaucratic red tape and delays too.

Many of the problems associated then satisfy both CIC and provincial This paved the way for the Immigration with the TFW program are attributed regulatory authorities responsible for Department to process applications based to it being jointly administered by two accreditation, that they are eligible to on labour market needs, instead of their federal departments. Prior to offering work temporarily in Canada. place in the queue. temporary employment to a foreign Employers experienced tremendous In April 2012, HRSDC Minister Diane national, the employer must obtain a difficulty with the TFW program. The Finley announced the Accelerated Labour Labour Market Opinion (LMO) from Auditor General of Canada (AGC) Market Opinion (A-LMO) program to HRSDC. HRSDC’s role is to certify delivered a scathing critique of how expedite the processing for targeted that the employer made reasonable the LMO process was administered. An TFW applications. The program enabled efforts to recruit within Canada first audit noted, “We found that directives employers with a positive compliance 52

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record of two years to have new applications fast-tracked. This new approach is working exceedingly well.

In July 2012, Minister Kenney announced the extension and expansion to the Alberta Pilot Project. Employers no longer need HRSDC approval and an LMO to recruit internationally for skilled workers in seven high-demand occupations. This move significantly helps companies – particularly construction and maintenance companies – to respond more quickly to the needs of resource developers. In most cases, TFWs brought in under this stream are allowed to move between employers in Alberta over a two-year period – a feature unavailable in other TFW streams. While the pilot project provides much-welcome relief in expediting international recruitment, it is for the most part only available to construction companies and not other industries experiencing acute shortages. Moreover, it is restricted to Alberta operations only. Industry is also critical of provincial regulatory rules that create different credential recognition streams and the process and length of time it takes to recognize trade credentials for optional and compulsory certiďŹ ed trades.

To deal with the bias in the FSW

program favouring applicants with university education over those with trades skills and experience, a new, dedicated skilled trades class was created in 2012 within the permanent immigrant stream. Rather than having to qualify under the “points� system, applicants in this class are now assessed on whether they have a valid long-term employment offer or appropriate working credentials and experience in a trade. They must also demonstrate that they have language skills appropriate for their occupation. In December, Minister Kenney announced that 3,000 spots were being allocated to applicants under this stream.

The introduction of this new and distinct category coincides with a series of other proposed changes to the Skilled Worker program point-system grid the government implemented in January 2013. The changes included: • Making language the most important selection factor including introducing minimum language uency thresholds and increasing the number of points awarded for linguistic ability; • Increasing points for younger immigrants on the basis that younger immigrants are more likely to “gain valuable Canadian experienceâ€? and will be in the workforce and contributing to

Canada’s economy for longer; • Increasing points for Canadian work

experience and reducing points awarded for foreign work experience; • Simplifying the arranged employment process to prevent fraud and allow employers to more quickly ďŹ ll vacancies; • Awarding additional points for spousal language ability and Canadian work experience.

While both temporary and permanent immigration are important tools in helping employers meet their human resource needs, immigration is not a stand-alone “silver bullet� solution to solving the shortage of skilled workers in Canada. The C.D. Howe Institute recently calculated that immigration numbers would need to increase to between 625,000 to one million annually to fully address Canada’s aging workforce and the shortage of workers. While other strategies and policies, in terms of apprenticeship, improving productivity and outreach engagement are all key to solving human resource problems, 2012 will be seen as a watershed year since the federal government made remarkable progress in reforming our immigration system to making it more responsive to the needs of Canada’s changing labour force.

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BY THE

NUMBERS New housing price index

Construction price index

($ thousands)

for apartment buildings in: Calgary

Edmonton

% change Calgary

% change Edmonton

2008

174.4

168.6

11.2

17.8

2009

160.7

148.4

-7.9

10.9

2010

156.6

150.9

-2.6

-12.0

2011

160.1

156.1

2.2

1.7

2012

167.2

163.1

3

3

– Seasonally Adjusted Jan. 2012 593.1

739.1

669.2

20.4

Non-residential:

350.0

679.6

570.7

30.9

Alberta total:

943.1

1,418.7

1,239.9

24.3

Bank Benefit Plan: 2007

69,743,223

2008

77,595,931

2009

74,140,547

2010

79,583,013

2011

87,908,004

2012

96,729,350

100.6

101.0

2009

93.9

89.7

2010

95.6

89.0

2011

95.5

89.9

2012

97.1

90.7

Jan. 2012 - Jan. 2013

Residential:

Total manhours worked under the Merit Hour

2008

in Alberta ($ millions)

% change

Nov. 2012 Dec. 2012

Edmonton:

Yearly value of all building permits

Value of building permits (monthly) in Alberta (in $ millions)

Calgary:

2008

13,141.2

2009

11,276.9

2010

11,425.4

2011

12,716.9

2012

14,662.9

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

2009 44,707.2

2010 61,026.3

2011 69,736.8

2012 76,605

2013 (est) 77,594.6

Average number of employees covered under the

Merit Hour Bank Benefit Plan: 2007

2008

2009

2010

2011

2012

33,875

38,314

38,187

39,371

43,089

48,015

(SOURCE: Merit Contractors Association)

Wholesale merchants’ sales by industry unadjusted ($ millions) across Canada 2008

2009

2010

2011

2012

Building material and supplies

77,235.9

66,932.4

73,935.3

78,723.3

81,522.1

Electrical, plumbing, heating and air-conditioning equipment and supplies

24,163.6

21,783.2

23,245.9

25,161.1 25,660.9

Metal service centres

18,972.7

13,163.1

15,022.7

17,750.4 18,827.8

Lumber, millwork, hardware and other building supplies

34,099.6

31,986.1

35,666.7

35,811.8 37,033.4

115,358.6

103,460.8

Machinery and equipment 54

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110,411.2 123,235.0 128,177.2 (SOURCE: Statistics Canada)

2013-04-04 1:52 PM

000OM-C

THE WAY RADHE WORKS:

BE A THINKER. BE A CREATOR. ENJOY IT.

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