Open Mind 2016 National

POWER SHIFT: What the new political leadership means for open shop construction

A FORUM ON OPEN SHOP CONSTRUCTION

Volume 24 • Issue 2 • 2016

Upside to the Downturn

Is there a recovery on the horizon?

How to get through the downturn and come out stronger on the other side

Shining a Light

Exposing corruption in Quebec’s construction industry

TOP TIPS FOR WINNING TENDERS: Expert advice for bidding on contracts

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Contents Volume 24 • Issue 2 • 2016

34 5 Chairman’s Column

28

By Domenic Mattina

7 News and Events 12 Shining a Light

20 ON THE COVER 20 Survive and Thrive How to get through the downturn and come out stronger on the other side

By Martin Dover

The Charbonneau Commission exposes corruption in Quebec’s construction industry and highlights a need to reform the system

By Terrance Oakey

18 Understanding Open Shop What you need to know about the open shop approach and what it stands for

By Kate Lakeman

24 Levelling the Playing Field With the move to apprenticeship harmonization building momentum, some concerns still need to be addressed

By Willow White

28 Upside to the Downturn

24

34 Changing of the Guard New political leadership brings challenges for the open shop construction industry

By Line Porfon

38 By the Numbers Canadian construction statistics

Times are tough for Alberta’s construction industry but it’s an opportunity to adapt and prepare for the future

By Lisa Catterall

31 Top Tips for Winning Tenders

31

Fillmore Construction VP Rob Gomizelj shares some of his best advice for successfully bidding on contracts

By David DiCenzo

12 OPENMIND 2016

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VPS94577

112586 (02/2016)

Message From Merit Canada’s Chair

Strong and Vigilant Volume 24 • Issue 2 • Spring 2016 Publisher

Ruth Kelly

Executive Editor

Malcolm D. Kirkland

Associate Editor

Kevin Armstrong

Managing Editor

Kim Tannas

Production Manager

Betty Feniak

Production Technicians

Brent Felzien Brandon Hoover

Circulation Manager

Karen Reilly

Vice-President Sales

Anita McGillis

Advertising Representative

Kathy Kelley

Sales Assistant

Julia Ehli

Art Director

Charles Burke

Graphic Designer

Andrew Wedman

Contributing Writers Lisa Catterall, David DiCenzo, Martin Dover, Kate Lakeman, Terrance Oakey, Line Porfon, Willow White Contributing Illustrators and Photographers Heff O’Reilly, Raymond Reid, Andrew Wedman, Thomas Wölfram 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 merit@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 Canada, welcome to the

24th edition of Open Mind magazine and the sixth edition for Merit Canada.

Open Mind is Canada’s only magazine dedicated to exploring the issues faced by the open shop construction industry across the nation. Open Mind examines subjects that matter to the livelihood of an industry that employs more than one million people across Canada.

The open shop philosophy believes that employment and compensation of personnel in the construction industry should be based on merit, regardless of employee labour affiliation.

Open shop and Merit Contractors Associations remain strong – despite facing a significant economic slowdown, losing familiar and friendly faces during the federal election, and indications more turbulent times are in the future.

Terrance Oakey has been leading Merit Canada’s advocacy efforts in Ottawa since 2011. Over the past five years in particular, Merit Canada has led the charge on several initiatives to increase the amount of competition in the construction industry, reduce the amount of taxpayer money invested in construction projects and advocate for the rights of the open shop industry.

There’s no doubt that the future of our industry depends on knowledgeable politicians who make decisions that significantly affect our industry. The decisions being made at a political level in terms of regulation, infrastructure, funding and training are affecting every aspect of the industry. With a new Liberal government, Terrance will be more vigilant than ever to keep a watchful eye in Ottawa.

Perhaps the biggest political shift came in Alberta where the NDP won a majority, knocking the PCs out of power. Merit Alberta’s vice-president of government relations, Line Porfon, penned an article called “Changing of the Guard” in which she examines the political upheaval in Alberta and across Canada. The article highlights issues and legislation that we must watch carefully.

While we face challenges, there are a lot of achievements and successes to celebrate and they are highlighted in this edition: from research initiatives that are helping to boost productivity, to successful bidding stories and much more.

We hope you enjoy this issue of Open Mind. As always, we encourage you to give us feedback and suggestions on future topics.

From all of us at Merit, we wish you the best for 2016!

Canadian Publications Mail Product Agreement #40020055 Copyright © 2016 by Merit Contractors Association No part of this publication should be reproduced without express permission of Merit Contractors Association.

Domenic Mattina CHAIR MERIT CANADA

OPENMIND 2016

5

News and Events

HOW TO GIVE BACK WHEN TIMES ARE TOUGH Merit Contractors Association members are known for

their generous giving and donations. Unfortunately, when money is tight, companies can’t always give in the way they did during the boom. Bruce McDonald, CEO of Imagine Canada, a Canadian charitable organization, offers some tips for companies who have to cut back on monetary donations but still want to give back.

Celebrating Three Decades Thirty years ago, 15 contractors changed the construction

industry in Alberta forever. They put their competitive nature aside and came together to discuss common challenges and agree to mutually beneficial solutions.

While planning events for the 30th year in operation, the term “anniversary” was being used. However, anniversary just didn’t fit when considering Merit’s past, present and future, explains Merit’s president, Malcolm D. Kirkland.

“The reason Merit exists today is because of the strong will of those who founded it, the persistence of those who have kept it strong, and all the members we have today showing that we are getting stronger,” says Kirkland, who decided to go with 30 Years Strong.

In 1986, the founding members focused on their most important asset, their people. The first piece was to construct an industry-wide, portable benefit plan that would cover their workers and their families. From there other sections of the foundation were formed, including advocating for open shop principles and offering training opportunities through the Merit College of Construction.

Merit will be celebrating 30 Years Strong throughout the year with events that include barbecues at the Calgary Stampede and K-Days as well as a special event in September (details to be announced later) and much more.

In-time contributions When people think about donating their time to charity, activities such as helping to build a house or serving meals to the less fortunate might come to mind. But people with corporate skills may not realize how valuable their expertise is for charitable organizations. “There are opportunities for people in companies to actually use their talent in the work that they do every day to support organizations,” says McDonald. He’s referring to people with skills in marketing, information technology, human resources, and accounting. Charities often need support in these areas and can benefit greatly from some one-on-one mentorship.

Time-release policies Going hand-in-hand with McDonald’s first tip, companies can create time-release policies so that employees are able to donate their time during working hours rather than after work, when they may become too busy with personal responsibilities. Allowing employees to donate their time during work hours, either as mentors or simply with some hands-on assistance, can be a great help to charitable organizations.

Concentrating your gifts When planning monetary donations, there are ways to make a reduced donation budget go further. Rather than spreading thin donations to a large number of charities, try focusing company giving to a few key organizations.

That means making tough choices about where donations will go, but it also means those donations will continue to have a significant impact, says McDonald.

McDonald reminds donors that “when economic situations are a bit tougher, not only are donations down, but demand goes up.” Now is a great time to think about ways to give back that involve creative alternatives to monetary donations that involve your employees and may even build up company morale during a rough season.

OPENMIND 2016

7

Benefit News and Boom Events

Boost Your Productivity Aminah Robinson Fayek, a professor in the Department of Civil and Environmental

Engineering at the University of Alberta, has been studying the factors affecting productivity on construction job sites across the province for five years. Those productivity factors are modelled using statistical methods and artificial intelligence techniques – and, in particular, a technique called fuzzy logic.

Essentially that allows for some very complex subjective factors to be mapped in a very straightforward way, explains Robinson Fayek. “The models we’ve created allow us to first of all determine the most significant factors affecting productivity but also how if you change the levels or improve certain factors, what impact it has on productivity improvement,” she says.

It’s valuable information that comes at a time when companies can certainly use it. “Everybody is looking at innovation and efficiency improvements so this is another contribution to helping companies be more innovative, be more systematic in how they analyze their projects and hopefully increase their efficiency,” she adds.

The research is funded by the Natural Sciences a nd Eng ineer ing Resea rch Council of Canada (NSERC), the University of Alberta, as well as various industry partners, including Merit Contractors Assocation. The collaborative nature of the research is what makes it so practical and useful, emphasizes Robinson Fayek. “We’re bringing academics together with industry partners and we’re solving these problems collaboratively and because we have owners, contractors and labour providers in our program, we really take a multi-perspective view on the topic.”

The research findings are being shared not only with the companies that the researchers work with (where they can put them into practice immediately) but also at industry conferences and in academic settings. “Because the data is highly confidential, what we do is we compile it and we analyze it in an aggregate way so that nobody can be identified and no companies can be identified,” notes Robinson Fayek. This summer, they will take it one step further and will be providing a series of industry workshops on the topic. For more information and workshop dates, visit www.strategic-construction.ualberta.ca.

Wage Survey Results Every six months, Merit conducts a survey that polls members and non-members across Alberta on hourly wage changes, expected change in labour force and future wage increases. Here are the results from January 2016.

Overall sector breakdown Overall hourly wage change

residential industrial

11%

32%

Number of companies participating

356

6-month average wage change

0.61%

Number of employees reported on

15,184

1-year average wage change

0.91%

Expected change in labour force

increase

17.7%

decrease

16.85%

remain level

65.45%

commercial

57%

Future wage increase

yes

3.4%

no

72.8%

unsure

23.9%

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Shining A Light 12

OPENMIND 2016

The Charbonneau Commission exposes corruption in Quebec’s construction industry, highlighting a need to change the system and allow open shop companies to compete

BY TERRANCE OAKEY

T

he Charbonneau Commission, officially the Commission of Inquiry on the Awarding and Management of Public Contracts in Quebec’s Construction Industry, has been making headlines for the past few years in that province. Recently, a former deputy premier was arrested as a result of testimony revealed at the commission.

The revelations of cozy backroom deals and outright corruption in Quebec’s construction industry will again be in the spotlight.

The Charbonneau inquiry was set up in 2011 with its final report released in November 2015. During testimony, the role that unions in the construction industry played was specifically highlighted when commission counsel Sonia LeBel said that unions hold “a key position in the industry.”

OPENMIND 2016

13

Shining a Light

The Charbonneau Commission heard testimony about the involvement of union officials in backroom collusion and bidrigging, along with testimony about vacations and hockey tickets that had to be given to union officials because they were in the union. The commission turned its attention to issues like possible infiltration

are allowed to work on construction projects, despite the fact that roughly seven out of 10 Canadian construction workers are not unionized. These outdated labour laws prevent open shop contractors from working in the province. For more than 30 years, a series of severely restrictive laws and regulations in Quebec have

As long as the decisions over who will be allowed to work are made in backrooms instead of in an open, transparent and competitive environment, the potential for corruption will remain. of unions, links to organized crime, ties between businesses and unions, and intimidation and extortion on construction sites.

The Charbonneau Commission exposed how Quebec’s labour rules have helped to foster these conditions.

In Quebec, only unionized employees

disenfranchised thousands of workers who don’t believe they should be required to join a union in order to work in the construction industry.

In fact, Quebec’s labour laws have created the bizarre situation where dozens of workers had to spend time in jail because

they worked in Quebec’s construction industry without permission from the appropriate union and regulator. Others have faced fines and penalties – almost $25 million in fines and penalties were issued between 1978 and 1996 alone.

These laws had created an environment where a small group of union hiring halls had been allowed to dictate who is hired for each job. Witnesses before the Charbonneau Commission public inquiry talked about union bosses using their power to pick workers to advance their own interests on construction sites. According to the testimony of union boss Ken Pereira, the practice of assigning workers to various construction sites was “an incredible power” that was used to favour certain construction companies over others.

Quebec’s labour laws allowed a situation where some could take advantage and benefit at the expense of Quebecers.

Sadly, it is not surprising to hear the revelations of collusion and bid-rigging that came out at the commission. Corruption,

­unfortunately,­is­a­natural­outcome­of­this­ system­and­under­these­circumstances,­ allowed­corruption­to­flourish­in­the­dark,­ behind­closed­doors.

But­sunlight­is­the­best­ disinfectant.

The­remedy­for­these­ systemic­problems­is­to­ change­the­system­itself.­ Quebec­should­follow­the­ path­of­other­jurisdictions,­ including­other­provinces,­ and­allow­open­shops­to­ compete.­No­longer­would­ there­be­the­select­few,­dividing­up­the­ cash­in­the­backrooms,­deciding­who­will­ be­hired­for­which­jobs,­without­the­need­ to­really­compete­for­contracts.­No­longer­ would­Quebec­taxpayers­be­left­holding­the­ bag­and­paying­the­bill­for­the­abuse­and­ corruption­revealed­in­the­commission.­ Outside­Quebec,­the­presence­of­open­ shop­organizations­has­resulted­in­a­competitive­environment,­benefiting­taxpayers,­ employers­and­employees.­Studies­in­both­

Canada­and­the­United­States­estimate­ that­limiting­competition­through­closed­ tendering­practices­inf lates­the­costs­of­ projects­by­12­to­18­per­cent­or­even­more­–­

particular­union­in­order­to­be­employed,­ nor­to­arrest­workers­for­just­trying­to­do­ their­job.­Moreover,­in­2016,­it­is­no­longer­ justifiable­to­limit­participation­on­construction­projects­to­ contractors­who­have­ collective­bargaining­ relationships­ with­ particular­unions.­In­ fact,­it­can­be­argued­ that­any­system­of­ m a nd a tor y­ u n ion­ membership­imposed­ by­governments­as­ as­high­as­40­per­cent­in­some­studies.­City­ a­condition­of­employment­or­continued­ of­Montreal­reports­have­suggested­that­ employment­infringes­on­freedom­of­assoinfrastructure­project­costs­in­the­city­have­ ciation­rights­that­are­legally­protected­in­ been­driven­up­by­as­much­as­85­per­cent­ both­the­Charter­of­Rights­and­Freedoms­as­ on­some­projects. well­as­the­Quebec­Charter.

The­presence­of­open­shop­organizaAs­long­as­the­decisions­over­who­will­ tions­has­ensured­competitive­wages­and­ be­allowed­to­work­are­made­in­backrooms­ comprehensive­benefit­and­training­pro- instead­of­in­an­open,­transparent­and­ grams­being­made­available­to­employers­ competitive­environment,­the­potential­ and­employees.­This­makes­it­unnecessary­ for­corruption­will­remain.­Until­there­is­ to­forcibly­legislate­employees­to­join­a­ a­fundamental­change­in­Quebec’s­labour­

According to the testimony of union boss Ken Pereira, the practice of assigning workers to various construction sites was “an incredible power” that was used to favour certain construction companies over others.

KEY TESTIMONY: Former high-ranking

PHOTO: CANADIAN PRESS PHOTOS

union official Ken Pereira was a star witness during the public inquiry

OPENMIND 2016

15

Shining a Light

PHOTO: CANADIAN PRESS PHOTOS

Superior Court Justice France Charbonneau and co-commissioner Renaud Lachance

legislation, its construction industry will continue to operate as a closed and isolated region with Quebecers paying the price.

Another place for reform is union financial disclosure. A star witness during the public inquiry later testified to the Sen-

ate. The Senate was studying the financial transparency bill of former high-ranking union official–turned–whistleblower Ken Pereira. In detailing the financial mismanagement he discovered within his own union, Pereira told the Senate that “All

Terrance Oakey is the president of Merit Canada.

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Canadians, not just unionized Canadians, need detailed online financial disclosure of all tax-exempt union organizations to put an end to the abuse of tax deductible union dues.” Pereira’s revelations were so damning that his life was threatened.

This is the system and culture that those opposed to financial transparency seek to defend. It forces the public to rely on whistleblowers risking their own livelihoods, and lives, to reveal financial mismanagement within unions. While Justice Charbonneau recommends greater whistleblower protection, the better solution is transparency that does not require a whistleblower in the first place.

The Charbonneau Commission has shone a light into the dark places – highlighting the collusion and corruption that have become all too prevalent in the construction industry under the current labour rules. It’s time for Quebec to reform the system.

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OPENMIND 2016

ILLUSTRATION BY: ANDREW WEDMAN

What you need to know about the open shop approach and what it stands for

BY KATE LAKEMAN

M

erit Contractors Association represents the voice of

open shop construction in Alberta, focusing on the human resource needs of contractors and offering employee benefits, training, retirement programs and membership perks. One of the association’s main roles is to provide strong and proactive leadership for a fair regulatory business environment. But what exactly does it mean to be an open shop company? What are the advantages to this approach? What misconceptions are out there? And how do today’s challenging economic conditions factor into the equation? Open Mind spoke to Brad Wright, vice-president of benefit services for Merit, for the answers to these questions.

Q: How would you define “open shop”?

A: Open shop represents or describes a organization, company or firm where the employment relationship between the employer or the owner and the employee is one that is not influenced by a collective agreement but instead that relationship is defined by pay, benefits, promotion and the standard by which that person works inside that organization. In a closed shop or a union, all of those conditions are quantified and contained in a collective agreement.

Q: What are some of the benefits of this approach?

A: If an individual wants to work harder – harder being taking on more tasks and stepping up for activities inside that company, doing things that set them apart from the rest of the individuals inside that shop – then that is recognized by the employer, and opportunities inside that place of employment come by virtue of that relationship as well. Hence the concept “Merit” – all those attributes, those values, would also define merit, and an individual would be recognized for those contributions and showing enthusiasm and loyalty to the company is rewarded through pay, opportunities for promotion, and training and development as well.

Q: What are some of the misconceptions associated with the open shop approach?

A: I can tell you open shop is simply the best place to be. Our research, our surveys show that the base pay for individuals in open shop, in construction anyway, in open shop as opposed to closed, is pretty well the same, and in some cases it exceeds collective agreements. The benefit program, the health and dental program, is equal to or better than what some unions offer.

Again, promotion is available inside open shop and not defined or laid out either by seniority, years of agreement or what the collective agreement says.

Q: How do open shop companies remain competitive in terms of wages?

A: Base pay without benefits, without the additions – so let’s say it’s $40 an hour – that base pay for a union person is probably similar to what it is with a tradesperson who is open shop – $40 to $41 an hour – so we’re competitive there. But unions add a whole bunch of other hourly rates onto that base pay, many of which don’t go to the individual employee. For example, they’ll add on an hourly fee for an education fund, or they’ll add on hourly dues for a defined benefit pension program or they’ll add on a contribution for a market enhancement fund. Now all those things aren’t paid by the worker; they’re paid by the employer who hires them, but that money moves off to the union and that employee will never see that. So since our wages in open shop don’t reflect all those additional fees, dues and other surcharges, they are a heck of a lot more competitive as compared to the ones with the collective agreement.

Q: Is the open shop approach more favourable given today’s economic conditions?

A: The open shop just isn’t sensitive to the economic conditions.

Open shop is an approach that works regardless of whether we’re in a strong economy or a weak one, and this weak economy is affecting everybody equally. The impact on the people who are trying to work for a living and support their families is the same whether you’re in an open or a closed environment, but the open shop environment is a positive way to go, especially with respect to defining that relationship with your staff.

However, should there be a layoff, employees have the ability to self-pay into their benefit package and maintain their benefits for up to six months, which could be the time it takes them to be hired on for the next project. Providing this security to the industry is an important component of Merit.

I think that with an open shop there definitely is a belief that the most important assets are the individuals that work with you, and it’s more than a cliché, especially in a tough economy.

Again in this environment it would be wrong for people to assert that this economic environment is going to be a ripe time for open shop. The open shop environment and the virtues and the values, that stands the test of time and the cycles of the economy as well.

OPENMIND 2016

19

20

OPENMIND 2016

ILLUSTRATION BY: HEFF O’REILLY

Survive and Thrive How to get through the downturn and come out stronger on the other side

BY MARTIN DOVER

C

ONSTRUCTION FIRM, KNOW THYSELF. When it comes to surviving an economic downturn like the one Alberta is currently facing, that’s the overwhelming advice from veteran construction companies in the province.

“Obviously, we’ve seen this movie before,” says Brian Lacey, vice-president of construction at Clark Builders. “It’s cyclical, so it’s nothing that the market hasn’t seen before, and we’ve survived. But the days of low-hanging fruit are over.” Executives who have been here before say one of the most crucial aspects in guiding your business through challenging economic times is in knowing what your company does best – and executing on those skills.

OPENMIND 2016

21

Survive and Thrive “Something I see companies do is try to take on projects they’re not accustomed to,” says Paul Verhesen, president and CEO of Clark Builders. “Residential trades will come and bid in the commercial world, that kind of thing. You have to define what you’re good at and focus on those areas and be really good at it. This is not the time to figure out those things you’re not good at. Now is not the time to experiment.”

Verhesen’s co-worker, Lacey, echoes this: “First and foremost, companies need to close the door and have a roundtable discussion about the reality of the economics and their individual company, and how it fits,” he says. “It takes some discipline, and you have to identify the reality – are we mediocre, good or great, and how do we improve? It’s one of the hardest things to do, and you often hear companies say they don’t have time. That excuse is now gone; now is the time.”

Lacey notes that downturns can actually lead to stronger companies in the future: “With reduced competition, some businesses won’t survive this, and that’s healthy for the industry overall. You should take the opportunity to make improvements on staffing, systems, and streamline and de-bottleneck your operations,” he says.

It’s also the perfect time to be brutally honest: “Leaders should ask themselves some hard questions with respect to their ability to survive the long game. Do you have confidence in your business and brand? Is your product desirable and does it stand out? Ask yourself, what is your competitive advantage? If your business and market needs don’t align, then you need to look for improvements and efficiencies.”

Duncan Binder, chief project and operations manager at Binder Construction, says focusing on a solid foundation of working capital or retained earnings is essential.

“Your cash flow will be limited, or won’t be as lucrative as it was in the past,” he says.

“In a tight market you tend to get a lot of [companies] that undercut or underbid work, or work too cheap. So being a general contractor, you have to be very cognizant of engaging the services of others that cannot effectively deliver. In tough times, labour costs are make-or-break. You know the old adage: you have to spend money to make money.”

22

OPENMIND 2016

“Surrounding yourself with competent, confident individuals is paramount to surviving these ebbs and tides.”

– Duncan Binder, chief project and operations manager, Binder Construction This means being extra cognizant of the contractors that your company hires on for projects. “You really need to engage the services of others that will satisfy [your clients], and at times you have to spend a few extra dollars to obtain that service, even though that sounds weird in a tight market,” he says. “If you hire someone that’s too cheap, the service that you will be paying for probably won’t satisfy the clients you’ll be working for.”

Binder insists that client expectations never change, even though a company may have to cut costs. “They’re paying for a sound, well-built, constructed building. So that level of service doesn’t change. It’s how you deliver it; you have to alter your thinking a little bit.”

Binder Construction was formed in 1972, and the company boasts strong employee loyalty – the average employee has been working with Binder for 12 years.

“Surrounding yourself with competent, confident individuals is paramount to surviving these ebbs and tides,” says Binder.

“We deliver good projects, and we build fun projects.”

Verhesen notes that surviving a downturn is no simple trick – and it’s something that all companies are currently dealing with. “Different companies are going to handle it differently, but it reflects who you are as a company both in good times and bad,” he says. “If you look after your people, it really doesn’t matter if it’s good times or bad because you’ll be successful regardless of the market.”

Lacey echoes this, urging companies to improve their use and deployment of labour. “We’ve been so dependent on transient labour, but I think the market needs to be more productive with what we have,” he says. “We should do more with what we have as opposed to using more resources. I don’t think that’s healthy. We need a more sustainable labour workforce.”

This labour reduction and reconsideration has, in some senses, worked itself out, says Lacey. “The reality out there is that owners are shelving projects for six months because they think the costs [of labour] will come down. But with temporary foreign workers and transient workers going home, the market demand and hourly rates haven’t come down. It’s not reasonable to expect labour rate cuts, and the costs of commodities are going up. I think there needs to be some alignment between industry players, design teams, owners and contractors.”

That’s a point that rang true across the board. “Part of the change in any market is expectations and your attitude towards the marketplace,” says Verhesen. “As things tighten up or become more competitive, consider your company’s competitive advantage and leverage that. And then you have to get to work.”

That means accepting that there might not always be an infinite number of projects to bid on. “That expectation is over,” says Verhesen. “You need to go to work and focus on the opportunities in front of you, and do a good job of winning those and executing them.”

In the end, it all comes down to the fundamentals of your business, says Verhesen.

“We focus on the fundamentals of budget, quality and schedule. Those are the things that we can control on the execution side, and they are fundamental to us.

“In good times, you can’t just pretend to do that and then in bad times think ‘Oh, now I have to do it.’ In our case you have to do it all the time – to be honest, that’s going to be the differentiation between companies that survive and do well and those who don’t. Those who have the fundamentals in place can rely on those going forward.”

Binder adds that it’s important to keep on going: “The biggest thing is to go to work and have fun,” he says.

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Levelling the F

With the move to apprenticeship harmonization building momentum, some concerns still need to be addressed or apprentices who transition between provinces, it can

ILLUSTRATION BY: THOMAS WÖLFRAM

be difficult to keep up with the skill expectations that differ from coast to coast. Each province in Canada is responsible for its own training program, and each program has different hourly requirements, different training content and a different arrangement of courses.

This poses a serious issue for employers who – despite the jurisdictional differences – may assume that a third-year apprentice from one province has the same skills as a third-year apprentice from another province. The inconsistencies are also a concern for apprentices who, when moving to a different province, may

24

OPENMIND 2016

face unnecessary bureaucracy and paperwork as they attempt to transfer between programs. For many years, there has been a push to harmonize the various apprenticeship programs in order to increase mobility for apprentices and save them from these complications – now that push is picking up momentum.

Line Porfon, vice-president of government relations at Merit Contractors Association, says the association is fully behind harmonization across the country, but there are concerns. “We are in agreement with collaboration and harmonization across the country, provided it does not water down the excellence of our own apprenticeship training programs,” says Porfon.

While harmonizing may help improve weaker apprentice-

Playing Field

BY WILLOW WHITE

ship programs in the country, some worry that it may have a negative effect on well-established programs. This could be especially true in Alberta, which is often considered “the Cadillac of apprenticeship training.” Porfon says that Merit will face this potential risk head-on.

One concern has already arisen for Alberta tradespeople with regard to creating consistent names for specific trades that could be used nationally. It was proposed that all electricians adopt the common national name “construction electrician.” However, this blanket title does not sufficiently describe the

role of electricians in Alberta. According to the Government of Alberta, electricians in the province are roughly divided into four categories: residential (housing developments), commercial (office buildings), institutional (hospitals) and industrial (plants and factories). The title “construction electrician” does not encompass all of the diverse skills that an Albertan electrician is trained for.

“An electrician in Alberta does a whole lot of things outside of construction,” says Porfon. “So, it could be you have electricians who specialize in doing some of the measurement devices on pipelines – that’s not construction – or an electrician may be looking at lighting on your roads – that’s not

OPENMIND 2016

25

Levelling the Playing Field

construction.” While creating a consistent national title for the trade has value, this particular name would simplify the role of electricians with diverse experience, undervaluing their skills. It is these kinds of issues that Merit is aware of, and Porfon assures members that Merit will be “in opposition to any potential changes that would lessen the quality of our training.”

Porfon believes there will be co-operation on all fronts for this important issue. “Government has been extremely forthcoming,” says Porfon. “They have reached out proactively to have conversations with us and keep us informed on it and are very respectful of Merit’s voice in the industry.”

Ken Gibson, executive director of the Alberta Construction Association, agrees and has been pleased by the efforts the government has made to collaborate. “We have been consulted by government in the past on specific trades, and we found that to be a productive process and we look forward to that being maintained,” he says.

The Canadian Council of Directors of Apprenticeship (CCDA) has long identified the need for apprenticeship harmonization across the provinces. The council, which is a voluntary partnership between Canada’s federal, provincial and territorial governments to support the development of skilled trades in Canada, has identified harmonization as its number one strategic priority.

Of course, the CCDA’s Red Seal program helps meet some of this need. First created in 1952, and representing 57 different trades, the Red Seal sets common standards for tradespeople across all provinces. While the program has long played an important role in harmonizing Canadian trades, more co-ordination is required to create consistency for apprentices.

In 2013, a CCDA task force was formed in order to identify the inconsistencies in apprenticeship training programs between provinces. Ultimately, the task force identified four key areas of harmonization which include the use of the Red Seal trade name; the number of training levels; the total training hours; and the order of training content. The organization hopes that harmonization will increase completion rates for apprentices who may be deterred from finishing their programs due to the difficulty of transitioning between provinces. Most jurisdictions are fully co-operative with the proposed improvements as aligning apprenticeship programs across the country has the potential to drastically improve the experience of apprentices and employers alike.

In the current economic climate, particularly with regard to Alberta’s slow oil and gas sector, the issue of apprenticeship harmonization has become less of an emergency, though not less important. During the boom, Alberta struggled to find enough skilled journeymen and apprentices from other provinces to meet the high labour demand. Apprentices training in other provinces may have struggled to take advantage of the labour need as they faced jurisdictional barriers. Working towards harmonization will make sure that when another boom comes to Alberta, the province will be ready with a mobile, interprovincial workforce.

Harmonization will also help improve the quality of work being completed. During Alberta’s last boom, when the labour demand was skyrocketing, it was vital that apprentices shared the same skills – extra training time would have been nearly impossi26

OPENMIND 2016

While the Red Seal program has long played an important role in harmonizing Canadian trades, more co-ordination is required to create consistency for apprentices.

ble during such a busy season. Time is not a luxury afforded to most companies during a boom. According to Porfon, “Now that the economics have changed, it’s not that much of as issue if you have people coming in who don’t have the standard of technical training that [employers] are looking for.” There is plenty of time to train apprentices in technical areas that may not have been covered and fill in any knowledge gaps.

Alberta runs in a cyclical economy, and soon enough work in the province will be heating up again. The downturn provides an opportunity for provinces to work on harmonization and collaboration during a slower period. Companies will be able to hit the ground running when the rebound comes along. And as baby boomers continue to retire, and oilfield layoffs sweep the province, Alberta will soon need every apprentice it can get.

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OPENMIND 2016

Times are tough for Alberta’s construction industry, but it’s an opportunity to adapt, improve competitiveness and build for the future

BY LISA CATTERALL

A

s oil prices declined, much of Alberta was left

grappling to adjust to a reality that had not been seen for decades. As the economy shifted, investment in oil sands projects fell, causing jobs to be cut across the province, many of which were in the construction industry. Up to that point, construction had been a major beneficiary of the oil and gas boom. The associated infrastructure costs allowed for unparalleled growth and development in construction across the province.

The boom in spending and investment associated with the oil sands had created an unprecedented demand for construction work and skilled labourers. As oil prices soared, engineers, tradespeople, and general labourers from across the country flocked to Alberta, seeing it as the promised land for employment. When prices retreated, the situation changed.

“The trickle-down effect from oil and gas into our industry is big. We’ve got layoffs in all sectors across the province, but especially in construction,” says Marla McCready, director at the Merit College of Construction. “Now, many companies are facing a situation where there’s nothing on the horizon, which can be concerning.”

According to the 2016 BuildForce Canada Construction and Maintenance Looking Forward report, the construction industry is predicted to lose approximately 31,000 jobs between 2015 and 2019.

The majority of these jobs are expected to be in the residential housing market, where it is anticipated that 11,000 jobs will be cut. By 2020, markets are expected to recover, with the construction industry returning to above current levels.

“We’re definitely shedding jobs at this point, but we still do have gaps in more specially trained positions, like project management,” says Line Porfon, vice-president of government relations at Merit Contractors Association, “so of course, there still is some positivity out there.”

While many jobs will be lost in the next three years, a number of major infrastructure projects across the province will sustain some activity. As part of the 2015 Capital Plan, Alberta is set to invest $34 billion in infrastructure from 2015 to 2020. To date, many infrastructure projects have supported the industry, softening the blow of plummeting oil prices. In the future, major transportation and utility projects will continue to create jobs, though the extent of this over the long term remains to be determined.

“It does equate to work, and these kinds of projects help. For instance, Edmonton has been more insulated as the downturn has continued, due to the massive amounts of infrastructure being constructed,” says Porfon. “Ideally, going forward we’re hoping to see that the province dedicates some substantial investment to spending in infrastructure.”

While divining the future actions of oil prices and infrastructure investment can create more answers than questions, resiliency will play a major factor in future success. Perhaps more than in any other field, the construction industry faces constant workforce fluctuations.

“Any construction company knows that construction can be very up and down, and whether seasonal or economic, these changes come with the territory and companies adjust accordingly during these times,” says McCready.

However, Merit’s self-pay hour bank system will help soften the blow. The system was designed due to the project-based environment of the construction industry. The hour bank allows skilled tradespeople the flexibility to move to different companies without the costly disruption in benefit plans. In the case of layoffs, employees can maintain their benefit package for up to six months through

OPENMIND 2016

29

Upside to the Downturn

the self-pay system, often long enough to be ment numbers marks an end to 25 years of generations look to other industries for hired and start working on another project. expansion in the industry. careers. Over the next decade, BuildForce This security to the industry, and during “Up to this point, we’ve had it pretty estimates that 21,000 workers will be lost to this time, is a critical piece to keep skilled good in the Alberta construction industry. retirement. With this in mind, it will be key workers healthy and ready to work.

But in the end, business will go where the for companies to continue attracting future Through careful, strategic planning, money is,” says Porfon. generations of workers, keeping longermany companies will be able to term goals in mind. ride out the market f luctuations “Right now, businesses are expected over the next five years. looking at tomorrow – that’s “THE CURRENT SITUATION IS A MASSIVE During that time, companies will it. They’re not looking farther RIGHT-SIZING OF THE INDUSTRY. IT’S A BIT have the opportunity to improve on ahead. But it’s important for current industry practices, leading companies to keep the longerOF A RESET AND A SHOCK FOR OUR the country and creating a more term future in mind, as we’re INDUSTRY, BUT IT’S AN OPPORTUNITY productive, efficient workforce. going to be impacted by the grey “Unfortunately, up to this wave in the future,” says MalFOR US TO BECOME MORE COMPETITIVE.” point, Alberta’s market has globcolm D. Kirkland, president of – Line Porfon, vice-president of government relations, ally been considered a high-cost, Merit Contractors Association.

Merit Contractors Association lower productivity jurisdiction,” “The good thing is we have the says Porfon. youngest population in Canada.

Over the last decade, many Now we need to make sure we’re companies in Alberta fought chronic shortIn the short term, this may mean that looking at how to engage them.” ages of labour. These shortages drove up some companies, employees, and investors Ultimately, adaptation will be key. By wages, first in the oil and gas sector before will migrate to other provinces. BuildForce taking time to evaluate the current sitspreading to other industries across the estimates that much of the market adjust- uation and its long-term implications, province. This included the construction ment will occur as interprovincial workers companies have the opportunity to adjust industry, where many companies struggled leave the province, returning to their home practices, focusing on efficiency, innovato find reliable, productive workers. Compe- provinces or moving to markets offering tion, and continuous improvement. tition for small pools of qualified workers increased opportunity, such as in British “There are some challenges that lie and tradesmen forced companies to match Columbia or Saskatchewan. ahead, and we are facing challenges now salaries in the ballooning oil and gas indusIn addition to worker migration, one too, but I have the utmost confidence that try. As the competition for qualified labour of the most significant hurdles facing the Albertan businesses will adapt and sucgrew, cost overruns and delays became com- construction industry going forward is ceed,” says Kirkland. “The light at the end monplace, creating scheduling problems the changing demographic of the availa- of this tunnel, once things turn around, is and production inefficiencies, ultimately ble workforce. With jobs scarce, companies that once contractors know the new reality, driving up costs for end users. These cost will face recruitment challenges as younger they will adapt.” pressures have eroded Alberta’s international competitiveness in recent years, a INVEST IN YOUR PEOPLE problem that could scarcely be addressed during the boom.

During a downturn, expenditures on training and development are often the first “The current situation is a massive to be cut. But according to McCready, this approach must change. right-sizing of the industry. It’s a bit of a “I’d like companies to look at the big picture and keep training their staff – some reset and a shock for our industry, but it’s an companies say, ‘Oh, we can’t afford more training and development right now,’ but opportunity for us to become more competreally, how can you afford not to invest in your people? It’s a direct turnaround to the itive,” says Porfon. By learning from more benefit of your organization,” she says. competitive markets around the world, A downturn provides the perfect opportunity for companies to look internally, the Alberta construction industry has the focusing on what might be overlooked when markets are hot. “From a management potential to once again thrive and lead the perspective, it’s an opportunity to re-examine your company culture to ensure it country in job creation. attracts and retains great people,” says McCready. “If you want to be the best company For nearly two decades, Alberta’s conout there, you need to look at how you’re going to become that.” struction industry had led the country in Strategy is important. By taking a strategic approach to continuing training, job creation. As a result of Alberta’s boomdeveloping innovation, and improving workforce productivity, companies will be able ing oil and gas sector, employment numbers to move forward confidently, and be prepared when the market rebounds. in construction nearly doubled since 1997.

The current fall in construction employ30

OPENMIND 2016

Fillmore Construction VP Rob Gomizelj shares some of his best advice for successfully bidding on contracts

BY DAVID DICENZO

OPENMIND

2016

31

Top Tips for Winning Tenders

R

ob Gomizelj has been a part of countless bids over h i s 20 -plu s ye a r s i n t he contracting industry. The 4 4 -yea r- old Ed monton native knows that to secure a tender, a bid has to be well thought out. Gomizelj, vice-president, business development for Edmonton-based contractor Fillmore Construction, started his contracting educating early, helping out on project sites for his dad at the age of 14. In the decades since, he has worked for some of the country’s biggest companies, gaining invaluable experience in both building and bidding.

A common thread for many companies that have a high success rate with securing tenders is in the process they follow. Larger businesses are typically very formal with the bidding process. At Fillmore, a midsized operation with 38 office employees and 90 in the field (about 110 during the summer), once the brass has determined that a job fits into their schedule, the process starts with a thorough spec review.

Subcontractors get the invitation and drawings are reviewed.

“It’s understanding your specifications, going through it in detail and just understanding the project itself,” says Gomizelj.

After that, a bid comes down to three things: 1) the takeoff (a quantity survey of items needed), 2) pricing and 3) getting all your subcontractors lined up on the day the tender closes.

Sounds simple enough. But securing a tender hinges on doing a number of things right.

Balancing estimating and operations When Gomizelj took his first office job after completing NAIT’s Construction Engineering program, he was thrown into an office, told to look at some drawings and do an estimate. He was unsuccessful 32

OPENMIND 2016

on the first attempt. And the second. But the third time was a charm.

“I thought, ‘Holy crap, now I have to go build this thing,’ ” Gomizelj says of his first successful bid. “The thing you really learn is that there is a mindset an estimator has and the mindset that the operations guys have. When you run through the numbers on the estimating side of it, you have to use the most aggressive number you can to get the work without impeding the operational side of the company. It’s a balance. If you don’t put enough on something, you’ve got risk issues. But if you make too much of an allowance on something, then you might not get the work.

“Usually, you find that really good estimators came up through the field.

They’ve seen what it takes and they know what you can and can’t get away with when you’re pricing things.”

It’s all in the details Gomizelj says that it is critical to take individual items on a bid and break them down into as many pieces as possible. He hammers this into his junior estimators – figure out what every single thing will cost.

Gomizelj uses the example of a sidewalk. “You can just guess x amount of dollars per square foot,” he says. “But what’s worked successfully for me is that I take the sidewalk and I break it down.

We’ve got the base prep, the formwork, the rebar, the concrete, the finishing and the cleanup. So it’s not just a sidewalk. It’s five or six components within that item.”

Details regarding materials, labour and equipment is an absolute necessity.

“It goes back to that balance between the operations and the estimating,” he adds.

“If you understand what you’re actually pricing out, then you can explain it a lot better on the operational side. When you

just look at something and say, ‘Yeah, I’ll just throw in a $1,000,’ that’s the death of a tender right there. It will either make you lose the project or when you turn it over to the operational side, that $1,000 was actually $8,000.”

Find your niche Fillmore Construction specializes in mid-sized projects, typically in the $18to $20-million range. But the company is much more than a project-based contractor. Fillmore has some regular clients that it has worked with for years, which has been instrumental in its steady growth in an erratic Alberta economy.

Gomizelj also knows the company’s strengths. “If your company focuses on institutional, build schools. Don’t go out and build retail projects,” he says.

“That’s being general but if you build your reputation on doing something specific, it’s more difficult getting into other markets. Focus on what works well for you.”

So bid on what you know.

“If it’s a commercial project, we tend to go to the contractors within the market that do really well on that side of it,” says Gomizelj. “Same with electrical. Some do very well on institutional projects, some do very well on industrial. It’s where they focus. We want to build our relationships with those guys in that specific market.

You basically try to get the best numbers out of them.”

Don’t bite off more than you can chew Because Fillmore is a mid-sized company, they don’t try and take on a lot of work that they really don’t need to.

“That would get us into trouble,” Gomizelj says. “So when we are looking at bidding a job, the first question is who are we going to put on it? Do we have availability?

“If it’s no, if we don’t have the manpower availability, we won’t bid on it.”

levels understandably rose.

“What ended up happening is that one of the guys touched the keyboard and accidently deleted a million-dollar trade just at the same time we submitted the price. We phoned the guy who submitted the number and we told him, ‘Get the envelope back and add a million dollars.’

He thought we were joking. We literally had a minute to go so he actually grabbed the envelope back from the tender authority, opened it up, crossed out the number, added a million dollars and handed it back. “We got it restamped and submitted with one second left.”

Not all bids are so dramatic. But it was a lesson learned for a young Gomizelj, one that he recounts often when training his junior estimators.

“The majority of the problems we run into are on the day of the tender closing,” says Gomizelj. A big project might require up to 30 trades. And for each of those trades, you can have numerous subcontractors offering up prices. So there is always potential to have some trouble as the deadline approaches. A way to combat that is to keep your closing group small and be prepared to troubleshoot.

“Typically, when you’re closing projects, you don’t want 800 people in the office,” says Gomizelj, who has been a part of $150-million deal with just three individuals present. “The more people you have, the more confusion you get.”

And minimizing confusion means you can focus on the necessary details to successfully close the deal.

In the Spotlight

Know your subcontractors When doing the initial assessment of a project Fillmore is bidding on, Gomizelj says they examine the specifications and determine the trades required so they can compile a list and do an invitation to subcontractors. But not all tradespeople are created equal. And like the bigger companies, subcontractors can have their own niche.

Closing the deal Gomizelj remembers being one of the estimators on a massive bid for a project at the Edmonton International Airport back in the late 1990s. His company at the time had submitted a price just before the deadline arrived. He continued working through some mechanical bids with colleagues when panic struck the group.

“All of a sudden, one of the guys says, ‘How come we’re a million dollars lower?’ ” Gomizelj recalls, noting that the adrenalin

Company: Fillmore Construction President: Brent Fillmore* Head Office: Edmonton Projects include: Lakeland College Energy Centre (Lloydminster), Stony Plain Community Centre, Sterling Centre Grande Prairie Specialize in: New building construction, tenant improvements, renovations and building expansions for commercial, industrial and institutional clients *winner of the 2015 Construction Person of the Year Award OPENMIND

2016

33

ILLUSTRATION BY: RAYMOND REID

Changing

34

OPENMIND 2016

of the

Guard

New political leadership brings challenges for the open shop construction industry

BY LINE PORFON

A

lberta and Canada have seen a significant shift in political leadership that has impacted the construction industry, with the potential for even more turmoil ahead.

In Alberta, the province swung far to the left during the May 2015 election, and industry has been reeling ever since. In the NDP’s first eight months in power, corporate taxes have increased from 10 per cent to 12 per cent and the flat tax has been cancelled in favour of a sliding scale.

The NDP are introducing a carbon levy, which is in essence a carbon tax and will apply to almost all consumer spending. As part of their campaign commitments, the NDP initiated a royalty review that ensured uncertainty and shook investor confidence at a time when oil dropped to under $30/barrel.

Finally, the province’s commitment to environmental controls will add costs at a time when many companies cannot afford to continue to employ their workforce, and in some cases, are closing their doors.

According to Statistics Canada, Alberta had a net loss of 19,600 jobs in 2015, up from the 14,600 jobs it estimated in January. This is the worst single year loss since the 1982 where the province lost 45,000 jobs.

The number of people receiving EI benefits has doubled from 31,220 in December 2014 to 62,480 in December 2015, and the unemployment rate has reached above 7.4 per cent in January 2016. All indications are that the numbers will worsen.

The recently released BuildForce Canada Construction and Maintenance Looking Forward forecast, estimates Alberta could lose up to 31,000 jobs by 2019.

Industry in Alberta initially took a wait-and-

see approach with the NDP; what they’ve seen is a government intending on making sweeping changes, causing job losses and an economic collapse.

Premier Rachel Notley was quoted many times as having a strong desire to work collaboratively with business, but announcements and decisions continued to focus on social issues, deficits, and debt funding. The honeymoon period for the NDP government appears to be over.

The October 2015 budget, while providing support for infrastructure spending, will impact business in Alberta more than any other stakeholder group. The NDP government has glaringly picked winners and losers. The NDP targeted business and high-income earners, leaving all public services and other earner groups untouched.

The premier’s commitment to work with business and industry has yet to transpire, and many stakeholder groups, including Merit Alberta, complain of an overt unwillingness to meet. The provincial mood in Alberta, especially after the federal election saw a rejection of the federal Liberal and NDP parties, is that electing the NDP may have been a mistake. Despite that, the NDP government tabled a massive deficit budget, putting Alberta at risk of losing our credit rating and driving business away.

Business is warily watching as concerns about changes to the labour code, apprenticeship training and requirements, and the planned Workers’ Compensation Board (WCB) review continue to mount.

Alberta business has long fought for competitive, fair, and transparent labour conditions.

The NDP, given their long-standing association with building trade unions, would like OPENMIND 2016

35

Changing of the Guard to see changes to basic employer and employee rights like the removal of the secret ballot and project labour agreements requiring the unionization of the workforce for public infrastructure projects. But there seems to be some recognition that these changes would further rock an already shredded industry.

It is imperative that the NDP government recognize that Alberta’s competitiveness must increase to mitigate the economic conditions, and Merit Alberta believes that labour legislation must promote fair and competitive labour relations rules that strengthen Alberta’s construction industry.

Apprenticeship policies and regulations is another provincial responsibility that industr y is watching.

Alberta has arguably the strongest apprenticeship training system in Ca nada with a worldwide reputat ion for excellence. This is because the system is led by industry through the Alberta Industry and Training Board structure in partnership with Advanced Education and Campus Alberta colleges or training institutes, which demands a neutral training environment.

Over the years, unions have requested public funding for their training centres and it is a concern that the current provincial government will be more sympathetic to these requests.

Should the demands of unions be met, Alberta Apprenticeship and Industry would divert public monies from publicly funded and community-supported colleges and training institutes to facilities that are controlled by unions. Given that the majority of work and apprenticeship training is being done by small- to medium-sized construction companies that operate on an open shop basis, there would be significant pushback, especially from the 80 per cent of non-building trade union contractors. Without the support of industry, the apprenticeship system could implode.

The NDP has long held a belief that the Workers’ Compensation Board is flawed and requires review and fundamental change. As a result, in fall of 2014, the NDP government announced a review of all agencies, boards and commissions, including the WCB. The WCB is currently developing the terms of reference and has created a bureaucratic secretariat to support the review.

During the 2015 Legislative fall session, Premier Notley was quoted as saying: “We have engaged in a review of agencies, boards, and commissions, and the Workers’ Compensation Board is part of that. We are in the process of trying to do a fulsome consultative review of how we

can improve the service provided by WCB” (December 7, 2015).

In addition she said, “I think that there could be improvement with respect to how the WCB handles occupational disease, how it handles repetitive strain injuries, and how it handles mental health claims” (December 8, 2015).

Given Premier Notley’s past experience with the WCB, these actions strongly suggest that the review is part of the NDP’s social re-engineering. But industry is concerned that the inclusion of mental health concerns as part of an employer-funded injury insurance program goes too far. If the review’s conclusion included such drastic changes, then employers will be left with significant premium cost increases in a time of volatile economic uncertainty.

Merit Alberta believes that the current WCB framework is working in a relat ively ba l a nce d way for b ot h e mploye r s and employees. While any worker injury case management organization has its challenges, overa ll the system works. The inclusion of a case management system that goes beyond the recovery and/or impact of workplace injuries blurs the lines of responsibility towards a “life skills” approach, which business would argue – correctly – is the responsibility of government, not private enterprise.

While the construction industry waited for signs of collaboration and consideration of their challenges, the provincial government made sweeping changes and signalled additional ones that will impact the viability of construction companies across the province. And that’s only in less than a year. Industry will continue to watch and plan to mitigate these changes for the next three years, hoping for the best, but anticipating increased pressures.

Federally, the indication from the newly elected Liberal government is they will make changes impacting the construction industry. However, it is early days and the impact is yet to be seen.

The Liberal government has made very specific promises on the labour front, including the repeal of Bills C-525 (Secret Ballot) and C-377 (Union Financial Disclosure), both included as Liberal campaign promises.

In January 2016, the federal government indicated it would introduce legislation to repeal secret ballot voting rights for workers in federally regulated sectors, a right that was only granted in December 2014. The open shop construction industry sees this as a step backwards for workers’ rights in Canada, as the system reverts to the old criteria, a system that Merit Alberta believes is ripe for intimidation and manipulation. The only way to guarantee the independent choice of whether or not to join a union is through a secret ballot, which is one of the basic tenets of a democratic country.

Bill C-377, also proclaimed into law at the end of the Con-

It is imperative that the NDP government recognize that Alberta’s competitiveness must increase to mitigate the economic conditions.

36

OPENMIND 2016

servative government’s leadership, was hamstrung shortly after the fall election when a Canada Revenue Agency policy was posted in a press release, advising unions that they did not need to adhere to the legislation. These requirements sought to provide rank-and-file union members and the general public with information about the $4-billion black hole of annual union spending in Canada, which is collected in mandatory, tax-free dues from unionized workers.

By reversing the dictate, the federal government will continue to let unions operate in secret, spending their billions each year without any accountability and transparency.

The Liberals also made a commitment to organized labour around funding their training centres. In the Minister of Employment, Workforce Development and Labour’s Mandate Letter, the prime minister directed the development of “a framework to fund training facilities delivered in partnership with labour unions.” The combination of this directive with the provincial NDP government’s wish to reward their union supporters may result in a negative fundamental shift in apprenticeship training.

So, while it is early days for the new federal government, and a quarter into the mandate of the provincial government, there remains a long road ahead for the Alberta construction industry. And Merit Alberta will continue to work collaboratively with our industry partners to ensure that the voices of construction are heard.

Line Porfon is the vice-president of government relations at Merit Contractors Association.

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BY THE

NUMBERS

Construction price index for apartment buildings: Calgary

Halifax

Toronto

Vancouver

2014

171.6

142.6

147.2

150.4

2015

170.8

144.4

150.2

152.6

Capital expenditures for construction in Canada* (in $ millions):

2014 6,349.1

2015

New housing price index ($ thousands)

2014

2015

Calgary

109.4

110.5

Toronto

122.1

126.0

St. John’s

151.1

151.5

Fredericton

108.2

108.0

Winnipeg

137.8

139.3

Saskatoon

123.4

122.9

Vancouver

96.0

96.9

6,157.5 *by North American Industry Classification System

Yearly Value of all building permits by Province (in $ millions) 2013

2014

936.0

676.0

1,176.3

1,209.7

830.9

821.9

Ontario

30,722.4

33,126.3

Manitoba

2,815.2

2,312.6

Newfoundland and Labrador Nova Scotia New Brunswick

Saskatchewan

2,669.2

2,883.2

Alberta

18,256.3

16,752.9

British Columbia

11,076.7

13,125.2

Total person hours worked under the Merit Hour

Bank Benefit Plan: 2014 2015

Average number of employees covered under the

Merit Hour Bank Benefit Plan:

113,277,126 108,808,973

2014

2015

56,025

56,134

Wholesale merchants’ sales by industry unadjusted ($ millions) across Canada Building material and supplies

2014 90,827.6

2015 91,459.0

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

28,493.7

28,675.4

Metal service centres

20,285.2

18,057.0

Lumber, millwork, hardware and other building supplies Machinery and equipment 38

OPENMIND 2016

42,048.7

44,726.7

133,378.7

134,067.5

(SOURCE: Merit Contractors Association, Statistics Canada)

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