Open Mind 2012 National

LEGALLY SPEAKING: DEFINING OWNERS’ AND SUBCONTRACTORS’ RESPONSIBILITIES

A FORUM ON OPEN SHOP CONSTRUCTION

Volume 20 • Issue 2 • 2012

MERIT AT WORK Association updates from coast to coast

Construction’s digital media tool of choice

BIM: Canada’s construction industry embraces modelling technology

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Contents Volume 20 • Issue 2 • 2012

22

5 Message From Merit Canada’s Chair

By Curtis Monsebroten

6

Merit at Work

The latest on Merit’s eight open shop associations

By Ben Freeland

10 Job Targeting Revisited Legislative progress with union subsidy schemes gains ground in North America

By Bill Stewart

ON THE COVER Immigration reform: A crucial element to Canada’s future

14 Easy as 1 2 3 Digital media tool Jobsite123 takes construction industry by storm

By Ben Freeland

Illustration by Steve Adams

14

18 Laggard to Leader 31

Canadian construction industry poised to embrace Building Information Modelling (BIM)

By Ben Freeland

22 Merit Goes National Open-shop movement battles regulatory construction burdens

By Terrance Oakey

26 Something’s Got to Give Canada’s future depends on immigration reform

By Bill Stewart

31 Don’t Blame the Workers Time-wasting management flubs get analyzed

By Bruce Buckley (reporting by Jonathan Barnes) from original 2011 article published on ENR.com

35 Clause and Effect Creative thinking by a subcontractor pushes boundaries of the law

By Corbin Devlin

38 By the Numbers Canada’s construction statistics

OPENMIND 2012

3

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Message from Merit Canada’s Chair

On behalf of Merit Canada, welcome to the 20th anniversary edition of Open Mind magazine and the second edition for Merit Canada.

Volume 20 • Issue 2 • 2012 Publisher

Ruth Kelly

Executive Editor

Stephen Kushner

Associate Editor

Ben Freeland

Editor, Contract Magazines

Michelle Lindstrom

Production Co-ordinator

Betty-Lou Smith

Production Technician

Brent Felzien

Circulation Manager

Heather Morrison

Vice-President Sales

Anita McGillis

Advertising Representative

Angela De Leon

Sales Assistants

Karen Crane, Kassie Mitchell

Art Director

Charles Burke

Associate Art Director

Andrea deBoer

Assistant Art Director

Colin Spence

Contributing Writers Bruce Buckley (ENR.com), Corbin Devlin, Terrance Oakey, Bill Stewart Contributing Illustrators and Photographers Steve Adams, Isabelle Cardinal, Curtis Comeau Janet Freysholdt, Kevin Ghiglione, Leanne Kroll, Heff O’Reilly, Chris Pyle 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.

Open Mind is the only magazine in Canada

focused on the open shop construction industry. This annual publication is dedicated to promoting discussion on the principles of free enterprise and the notion that employment and compensation of personnel in the construction industry should be awarded based on merit regardless of employee labour affiliation.

2011 was a landmark year for the open shop sector in Canada as Merit Canada established a national advocacy office for the open shop construction industry with Terrance Oakey as its founding president. With an office situated literally steps away from Parliament Hill and the Prime Minister’s Office, Merit Canada has already made its presence felt on the national stage. We played a major role in changing the financial arrangement with the old Construction Sector Council (CSC), explained in detail in the article “Merit Goes National” on pages 22 to 24. We are also pushing the federal government to take action to ensure union financial transparency through Bill C-377, while lobbying for immigration reform to attract foreign workers with construction skills.

Last year also saw impressive economic gains across Canada, resulting in growth in the construction industry in many provinces. Nevertheless, any economic growth is contingent on a healthy workforce and Canada faces a looming construction labour shortage over the coming decade as a result of an aging workforce. This issue of Open Mind tackles the labour issue on several fronts, including the immigration issue and construction labour cost control.

We also look at two technological innovations that offer great promise to the industry, namely Building Information Modelling (BIM) and Jobsite123, a cutting-edge digital media tool that has already made waves in the U.S. and now looks to reshape the industry here in Canada. We will also be visiting the provinces to see how things are shaping up at our provincial open shop associations from Vancouver to St. John’s in “Merit at Work” on page 6.

We hope you enjoy this 2012 national issue of Open Mind. As always we encourage you to give us feedback and suggestions on future topics.

From all of us at Merit Canada, we wish you the best for 2012!

Canadian Publications Mail Product Agreement #40020055 Copyright © 2012 by Merit Contractors Association No part of this publication should be reproduced without express permission of Merit Contractors Association.

Curtis Monsebroten CHAIR MERIT CANADA

OPENMIND 2012

5

Promising updates for Merit’s eight open shop associations

BY BEN FREELAND

A

s Merit Canada advocates for the open shop sector on the national stage, the provincial Merit associations continue working to improve prospects for the sector at the grassroots level.

The story begins in 1974, when the Independent Contractors and Business Association (ICBA) was founded in Trail, British Columbia. The ICBA was established in response to the then NDP provincial government’s barring of open shop contractors from bidding on public works projects. Today, the open shop sector represents 85 per cent of B.C.’s construction industry, thanks in large part to this organization’s tireless efforts. The next chapter of the story would take place in Alberta, where 15 open shop contractors banded together in early 1986 to form Merit Contractors Association. At that time, many dismissed the open-shop movement as a temporary phenomenon that would disappear once the province’s then stagnant economy picked up steam. Twenty-six years later, open shop now dominates Alberta’s construction industry with a commanding 80 per cent market share.

The establishment of Merit Contractors Association in Alberta triggered a chain reaction, with provincial Merit Associations springing up across the country in the subsequent decade. Merit Contractors Association of Saskatchewan opened its doors in 1988, followed by Merit Ontario in 1990, Merit Contractors Association of Newfoundland and Labrador in 1992 and Merit Manitoba, New Brunswick and Nova Scotia in 1994.

These eight organizations have continually met the unique needs of their member companies within their respective economic, industrial and regulatory environments by providing employee benefits, training, management seminars and political 6

OPENMIND 2012

advocacy at the provincial level. And while the open shop movement has faced political battles in many provinces, as a whole the movement’s gains have been monumental.

Fighting for a fair and competitive construction industry is what the provincial Merit Associations have done from the beginning and continue to do today. Here is a look at what these provincial associations are presently up to.

In British Columbia, the country’s oldest open shop contractor association is tackling a variety of procurement issues across the province. This past year has seen ICBA make progress in negotiations with BC Hydro (the province’s largest crown corporation) aimed at making its capital procurement process more balanced. “In the past, BC Hydro’s contracts put too much risk on the contractor and had a dubious resolution process,” explains Philip Hochstein ICBA’s president.

“ICBA is working with other construction associations in B.C. to change this and we’re seeing an honest willingness from BC Hydro to change.” This past year has also seen an expansion of ICBA’s training offerings, including a new steel training program, offered in partnership with the Canadian Institute of Steel Construction.

Finally, ICBA proudly announced that it has gone carbon-neutral with its insurance products as well, thereby helping firms meet a growing demand for a green supply chain on projects.

Merit Alberta celebrated its 25th anniversary in 2011 and enters 2012 with plenty to celebrate: the province looks to return to pre-2008 levels of economic growth and its industrial construction sector is particularly robust. The Merit College of Construction’s focus is to

projects in the potash industry there looks to be no shortage of projects for member companies to bid on. Merit Saskatchewan continues to develop new training courses, ALL EXPECTATIONS. IT CONTINUES TO BE THE including five short courses as part of its Fall Learning Series and four longer courses in its Winter Training Program. The Association is also holding the first ever LEADING PLAN OF ITS KIND IN THE COUNTRY.” Saskatchewan Construction Awards of Excellence in April of this year. “We’ve been growing between 15 and 20 – Stephen Kushner, Merit Alberta president per cent over the past couple of years,” says Merit Saskatchewan executive director Karen Low. “With the addition of a member alleviate the predicted shortfalls in construction labour and has services co-ordinator to our team, we expect that rate to increase expanded its training offerings to include many new programs, even more.” including a suite of e-learning courses. Merit Alberta is also pleased to bring the acclaimed U.S.-based construction industry Manitoba is seeing a different political climate digital networking tool Jobsite123 to Canada. As the country’s from that in Saskatchewan regarding the open shop founding Merit Association, Merit Alberta continues to set the sector. Manitoba saw the ruling New Democrats standard for benefit plans for the open shop construction sector. elected to a fourth consecutive term in October 2011. The pro-union The Merit Benefit Plan once again expanded its offerings in 2012 NDP continues to impose labour agreements on major projects, to include Best Doctors, an online medical second opinion pro- thereby forcing open shop contractors to pay union dues and gram developed by the Harvard School of Medicine. “Our benefit associated fees for all work on these projects. Nevertheless, the plan continues to surpass all expectations,” says Merit Alberta province’s economy remains vibrant with a wide range of major president Stephen Kushner. “It continues to be the leading plan projects on the horizon. Such projects include several new hotels, of its kind in the country.” a new stadium and a rapid transit corridor in Winnipeg, new hydroelectric and health-care projects and flood damage repair With Saskatchewan’s economy continuing and restoration work, meaning bright prospects for the constructo grow at a brisk pace and Brad Wall’s pro- tion industry as a whole. Meanwhile, Merit Manitoba continues to business Saskatchewan Party re-elected to a expand its training programs as demand increases with its growing second majority, the mood at Merit Saskatchewan continues to be membership. “We had a 10 per cent increase in membership in 2011,” optimistic. Residential and commercial construction remain says Merit Manitoba president Harvey Miller. “And we’re looking at robust in the province and thanks to the launch of several new an even higher rate of expansion in 2012.”

“OUR BENEFIT PLAN CONTINUES TO SURPASS

OPENMIND 2012

7

Merit at Work

“MERIT ONTARIO HAS MADE HUGE STRIDES IN OUR EFFORTS TO ENSURE THAT OUR MEMBERS HAVE EQUAL OPPORTUNITIES IN TORONTO’S EXPANDING PUBLIC TRANSIT SYSTEM.” – Frank Viti, Merit Ontario manager In Ontario, the re-election of the pro-union Liberal Party of Dalton McGuinty was a blow to an open shop sector already under threat from the newly created Ontario College of Trades. Merit Ontario has expressed concerns that the College, whose board of governors is weighted heavily in favour of the closed shop sector, will oppose important moves such as changes to journeyman/apprentice ratios and ensuring fairness and transparency within this new entity. Nevertheless, 2011 was a big year for Merit Ontario as it saw the launch of the Merit Ontario Training Centre and the introduction of the Merit Ontario Customized Plan as a new health benefits option. It also achieved major breakthroughs in tendering for infrastructure projects in the Toronto area.

“Merit Ontario has made huge strides in our efforts to ensure 8

OPENMIND 2012

that our members have equal opportunities in Toronto’s expanding public transit system,” says Merit Ontario manager Frank Viti. “We were successful in having Metrolinx reverse its union-only tender policy and they are now completely open.”

In New Brunswick, a formerly stagnant provincia l economy now appears to be on a recovery path under the fi scally prudent leadership of Premier David Alward’s Progressive Conservatives. While concerns remain that the government’s program of fiscal restraint will hamper economic growth, strengthening energy exports are a promising development while job growth and reduced unemployment are predicted for 2012. Growth in the construction industry is expected in the light industrial sector while the commercial and retail markets appear to be trending upward.

While no major changes are afoot at Merit New Brunswick in 2012, the province’s small but expanding open shop association expects continued growth in 2012 and 2013. “It’s good to be looking at a positive economic outlook for a change,” says Merit New Brunswick executive director Linwood Hupman.

“We finally feel that we’re moving towards positive times for the construction industry in New Brunswick.”

While the picture for the open shop sector in New Brunswick appears to be brightening, the outlook for Merit Nova Scotia is decidedly mixed. In the third year of his mandate, NDP Premier Darrell Dexter passed the pro-union First Contract Agreement Bill 102, a bill criticized by many in the provinceâ&#x20AC;&#x2122;s business community for giving unions a foothold in non-union workplaces. Merit Nova Scotia has strongly condemned the legislation as well as the governmentâ&#x20AC;&#x2122;s appointment of a union member only Labour Board.

In spite of these obstacles, however, Merit Nova Scotia continues to maintain steady growth. Furthermore, the securing of a major federal shipbuilding contract by Halifaxâ&#x20AC;&#x2122;s Irving-owned shipyard is expected to provide a shot in the arm to the construction sector. Current priorities include advocating for changes to the provinceâ&#x20AC;&#x2122;s apprenticeship ratio, which is currently at one to one and continues to place a stranglehold on the labour supply.

This year marks the 20th anniversary of Merit Contractors Association of Newfoundland and Labrador (NL), and with Canadaâ&#x20AC;&#x2122;s easternmost province currently outpacing the rest of Atlantic Canada, Merit NL looks to have plenty to celebrate. With several megaprojects currently underway and steady growth in the commercial and institutional construction sectors, Merit NLâ&#x20AC;&#x2122;s member companies have had no shortage of work, with particularly intense activity

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in the St. Johnâ&#x20AC;&#x2122;s area. In addition, steady advocacy resulted in the provinceâ&#x20AC;&#x2122;s loosening of its apprenticeship rules, resulting in increases in enrolment. Merit NLâ&#x20AC;&#x2122;s membership grew by approximately seven per cent in 2011, with total Hour Bank time increasing by 17 per cent. The association also awarded its first ever post-secondary scholarships, giving a total of $6,000 to six family members of Merit NL company employees. Plans are also afoot for a 20th anniversary celebration. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s a big year for us,â&#x20AC;? says Merit Newfoundland and Labrador executive director Paul DubĂŠ. â&#x20AC;&#x153;We want to continue driving value for our membership and celebrating a successful 20-year history will be a part of that effort.â&#x20AC;?

Moving right along, step by step. This has been the story of the open shop construction movement in Canada.

While 2011 was unquestionably a landmark year for the movement with the establishment of a national office in Ottawa, literally steps from Parliament Hill and the Prime Ministerâ&#x20AC;&#x2122;s Office, this would never have been achieved were it not for the nearly four-decade-long saga of Canadaâ&#x20AC;&#x2122;s provincial associations.

In this time, the provincial Merit Associations have proven their critics wrong time and time again by delivering industry-leading employee benefits and training programs within a low-cost model, unrivalled across the industry.

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The legislative progress of dealing with union subsidy schemes is gaining ground in Canada and the U.S.

TARGETING Revisited

ILLUSTRATION BY: ISABELLE CARDINAL

S

ince the early ’90s, Canadian and U.S. open shop contractors have had to deal with a variety of unfair yet legal building trade union “market recovery” schemes. Variously known by terms such as Job Targeting Funds (JTFs), Stabilization Funds (STABs) or Market Enhancement Recovery Funds (MERFs), they are all, in the words of the International Brotherhood of Electrical Workers (IBEW), “Part of a strong organizing program aimed at securing monopoly of local labour markets.”

How effective were these schemes? In Portland, Oregon, it reportedly took only six years for IBEW Local 48 to increase its market share from 40 to 85 per cent. Dealing with this potential threat to fair and competitive construction markets is one reason why North American contractors could ultimately be helped by groundbreaking changes in Alberta and Idaho.

On June 5, 2008, the Alberta government passed Bill 26: The Labour Relations Amendment Act 2008. The act brought in specific labour law amendments to curb the use of bid subsidy schemes called MERFs. Fuelled by high energy prices, Alberta’s economy expanded rapidly over the past two decades. In parallel to this expansion, building trade unions such as the IBEW and the United Association of Plumbers and Pipefitters Union (UA) convinced a number of

major oilsands project developers to grant them labour supply monopolies for the building of the province’s largest construction projects. The projects provided the financial means for exploiting blind spots in Alberta’s Labour Relations Code.

In Alberta, these schemes emanated from collective bargaining agreements and amounted to cross-sectoral transfers of economic rents from a group of industrial construction owners and contractors to contractors and owners in the institutional commercial sector. Essentially, this occurred because some large oilsands developers willingly paid a premium on their multibillion-dollar construction projects to gain access to pools of unionized tradespeople.

Why would major oilsands owners turn a blind eye to paying higher costs for labour?

The answer lies seemingly in Alberta’s royalty regime, which mitigates higher costs by allowing developers to pay lower royalties to Alberta’s treasury until they recover their capital construction costs. The unions involved in orchestrating these schemes successfully used the funds to subsidize the labour costs of unionized contractors working in institutional and commercial construction, wherein the prevailing industry custom is to award contracts based on having projects built on schedule for the lowest price. In practice, MERFs are a tax

BY BILL STEWART

on the economic rents that unions extract primarily from the energy sector being redistributed to commercial construction projects where similar economic rents do not exist because of competition from open shop contractors.

In Alberta, the schemes were initially outlined in collective bargaining agreements stipulating that contractors were required to remit part of the total wage package (up to $2.32 per hour) into the union-controlled fund, which other unionized contractors could apply for subsidies on a project-by-project basis. In certain instances, the hour rate subsidy was estimated to be as high as $15 per hour multiplied by the total estimated hours of labour required for the project.

In passing Bill 26, Alberta legislators intended to ensure that the labour code was not used to promote, sanction or provide a legal haven under the guise of collective bargaining for this type of unfair activity.

Accordingly, Alberta’s law sought to restrict how MERFs were collected and disbursed.

Payments from employers to unions – and unions to contractors – aimed at undercutting the bids of more competitive contractors were prohibited. And although unions and their members were legally permitted to establish lawful subsidy funds, the law stipulated a transparent and voluntary process, which was a first in Canadian labour law.

OPENMIND 2012

11

Job Targeting Revisited

The legislation also specified that for a MERF to lawfully operate, employees must authorize deductions in writing and the deduction amount and purpose must be separately shown on both employee and employer payroll records. The law also made it an unfair labour practice for a union to expel or suspend a person from membership or take any other disciplinary action against anyone who refuses to contribute to such schemes.

If it waddles and quacks like a duck â&#x20AC;Ś Despite the intent of Albertaâ&#x20AC;&#x2122;s legislators to end this practice, the respective Building Trades Unions (BTUs) wasted little time in developing new schemes to circumvent the law. Indeed, within six weeks of the royal assent of the amendment act, one BTU business manager reported to members that it would be â&#x20AC;&#x153;business as usualâ&#x20AC;? and that the union would â&#x20AC;&#x153;have in place an alternative way of ensuring that [unionized] contractors will be competitive for this work.â&#x20AC;? Some unionized contractors also mentioned anecdotally that relief was being provided under â&#x20AC;&#x153;something we donâ&#x20AC;&#x2122;t call MERFs anymore.â&#x20AC;? Legal counsel for unionized contractors also noted, â&#x20AC;&#x153;They [BTUs] know how to read legislation and have the ability to change their tactics to accomplish their objective of seeing more construction work done by contractors bound to their respective collective agree-

ments.â&#x20AC;? This change in tactics was evident when efforts were made to have unions comply with the act and the related Market Enhancement Recovery Fund Distribution Regulation in 2009.

The collective agreements for each of the respective unions continued to include specific references to MERFs. In April 2009, the Alberta Labour Relations Board (ALRB) received notification that none of the MERFs identified in six current collective agreements had complied with S.2 of the regulation requiring the filing of disclosure reports.

The ALRB did not initiate an investigation as contemplated by the act but accepted written arguments. As part of their submissions, the union legal counsel raised numerous issues challenging whether any party outside their bargain had the legal standing to raise this issue and that there was no lawful basis for their clients to disclose any information whatsoever. In turn, the board ruled that it could not determine whether the MERFs referred to in the same collective agreements that were in force before and after Bill 26 provisions and related regulations came into effect were regulated by the MERF Distribution Regulation.

In time, the various collective agreements were amended and the picture became clearer. While the names of the MERFs were changed, the sums that contractors were required to pay into newly created funds remained the same. For example, the collective agreement between the Electrical

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CONSTRUCTION Construction Managers General Contractors Design Builders

Contractors Association of Alberta and the International Brotherhood of Electrical Workers Local 424 prior to the 2008 statute was referred to as the Market Target Recovery Trust Funds (MTRF) and the amount contractors were required to contribute to the fund was $0.93 per straight time hour worked by each journeyman. In the subsequent collective agreement, the formerly referenced MTRF became the Membership Development Fund and the amount contractors remained obligated to remit continued to be $0.93 per straight-time hour worked by each journeyman.

How is the money being spent? The answer is likely similar to the solution reached by Construction Labour Relations â&#x20AC;&#x201C; An Alberta Association (CLR-A) and Local 110 of the Heat & Frost Insulators and Allied Workers Union. In a fashion similar to the other collective agreements, the previously named MERF was renamed the Promotion of the Insulation Trade Trust (PITT). The hourly contribution rate remained unchanged at $0.50 per straighttime hour worked.

What did change, however, is found in the Letter of Understanding accompanying the revised collective agreement. After agreeing that â&#x20AC;&#x153;non-signatory contractors operating in the commercial/institutional sector do not offer Health and Welfare and Pension packages to their workforce equivalent to those contained in the collective agreement,â&#x20AC;? the parties acknowledged

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that “the added cost of maintaining the added cost [had] a negative impact on the ability of signatory contractors to compete, secure work and offer gainful employment opportunities to members of the union.”

This problem is then dealt with in the final paragraph stating, “All current and future commercial work may, at the Employer’s discretion, be enabled by waiving the employer’s obligation to contribute on behalf of its employees to the Health and Welfare and the Pension Plan.”

In the case of the Insulators, the value of this relief is equivalent to $6.50 per hour worked. This raises concerns about other similar arrangements with other union locals because charges for vacations, pensions and other funds are approximately 30 to 33 per

cent of the basic negotiated hourly “wage rate.”

Under normal bidding conditions, these costs are added to the hourly charge a contractor would include in a bid estimate.

From an open shop perspective, the legislation passed in 2008 was clearly intended to end “subsidizing the bids, tenders, fees and prices” of unionized construction contractors. A subsidy is a subsidy is a subsidy. To put it another way, if it waddles and quacks like a duck, chances are it is.

This and other information was presented to a panel of lawyers who submitted an initial confidential report to the responsible minister in March 2011. A second report was commissioned and at the time of writing the contents of their report remain confidential.

“ALL CURRENT AND FUTURE COMMERCIAL WORK MAY, AT THE EMPLOYER’S DISCRETION, BE ENABLED

BY WAIVING THE EMPLOYER’S OBLIGATION TO CONTRIBUTE ON BEHALF OF ITS EMPLOYEES TO THE HEALTH AND WELFARE AND THE PENSION PLAN.”

Idaho also passed legislation addressing job targeting funds

In 2011, the State of Idaho passed the Fairness in Contracting Act (FCA) to promote fairness in the construction bidding process in that state. This legislation is a further indication of how union bid subsidy schemes are being viewed by other jurisdictions as a matter that needs to be addressed in order to properly – Insulators Union Letter of Understanding protect the public interest.

The significance of this law cannot be overstated, as it sets the precedent for other states trying to become more competitive. This concise one-page law addresses the issue directly so as to ensure that labour unions do not attempt to circumvent it in the same way that their Alberta counterparts have.

The FCA is the first piece of legislation in the U.S. that deals directly with construction union bid subsidy schemes. Unlike Alberta’s amendments, the Idaho legislation made it illegal for a contractor or subcontractor to “directly or indirectly receive a wage subsidy, bid supplement or rebate on behalf of its employees, or provide the same to its employees, the source of which is wages, dues or assessments collected by or on behalf of any labour organization(s), whether or not labelled as dues or assessments.” The bill also prescribed fines of $10,000, $25,000 and $100,000 for violations.

Given the high stakes involved, it is hardly surprising that this act, as well as another Idaho act related to project labour agreements, are currently before the Idaho courts. Initially, the union legal counsel used the existence of a national labour relations code in the U.S. to successfully argue that the legislation was outside the state of Idaho’s jurisdiction, as it is related to labour relations. However, the Inland Pacific Chapter of the Associated Builders and Contractors (ABC) of the United States intervened and is making the case that it is within Idaho’s jurisdiction to adopt and implement the legislation based on the fact that Idaho is a Right-to-Work State.

The ABC is asserting that the FCA directly serves a broad state interest by prohibiting unfair bid subsidy programs that undermine the right of Idaho citizens to choose to not be represented by a labour union and that “job targeting activity, by its very definition, is aimed at unduly coercing and restraining Idaho’s non-union employees in their decision not to join a labour organization, by undercutting their employers’ ability to get work.” The ABC also asserts that “the loss of available non-union work based upon artificially lowered bids by union contractors funded by their employees is a far more compelling state interest than the right of union employees to engage in such activity for the preservation of their jobs.” The court’s initial ruling, they argued, “was based upon a decision that compulsory unionism trumps the right to choose. Existing right-to-work laws in Idaho very specifically protect Idaho citizens from compulsory unionism and give them the right to choose.”

Given the high stakes involved, it seems likely that there will be considerable and lengthy litigation around this legislation.

Efforts by the Alberta and Idaho legislatures to end unfair union subsidy schemes are groundbreaking developments that could dramatically rebalance the construction industry across North America. Open shop contractors now have two examples of significant government responses to the unique labour relations challenges in the construction industry. While there may be delays and setbacks in achieving legislative justice, it seems apparent that the door is now opening wider and wider to end these abusive job subsidy schemes.

OPENMIND 2012

13

ILLUSTRATION BY: JANET FREYSHOLDT

BY BEN FREELAND

14

OPENMIND 2012

I

t started out as a simple idea. A group of construction contractors in

south Florida were examining the possibility of creating an easyto-use online directory to help them find the resources necessary for jobsite mobilization – quickly and within their geographical area. At the time, the only resource available for this purpose was the Blue Book Building and Construction Network, which contractors did not find particularly user-friendly given that it divided Florida into two geographical zones (north and south) and provided no company information beyond names and numbers. Clearly something better was required.

The result was Jobsite123.com. It is currently the fastest growing online tool for the commercial construction industry with over 500,000 companies in its database and it appears to be taking Canada by storm, too.

“In the beginning, we focused on building a directory of jobsite mobilization resources,” explains Coty Fournier, Jobsite123.com’s founder and CEO. “There was nothing on the web like it and it started to take off. Before long, contractors and other suppliers had begun asking, ‘Why not put the whole industry on it?’ ”

OPENMIND 2012

15

Easy as 1 2 3

“That’s when we knew the potential for Jobsite123.com was even bigger than we had originally envisioned and we set out to take the free online community concepts started by web titans like LinkedIn and Facebook and customize the company profile content so that each company had the ability to showcase the answers to 95 per cent of the most commonly asked questions in the marketplace. Investors jumped in and version 2.0 of Jobsite123.com was developed and launched in summer of 2009,” Fournier says.

Since its inauguration, Jobsite123.com has established itself as the gold standard for digital communication tools in the construction industry in the United States, where it is quickly gaining ground as the commercial construction industry’s counterpart to Facebook or LinkedIn. The services cater equally to the buy and sell sides of the equation. Jobsite123 provides buyers with qualitative and quantitative data on prospective contractors or suppliers while simultaneously giving firms an easy way to showcase themselves online. “The name comes from the expression ‘Easy as 1 2 3’,” says Fournier. “We’ve built a tool that anyone with rudimentary

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OPENMIND 2012

computer skills can use. If you can type, you can build a phenomenal company profile inside Jobsite123 that, when fully completed, will rival the look and feel, and most importantly, the useful content of most construction company websites out there.

It literally solves the problem of how to get effective content about your company onto the web. And – it’s completely free.”

The notion of creating a free online hub for the industry gained early support from Fournier’s industry backers. While the site does derive revenue from profile upgrades and other additional forms of marketing exposure (known as “freemiums”), continued industry support has allowed the site to remain free of charge. However, the freeness of the site would ironically prove to be an obstacle at the outset. “Free is not a word you hear very often in the construction industry,” Fournier notes. “One of our challenges early on was convincing contractors that this service actually was free and that there weren’t any catches.” However, the timing of Jobsite123’s genesis was at the height of the worst recession in postwar U.S. history, which meant that once companies overcame their initial hesitations, they wasted no time getting on board. “In some ways the recession made it easier,” she says. “Most companies needed more work and were looking for new, cost-effective ways of marketing themselves. The fact that our customized profiling platform is free meant that companies had nothing to lose by trying it out.”

Jobsite123’s rapid expansion has been facilitated in large part through connectivity with vital industry software provid-

ers with company databases inside their user platforms, such as project management and invitationto-bid software programs. These technologies can now connect their database to the Jobsite123’s database for auto-feeds so that companies’ Jobsite123 profiles can be viewed or accessed within various software platforms. The first partnership of this kind was launched in October of 2011 with SmartBidNet, one of North America’s leading providers of construction bid management software with well over 200 major general contracting clients across the U.S. and Canada. These and similar connections link prospective buyers directly to the Jobsite123 database when additional resources are needed for any given project bid, while Jobsite edits appear automatically in the linked databases.

In late 2011, a three-way partnership was established between Jobsite123.com, Merit Contractors Association and the Calgarybased JuneWarren-Nickle’s Energy Group to create the Canadian version of the site.

Jobsite123.ca was officially launched in Alberta in October 2011 and in its first four months drew some 5,000 companies. Plans are underway to make the service available to contractors and all other construction professionals nationwide this year.

Meanwhile, back at Jobsite123.com’s head office in Fort Lauderdale, Fournier and her colleagues are already looking beyond North America for future expansion possibilities. “We’re looking at possible expansion into South America and Europe,” she notes. “There’s nothing confirmed yet but it’s our intention to expand further.”

Anticipation over the Canadian ver-

sion is already running high. “It’s a fantastic tool,” says Bill Whitelaw, JuneWarren-Nickle President and CEO, whose firm is overseeing marketing, digital advertising and integration solutions for Jobsite123.ca.

“It builds on the way the construction industry has always done business while also giving people a range of extra tools. Companies can cover all the prequalifying elements – insurance coverage, bonding capacity, client relationships, project portfolios, safety records – and build themselves a very compelling prequalifying story for buyers. And from the buyers’ standpoint, it’s a very powerful search tool.” Whitelaw sees few obstacles to the site’s spread in Canada and further expects the free access aspect of the service to be a plus in today’s social media-saturated marketplace. “It’s expected now,” he says. “You can’t put a tool like this out there without a free component. There are many purchas-

ers and general contractors in this sector who require free access to this type of website to find the services they need.”

What began as a simple solution to a local need evolved quickly into a standard construction industry tool across the United States and has altered the industry.

“I’ve already noticed an evolution in how contractors behave,” says Fournier. “At first contractors were hesitant to display their credentials out in cyberspace. That

has changed completely.” Fournier notes that Jobsite123, like LinkedIn, has a built-in performance rating request function, allowing contractors to request reviews of their work from buyers following the completion of a project, which they can then display on their profile. Also, they can allow companies to connect their profile to companies they enjoy doing business with and would readily recommend. “What this tool has done is create a much greater emphasis on managing content and online reputation management,” she says. “In the construction industry, we have all too often lingered at the trailing edge of technology and innovation, but we are working hard to change that, as times have changed irrevocably.

Our industry needs to step up our game.”

The Canadian version of Jobsite123 is now a reality, and judging by its success south of the border, it shouldn’t be long before this digital media tool is industry standard in this country.

.ca

Merit Contractors Association has partnered with Jobsite123.ca to help your company to:

Promote your company’s complete qualifications, client performance ratings and industry connections in Jobsite123.ca’s powerful construction search engine!

Email Merit at jobsite123@meritalberta.com to get started today

18

OPENMIND 2012

Laggard to

Leader The Canadian construction industry is poised to move into a role of prominence, embracing Building Information Modelling technology

By Ben Freeland

ILLUSTRATION BY: LeANNe KROLL

P

eople often say that Canada is not a nation of early adopters.

In actual fact, this clichéd view holds little water. Canadian business was well ahead of the curve in harnessing the power of social media and the evolution of the Smartphone was in large part a Canadian story thanks to RIM and its BlackBerry. However, when it comes to Building Information Modelling (BIM), there is more than a grain of truth to this cliché. While a number of countries (notably in Europe) have raced ahead to implement BIM, Canada’s construction industry has shown some reticence in embracing this innovation. Nevertheless, the last few years have seen substantial growth in BIM use in Canada. An increasingly prominent role in the creation of international industry standards for BIM promises to catapult the country from laggard to leader in the field.

OPENMIND 2012

19

Laggard to Leader

BIM is, in broad terms, the process of Fast forward to early 2012, however, Canada and are well into the managed, generating and managing building data and the picture appears to be changing. and touching on the integrated. We’re in parallel with the life cycle of the build- While Canada has yet to become a world not at the leveraged stage yet, but that’s ing. It involves 3-D, real-time, dynamic leader in BIM, the construction indus- the goal.” building modelling software aimed at try in this country has made significant The potential for bona fide internaincreasing productivity in the design progress to adopt BIM. A 2010 IBC sur- tional collaboration in building design and construction process. However, BIM vey showed that 60 per cent or more of that the technology promises has yet goes well beyond the parameters of estab- commercial and institutional projects in to materialize due to a lack of internalished 3-D design techniques in its inclu- Canada were employing BIM, with use in tional standards. This, according to sion of geometry, spatial relationships, the commercial and residential sectors Partridge, is an area in which Canada light analysis, geographic information approaching the 50-per-cent mark. “We’re has the potential to emerge as a world and quantities and properties of build- at a transitional stage,” explains Pelletier. leader. CanBIM is already working with ing components. As such, leading BIM sof tware BIM is an industry paradesigners Nemetschek “The fuTure has a nasTy way of digm shift that requires (producers of Vectorworks) rising up and biTing you unless unprecedented collaboraand Autodesk (designers you pay aTTenTion To iT.” tion between architects, of Autodesk Revit Archicontractors and building tecture) in establishing – Will Koroluk, Daily Commercial News reporter owners for effective use. global standards.“We are “BIM can’t be seen just from the per- “The larger construction firms are ahead currently working on developing standspective of a contractor, an architect or an of the curve. It’s the smaller firms that ards with Australia and the U.K.,” he owner. They become mutually inclusive – need help.” He notes that in certain sec- explains. “We are also working with our that’s the key to it,” explains Dave Pelle- tors in Canada, most notably the oil and partner buildingSmart alliance in the U.S. tier, president of D&G Mechanical Inc. in gas industry, BIM has been in full-fledged on the National BIM Standard (NBIMS) Kelowna. Mr. Pelletier is the current chair use for many years now but that it is still V2. This is being set up as an eventual ISO of the Institute for BIM in Canada (IBC), relatively new to most of the vertical standard for BIM and CanBIM is becoma consortium set up to lead and facilitate building in the industrial, commercial, ing a major conduit for this. We were the co-ordinated use of BIM in design, and institutional (ICI) sectors. There is pleased to see the recent announcement construction and management of the also widespread interest across the indus- by buildingSmart international that Canadian-built environment. try. “We have a lot of contractors and NBIMS V2 will be adopted as a global Determining levels of BIM use is a far other industry partners who recognize its standard of standards related to utilizing from straightforward matter as statistics value but need help implementing it,” he BIM-enabled technologies.” often do not differentiate between com- says. “That’s exactly what the IBC was set With BIM technology approaching the panies making full use of the technology up to do.” maturity stage in some markets and the and those who use it just as a flashy 3-D In addition to helping small- and high-growth stage in others, evidence of its modelling sales tool. Nevertheless, the lat- medium-sized contractors with the BIM benefits are widespread. A recent McGrawest findings show that BIM use worldwide learning curve, IBC works to establish Hill Construction survey indicates that is highest in northern Europe (with Fin- industry standards and best practices for BIM users are seeing overwhelmingly land using BIM in an astonishing 93 per the technology together with its sister positive payback from its implementacent of its new projects) and parts of the organization CanBIM. The latter organi- tion. The survey found that two-thirds of Asia-Pacific region. North America – and zation made considerable progress in U.S. BIM users reported positive return Canada in particular – has trailed behind building bridges between academia and on their investment in the technology. the rest of the industrialized world. Speak- industry in the quest for best practices, Among expert users, that figure rises to 87 ing at the CanaData Construction Indus- particularly regarding the handover per cent, with a further 93 per cent of users try Forecasts Conference in Toronto late of buildings from contractor to owner believing in the potential to gain more 2009, Daily Commercial News reporter Will within the context of the BIM process. value from BIM in the future. Among speKoroluk expressed dismay at the reluctance “BIM is more than a technology, it’s a cific business benefits, the most commonly he saw on the part of Canadian construc- process,” says Allan Partridge, CanBIM’s cited was reduced rework. Others include tion firms to embrace new technological vice-president and executive director of reduced conflicts and changes during developments such as BIM. “The future Group2 Architecture in Edmonton. “Any construction as well as better multi-party has a nasty way of rising up and biting you really diffusive change in the industry communication and understanding from unless you pay attention to it,” he says, goes from being ad hoc to managed, to 3-D visualization and improved project adding that Canadians generally aren’t very integrated, to leveraged. We’ve definitely process outcomes, such as fewer RFIs and good at paying attention to the future. moved out of the ad hoc phase here in field co-ordination problems.

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OPENMIND 2012

While a sense of immediacy surrounding BIM has yet to fully permeate Canada’s construction industry, a growing chorus of Canadian contractors is urging the rest of the industry to get on board.

“Contractors really need to start looking at modelling,” says Russell Bridgeman, senior construction manager at PCL Builders in Edmonton. “As of now, there aren’t many owners who are requesting it but there’s nothing to stop designers from using it to improve productivity.” Bridgeman adds that BIM is already gaining considerable traction in Eastern Canada as well as in the U.S. while the western provinces trail behind.

He anticipates that this will soon change.

He also says that companies not looking into BIM as a design tool are doing themselves a disservice. “The cost of using it is far outweighed by the efficiency and productivity that is gained through it.”

The challenge ahead, most experts

000.Adroit_1-2H_nBL.indd 1

agree, is the human challenge, namely the recasting of relationships that this new process requires. Fortunately, the range of BIM educational resources now available far outstrips what existed just a year ago. Merit Contractors Association introduced an online BIM awareness course in 2011 as part of the Merit College of Construction’s expanding suite of e-learning courses while CanBIM now provides extensive BIM educational resources tailored to the needs of architects, engineers, builders and owners. “With any major change there’s human resistance,” says CanBIM’s VP Partridge. “It’s a disruptive change and CanBIM is working to break down those fears through best practices and our regional sessions.”

IBC’s Pelletier agrees, adding that the most pressing issue for the next few years will be educating the industry so that contractors and other stakeholders are not ambushed by the technology once

it becomes universal. “We don’t want anyone to feel that they’re being forced to adapt overnight,” Pelletier says. “We want everyone to be well-informed ahead of implementation.”

Slow but steady – this aptly characterizes the state of BIM in Canada’s construction sector. While other jurisdictions remain ahead in terms of implementation, BIM has made impressive strides in Canada in recent years.

This is largely due to the educational and advocacy efforts of CanBIM and IBC and Canada is poised to emerge as a world leader in the technology over the course of the coming decade. Moreover, Canada’s slow-but-steady approach to the technology and the efforts of organizations like CanBIM and IBC to lay the groundwork should make for a relatively smooth process whereby BIM becomes a universal ingredient in Canada’s construction industry.

3/16/10 9:27:54 AM

The open-shop movement battles regulatory burdens in construction that no other industry has to face

ILLUSTRATION BY: KEVIN GHIGLIONE

BY TERRANCE OAKEY, the first full-time president of Merit Canada

22

OPENMIND 2012

C

anada’s open-shop movement marked a significant

milestone in 2011 because that was when the vision of the eight provincial open shop construction associations became a reality, with the establishment of a national voice for Merit’s member companies.

Merit Canada is needed because federal government policy, legislation and consultations continue to disproportionately reflect the views of union leaders. Consequently, the narrow interests of organized labour are reflected in federal legislation and policies, despite that an overwhelming majority of Canadian workplaces operate on a union-free basis.

Merit Canada now has an office steps away from Parliament Hill and the Prime Minister’s Office and we have met with key decision makers to discuss the issues that impact our members. While Merit Canada became operational as recently as June 2011, its impact is already being felt in Ottawa.

One tangible result for open shop contractors has been the

defunding of the old Construction Sector Council (CSC). The board of the CSC was not reflective of the industry, with the vast majority having ties to the building trade unions. Merit Canada has long called for a rebalancing of the Board of Directors of the CSC in order to reflect the reality that the open shop sector compromises more than 70 per cent of the industry. Merit also raised concerns about the CSC’s approach, methodology and focus on the needs of the unionized sector of the industry. Given the Board’s inability to address any of these concerns, Merit Canada supported the government’s decision to phase out its core funding by 2013. It also participated in an announcement with the minister of human resources and skills development to develop a new grants-and-contribution program.

Merit Canada is now participating in a construction stakeholder group to keep those elements of the CSC, that were of value to the industry (e.g., Labour Market Information or LMI) while ensuring the open shop has appropriate representation. This was an important step for Merit Canada as provincial government policy makers

OPENMIND 2012

23

Merit Goes National used to use the results of the LMI surveys to develop programs and services without input from the open shop sector.

The ability to compete for work in an open and fair manner is at the heart of what Merit Canada members believe. Only a business environment in which construction contracts are awarded on the basis of corporate merit ensures that taxpayers receive the best possible service at the best possible price. Therefore, construction projects financed in any way with federal funds must be tendered without any precondition requiring that contractors be signatory to any union or abide by the terms of a specific collective agreement.

Providing equal opportunity for all contractors to submit their best bids will ensure that Canadian taxpayers receive the best value for their money.

Canadian taxpayers expect that their hard-earned money is being spent in the most cost-effective manner, particularly now that the country is beginning to emerge from one of the worst economic crises in our history.

Studies in Canada and the U.S. indicate that taxpayers can save between 12 and 18 per cent on projects that have more inclusive tendering approaches that do not favour union or nonunion firms.

All Canadians pay for federally funded public works projects equally. It stands to reason that all Canadians should have an equal opportunity to provide the services for which these funds pay. There are many jurisdictions in Canada where open-shop contractors – more than 70 per cent of the entire construction industry – are excluded from bidding on public works projects, even though these contractors would be able to provide the same or better services at a significantly lower cost. This unfair practice must end.

Merit Canada also played a public and private role in ensuring that unions provide greater financial transparency to everyone who pays union dues as well as those who may be considering joining a union. MP Russ Hiebert introduced a Private Member’s Bill (C-377) that would require unions to publically disclose detailed financial information. This will be of particular benefit to the open shop contractor community, as the way unions spend dues will become another factor in the certification process by providing valuable information to employees who are considering joining a union. Merit Canada will continue to work with members of parliament from all parties to ensure the passage of this important piece of legislation.

Another issue that impacts the open shop contractor community at the federal level is immigration. Over the next decade, Canada’s construction industry will have to attract at least 320,000 workers or face serious shortages in the labour supply. While the industry is dedicated to training and recruiting Canadians into the construction industry, it has become clear that this strategy by itself will not suffice.

Continued economic growth depends considerably on the maintenance and improvement of Canada’s infrastructure and capital projects. Labour shortages in the construction industry will lead to

delays in critical infrastructure and capital construction projects.

These delays will directly undermine the ability of Canadian businesses to compete in a global market, reduce foreign investment in Canada and limit economic growth.

Current immigration regulations disproportionately favour immigrants with high academic qualifications and give insufficient weight to professional skills and achievements. As a result, less that 0.2 per cent of immigrants admitted each year into Canada are skilled construction workers or construction industry professionals, even though the construction industry employs more than eight per cent of Canada’s labour force.

Merit Canada is asking the federal government to increase the point system recognition for technical and/or trades skill training and experience in occupations where long-term trade skills shortages are anticipated under the Economic Immigrant Class Program.

Merit is also calling the government to streamline its immigration procedures and ensure adequate resources are in place at embassies and consulates throughout the world to improve efficiency of applications intake. In addition, the federal and provincial governments need to streamline and bolster the Temporary Foreign Worker program and the Provincial Nominee program in order to alleviate regional differences in labour requirements. The federal government also needs to streamline its work visa and foreign credential recognition processes for journeymen and update its labour market opinions.

Another pressing issue for Merit Canada is the regulated minimum wage policy for construction workers. Merit Canada members believe that wages and working conditions should be determined through direct dialogue between employers and employees. If not that way, then through collective bargaining processes, as freely chosen by the parties, within the boundaries of the law. For this reason, Merit Canada has called on the government to repeal the Fair Wages and Hours of Labour Act, which creates a national system of regulated minimum wages for the construction industry with work undertaken in relation to public works and contracts.

Given the relatively high wages of construction workers, we are at a loss to understand why the federal government chooses to single out the construction industry and impose regulated minimum wage rates across an industry that consistently pays workers 25 per cent more than the Canadian industrial average. Why, for example, is it necessary for the federal government to regulate minimum wages for elevator constructors in the Metro Toronto area at $43.53 per hour? This type of regulatory oversight burdens no other industry and construction workers are one of the best-paid classes of employees in the country when operating in a free market. As such, this policy is completely unnecessary.

These are just some of the issues on which Merit Canada will focus over the coming months to ensure that open shop contractors will operate on a level playing field.

Merit Canada wants the federal government to increase point system recognition for technical and trades skill training and experience in occupations where long-term trade skills shortages are anticipated.

24

OPENMIND 2012

That’s a Merit Contractor.

Merit contractors give you the best value and ensure your job is completed efficiently – with quality, budget, safety and on time delivery as the top priorities.

Merit contractors • complete your projects on time and on budget • handle any size project, of any design • have the qualified manpower to get your project done to your specifications • are flexible and dependable • have excellent safety records Representing the voice of open shop construction in Canada, the eight provincial associations that make up Merit Canada focus on the human resource needs of contractors by offering employee benefits, training, retirement programs, tuition refunds, and more. Member companies work in all areas of the construction industry including residential, commercial, institutional, civil, and industrial.

1.877.41MERIT (63748)

www.meritcanada.ca

26

OPENMIND 2012

ILLUSTRATION BY: STEVE ADAMS

Something’s Got to

Give

Canada’s future depends on immigration reform

BY BILL STEWART

I

n the near future, Canada’s construction industry

will be plagued by labour shortages as will any other industries reliant on workers with trade skills.

The single largest factor leading to this shortage is our aging workforce. In 2005, the proportion of Canada’s adult population 55 years or over was 29 per cent and is estimated to grow to 35 per cent by 2015.

Between 2005 and 2015, an estimated 3.8 million workers are expected to retire. Specifically in the construction industry, 210,000 workers will likely retire from the 1.2 million-strong industry over the next eight years.

According to a 2011 study released by the Construction Owners Association of Alberta (COAA), the gap in Alberta’s construction industry could be as great as 40,000 workers. Such shortages in needed trade skills will result in an industry unable to respond to owners’ needs for on-time, on-budget projects. While this impending demographic tsunami has been known for years, solutions are complex and clouded by politics.

OPENMIND 2012

27

Something’s Got to Give

TOP 20 TRADES Canada - Permanent Residents (Skilled Worker - Principal Applicant Only) 2005-Sept. 2010* Trade

2005

2006

2007

2008

2009

7242 - Industrial Electricians 7246 - Telecommunications Installation and Repair 7241 - Electricians 7271 - Carpenters 7265 - Welders 7311 - Construction Millwrights 7312 - Heavy-Duty Equipment Mechanics 7313 - Refrigeration and A/C Mechanics 7251 - Plumbers 7281 - Bricklayers 7219 - Supervisors, Other Construction Trades 7272 - Cabinetmakers 7243 - Power System Electricians 7215 - Supervisors, Carpentry Trades 7217 - Supervisors, Heavy Construction Equipment 7252 - Steamfitters, Pipefitters & Sprinkler System 7263 - Structural Metal and Platework Fabrication 7261 - Sheet Metal Workers 7253 - Gasfitters 7282 - Cement Finishers Sub-total: Top 20 Trades Others Totals

155 85 45 35 45 35 30 15 5 15 15 15 20 *** 5 5 5 *** *** *** 530 20 550

150 50 35 35 40 25 30 25 10 10 15 15 20 5 *** 10 5 10 5 *** 495 30 525

105 90 65 45 45 35 30 20 20 10 15 25 5 5 10 10 *** *** *** *** 535 20 555

60 75 55 80 30 30 30 35 25 25 20 20 20 5 10 *** 5 *** 5 *** 530 60 590

65 55 65 75 40 50 25 30 20 35 25 15 15 10 15 15 10 10 10 *** 585 80 665

Jan-Sept 2010 85 50 80 60 55 40 40 30 40 20 15 10 15 35 20 15 10 10 5 15 650 70 720

Total

Avg.

620 405 345 330 255 215 185 155 120 115 105 100 95 60 60 55 35 30 25 15 3,325 280 3,605

108 70 60 57 44 37 32 27 21 20 18 17 17 10 10 10 6 5 4 3 578 49 627

SOURCE: Citizenship & Immigration Canada

What is clear, however, is that a variety of strategies are needed to combat the problem.

Apprenticeship and training programs are important to pursue, along with outreach initiatives to attract youth and others from traditionally under-represented communities. Such efforts are making good headway.

According to Statistics Canada, three of the largest construction-related apprentice trades involve carpenters, electricians, plumbers, pipefitters and steamfitters. In 1991, the number of apprentices registered in these trades across Canada totalled over 83,000. Despite the recession, the numbers of registered apprentices increased by 86 per cent to almost 155,000 in 2009. However, developing new resources takes time. Canada’s apprenticeship systems are based on a combination of time accumulated in onthe-job training supplemented by technical in-class training. The normal timeline from initial intake to obtaining a journeyperson’s credential is about four years.

Despite the best efforts of governments, business associations and contractors, various forecasts indicate that there will be a significant shortfall in domestic resources to meet demands. For example, the COAA estimates that almost 160,000 offshore construction workers will be needed within the 28

OPENMIND 2012

next eight years to satisfy all the projected workforce needs. Unfortunately, Canada’s immigration system is extremely inefficient.

It also does a poor job of targeting immigration for high-demand construction occupations, particularly for people seeking to come to Canada permanently under the Skilled Worker Program (SWP).

During the last construction surge, many contractors attempted to use the federal Temporary Foreign Worker (TFW) program after finding that all domestic supply sources had been exhausted. Unfortunately, contractors that availed themselves of this program found it expensive, cumbersome and time-consuming. Moreover, contrary to assertions from the federal government that it has improved the program, new regulations and procedures introduced in 2010 in fact made using this program even more convoluted than before for construction contractors.

PERMANENT IMMIGRATION UNDER THE SKILLED WORKER PROGRAM The diff iculties that underemployed immigrant professionals such as doctors, accountants and engineers face are well known due to the extensive media attention

that they have received. Have you heard or read about an underemployed or unemployed immigrant with a construction trades background? This is unlikely given the fact that Canada’s immigration system is heavily biased in favour of universitytrained applicants and against applicants with construction trades skills and training. Our system simply does not permit many tradespeople to immigrate, and the few who do gain entry are quickly absorbed into Canada’s construction industry.

The federal government’s selection criteria under the Skilled Worker subcategory are intended to aid in selecting immigrants “more capable of adapting to the evolving Canadian labour market.” Changes in legislation in 2002 established selection criteria based on a “human capital model.” In the words of the government of the day, the new criteria were intended to help “select skilled workers with a range of flexible skills needed in Canada’s new economy” rather than workers whose skills qualified them for employment in a single occupation. The basic premise was that the more education an immigrant has (as opposed to specific occupational skills and training), the more likely he or she is to succeed in settling in Canada.

To be admitted as a skilled worker, the

principal applicant must score at least 67 assessment points out of 100. Up to 25 points are awarded for educational achievement; 24 points for language proficiency in either English or French; 21 points for prior work experience; 10 points for age (ages 21 to 49 are preferred); 10 points for having a job offer waiting; and six points for being “adaptable” in terms of having prior work experience or relatives already living in Canada.

Prior to the 2002 amendments, points were awarded for “specific vocational preparation” and being part of a targeted occupation or occupational group. In an ostensible effort to streamline the system, the points for these criteria were rolled into broader categories. In 2000, however, the auditor general of Canada noted that the government had not updated its list of “occupations in demand in Canada” in the previous seven years.

The maximum 25 points in the educational component requires a PhD or master’s degree and at least 17 years of fulltime study. By comparison, an applicant

with apprenticeship training and at least 12 years of full-time study is only awarded 12 points.

This emphasis on educational achievement means that gluts of immigrants are being admitted to Canada to work in professional occupations at the expense of high-need occupations that require trades training and skills. In fact, according to a Citizenship and Immigration Canada (CIC) evaluation published in 2010, 46 per cent of admissions under the SWP held a master’s or PhD, while less than three per cent were trade apprentices or holders of formal trade certification.

This is evident in the table on page 28, which shows that, on average, only 627 tradesmen with trade training and experience have been admitted to Canada annually over the past five years.

ALTERNATE IMMIGRATION PROGRAMS Overall dissatisfaction with the Federal SWP has led the federal government to develop other programs and initiatives

intended to be more responsive to labour market requirements – particularly outside Quebec, which manages its own immigration program. These include various Provincial Nominee Programs (PNP), the Experience Class managed by CIC and the TFW program, which is managed jointly

by CIC and Human Resources and Skills Development Canada (HRSDC).

Through joint agreements, the PNP programs allow the provinces to nominate potential immigrants for permanent admission based on selection criteria established by the province (i.e. the federal point system is waived). According to a 2010 CIC evaluation study, “Provincial governments prefer the PNP, citing perceived advantages such as greater responsiveness

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Something’s Got to Give to immediate labour needs and provincial priorities, the ability to attract workers who wish to settle in destinations other than major urban centers and shorter processing times.” However, as the provinces move to increase their PNP numbers, CIC needs to reduce the number of immigrants admitted under the SWP because of annual limits on total immigration set by parliament.

With the ongoing backlog of immigration applications that by law it must process, the federal government is understandably reluctant to allow the provinces to select too many potential immigrants. Consequently, in 2010 almost 14,000 provincial nominees along with almost 23,000 family members were admitted to Canada.

To provide permanent immigration opportunities to workers or students who seek to remain in Canada following the expiration of a temporary work or study visa, the federal government introduced the Experience Class category in 2008.

While the program was resoundingly welcomed by the business community, the number of admissions it targeted was relatively small. In 2010, only 2,500 applicants along with 1,400 spouses and dependents obtained landed immigrant status through this program.

Given the disproportionately low number of immigrants with trade skills entering Canada under the SWP, is it any wonder that construction contractors find the need to resort to short-term employment solutions through the TFW program? While this is perhaps the most important last resort in a contractor’s recruitment tool box, it is also the most maligned.

On average, only 627 tradesmen with trade training and experience have been admitted to Canada annually over the past five years.

30

OPENMIND 2012

At the height of the construction surge in 2005 to 2008, reports by employers attempting to supplement their workforce through the TFW reflect a litany of complaints and frustration. Part of this frustration is attributable to the program being jointly administered by two different federal departments. Prior to offering temporary employment to a foreign national, the employer must obtain a Labour Market Opinion (LMO) from HRSDC. HRSDC’s role is to certify that the employer has first made reasonable efforts to recruit within Canada and that the terms and conditions of employment are not fraudulent and are in accordance with prevailing local wage rates and employment standards. Once the LMO is obtained, the employer and prospective employee must then satisfy both CIC and the provincial regulatory authorities responsible for accreditation that a candidate is eligible to work temporarily in Canada. For some, overcoming the bewildering array of regulatory requirements caused them to abandon their attempts.

According to Canada’s auditor general, the number of LMO applications increased by 124 per cent between 2002 and 2008, with the largest increase (26 per cent) occurring between 2007 and 2008 at the height of economic surge. Much of this surge was due to oilsands developments in Alberta and the preparations for the 2010 Winter Olympics in Vancouver. And while the auditor general applauded HRSDC for establishing pilot projects, such as the expedited LMO (a process that has since been disbanded), she also delivered a scathing critique of the manner in which the LMO process was administered. In particular, she noted that, “We found that directives on how to assess whether employers meet some or all of the factors outlined in the regulations are not clear or incomplete; interpretations vary from one regional office to another and even within the same office. For example, directives on determining prevailing wages do not provide specific guidance and are not wel l u nderstood .

Furthermore, each regional office uses labour market information differently to assess and determine prevailing wages.”

THE CHALLENGE AHEAD In Alberta, the most recent inventory of major projects lists $191 billion in construction investments across various construction sectors over the next few years. While oilsands construction dominates the investment picture, billions will also be spent on residential, commercial, institutional and infrastructure related projects. This construction is taking place as demographic and workforce demand/ supply forecasts have consistently pointed to persistent and ever-increasing shortages of skilled construction workers.

Alberta is not alone. Saskatchewan and Newfoundland and Labrador – long vital sources of construction workers for Alberta – are currently experiencing record levels of construction activity. According to recent news reports, Newfoundland and Labrador is in the midst of an energy boom that is “straining the province’s ability to keep up.” Indeed, according to one Globe and Mail report, “Finding enough workers to complete some $43 billion worth of major projects underway and planned is proving to be a monumental challenge.”

In light of all this, how is it possible to reconcile the fact that only 55 steamfitter/pipefitters – a trade vital to industrial process construction and maintenance on energy related projects – were permitted into Canada under the SWP from 2005 to 2010? Furthermore, why were LMOs authorizing up to 4,300 steamfitter/pipefitters to be brought into Canada from 2007 to 2009 under the TFW program?

IS CANADA’S IMMIGRATION SYSTEM PREPARED FOR IMPENDING SHORTAGES? It is important to recognize that shortages of skilled workers have occurred and will continue to be experienced despite record levels of apprenticeship training taking place across Canada.

It seems abundantly clear that the current immigration system is ill prepared to handle the impending storm of skilled worker shortages in the construction industry and that dramatic and decisive reforms are needed to address this problem.

ILLUSTRATION BY: CHRIS PYLE

DONâ&#x20AC;&#x2122;T BLAME the

Workers

How measurement-minded companies attack time-wasting management flubs that frustrate workers and slow production

BY BRUCE BUCKLEY (WITH REPORTING BY JONATHAN BARNES)

OPENMIND 2012

31

Don’t Blame the Workers

C

work time. From the 1960s through the history. The five-year Craft Productivity a craftsperson lose 15 minutes 1990s, owners, contractors and academics Improvement Program aims to compile of work time about as much noted with frustration and alarm a steady a comprehensive collection of innovative as he likes discovering that he just left lag in productivity within the construc- analysis techniques, common metrics and his wallet in the back seat of a taxi. tion industry, especially in periods of best practices for craft productivity.

As the owner of Pittsburgh plumbing and inflation. While technology had driven The new research team, called RT 252, HVAC contractor DeFinis Mechanical increased non-farm productivity ahead determined that project teams lacked a Contractors, he grants his union plumbers by 200 per cent from 1964 to 2003, one sufficient understanding of the issues that a quarter-hour morning break, even controversial study showed, construction keep crafts workers off their tools. though his contract doesn’t require it, in the same period actually slipped by Workers already had been polled on and hopes the workers don’t stretch it the nearly 20 per cent. Years ago, fingers may the subject. As part of a 2006 CII survey, way the half-hour lunch break sometimes have pointed to union work rules and 1,996 crafts-persons listed what kept them goes to 45 minutes. Because each worker contract terms as factors, but a decline in waiting around: no forklift to move the costs about $60 an hour Sheetrock, no in wages and benefits, reply from the e x t r a m i n u t e s a d d “WHEN YOU EXPLAIN THE PROCESS, THERE ARE VERY FEW engineer about unclear plans up over the long run.

THINGS YOU CAN BLAME ON THE [CRAFTS WORKERS] “Multiply that by eight and specs, fixing OTHER THAN LATE STARTS OR EARLY BREAKS.” guys, five days a week, for prefabricated six months – that’s a lot items and looking – Mark Stofega, principal construction support engineer at Fluor of money,” he says. for tools, among other responses.

DeFinis does more than gripe about breaks. He holds trade-union market share in the last 30 Productivity engineers argue that most meetings with foremen every week to years has changed that argument. contractors fail to investigate fully how ensure timely delivery of tools, materials With a few exceptions, new research on these types of shortages and idle time and information to his crews. Further, he productivity is giving managers the tools disrupt production. stays alert to errors in the plans his crews to maximize “wrench time.” Equipped “Crafts guys want to be productive,” work from. “Some engineers are better with stopwatches and PCs to crunch says Chris Buck, president of Producthan others,” he says. their data, big owners, contractors and tivity Enhancement Resources (PER) in Overall, DeFinis reflects both the old university researchers have turned to Simpson, N.C. “You’re going to have your and new ways of thinking about wasted measuring and charting disruptions that exception here and there, but the vast can hit a jobsite daily. By drilling into majority want to be productive. If we can the workday minute by minute, gauging take away the barriers for them to produce, output with new precision and zeroing in they will take the reins and go.” on ways to turn downtime into wrench Buck is among a small group of productime, researchers are cutting through the tivity professionals engaged in the emerging fog of confusion over what takes place technique of “activity analysis.” When it on jobsites and, in the process, dispelling is hired by an employer or owner, Buck’s myths about lazy workers. Now, a major firm is sent to a site to make thousands of question is what to do with the rich detailed observations about how crafts harvest of activity data and how to exploit workers spend their time. While parsing it consistently. A few measurement- the data and comparing it with historical minded companies are learning how. norms, Buck looks for unusual spikes in In 2009, the Construction Industry non-direct work. He then goes back and Institute based at the Cockrell School of interviews workers to find out why so Engineering at The University of Texas much time is spent off-task. Once issues at Austin, launched the most ambitious are identified, PER develops strategies to study of craft productivity in its 28-year optimize the time of crafts workers.

32

raig DeFinis enjoys watching

OPENMIND 2012

The on-site observations produce mountains of data. Between March 2009 and February 2010, PER made 74,000 observations open-shop crafts labour on a Gulf Coast refinery project. The study led to an implementation plan that reduced total travel time for employees of an EPCM firm by 16 per cent and cut operator idle time by 49 per cent by taking downtime and using it for inspections of rigging equipment, cleaning of cranes and other machinery, and planning for lift co-ordination during the shift, says Beck.

PER then analyzed personal delays by the hour, showing a spike in the second half of the shift when temperatures were higher, he adds. So Beck advised supervisors to plan and schedule activities in the shade provided by existing structures, moving from one side of the project to another during the day.

The concept of observing direct and non-direct work rates isn’t new, but activity analysis represents an evolutionary step in productivity science.

In the 1920s, Leonard Henry Caleb Tippett developed the “snap reading” method, which calculates the ratio between production and delay based on observations of work activity. Over time, some contractors began to gravitate towards the work-sample method, which splits a worker’s time into direct work, support work and delay.

CATEGORIES OF WORK Through activity analysis, productivity engineers take sampling several steps further, breaking work into multiple layers that allow for more focused study.

In July, CII’s RT 252 team released a comprehensive “Guide to Activity Analysis.” The guide suggests seven prime categories of work: direct work, preparatory work, materials handling, waiting, travel, personal, and tools and equipment. Each category can be broken

into subcategories to add detail.

To d a t e , a c t i v i t y analysis has developed largely in silos in which companies have developed definition sets to meet their specific needs. Faithful + Gould, Seal Beach, Calif., established its own work-sample methodology, dubbed Time on Tools, in 2003. Dan Leng, vice-president at the cost-management consultancy, says the system breaks non-direct work into nine main categories as well as smaller subcategories.

Although activity analysis appears laborious, Leng maintains that it is necessary in order to root out specific problems. Processing of permits, for example, can be broken down into many separate activities. “We break it down into type of permit, time waiting for someone to sign a permit, the signing process and so on. Eventually, you discover that a key person on the permitting process is constantly running 30 minutes late to sign a permit, for example.”

The payoff for micro-level information can be significant. Leng says his system saved $1.7 million by cutting logistics delays in half on a major turnaround job at a refinery, saved $835,000 by reducing breaks to 30 minutes from 55 minutes, and saved $330,000 by reducing by 10 minutes the owner “pep talk” during all-hands meetings.

“To me, it’s the most basic thing,”

Leng adds. “If you have a project with 30 per cent direct work, why would you spend time and money improving that direct work when you can try to fix the 70 per cent [not spent on task]?”

Identifying issues is only the first step, notes Steve Toon, productivity engineer at Bechtel. Toon says activity analysis needs to be an ongoing process of assessing problems and applying solutions.

“The thing that is not addressed with traditional work sampling is what to do with the data,” he says. “We need to identify solutions, implement those solutions and follow up with another study to either validate that those solutions addressed the issue and increased productive time or [find ways to improve].”

In a typical two-day period on a Bechtel site, Toon says, he might collect 2,000 observations to serve as indicators of possible problems. He then surveys workers and foremen in the field to identify common restraints that cause delays. Armed with that data, he crafts solutions and presents them to the site manager and the project superintendent.

“You’d be surprised how many times we OPENMIND 2012

33

Don’t Blame the Workers

“JUST AS WITH SAFETY, TOP-DOWN PRESSURE, RATHER THAN BOTTOM-UP INITIATIVES, MAY BE NEEDED TO FORCE CHANGE.” – Paul Goodrum, civil engineering associate professor at the University of Kentucky

sit down and I’ve seen [managers] have an epiphany,” he says. “Often, I come in with a set of data that validates everything they thought, but now they have the data.”

Not everyone likes being watched.

Mark Stofega, principal construction support engineer at Fluor, says workers think he is “checking up on them,” when, in fact, he usually seeks managementbased problems.

“When you explain the process, there are very few things you can blame on the [crafts workers] other than late starts or early breaks,” he says. “What you find are management issues—the materials aren’t there, designs aren’t there, equipment is not there. All of a sudden, the [crafts workers] see what you’re doing, and they open up.”

Just as researchers hope to get better at identifying productivity issues, work is under way to develop a framework for applying effective solutions. As part of the first phase of CII’s project, the RT 252 research team is investigating the relationship between craftsperson productivity and best practices. For example, CII maintains a benchmarking and metrics database that is used to identify possible best practices.

In the first of the project’s five phases, the team focused on the mechanical trades. It reported a significant relationship between improved productivity and best practices in materials management, safety, team building, front-end planning, and automation and integration.

Research showed that projects that were “advanced implementers” of these practices experienced as much as a 50 per cent average productivity advantage over “weak implementer” projects.

The team’s analysis of electrical crafts produced similar results, indicating 34

OPENMIND 2012

that the more productive projects are associated with a high level of safetyprogram implementation, automation and integration of information systems, materials management systems, team building and constructibility.

The practices are proven, and CII acknowledges that many have been known for years, such as short interval planning and work packaging. Still, the team says those solutions are rarely “implemented completely or consistently from project to project.”

INDEX OF BEST PRACTICES Instead of supplying a laundry list of practices, the team is developing an index of best practices with weighted scores based on the relative influence of each on improving productivity. Dubbed the Best Productivity Practice Implementation Index, the system is designed to help determine which practices or combinations of practices might help drive productivity.

General contractors may find there are limits to productivity gains for contractors, owners and others that use subcon-tractors. The common approach among productivity experts is for each party to focus on its own part of the equation.

Rather than using activity analysis to identify issues for managers, Chris Heger, a Turner Construction project superintendent, tries to remove barriers for subcontractors. Some strategies are basic, such as keeping materials on wheels for easy transport.

Other strategies require extra effort. At a lab project site at which portable toilets weren’t allowed in clean spaces, a portable toilet was placed on three-story staging outside the facility to reduce travel time.

“Those are the types of things we can do to help [crafts workers] spend more time on task,” he says.

A steel erector working at Manhattan’s One World Trade Center is taking a similar approach. DCM Erectors, New York City, has arranged for a Subway sandwich shop to operate from a platform that is jacked to rise with the skyscraper’s steel frame, thus helping the ironworkers avoid a trip of as much as 30 minutes down to the street to find lunch.

Heger’s primary tool is tracking performance through the development of detailed work “breakdown structures” for subcontractors. The team focuses on the most predictable aspects of the job and breaks tasks into short intervals to help stay on top of issues. If performance begins to slip, the team can quickly investigate and work toward solutions.

Although it is a team approach, Heger says crafts workers can be left to themselves to improve their productivity. “Crafts workers know how to do their jobs better than anyone. I try to set them up for success rather than try to avoid failure.”

Just as with safety, top-down pressure, rather than bottom-up initiatives, may be needed to force change, says Paul Goodrum, associate professor of civil engineering at the University of Kentucky and a member of RT 252. “In the end, it will take some leadership from government agencies to push this forward,” he says. “We’ll begin to see good breakthroughs on productivity once we get some reliable measures on it. I don’t think [the challenge] is as difficult as people think.”

Originally published in the Engineering News-Record (ENR.com) June 1, 2011 and reprinted with permission.

By Corbin Devlin, PartNEr Of McLENNaN rOss LLP LEgaL cOuNsEL

Typical construction contracts encourage a divide between owners and subcontractors regarding liability ... that was until a recent case blurred the division of responsibility OPENMIND 2012

35

Clause and Effect

I

In a typical general contract

scenario, a construction owner has no contractual relationship with subcontractors or suppliers and, therefore, no contractual liability to those parties. The grounds upon which an owner may be liable to a subcontractor for unpaid fees and services are very narrow. However, a recent case in Newfoundland and Labrador illustrates the creative efforts that subcontractors sometimes use in an attempt to attach liability to construction owners.

The legal doctrine of privity of contract provides that only the parties signing a contract are bound by that contract. As such, a subcontractor who signs a contract with a general contractor has no privity of contract with the construction owner. As a general rule, the construction owner cannot sue the subcontractor for breach of the subcontract and the subcontractor cannot sue the construction owner for non-payment.

The most obvious exception to this general rule is found in provincial lien legislation. Lien legislation exists to protect subcontractors by providing a form of

36

OPENMIND 2012

security for payment. In practical terms, lien legislation makes the construction owner directly liable to lien claimants – but only to the extent of the statutory holdback or lien fund.

significant payment dispute arose as a result of problems with the heating system. Dobbin terminated Air-Tite’s contract and hired another subcontractor to complete remedial work to the heating system. However, at trial, the court concluded that Dobbin wrongfully terminated Air-Tite’s subcontract and Air-Tite was entitled to payment.

Air-Tite claimed not only against Dobbin as general contractor but also against Defence Construction as construction owner. The creative basis for this claim against the owner was an allegation that Defence Construction negligently administered the prime contract with Dobbin. In particular, the prime contract contained a fairly standard provision giving the owner the authority to disallow the general contractor from substituting subcontractors. Defence Construction did not exercise its authority to prevent Dobbin from terminating the Air-Tite subcontract and Defence Construction did not make any investigation into whether Dobbin was justified in terminating the subcontract. In a decision that seems

The grounds upon which an owner may be liable to a subcontractor for unpaid fees and services are very narrow.

Outside of provincial lien legislation, the potential liability of an owner to a subcontractor for unpaid services or materials is very narrow indeed. This does not preclude creative attempts to attach liability to a construction owner through the courts.

The recent court case Air-Tite Sheet Metal Ltd. v. N.D. Dobbin Ltd. provides such an example.

Defence Construction, which is the construction arm of the Department of National Defence, contracted N.D. Dobbin Ltd. to construct a large airplane hangar. N.D. Dobbin Ltd. subcontracted Air-Tite Sheet Metal Ltd. to supply and install the hangar’s heating system. A

truly remarkable, the trial judge found Defence Construction directly liable to the subcontractor on this basis.

Fortunately, the Court of Appeal exists as a forum for sober second thought.

Defence Construction appealed the trial decision that it was directly liable to Air-Tite. The Court of Appeal, making reference to the doctrine of privity of contract, overturned this aspect of the trial judgeâ&#x20AC;&#x2122;s decision.

The Court of Appeal noted Air-Tite was making a claim outside of the law of contract (i.e. alleging negligence) for a pure economic loss (as opposed to a claim for injury or damages to property). Even if Defence Construction was negligent, the law in Canada does not recognize claims for pure economic loss outside of contract, except in certain specific cases. For example, pure economic loss is recoverable in cases of negligent misrepresentation (e.g. if a construction owner made a false representation to a subcontractor resulting in a loss) or in cases of relational economic loss (e.g. if a construction owner caused injury or property damage that in turn resulted in financial loss to a subcontractor). A claim effectively seeking compensation for unpaid services and materials from someone who is not a party to a contract, without more, is simply not accepted in the law in Canada.

This Court of Appeal decision illustrates that a construction owner is not generally liable to a subcontractor for unpaid services and materials (subject to the requirements of provincial lien legislation). However, the Air-Tite trial decision shows that the situation is insufficiently clear inasmuch as a construction owner cannot necessarily escape going to trial â&#x20AC;&#x201C; or even suffer an adverse trial decision â&#x20AC;&#x201C; before escaping liability. Creative subcontractors and their legal counsel may find ways to implicate construction owners where circumstances permit. As the old adage goes, you donâ&#x20AC;&#x2122;t necessarily go to court for justice; you go to court for a decision.

Of course, prudent construction owners will not assume that these legal concepts (privity of contract and pure economic loss) exclude them from all

potential liability to subcontractors. As mentioned above, construction owners

such as claims for negligent misrepresentation or injury to persons or property causing relational economic loss. Further, the unpaid subcontractor may be the driving force behind a multi-party construction claim, in which case a construction owner must often deal with a subcontractor directly, as a matter of practical necessity.

Fortunately, the Court of Appeal exists as a forum for sober second thought. can be directly liable to subcontractors for some forms of pure economic loss,

mike roper senior Project manager, nAIt grad

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2

NUMBERS

BY THE

Total man-hours worked under the Merit Hour

Bank Benefit Plan:

Wholesale merchantsâ&#x20AC;&#x2122; sales by industry unadjusted ($ millions) across Canada

2006

58,264,783 69,743,223

Building Supplies

2007 76,635.5

2008 77,235.9

2009 66,932.4

2010 73,935.3

2011 78,723.3

2007 2008

77,595,931

Metal Products

17,619.4

18,972.7

13,163.1

15,022.7

17,750.4

2009

74,140,547

Lumber and Millwork

35,721.0

34,099.6

31,986.1

35,666.7

35,811.8

2010

79,583,013

110,411.2 123,189.8

2011

87,908,004

Machinery and equipment

108,813.6

115,358.6 103,460.8

(SOURCE: Statistics Canada)

Construction price index for

apartment buildings in:

Average number of employees covered under the Merit Hour Bank

6

2007

2008

2009

2010

2011

Halifax

123.1

128.9

130.4

131.8

135.7

Toronto

129.9

139.9

136.8

136.7

141.7

Calgary

156.8

174.4

160.7

156.6

160.1

Vancouver

150.2

159.9

136.0

134.1

138.9

Yearly value of all building permits by province ($ million): Newfoundland Nova Scotia & Labrador

(SOURCE: Merit Contractors Association)

Benefit Plan: 2006

2007

2008

2009

2010

2011

28,844

33,875

38,314

38,187

39,371

43,089

Capital expenditures for construction in Canada (in $ millions): 2008

2009

2010

2011P

2012 (est.)

235,282.2

205,373.9

243,866.6

260,919.4

281,693.8

New Brunswick

Ontario

Manitoba

Saskatchewan

Alberta

British Columbia

965.2

26,710.4

1,480.1

1,646.4

15,729.7

12,544.7

2,185.8

13,141.2

10,577.2

660.1

1,288.9

2008

802.5

1,326.7

1,113.8

25,414.6

1,636.7

2009

766.4

1,368.7

1,148.2

21,880.5

1,560.7

1,890.3

11,276.9

7,629.9

2010

1,205.2

1,633.8

1,133.3

28,138.6

1,757.4

2,077.0

11,425.4

9,723.8

2011

1,057.3

1,464.6

965.9

28,024.4

1,842.1

2,613.9

12,768.1

9,249.8

2007

New housing price index ($ thousands)

38

St. Johnâ&#x20AC;&#x2122;s

Saint John, Moncton, Fredericton

Halifax

Toronto

Winnipeg

Saskatoon

Calgary

Vancouver

2007

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

2008

119.6

102.5

107.9

103.6

110.2

120.6

100.6

102.3

2009

133.3

105.8

109.1

103.4

113.0

111.4

93.9

95.8

2010

141.2

107.5

110.1

106.1

118.4

114.6

95.6

99.0

2011

146.9

108.1

112.0

111.0

124.1

116.2

95.5

98.7

OPENMIND 2012

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