November 19 2018 blog

The Low-Down on Construction – November 19, 2018

The following Letter to the Editor was printed in the Regina Leader Post on November 6:

Community benefit agreements are costly misnomer

I think we can all agree that politics sometimes get in the way of good public policy. Politicians of all stripes have been known to let special interests, ideology, or polling numbers blind them to effective policy in the public interest.

This is why Merit took notice of the recent trial balloon floated by the NDP opposition to impose Community Benefit Agreements (also known as Project Labour Agreements — PLAs) on government procurement and projects here in Saskatchewan. Recently, the NDP government in British Columbia went back to the future by implementing Community Benefit Agreements for public procurement. These agreements mandate either part or all of publicly-funded projects be awarded only to union-affiliated contractors.

A recent study published by CARDUS shows that by restricting who can and cannot deliver public procurement drives the costs up and lengthens the time for project completion. With higher costs and longer time periods this means that only the largest corporations — often foreign-owned — can compete. It also means that taxpayers wind up paying more for infrastructure and services.

On the surface, the intent of CBAs is to promote hiring local labour. In practice, this type of closed tendering means that open shop contractors, or 85 per cent of contractors in Saskatchewan, would be excluded from public projects. Where’s the community benefit in closing the door on almost nine out of 10 workers, contractors and suppliers? Open shop contractors are the small, locally owned and operated companies that are hiring local people and buying local goods. You can’t provide much more benefit to the community than that.

Merit is not saying that contractors or suppliers with union affiliation should be prevented from bidding on projects. That would be just as unfair and unreasonable as excluding open shop employers and employees. The concern stems from the lack of competition and options that PLAs impose, raising costs for the public and putting open shop contractors and their workers at a disadvantage.

Most provinces, Saskatchewan included, used PLAs in the past. Most provinces, Saskatchewan included, have long since stopped, recognizing them as unfair, costly, and a proven failure for effective public procurement.

By keeping public procurement open to all qualified bidders, taxpayer costs will be minimized, local employment will be optimized, and instead of narrow political interests being catered to, the public interest would be more broadly served. After all, it’s only fair.

Karen Low, president, Merit Contractors Association of Saskatchewan