BC NDP announces Crown corporation to handle union-friendly construction

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B.C.’s NDP government has announced a new system to hire workers for infrastructure projects in the province, sparking a war of words between supporters who say the pact will benefit workers and communities and critics who insist it will drive up costs at taxpayers’ expense.

The Community Benefits Agreement, unveiled on Monday, will set up a new Crown corporation that will hire union workers for major projects such as highways and bridges and also manage payroll and benefits.

Non-union companies will be able to bid on projects, but their workers will be required to join unions while on the job.

In announcing the project, NDP premier John Horgan cited benefits including greater numbers of apprenticeships, more training and employment opportunities for women and Indigenous people and “cost certainty to government.”

But Independent Contractors and Businesses Association president Chris Gardner predicted the new arrangement would make projects significantly more expensive.

“They’re resurrecting a procurement model that was used in the 1990s – it didn’t work then and it’s not going to work now,” Mr. Gardner said.

The ICBA represents non-union construction and resource companies. Only about 15 per cent of B.C.’s construction workforce is unionized, Mr. Gardner said.

Mr. Gardner cited a previous project, the Vancouver Island Highway, as an example of a major infrastructure project in which requirements to hire union labour pushed up construction costs by 40 per cent.

Tom Sigurdson, executive director of BC Building Trades, disputed the accuracy of the cost overruns reported for the Island Highway project and pointed to cost overruns for projects that had been built through an “open shop” model.

That process has resulted in several projects for which which the final cost has outpaced the initial bid, Mr. Sigurdson said, including the Evergreen Line, which was awarded at $410-million and came in at $586-million, and the Port Mann bridge.

It was awarded at $2.3-billion and came in at $3.3-billion, Mr. Sigurdson said.

The NDP received $5-million in donations from unions in 2017 out of a total of $14.2-million. The party also had more than a dozen Steelworkers employees working on its election campaign last year, including the campaign deputy director.

Rules around political donations were changed after the May 2017 election to put hard caps on the amount individuals could donate to political parties, including a ban on union and corporate donations.

Green Party leader Andrew Weaver backed the NDP’s approach. He said he looked forward to seeing details of the agreement and that community benefit agreements can help meet social and environmental goals.

The opposition Liberal party said the agreement amounts to “little more than a political payoff at the taxpayer’s expense.”

Community benefit agreements for major infrastructure projects are becoming increasingly common throughout Canada and B.C.’s new framework is unlikely to deter private-sector companies from bidding on infrastructure projects in the province, said Mark Romoff, chief executive officer of Canadian Council for Public-Private Partnerships.

“The bidders for these projects – as long as they know the rules of the game, they’re more than happy to play by them,” Mr. Romoff said.

“It may be a little more onerous than it would have been without those community benefit agreements – but the reality is it is up to government to decide what are the real issues they want to make sure are addressed in these contracts.”

“And bidders will respond,” he said.