Rose Fierimonte, president of Dorbec Construction, a rare woman in a male-dominated industry, now faces descrimination dure to her Italian descent.Christinne Muschi/The Globe and Mail
Players in Quebec's construction industry say hundreds of companies teeter on the brink of bankruptcy as mistrustful public sector clients withhold payments and challenge every unexpected expense with a wary eye.
Daily descriptions at the Charbonneau inquiry of corruption on a massive scale involving dozens of the province's biggest construction and engineering firms have cast a pall over the rest of Quebec's 43,000 licensed contractors, according to an industry umbrella group and company owners.
Even at the best of times, running a construction company is not easy. Cash flow is a perennial issue, and firms often strain and fail because real estate development dries up or governments cut back on infrastructure projects.
The stakes are enormous: Construction companies account for about 14 per cent of the province's sluggish economy, and in an attempt to get hammers swinging, Premier Pauline Marois announced a $2-billion "shock action" jobs plan earlier this week seen by many as a pre-election mini-budget.
If it is a tough business in good times, it is even harder when people think you are a crook.
"Everyone treats us like a bunch of gangsters," said Rose Fierimonte, a general contractor and owner of Dorbec Construction Inc. "I can understand people being frustrated and upset by corruption, but the honest general contractor is as angry and upset as the general public."
Construction industry leaders say almost every operator has a story about delays of up to 120 days for payment and disputes over "extras" to cover unexpected costs. Christian Thériault, president of Quebec's association of construction company owners, the lead organization sounding an alarm, said his office gets dozens of calls every day.
The Charbonneau commission has heard hundreds of hours of testimony that major Quebec construction company bosses bought off engineers and politicians, especially at the civic level in the Montreal region, while they inflated contracts by up to 40 per cent.
Millions in kickbacks are said to have lined the pockets of mobsters, city councillors and their staffers, and many of the bureaucrats and engineers running construction projects, particularly in two of Quebec's three biggest cities – Montreal and Laval.
Witnesses have told the inquiry that billing for fake extras was one of the favourite means dishonest construction bosses and their government collaborators used to cheat the system.
And now construction firms working on projects are facing demands from suspicious clients for more proof to justify costs, and the paperwork is piling up.
Ms. Fierimonte, a rare woman in a male-dominated industry, who won an award this month for the quality of her work, said she faces an extra hurdle: her Italian name. Many of the industry players named at the Charbonneau inquiry are of Italian descent.
"Over the past year, I haven't had as many referrals or invitations to bid. Some architects I called said, 'Rose, it's not a problem with your service. It's that businessmen don't want to deal with Italians any more,'" said Ms. Fierimonte, who has worked in the industry for 25 years. "I've always faced some discrimination because I'm a woman, and now I'm being discriminated against because I'm the daughter of Italian immigrants? Come on."
Many of the clients withholding cash are school boards, hospitals and other public-sector building clients who are not even sure they trust their own engineers, Mr. Thériault said.
Mike Cohen, who is spokesman for the Montreal English School Board as well as an elected councillor with the Montreal suburb of Côte Saint-Luc, says both bodies face extremely high public expectations that they will spend money properly.
He said the unexpected discovery of asbestos during a recent school project led to a year-long delay as every phase of the renovation had to go back for tender and approval.
"The public is looking more closely at the way we spend their money, and we're trying to make everyone aware of why these processes are important," he said.
Mr. Thériault's company, Innovtech Construction Inc., has not been exempt: He has led 70 hospital projects in Quebec in recent years, but has had bills outstanding for as long as six months on several projects.
"I don't think they're taking advantage of this situation, or doing anything dishonest. There's just a real lack of trust," he said.
Last year, the province passed a law requiring all companies competing for contracts of more than $40-million to get an ethical seal of approval from Quebec's security regulator and anti-corruption squad. The high threshold, scheduled to be reduced to $10-million in coming months, means the backlog is not too long. But a threshold for Montreal of $100,000 has put a few paving and sidewalk projects on hold while construction companies wait for approval.
Montreal's interim mayor, Laurent Blanchard, said recent regulatory tweaks will help. "We're confident [the authorities] will catch up on the backlog over the winter, and over the next three or four months, all the companies that want to be accredited will be," he said.
Mr. Thériault is not sure. The process leaves too much room for interpretation by government analysts, "and that scares us," he said.
The population is unlikely to be very sympathetic to construction bosses suffering because of red tape or the caution of public officials, Mr. Thériault admitted.
"The everyman on the street has been told they've been robbed, and they look at us all as bandits," Mr. Thériault said. "But not everyone who rides a motorcycle is a Hells Angel."
Les Perreaux