Construction strike hobbles Quebec

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A construction shutdown in Quebec has added an element of uncertainty in the run-up to a traditional moving day that can be hectic even without labour strife.

Quebec businesses are worried about the impact of a strike, launched at midnight Sunday by unions representing more than 175,000 workers, that has hobbled most construction activity.

"As we get closer to moving time, if the strike persists, every day has a little bit more of a consequence affecting people," said Ilan Gewurz, executive vice president of residential developer Corporation Proment.

July 1 is traditionally moving day in Quebec. It's particularly busy in Montreal, where Corporation Proment is putting the finishing touches on about 50 units in a new waterfront tower.

"We have a delivery date for our condos and people have sold their houses and are planning to move in," he said.

He's worried about what condo buyers will do if their new homes aren't reading in time. Louis-Joseph Papineau, vice-president of construction and development, said Corporation Proment is working with buyers on a case-by-case basis to ensure their needs are met.

Quebec's main business group, the Conseil du patronat du Québec, said the economy will be hit hard if the strike is protracted.

"Every day that is lost due to the labour conflict will result in additional costs that can only be harmful for the economy of Quebec and for all Quebeckers," said the group's president, Yves-Thomas Dorval.

The Conseil, representing the province's biggest employers, puts the anticipated value of private and public investment in construction projects for 2013 at about $50-billion, similar to last year.

Mr. Dorval said in an interview he's optimistic about a quick settlement because both sides have too much to lose in the event of a prolonged work stoppage. Contractors face stiff late-delivery penalties and workers don't wish to see any pay increase delayed for too long, he said.

"The ingredients favouring a settlement are there," he said.

Union officials were not immediately available to comment.

Ilan Gewurz, executive vice-president of residential developer Corporation Proment, says he's worried about what clients will do if they've locked in their moving day and the company's new condos aren't ready.

"We have a delivery date for our condos and people have sold their houses and are planning to move in," he said.

Moving day in Montreal is traditionally July 1.

"As we get closer to moving time, if the strike persists, every day has a little bit more of a consequence affecting people," said Mr. Gewurz.

About 50 units in the developer's new waterfront tower on Nuns' Island, just southwest of downtown Montreal, are in various stages of completion, he said.

Louis-Joseph Papineau, vice-president of construction and development, said the company is working with clients on a case-by-case basis to ensure their needs are addressed.

Among the union's concerns are a proposed change in overtime pay to time-and-a-half from double time. The union has also been seeking a 3-per-cent increase in wages in the first year of a new agreement, and 2.75 per cent in the next two years.

Yves Ouellet, a spokesman for the construction unions, said in an interview that the unions have been reasonable in their demands after making important concessions and there will be no backtracking on hard-won rights.

There is nothing greedy about seeking to protect one's purchasing power against inflation, he said.

The unions represent more than 175,000 workers.

"The employers seem to forget that we are 175,000 consumers and taxpayers. It's in no one's interest that we become poorer."

Among major projects affected in the Montreal area are the two super-hospitals. Engineering and construction giant SNC-Lavalin Group Inc. is part of a group building the McGill University Health Centre.

The Conseil du patronat says it's consulting with contractors to more closely assess the impact of the general strike, launched at midnight Sunday, which has paralyzed most construction activity.

Talks between the unions and builders' representatives broke down on Saturday. That has affected the residential, commercial and industrial sectors. Negotiations in civil engineering and road building continue.

Eric Cherbaka, director general of Quebec's residential home builders' association, said the strike won't do too much damage if it lasts only one or two days, but delays of one week or more will affect not only contractors but also buyers who won't get their houses on time.

Mr. Cherbaka said he's frustrated because progress was being made in negotiations with the unions in the residential sector.

"We're close to a settlement. We feel like we're being held hostage," he said.

New home construction in Quebec is an $8-billion-a-year business. Renovation work adds another $10-billion, said Mr. Cherbaka, who pointed out that costly delays also harm taxpayers because so many projects are public.

Michel Leblanc, chief executive of the Board of Trade of Metropolitan Montreal, said his organization estimates the cost of the strike for the Montreal area at about $15-million for every day work sites are down.

"What's happening right now is very damaging for the economy," he said.

He urged the Quebec government to get the two sides back to the bargaining table and to legislate an end to the strike if no progress is being made within a few days.

The work stoppage at the height of construction season also tarnishes Montreal's image as a good place to invest in real estate projects, he said.