Construction groups miffed by new fee on public-sector projects

Three large construction associations in Manitoba say the cost of huge public projects will soar thanks to a new fee implemented by the province, and they want the auditor general to investigate it.

The fee is applied to projects covered by Manitoba Jobs Agreements, which launched last year to try to ensure more local workers and contractors benefit from big public-sector projects. Builders must pay 85 cents per hour, per worker.

The Winnipeg Construction Association, Manitoba Heavy Construction Association and the Construction Association of Rural Manitoba attacked the fee in a joint letter Thursday.

“The 85 cents per hour has nothing to do with wages of workers on site,” said Darryl Harrison, director of the Winnipeg association. “Every cent… (could) be spent in other ways that help the Manitoba taxpayer.

“It could be additional construction projects, or it could be things like doctors and nurses.”

The groups want the government to drop the new charge, and they want answers.

“Getting the auditor general involved will mean that there’s actually some transparency on how this fee was established, who negotiated the fee and what it’s being used for,” Harrison said.

The groups expressed concern that non-unionized workers will be squeezed out.

The new policy requires that contracts for capital projects exceeding $50 million — hospital wards, schools, for example — must outline wages, benefits, safety protections and the use of apprentice workers.

When Premier Wab Kinew unveiled the policy, he said it will ensure workers are paid well and sites are staffed with locals.

A mix of unionized and non-unionized employers have inked deals for the first jobs agreements — the four-school contract (two builds in Winnipeg, one in West St. Paul and another in Brandon), and the new emergency room at the Victoria General Hospital.

Public Service Delivery Minister Mintu Sandhu defended the fee: “This is about training the workforce for the future.”

Tanya Palson, executive director of Manitoba Building Trades, has said the fee will also cover administrative expenses. She heads the Building Trades Bargaining Council, which has representation from 13 unions.

The council is overseeing the rollout of the jobs agreements and will track compliance, including apprenticeship hour completion.

“It’s wild to me that we’re at a point where there’s this much pushback,” Palson said Thursday. “The government is willing to pay contractors to pay their workers a fair prevailing wage rate.”

The fee will likely vary based on the project, Palson has said. Unionized workers will continue to pay their union dues.

The Progressive Conservatives showed support for an investigation by auditor general Tyson Shtykalo. It’s unclear whether he can conduct such an investigation; he wasn’t available for an interview Thursday.

“(It’s) Manitoba taxpayer dollars being siphoned off,” said Tory Leader Obby Khan. “It’s forcing employees and employers to do things that they did not sign up for.”

A majority of local construction workers — 88 per cent, according to the three associations — aren’t unionized, Khan noted.

There isn’t anything to investigate yet; construction hasn’t started, and no money has been spent, Palson said. She expects shovels to hit the ground on school foundations in the next month.

“It’s getting entirely blown out of proportion,” Palson said, adding the spending will be reported and publicly viewable.

The council consulted with the Construction Labour Relations Association of Manitoba, which represents large employers. That association showed its support for the jobs agreements earlier this year.

Still, Harrison insisted the policy was developed “in secret.”

Chris Lorenc, president of the heavy construction association, said the NDP is asserting an “ideological labour relations framework.”

For example, a clause in the agreement to build the four schools indicates that if a contractor needs to hire workers, and there are several qualified Manitoba applicants, preference should be given to union members.

“It should not matter whether or not (workers) hold union cards,” Lorenc said. “This is blatant discrimination.”

Under the school construction contract, companies’ employees must have worked for them or a partner in the project for at least 200 hours in the year prior to the contract being awarded. Lorenc said that’s problematic.

Palson responded that unions won’t dictate who is hired by contractors, adding that companies generally bid on projects when they have the workforce for the job.

Palson said the council will take industry feedback into consideration for future projects and each contract will be unique.

The International Brotherhood of Electrical Workers Local 2085, which is part of the council, expressed support for the jobs agreements policy Thursday.

“Public infrastructure should build more than roads and buildings. It should build strong careers, safe worksites, and stable families,” business manager Dave McPhail wrote in a statement.

— With files from Carol Sanders

gabrielle.piche@winnipegfreepress.com