Jobs policy will increase cost of new Brandon school by 20%: CARM

The Construction Association of Rural Manitoba says the new southwest Brandon school will cost roughly 20 per cent more to build because of the labour policy introduced last year by the provincial government.

The new regulations will include prioritizing union workers when adding extra staff and paying a fee of 85 cents per worker hour, CARM executive director Shawn Wood told the Sun on Friday.

“We know from talking to our members: if they’re going to bid on a project, just the additional admin costs and the additional cost of that 85 cents per man hour puts them anywhere from a five to 20 per cent increase in cost,” Wood said.

“I believe the Brandon school will be closer to the 20 per cent.”

The new provincial policy, the Manitoba Jobs Agreement, burdens construction companies with a list of extra obligations, such as meeting collective bargaining wages for some staff, paying into union dues and managing layers of administrative work, Wood said.

As a result, he said, companies charge the province more to cover the costs, or simply abstain from the work.

The NDP government introduced the MJA last September, stating it supports workforce development, creates good jobs and supports Manitoba’s economy. The agreement targets large public infrastructure projects, such as four new schools the province announced, and “sets standardized terms of employment … so that all workers get the same wages, benefits and protections — whether they are unionized or non-unionized.”

The policy is set to impact rural Manitoba the hardest, according to Wood. Rural areas have the highest representation of non-unionized workers, all of whom will be deprioritized on projects covered by the new agreement, he said.

“So under the Manitoba Jobs Agreement, if you don’t have a current employee and need to bring on additional staff, you have to utilize union shop,” Wood said. “Which means these guys then have to go to union hall and hire union workers to increase their staff members.”

Rural workers stand to lose jobs because of this policy because roughly 95 per cent of the construction workforce in rural Manitoba falls under the deprioritized category of non-unionized, Wood said.

Evan Keller, president of Keller Developments in Brandon, said he believes the NDP’s policy reflects connections, rather than logic.

“It’s clearly driven by our current government’s connection to the unions. That’s all it is,” he said. “Outside of the Perimeter, this makes no sense. It absolutely makes no sense.”

Keller’s company decided not to bid for work at the new Brandon school because of the “red tape” and “bureaucracy” involved, he said. He added that the new policies are pushing too far.

“They’re taking union dues from open shop companies; I think they’re crossing a line there,” he said. “It’s frustrating. I don’t understand it. It really feels like this current government is attacking open-shop construction companies.

“In principle, I’m kind of stepping back on this one.”

Keller said it appears that many companies in the construction industry are not bidding on projects at the schools, and those that do bid are “having to throw a very high number out.”

The result is that “it’s not going to help keep this project on budget, on time, or any of those key metrics that you want to see in a construction project. If anything, it’s going to do the opposite,” he said.

Public Service Delivery Minister Mintu Sandhu did not respond to CARM’s assertions of increased construction costs at the Brandon school, but he defended the jobs agreement.

“The Manitoba Jobs Agreement is about putting Manitoba workers first and making sure that our public projects are finished on time and on budget, and deliver high wages, good benefits, and safe worksites for Manitoba workers, whether they are in a union or not,” Sandhu said in an emailed statement.

In March, Sandhu defended the 85 cents per hour 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 in March. “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.

Palson’s comments came after the three largest construction associations in Manitoba spoke out against the MJA, calling for an auditor general review and for the province to restore “fair and open” competition to public projects and end discriminatory hiring requirements. The letter was signed by CARM, the Winnipeg Construction Association and the Manitoba Heavy Construction Association.

On Friday, Wood said one reason companies aren’t bidding on the school projects is that the policy stands to introduce union reps and members to non-unionized teams, which may lead to unionization of small businesses. Some employers are concerned about this risk, he said.

“If you’re on that job, and there’s union reps on the same job that may be trying to influence your workers to join the union … then there’s the risk that that company will become unionized,” he said. “We’re not against unions. It’s the freedom of worker choice is what we’re looking for.”

Wood said through Manitoba’s “card check system,” companies can become unionized without a vote if 50 per cent of staff plus one sign union membership cards. This can “impose” a union in a situation when many staff members, and the owners, don’t want one, he said.

“The government’s having a hard time getting bids on some of these schools and certain scopes of work, because guys just aren’t willing to bid them because the union piece,” Wood said.

Wood said three companies in the Brandon area would have bid on earth work at the new Brandon school site, but abstained because of the complications and risks introduced by the MJA.

“I think the most important part of this is the current Manitoba government didn’t consult with the industry before they applied this,” he said. “MJA was put in place, we’ll say, behind closed doors.”

» cmcdowell@brandonsun.com, with files from the Winnipeg Free Press