City officials give green light to open tendering

Torontosun.com
June 3, 2019
Sue-Ann Levy

A report to next week’s executive committee recommends council open the door to competitive bidding on city construction and other infrastructure projects -- by doing nothing.

The report from City Manager Chris Murray and six senior staff proposes the City agree to the terms of Section 9 of the province’s Labour Relations Act -- passed in April -- which removed an obscure loophole permitting only closed shop tendering in the City of Toronto, at Toronto Community Housing Corporation (TCHC) and at the Toronto District School Board (TDSB).

The City, TCHC and TDSB have until July 3 to either agree to the new provisions of Bill 66 or opt out.

Rather than restricting bids on a wide variety of city projects -- from splash pads and playgrounds to new community centres and police stations -- to nine unions (as noted in the city report), under the new provisions all union and non-union general contractors and sub-contractors would be eligible for city jobs.

That move -- if adopted by council later this month -- could save the city hundreds of millions of dollars in costs for city building, road and watermain projects.

Murray’s report provides very conservative savings of $12 million to $48 million a year based on $616 million worth of industrial and commercial contracts.

However, as the report shows, some 62% of all road, watermain and heavy construction work was awarded to the same unionized contractors in 2018. The value of all contracts awarded to unionized shops was nearly $1.7 billion compared to a paltry $187 million for the non-union ones.

Sean Reid, vice-president and Ontario Regional director of the Progressive Contractors Association of Canada (PCA) -- whose members have been restricted from bidding for city jobs -- told me recently that the loophole has impacted on tens of thousands of union and non-union trades.

He calculated the cost savings to be as much as $400-million yearly with open-shop tendering, depending on the complexity of the project.

Bear in mind those savings do not capture TCHC, which will have to decide what to do about the new provisions. Given their cash crunch, I can’t imagine them doing anything but allowing open-shop tendering.

The only catch is that anyone bidding for infrastructure and construction work must agree to pay their employees wages that come under the city’s Fair Wage Policy, which in most cases mirror collective agreement rates in the construction industry. This proviso is repeated several times in the city report.

That notwithstanding, competition is a good thing.

It will not only bring costs down but I suspect it will improve efficiency on city projects -- meaning they will get done on time and on budget. Perhaps competition will help avoid or reduce construction project fiascos like Union Station, the North St. Lawrence Market, the homeless referral centre at 111 Peter St. and the renovation of Nathan Phillips Square.

I have no doubt this will sail through executive committee next week.

How can it not, especially after Premier Doug Ford compromised by reversing the $177 million in retroactive budget cuts impacting City Hall this year?

After considerable whining from Mayor John Tory and various councillors, who seemed to have nothing better to do over the past few weeks, they too have to show good faith by making efforts to streamline costs.

But getting this by the likes of union-friendly Councillors Mike Layton, Joe Cressy, Gord Perks, Paula Fletcher, Kristyn Wong-Tam, Anthony Perruzza and Mike Colle could be another story.

These councillors seem never to care about optics or doing what’s right for taxpayers.

Only their union buddies matter.

It was ever thus.