Project labour agreements stifle marketplace competition

Imagine you’re looking for a new high-def TV. If you’re like most consumers, you’d shop around for the best TV possible – the biggest screen, the most features, the sharpest picture – all for the best possible price.

Or, you could go to a store, agree to the minimum price you will pay, then sign a contract that will let the store decide the features, the screen size and ultimately which TV will be delivered.

I don’t know anyone who would use Scenario 2 to buy a TV – but that’s just the sort of approach Vancouver City Coun. Geoff Meggs is advocating in his Business in Vancouver column on project labour agreements (PLAs) (“Major corporations spearheading revival of project labour agreements,” – issue 1087; August 24-30).

A PLA is the exclusive awarding of a contract to building trade union firms in exchange for the “promise” of labour peace. What’s delivered is higher construction costs, lower productivity and an inability to shop around for innovative contractors. Qualified open-shop contractors who could make better value bids and employees who wish to work non-union are banned from the project.

The peace promise comes from the smallest part of the construction industry – the building trades that do a mere 15% of the work in B.C. The open-shop sector does 85% of the construction work in B.C. So the people who do 15% of the work promise labour peace – as long as the people who are always peaceful and do 85% of the work are excluded. Simply, it’s buying fire insurance from an arsonist.

The Vancouver Island Highway project of the 1990s is a close-to-home example of a PLA in action. Thanks to the deal handed to unions by the NDP government of the day, taxpayers and island drivers paid $72 million in higher costs that resulted in overpasses being scrapped and replaced with stoplights. They got less for more.

Back before the Olympics, the construction trades lobbied hard to have a PLA slapped onto the Games. Without one – they warned – project costs would escalate, labour strife would reign and Vancouver would be lucky to have its venues ready in time to welcome the world.

Thanks to vigorous opposition to the idea, there was no PLA for Vancouver 2010 venues. The result? Construction and upgrade projects like the Richmond Oval, the Sea-to-Sky Highway, the $2 billion Canada Line and the Whistler Sliding Centre were completed on time and on budget; some were ready early and under budget.

All the open-shop sector wants is to bring its innovation to the table in a competitive playing field where all contractors can bid and work on projects regardless of union affiliation.

Meggs’ article even shows the spirit in action – the work being done on the new Port Mann Bridge. As Meggs states, there’s “an overarching agreement with the Christian Labour Association of Canada,” but “so many subcontracts with union firms that a solid majority of the project is being built union.”

That crystallizes the difference between big labour and the open-shop sector. Open-shop believes everyone gets the chance to compete – and work. Big labour wants complete control and to exclude – and let someone else pay the price.

Philip Hochstein is the president of the Independent Contractors and Businesses Association