By Ian Ross
The awarding of a $17.3-million contract to a southern Ontario company to rebuild Sudbury’s David Street pumping station has riled some individuals in the construction trades community.
The city’s decision to award the tender to North American Construction Ltd., a Morriston, Ont. firm specializing in municipal water treatment plants, has angered labour leaders who argue it provides employment for southern Ontario workers.
And it is not an isolated incident, says Ron Laforest, president of the Building Trades Union and business manager of the Plumbers and Pipefitters Union Local 800 in Sudbury.
“(The awarding of tenders to out-of-town firms) happens quite often,” Laforest says. “Some cities have it in tender packages if they have a one or two per cent difference they’ll award it to a local contractor, and this city doesn’t.”
North American’s winning bid of $17,365,000 was $350,000 lower than TESC Contracting of Sudbury.
The contractor, which is a union shop, is affiliated with the Christian Labour Association of Canada, a non-confrontational labour movement.
Laforest says most of these firms buy materials down south and bring their own manpower, while local construction suppliers and contractors end up hurting.
With more than 50 per cent unemployment among his 250 members, Laforest feels the city should show some preference wherever possible to assure Sudbury companies are used wherever possible.
While the construction sector in southern Ontario is screaming for skilled manpower, Laforest says it is not financially worth it for his members to travel south to find work.
“If a (tradesmen) from here were to go down to Toronto and has to stay in a hotel he doesn’t make enough to stay in his room,” says Laforest.
“If at least they could claim it on their taxes like a salesman for living allowances, meals..then it would be worth it for us to go.
“I have between 30 to 40 in Alberta, but at least the company there was willing to pay for their hotel room to get these people.”
Darryl Mathé, manager of supplies and services for the City of Greater Sudbury, says the notion of giving preferential treatment for local companies has been kicked around in Ontario for years.
The trouble is that this process, which would give preferential treatment to local companies invites fewer project bidders, and the fallout can have serious repercussions on local businesses bidding on out-of-town projects.
“Loud and clear the construction industry has told me...if we get a reputation in Sudbury of showing preference I’m going to get blackballed.”
As well, stringent inter-provincial trade agreements indicate cities cannot grant preferential treatment to local labour, “that is why we advertise in MERX, (a national electronic bulletin board used as a vehicle to advertise their tenders) which is a criteria in the trade agreements for projects over $100,000,” Mathé says.
Mathé says over the next 12 to 14 months North American intends to be hiring 80 per cent of its workforce from the local labour pool for the David Street project.
He hopes some fences can be mended with the new purchasing bylaw expected to be struck by June, 2003. Construction association, trades unions and chambers of commerce will be invited to give their input and make suggestions on issues such as local preference.
“Really I don’t think there’s a person at city hall that doesn’t hope local people get the business.”
In cases of seeking bids, quotations and tenders for city suppliers, Mathé says the city makes “it very clear that the supplier has to carry inventory in Sudbury. If the bidder doesn’t have a warehouse in Sudbury they are not even considered.”
Mathé points out the Sudbury Airport terminal redevelopment project, awarded to Maple Engineering and Construction Canada Ltd. of Brampton, in which 85 to 90 per cent of the two major electrical and mechanical subcontractors are from Sudbury, with all the supplies purchased locally.
Ron Martin, president of the Sudbury Construction Association, says though the David Street project tendering award created a great deal of industry buzz, showing any preferential treatment to local firms for city projects would be sliding down a slippery slope.
“My issue is to allow contractors to access as much work as possible, and if we start tying the hands of out-of-town contractors, then Sault Ste. Marie, North Bay, Barrie and Timmins will all do the same thing.”
Like all construction associations across Ontario, Martin is opposed to any municipal policy favouring local firms or requiring out-of-town companies to hire a specific percentage of local subcontractors.
“If the city came out with a policy that, if the second lowest bidder is local, we’ll take him...we wouldn’t support it.”
Martin says he regularly meets with city supply and service officials to discuss any problems with the tendering process and staff are usually receptive in asking for input.
“In that particular circumstance (of David Street) the out-of-town contractor was low and I don’t know where else we would go with it.”
Martin says some northern cities attempt to find ways to secure employment for local tradespeople on municipal projects by sometimes leaking plans, but none blatantly push for a local preference policy.
“This is a union, non-union issue and they’re pretending that it’s a local versus non-local.
“A non-union company can come into town and hire whoever they want, but it costs money to bring people.
“It’s just plain economics for a company to bring in their key people, but they’re usually going to hire as many local people as possible or else they pay room and board.”
Particularly on large publicly financed mega projects, cost is the bottom line.
“When you’re talking a $15-million project, you better have a good reason not to go with the lowest tender,” Martin says.
In Sault Ste. Marie, two trade unions will go before the Ontario Labour Relations Board sometime this summer to contest the City of Sault Ste. Marie’s claim that unionized labour is not needed for a component of an east end sewage treatment plant.
The city awarded a $7-million contract to North American Construction for the construction of a 12,000-cubic-metre underground storage and overflow tank for the larger $35-million project.
It is the continuation of a long-running dispute between the city and two unions, the Labourers International Union of North America and the United Brotherhood of Carpenters and Joiners of America, dating back to a controversial 1987 labour board ruling. The board ruled the city must use unionized labour on municipal projects and the city is challenging the legal opinion.
