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River City condominium development continues along River St. on May 28 2012. Condominiums are being built in the West Don Lands area that will house athletes for the upcoming Pan Am Games in 2015. (Fred Lum/Fred Lum/The Globe and Mail)
River City condominium development continues along River St. on May 28 2012. Condominiums are being built in the West Don Lands area that will house athletes for the upcoming Pan Am Games in 2015. (Fred Lum/Fred Lum/The Globe and Mail)

Ontario Tories warn labour laws could boost Pan Am costs Add to ...

The Progressive Conservatives say the province could be paying millions more than necessary in construction costs for a Pan American Games stadium because of a labour law that obliges it to hire unionized carpenters.

PanAm organizers, however, say that there is no danger of labour costs inflating the final price tag because they have already been factored into the budget.

Opposition leader Tim Hudak's complaint relates to Ivor Wynne, the football stadium in Hamilton that is receiving a $155-million renovation to host several PanAm soccer events in 2015.

In 2005, two of Hamilton's staff carpenters joined the United Brotherhood of Carpenters and Joiners of America Local 18. As a result, provincial law obliged the city to enter UBCJA's collective agreement. As part of the deal, Hamilton must use companies with UBCJA employees when contracting out carpentry work on construction projects.

The Ivor Wynne renovation is covered by this provision because the city owns the stadium.

Hamilton city staff could not be immediately reached for comment on how much, if anything, the UBCJA contract would add to the final price. But a report by them in 2007 estimated the added cost of only dealing with UBCJA firms was between $4- and $10-million annually. The documents says cost inflations could be even higher - up to 40 per cent - on large projects related to water treatment facilities.

Sean Reid of the Progressive Contractors Association of Canada, an industry group that wants cities exempted from such rules, says this estimated cost increase could prove correct for the Ivor Wynne project.

"The more the carpentry work on a project -- and pouring concrete is considered carpentry work -- the larger the price inflation would be," he said.

Other cities, including Toronto, have similar arrangements as Hamilton. But it is not clear if any other PanAm venues would be city-owned and subject to the UBCJA agreement.

PanAm organizers suggested such considerations had already been taken into account: "…the varying labour costs per project are already all factored into our $700-million capital budget. They will not increase our costs because they are already factored into our costs," wrote spokeswoman Carlene Siopis in an e-mail.

The office of Charles Sousa, the cabinet minister in charge of the PanAm Games, also issued a statement saying the games' budget would be "managed well."

Part of that budget includes an $82-million contingency fund to pay for cost overruns.

With a report from the Canadian Press

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