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Recently, the Progressive Contractors Association of Canada (PCA) filed a Competition Bureau complaint. It relates to an exclusive labour agreement between The Ottawa Hospital and select unions.Adrian Wyld/The Canadian Press

Paul de Jong is president of the Progressive Contractors Association of Canada.

If the federal government wants to build a more competitive Canada, the place to start is with the industry that’s responsible for building and maintaining our country’s infrastructure. The current review of Canada’s Competition Act should aim to better protect the public interest, by taking a hard look at making construction across Canada far more competitive.

Unfortunately, construction competition is not alive and well in Canada. All too often, the bidding process for projects funded with public money is restricted to select groups such as certain unions. These agreements are done ostensibly as a means to support the under-represented or to ensure a lack of labour disruption. But they also cost Canadians hundreds of millions in overruns, delays and missed opportunities, when the winning bid is not the most competitive one. And it’s happening right across the country.

Recently, the Progressive Contractors Association of Canada, whose members build major infrastructure projects throughout Canada, filed a Competition Bureau complaint. It relates to an exclusive labour agreement between Ottawa Hospital and select unions.

In our view, this arrangement runs counter to the Competition Act by prohibiting thousands of Ottawa-area construction workers and contractors from bidding on and building the hospital’s new $2.8-billion civic campus. They’re shut out of a project that is funded by taxpayers, because they do not carry the right union card.

It’s no different in British Columbia, where in 2018, the NDP government granted select Building Trades Unions a monopoly on the construction of several major public projects. The vast majority of the province’s construction workers and contractors are prevented from building these publicly funded projects. And once again it’s because they are either non-union or choose to belong to other unions.

B.C.’s controversial labour deal came back to bite the government. A Cowichan Tribes contractor and his workers were outraged to learn they’d been barred from building the new $1.4-billion Cowichan District Hospital, on their own lands, because they are not members of the province’s favoured unions. This embarrassing debacle forced the government to make a one-off exception, allowing the Cowichan Tribes contractor to work on the project.

Promoting competition and multiple bids on projects encourage contractors to innovate and put their best bid forward. When competition is restricted, it’s at the public’s expense. For example, project costs under the B.C. government’s anti-competitive labour deal have soared, including construction of the Cowichan District Hospital. That project alone is 63 per cent over budget – an outrageous overrun of $559-million and counting.

Toronto taxpayers are also paying the price for the city’s steadfast refusal to join all other Ontario municipalities that award civic construction work based on a competitive bidding process. Research by the Montreal Economic Institute shows that Toronto’s decision to restrict competition on city projects raised construction costs by $381-million, just in 2019. The institute also calculates that Ottawa Hospital’s exclusive labour deal will cost taxpayers as much as $525-million more by 2028.

When the commissioner of the Competition Bureau said Canada needs more competition, in no sector is this truer than construction. Toronto Community Housing Corp., Toronto District School Board, Ontario Power Generation, Bruce Power and Hydro One also restrict competition, by allowing only chosen insiders to bid on construction work funded with public tax dollars.

The reality is that governments across Canada pander to special interest groups, preventing competition, and undermining public confidence in a “system” that’s supposed to protect them. This needlessly drives up public infrastructure costs, and squanders funding that could otherwise be directed toward crucial projects from transit expansion to building more affordable housing.

Canada’s federal, provincial and municipal governments have an obligation to show they care enough about construction competition to follow the lead of American states. Many of these jurisdictions are working to pass the Fair and Open Competition Act which prevents unfair bidding restrictions on public projects.

A fair and open bidding process gives all qualified companies and their workers an equal shot at bidding and building in their communities. It’s the way to ensure taxpayers get a greater return on their investments. Now that’s something all elected officials should get behind.

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