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The area of the Peace River where the proposed Site C hydroeletric dam would be built near Fort St. John, B.C.Deborah Baic/The Globe and Mail

BC Hydro has agreed to give union labour an edge when it chooses the contractors who will build the $8.8-billion Site C dam – a partial retreat from its "open shop" approach for the project.

It is not the project-wide labour agreement that the unions had pushed for, but the pact was enough to persuade the umbrella organization representing the B.C. building trades to withdraw its threats to redirect skilled workers to other construction projects.

BC Hydro has already awarded one contract to a non-union firm for clearing a portion of the dam site. However, this new deal, which will give a higher priority to contractors who intend to recruit some of their workers from the building trade unions, will be tested shortly when the Crown looks at bids for the main civil works – one of the most valuable contracts at stake.

Tom Sigurdson, executive director of the B.C. and Yukon Territory Building and Construction Trades Council, credited Premier Christy Clark for intervening after a dispute that has been simmering for more than a year with BC Hydro over the labour model.

"We just know there is going to be added weight for those contractors who have a relationship with the building trades. That is where now the work begins," Mr. Sigurdson told reporters in Victoria on Wednesday. "We still have to negotiate with the contractors that are going to be doing the bids. … We hope to have good news within a short period of time."

The Crown corporation has abandoned its long-standing practice of using project labour agreements, which ensured no strikes and no lockouts, and provided standard wages and benefits for workers on the job site. The unions said that approach would bring chaos to the construction site and would favour cheap foreign labour on what is to be the province's most expensive public-works project in history.

The deal announced on Wednesday meets the unions' demands part-way. The unions agreed not to strike or raid workers from other contractors on site. However, they will still have to bargain with individual bidders who could have union workers labouring alongside non-union workers.

BC Hydro president and CEO Jessica McDonald said the new agreement puts a premium on the value of labour stability – over cheap labour. "In our discussions with the building trades, we have found common ground that I think defines the new and modern model for large construction projects," she said in an interview.

Ms. McDonald said BC Hydro is already well into discussions with proponents for the major contracts, but the new framework will not delay the process. "We have let them know what we would value the most is to have mixed labour representation on site." BC Hydro wants to begin construction this summer, but still faces a string of court challenges to the project.

This is not the first time the Premier's office has intervened with BC Hydro on behalf of the trade unions. Earlier this year, Ms. Clark declared that BC Hydro had gone too far in its bid to curb union powers for the construction of Site C and ordered Ms. McDonald to strike out language that would prohibit union organizing on site. "They do have the right to organize, and BC Hydro can't take that away," the Premier said in March.

Ms. Clark told reporters on Wednesday she remained involved behind the scenes because it was clear the project, which will be competing for skilled labour amid what is expected to be a construction boom in B.C.'s north, needed to keep the unions onside.

"It was really important to come to an agreement. Look, I'm not ideological about this," she said. "These sites will have a lot of union workers on them and that's great. … We can't do it without them."

But Mr. Sigurdson said this week's framework agreement will not guarantee a smooth construction operation. He said he remains concerned that having union and non-union workers sharing the job site with different wages and benefits could lead to strife. "That could still happen," he said, adding it will depend on how the winning contractors have structured their bids. "It ain't over," he said.