London could face higher taxes without legislative change

August 12, 2013

LONDON — Without making important legislative changes, London taxpayers could face higher taxes to fund local infrastructure projects, Kitchener-Conestoga MPP Michael Harris said today.

“For more than three decades, certain unions have been able to exploit a loophole in Ontario’s labour laws that allows them to force municipalities to contract out all work on publicly funded infrastructure to companies they represent,” Harris said at the London and District Construction Association. “Everywhere this situation has occurred, taxpayers have had to pay 5% to 40% more for local bridges, water treatment facilities and public buildings, without any added value.”

If London were to fall victim to this legal loophole, it would join a growing list of municipalities that have become trapped in labour monopolies, including: Hamilton, Kitchener, Sault Ste. Marie and Toronto. Waterloo Region could also soon see the end of open competition for local infrastructure.

“Nobody in the Region of Waterloo thought they’d be the target of a union seeking to set up a labour monopoly. But that changed very quickly when the Carpenters’ Union filed a certification application with the labour board earlier this year,” Harris said. “Most estimates indicate that the Region will see its infrastructure costs rise by $5 million to $78 million a year. So my message for London is complacency comes at a cost.”

To protect taxpayers, Harris tabled the Fair and Open Tendering Act on May 16 at Queen’s Park. This bill, if passed, would add a very clear exemption to the Labour Relations Act to ensure municipalities and school boards are no longer subject to the province’s labour rules for the construction sector.

“This much-needed legislative change would ensure that municipalities would no longer be at risk of losing millions of dollars to fund a labour monopoly that forces them to restrict roughly 70% of qualified contractors from working on taxpayer-funded infrastructure,” Harris said.

The Progressive Contractors Association of Canada and the Christian Labour Association of Canada (CLAC) have both been actively working to gain support for fair and open construction tendering and Harris’s Bill, said Ian DeWaard, regional director with CLAC. “We are pleased that Mr. Harris has put forward this fair proposal to close an expensive legal loophole.”