May 25, 2009

Construction Labour

Merit Contractors takes aim at union Stabilization funds

IAN HARVEY

correspondent

Canadian taxpayers are being hosed by big unions who use their monopolies to unfairly subsidize union contractors in bidding against open shops and keep costs unnecessarily high on public projects, says the Merit Contractors Association.

The group, which last fall went national in its bid to raise issues around labour laws, said the current environment favours big unions and it is taking the offensive in its quest to make changes.

It points to Alberta, which last August outlawed the practice of Market Enhancement Recovery Funds (MERFs), which allow unions to charge members an hourly levy and direct that money to subsidize union contractors’ hourly labour costs in bidding against non-union contractors.

In deeming it an unfair labour practice, Alberta found it “distorted the economic efficiency of ICI sector labour markets, stifled competition, allowed specific contractors to be targeted for economic harm and compromised the integrity of the competitive bidding system.

Another government report was critical of the practice.

“The practice enticed contractors into voluntarily recognizing unions regardless of the wishes of existing employees and created a financial dependency on the union to the point where the firm is financially beholden to the union and vulnerable to union domination from a labour-relations perspective,” it said.

Merit maintains that getting the same recognition outside Alberta is an uphill battle.

They are, however, winning some support from right-wing politicians like Ontario MPP Randy Hillier, who is running for the leadership of the Ontario Progressive Conservatives.

“I have bittersweet feelings about it,” said Hillier, a former International Brotherhood of Electrical Workers member and federal government project manager.

“It does give union contractors a bit of an edge in bidding against non-union contractors. I’m not in favor of it, but you can’t tell people what to do with their own money.”

With between $1 and $1.50 an hour going to a MERFs, the practices allows unions to undercut smaller non-union contractors.

As it stands now, said Dave McDonald, Ontario chairman of the Merit Contractors Association, non-union bidders are locked out of the GTA and some nearby cities because of provincial labour laws.

That, in turn, allows the large trade unions to use those MERFs (also called Stabilization or Stab funds) to target jobs in other geographical areas.

But Barry Stevens, an IBEW local president in Toronto, shrugged off Merit’s argument.

“We don’t tell them how to run their business, so they have no business telling us how to run ours,” he said.

“The membership approves the Stab fund and we use it to target unscrupulous contractors. We use the fund to help contractors when needed, like now when things are tight.”

He said the Merit contractors aren’t just anti-Stab fund, they’re anti-union.

“They (some non-union shops) want to pay a new electrician or immigrant starting out $15 an hour,” he said. “Our members get a fair day’s wage for a fair day’s work.”

As such, trade unions said they’re only ensuring members in smaller areas get a fair shot at the work available.

The situation isn’t unique to Canada.

Earlier this year, the U.S. group, Associated Builders and Contractors, released a study showing unions spent $1 billion subsidizing members bidding against non-union shops and artificially inflating wages on public sector jobs from 2000 to 2007.

The Alberta Trades Union Council said the benefits and threats posed by MERFs are overstated. They said MERFs bring success on just 15 to 30 per cent of bids.

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