WHO SUPPORTS COMMUNITY BENEFITS PROGRAMS?
Community benefit programs have been in use for decades. Over the past few years, the use of CBA’s has increased as various levels of government seek to alleviate adverse employment impacts of globalization and Free Trade Agreements (FTA) and to create more opportunities for historically marginalized populations.
The Government of Canada’s Investing in Canada Infrastructure Program seeks to “encourage project planners and communities across the country to take advantage of their infrastructure projects to support the diversification of recruitment, training and procurement practices.”
Most recently, the government of British Columbia and Alberta have adopted community benefits frameworks to increase the return on public sector investments.
The Manitoba Chambers of Commerce (MCC) has recently completed a comprehensive survey of its members.
It reports that “two attributes surface strongest among members as important considerations for the provincial government when tendering large-scale public infrastructure projects: Selecting Manitoba based companies to keep taxes in the province and Quality.”
These two attributes account for 34% and 33% of first selections respectively. Only 9% of respondents cite lowest cost as the most important factor.
DO COMMUNITY BENEFITS AGREEMENTS VIOLATE INTERNATIONAL OR PROVINCIAL FREE TRADE AGREEMENTS?
No. community benefits agreements do not mandate the selection of local companies. Instead, they ask all bidders to satisfy community benefits considerations like local employment, social benefits and supply chain impacts. These are clearly identified at the outset and all bidders have an equal and transparent opportunity to identify their community benefits contributions.
By including community benefits considerations in the tendering process, all levels of government can remain compliant with trade rules while leveraging public investments for additional second and third level community benefits.
HOW CAN GOVERNMENTS INCORPORATE COMMUNITY BENEFITS PROVISIONS IN THEIR PROJECTS?
Progressive procurement practices clearly allocate a portion of the selection criteria related to identified community benefits considerations. A community benefits policy is adopted government to include community benefits on projects undertaken by the government or related public agencies. Common examples include prevailing wages, local hiring, training and apprenticeship opportunities, affordable housing requirements, street and neighbourhood revitalization and the inclusion of communications infrastructure.
For municipal and provincial government, we recommend that a community benefits policy be developed within one hundred and twenty (120) days and that the policy assign ten per cent (10%) of the selection value to community benefits provisions for future projects undertaken by the City.
Under the policy, the cost will still account for ninety per cent (90%) of the selection criteria. The remaining ten per cent will be based on the satisfaction of community benefits provisions as identified for each project.
DO CBAS FORCE UNIONIZATION AND REDUCE COMPETITION?
The term ‘forced unionization’ is used by opponents of CBAs and they suggest that their use violates individual rights and limits market competition. Historical and current data has consistently proved that the number of bidders increases when CBAs are used and the majority of work continues to be awarded to non-union contractors. At Keeyask, nearly 80% of contractors are non-union.
Accusations of forced unionization and competition restrictions are exclusively made by stakeholders that use a low-cost business model. Evidence from multiple jurisdictions fails to support either claim and these arguments are not raised by workers who are paid prevailing wages under CBAs.
Forced unionization has always been charged by private, non-union business groups that want to pay these same Manitobans lower wages to gain a competitive advantage. The issue of CBAs is about private interest, not the real needs of Manitoba workers who earn their salaries at these projects.
DO CBAS COST MORE?
Private companies like Walmart and Disney voluntarily enter into CBAs and voluntarily pay higher wages for their construction projects. They do so because they understand that skilled labour is not cheap and cheap labour is not skilled.
These companies make rational business decisions to use higher cost labour because it pays off with higher productivity, quality and safety in the long run.
Premier Duff Roblin introduced CBAs for precisely the same reason. Before entering CBAs, Manitobans often paid for infrastructure twice; once to build it at a low cost and a second time to repair or replace poor quality assets.
Under the CBAs, workers earn higher wages. That cannot be confused for higher costs, as the end product is higher quality and costs far less in the long run. The lowest price is not always the best value.
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