GTA contractor groups call for LRA reforms
A new report from two GTA-area contractors groups is calling on the provincial government to make long-overdue changes to the Labour Relations Act.
In their paper, Planning for Ontario’s Building Boom: Ontario’s Construction Industry and the Need to Reform the Labour Relations Act, the General Contractors’ Association of Toronto (GCAT) and the Golden Horseshoe General Contractors’ Association (GHGCA) outline a series of changes that they say will give the unionized construction sector greater flexibility and creativity to address “modern day issues” and to respond to the province’s building needs in the near future.
The report points to the large and growing role played by the construction sector in Ontario’s economy. It accounts for about 8% of the province’s GDP and employs more than half a million people. Moreover, as the province continues to build its post-pandemic economy, construction is being called upon to play an ever-increasing role.
The provincial government has made housing construction a priority, with a plan to build 1.5 million new homes over 10 years. It is also building out Ontario’s infrastructure, with a whopping spend of $158 billion in the construction of new hospitals, long-term care homes, and major transit and highway transportation projects.
The province’s construction sector will therefore be a critical player in achieving these government priorities and in driving Ontario’s economic recovery, the report argues.
Despite all this, the industry faces two big challenges. The first is labour shortages. Data from BuildForce Canada suggests the province’s industry will need to recruit more than 100,000 new workers over the next 10 years so that it can keep up with construction demands and replace an estimated 82,600 workers who are expected to retire by 2033.
“Unfortunately,” says the report, “there are no current plans to address the other structural issue that is impeding Ontario’s construction sector – the labour relations legislation for the industry. The Labour Relations Act (LRA) contains construction sector-specific provisions, but these have not been substantively updated in 40 years. This outdated legal and regulatory framework is becoming more of an impediment to completing projects and to attracting workers to the industry. To ensure the overall health of Ontario’s construction sector, the Ontario government can no longer hesitate in modernizing the provisions governing labour relations in Ontario’s construction sector.”
The construction provisions of the LRA were brought into the force in the early 1980s. They have not changed since. In that time, the industry has changed a great deal. Projects are larger and more complex, with longer timelines than when the LRA construction regulations came into the force.
The report argues that the time for changes to the regulations affecting the industrial, commercial and institutional (ICI) sector is now.
“Amendments to the ICI provisions of the LRA are needed to enhance the economic health of construction projects in the future,” it says. “Failure to legislate amendments will cost the industry, and ultimately the people of Ontario, millions of dollars.”
The associations are calling for changes to six major issues within the act.
The first is to lengthen the term of ICI collective bargaining agreements from three years to four. As the industry is increasingly called upon to build large, complex projects over long schedules, it is hampered by three-year negotiating periods.
“An extended term of Collective Agreements would increase stability in the industry, reduce labour disruption, encourage better planning and scheduling and encourage investment,” say the associations. “In addition, an ancillary advantage may be the introduction of additional tradespeople to the ICI sector of the industry given the enhancement of job stability.”
Their second call is to stagger the timing of contract terms between construction sectors. Rolling or cascading strikes can cripple ongoing construction projects. That fact was on full display in the spring of 2022, when a series of strikes by several unions dovetailed into one another, and disrupted work on many construction sites almost continuously between early May and the end of June.
A similar scenario occurred in the residential sector in Greater Toronto in or about 2005. A series of rolling strikes caused havoc in the housing industry. Numerous unions took strike action for the duration of the summer, causing untold delays and costs.
“Without a mandated protocol, the probability of rolling strikes, serious labour disruptions resulting in uncertainty, lack of industry stability and substantial loss of time and money is a very real issue,” the report says. “The lack of legislative guidelines results in destabilization of the industry, long and costly delays in completion of projects and erosion of confidence and thus investment on behalf of investors, both local and international.”
Extending a limited strike window to the ICI sector, as in the GTA residential sector, would help to control such issues.
The report also calls for repairs to the grievance process at the Ontario Labour Relations Board (OLRB). Currently, the parties to a collective agreement can refer a grievance to the OLRB for final and binding arbitration. The OLRB must then schedule a hearing date within 14 days from receipt of the referral. This can be done outside the grievance and arbitration provisions of the relevant collective agreement, which is problematic. Often, the steps described in the collective agreement can mandate swifter decisions.
The fourth recommendation is for the creation of new special commercial and institutional conditions covering smaller-scale commercial and institutional projects, such as public libraries, municipal or regional sports facilities, retail facilities of less than 50,000 square feet, schools, places of worship, fire halls and police stations.
Currently, companies that are bound to ICI collective agreements are effectively frozen out of these types of projects because they cannot compete with the lower wages (and, consequently, bids) provided by non-union firms.
New special institutional and commercial conditions within the ICI sector could include such provisions as flexible work hours, and base wage rates below the current ICI wages. Doing so could help restore competitiveness within the sector, and help bolster safety.
The fifth recommendation: to recognize that a lack of qualified subcontractors can give rise to a competitive disadvantage for contractors. The change aims to correct the situation where, in a particular geographic area, qualified subcontractors affiliated to the same union as the contractor are either unavailable or there may only be one possible option. In such cases, the contractor may be forced to self-perform the work, to put forward a bid price that may cause it to be non-competitive, or to work with an unaffiliated subcontractor (which could expose the contractor to a grievance and potential monetary damages).
The LRA currently does allow for contractors to provide relief against competitive disadvantages, but these do not include any reference to a lack of available subcontractors.
Finally, the report calls for the creation of project labour agreements that would apply to any project that receives provincial government funding of $5 million or more. These projects, again, are often lost by unionized contractors to their non-union counterparts.
While the LRA does allow for the creation of project agreements where the project is deemed “economically significant”, the contractors argue the scope of these agreements should be expanded to permit only members of the trade union performing the work to be employed.