Open Mind Alberta 2014

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A FORUM ON OPEN SHOP CONSTRUCTION
INFRASTRUCTURE PERSPECTIVES: Find out how the provincial governments capital plan stacks up
BENEFITS BOOM
Build up your perks
with the Merit Hour
Bank plan
THE $500,000 TOILET
Open tender avoids
project ination
Volume 22 Issue 1 Spring 2014
KEY PLAYERS, 2013: The Contractor of the Year Awards recognize top construction pros
CONTRACTOR
VERSUS EMPLOYEE
Clarify the fuzzy line
between workers
Has the Alberta government
made progress on its
commitments?
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OPENMIND_14_p01.indd 1 2014-04-01 3:55 PM
TOGETHER
WE
BUILD
SUCCESS.
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OPENMIND SPRING 2014 3
TOGETHER
WE
BUILD
SUCCESS.
000OM-PCL-FP.indd 1 2014-03-14 7:57 AM
ON THE COVER
Mixed Results
Albertas provincial leaders have delivered
on some key campaign commitments.
What about the rest?
By Ben Freeland
Illustration by David Vogin
42 The Years Key Players
The 2013 Contractor of the Year Awards
recognize top construction professionals
By Allison Myggland
47 Build Better
Apprenticeships
Look to successful models, rather than
legislating a poor solution
By Peter Pilarski
51 Merit Canadas Efforts
Read about how Merit Canada is taking
care of business
By Terrance Oakey

54 By the Numbers
Canadian construction statistics
7
5 Executive Editors Column
By Stephen Kushner
7 The Benefit Boom
Merit member employees worked more
than 100 million hours in 2013. The Merit
Hour Bank is one of the reasons
By Suzanne Pescod
10 The $500,000 Toilet
If guaranteeing work to unions is
inflating the cost of public projects,
why arent we open tendering?
By Terrance Oakey
15 Perspectives on
Infrastructure
Find out how the provincial governments
capital plan stacks up against the one
proposed by the official Opposition
By Peter Pilarski
20 Independent Contractor
or Employee?
Clarify the fuzzy line that exists between
and employee and a contactor
By William Johnston
26 Coaches Corner
Find the right corporate coach and establish
a relationship that could change your career
By Michelle Lindstrom
33 Merit, Coast to Coast
Regional Merit organizations are making a
splash in their home provinces advocating
for an open shop approach
38
26
20
Contents
10
OPENMIND_14_p02-05.indd 3 2014-04-02 10:23 AM
INVEST IN YOUR TEAM
CUSTOMIZE YOUR CORPORATE TRAINING PROGRAM
NAITs 40+ years of corporate training experience shows that we are essential to
helping business and industry become more productive, competitive and successful in
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customizes and delivers relevant training across a wide range of competencies, in
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Executive Editors Column
Publisher Ruth Kelly
Executive Editor Stephen Kushner
Associate Editor Suzanne Pescod
Director of Custom Content Mifi Purvis
Production Manager Betty Feniak Smith
Production Technicians Brent Felzien
Brandon Hoover
Circulation Manager Karen Reilly
Vice-President Sales Anita McGillis
Advertising Representatives Kathy Kelley
Alison DeGroot
Sales Assistants Julia Ehli
Michelle Benz

Art Director Charles Burke
Associate Art Directors Andrea deBoer
Colin Spence
Contributing Writers
Ben Freeland, William Johnston, Michelle Lindstrom,
Allison Myggland, Terrance Oakey, Suzanne Pescod,
Peter Pilarski
Contributing Illustrators and Photographers
Steve Adams, Stockwell Collins, Nick Crane,
Kevin Ghiglione, Heff OReilly, Ben Rude,
Raymond Stockton, David Vogin
Open Mind is published two times per year by Venture
Publishing Inc. for Merit Contractors Association.
Venture Publishing Inc.
10259-105 Street,
Edmonton, Alberta T5J 1E3
Tel.: (780) 990-0839
Fax: (780) 425-4921
admin@venturepublishing.ca
www.venturepublishing.ca
Merit Contractors Association
103-13025 St. Albert Trail,
Edmonton, Alberta T5L 4H5
Tel.: (780) 455-5999 or 1-888-816-9991
Fax: (780) 455-2109
meritedm@meritalberta.com
www.meritalberta.com
Merit Contractors Association is a non-profit
organization that offers human resource services
to the open shop construction industry.
Printed in Canada by Transcontinental LGM Graphics
The opinions conveyed by contributors to
Open Mind magazine may not be indicative
of the views of Venture Publishing Inc. or
Merit Contractors Association. While every
effort is made to ensure accuracy, neither
Venture Publishing Inc. nor Merit Contractors
Association assume any responsibility or
liability for errors or omissions.
Canadian Publications Mail Product Agreement
#40020055
Copyright 2014 by Merit Contractors Association
No part of this publication should be reproduced without
express permission of Merit Contractors Association.

INVEST IN YOUR TEAM
CUSTOMIZE YOUR CORPORATE TRAINING PROGRAM
NAITs 40+ years of corporate training experience shows that we are essential to
helping business and industry become more productive, competitive and successful in
todays global economy.
With more than 200 world-class programs, our Corporate and International ofce
customizes and delivers relevant training across a wide range of competencies, in
Alberta and internationally.
Aboriginal Initiatives
Business and Leadership
Computer Training
Engineering Technologies
Environmental Management
Information Technology
Project Management
Telecommunications
Trades
Call today
780.471.6248 | nait.ca/cit
000OM-NAIT-FP.indd 1 2014-03-19 3:26 PM
Stephen Kushner
PRESIDENT
MERIT CONTRACTORS ASSOCIATION
On behalf of Merit Contractors Association,
welcome to the 22nd edition of Open Mind
magazine.
Open Mind is dedicated to exploring
the issues faced by the open shop
construction industry in Alberta and
across the nation and, once again we
are pleased to focus on key issues and
challenges facing our industry.
In this issue we shine the light on key
public policy issues relating to ensuring
open access of any public infrastructure
projects to any qualied contractor, union
or non-union in the article titled The
$500,000 Toilet.
We also discuss the differences in
policy between the Government of Alberta and the Wildrose Party.
In Perspectives on Infrastructure, we evaluate infrastructure
expenditures and the respective Party policy positions for three years.
On the topic of political promises in Mixed Results we examine the PC
government two years into their four-year mandate and identify areas
where they have fullled their promises and areas where they have not.
We examine in Coaches Corner the role of a good executive coach
in construction. We also examine the legal issue of employee versus
independent contractor and the tests used by entities like CRA, the
Labour Board and Courts.
We tackle the role of government regulation in either inhibiting
or facilitating greater use of apprentices on the job in Build Better
Apprentices.
For the fourth year in a row, we recognize the tremendous
achievements of our construction leaders with the Contractor of the Year
Awards. In an industry with little time to acknowledge the innovation
and productivity of these teams that keep our province growing, we
relish the opportunity to congratulate them on a job well done.
We hope you enjoy this 2014 issue of Open Mind, Canadas only
magazine dedicated to the open shop construction industry. As always,
we encourage you to give us feedback and suggestions on future topics.
From all of us at Merit we wish you the best for 2014!
OPENMIND_14_p02-05.indd 5 2014-04-01 3:27 PM
6 OPENMIND SPRING 2014
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BY SUZANNE PESCOD
he year 2013 was record
breaking for the Merit Hour Bank
program. Merit Member employees
worked more than 100 million hours,
a significant indicator of Merits tremen-
dous growth, not only over the past year,
but since its inception.
A good benefit package is one of your
best tools to attract and retain the best
employees. As shown in many surveys, a
benefit package is an
essential component of
preferred employment.
But the construc-
ti on i ndustry has a
diversity not seen in
many other industries.
Project based, seasonally affected, and skills
driven, many components of the industry
mean you cant package just any benefit
program into something that meets the
needs of employers and employees.
In Western Canada, open shop contrac-
tors make up nearly 80 per cent of the work
underway in the construction markets. As
you venture east across the country, the
numbers rise only marginally for the build-
ing trade unions, but economic factors
have put open shop contractors in a pre-
ferred market, as they have a much better
ability to provide their clients with the most
cost-effective product. This relationship
and the strength of a competitive market
are great for economics, but when we talk
Why the Merit benet plan has
seen signicant growth over
the past 20 years
T
BOOM
Merit Hour Bank plan participants
know that they and their families
will be taken care of.
about benets, we need to think about the
construction employee.
It is with both the employer and the
employee in mind that Merit provides a
tailor-made benet plan that has yet to be
topped by anything else in the open shop
construction industry.
Merits Hour Bank program is the
only one of its kind in the free enterprise,
non-union environment.
As employees work they build hours in
their Hour Bank account in order to qual-
ify and maintain benefits, in contrast to
stationary industry who use a monthly pre-
mium structure.
To become in-benefit an employee
must first accumulate 300 hours of work
for a Merit company, and then for every
150 hours worked following, the employee
receives a month of benet coverage. If any
employee ever falls below the 150 hours,
they are given a self-pay option in order to
maintain their benets for themselves and
their family.
The per-project need for labour in the
construction industry provides months,
sometimes years of steady work for a
BOOM
skilled construction person, but once the
project is completed, many are laid off, or
left to find work on another project with
another company. The Merit Benefit Plan
is portable, and an employee does not lose
their benets, or standing in benet, if they
nd work with another Merit company. The
ability for employees to transfer their ben-
efits to another company is an incredibly
important factor in the success of the Hour
Bank plan.
If an employee is unable to find work
immediately following a downsizing or
layoff, the Hour Bank program provides a
self-payment option to the employee, giv-
ing him up to six months to retain benets
while out of work.
Imagine the difference in your quality
of life if you knew that you and your fam-
ily would be OK in the face of job loss. The
peace of mind and ease of transition is one
of the reasons why employees are often
Merits biggest source of referrals as they
transfer from company to company.
The transfer of benets between Merit
companies is also a huge boost to employ-
ers as Merit has seen the search term
Merit Benets become one of the more
popular searches within the industry for
online job-seekers. Companies are now
using the industry recognized Merit Ben-
Benet Boom
efit program as a means to attract new
skilled employees.
The economics of the Merit Benefit
plan and its cost effectiveness are driven by
several factors.
One is that the Merit plan avoids the
costly aspects of dealing with an insurance
broker, who then engages an insurance
company. With the Merit plan there are
no commissions being paid and low fees to
insurance companies as Merits size allows
it to negotiate low rates not offered by any
competitors in the market.
The result is low premiums to
contractors.
The Merit plan comes
with the added bonus of
Mercon admi ni strati on,
which keeps the bulk of the
paperwork and issues of dealing with ben-
ets, out of your ofce. Mercon acts as a
third party administration for members,
the only thing companies have to do is
report their hours, and then Mercon looks
after everything else. Communication
about benets, claims issues, and all ques-
tions about benets are handled through
the Mercon ofce.
Adding to the growth of the benet plan,
Merit recognized a need from members to
develop a plan for their office employees,
so Merit constructed a salaried plan that is
being quickly taken up by member compa-
nies across the country. Although it follows
a different set of guidelines tailored to the
salaried worker, the benet plan is competi-
tive, cost effective and, again, recognized by
the construction industry. Recently Merit adopted a new tagline,
Your People Have People Too. This
sentiment resonates loudly within the
industry. By providing not just medical
and dental coverage, but optional benet
coverage, retiree plans and several free-
of-charge counselling services, employees
know that they and their families will be
taken care of.
In fewer than eight years, the Hour
Bank program has doubled reported hours
worked. With its competitive rates, out-
standing coverage, and increased adoption
across the country throughout the open
shop sector, the Merit Hour Bank plan
continues to grow in recogntion, use, and
value to all of its members.
When we talk about benets,
we need to think about the
construction employee.
YEAR TOTAL
2013 103,774,392
2012 96,729,350
2011 87,908,004
2010 79,583,013
2009 74,140,547
2008 77,595,931
2007 69,743,223
2006 58,264,783
2005 51,931,342
2004 43,693,974
2003 40,670,945
2002 36,126,615
2001 33,033,640
2000 26,644,185
1999 22,617,321
1998 19,474,088
1997 14,990,746
1996 10,843,291
1995 8,232,430
1994 7,332,558
1993 7,244,617
1992 7,188,576
1991 6,585,812
1990 6,729,128
1989 6,341,166
1988 5,713,626
1987 5,045,662
1986 2,158,821
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Since 1993 Imagewear has been supplying
more Canadian companies with their branded apparel,
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$500,000
TOILET
THE
BY TERRANCE OAKEY
Guaranteeing work to unions is inating
the cost of public projects, so why is
this happening?
his past year, Merit Canada focused its efforts to bring a truly
open and transparent tendering system to the construction
industry at the federal level and in Ontario and Manitoba at
the provincial level. Merit Canada launched a new website
to bring attention to the issue (opportunitytowork.ca) and ran ads in a
number of publications, and those outreach efforts are starting to pay off.
At the federal level, the House of Commons Transport Committee
launched an important study called How Competition Can Make
Infrastructure Dollars Go Further and held hearings from April to June. On
behalf of members across the country, Merit Canada appeared before
the Committee and brought other stakeholders together to advance
this important issue. The move was timely, coming during continued
fiscal challenges at all levels of government coupled with crumbling
infrastructure in many jurisdictions.
T
construction workers in Canada are excluded from employ-
ment on these projects because they do not belong to a union.
To make things even less competitive, specic unions have privi-
leged access to these contracts over other unions, thereby fur-
ther limiting competition.
It does not take a degree in economics to know what hap-
pens when 70 per cent of any industry is barred from compet-
ing. Quality goes down and costs go up. A study conducted by
the City of Montreal found closed tendering inflated project
costs anywhere from 30 to 85 per cent.
As we argued before the Transport Committee, it is time
for Ottawa to take a leadership role and ensure projects that
use any federal funds be tendered openly. This policy should
be included in all infrastructure agreements and apply to all
Crown corporations and any other federal mechanisms used to
fund infrastructure.
However, the debate around open tendering is not only tak-
ing place at the federal level. For example, the restrictive poli-
cies of the City of Toronto have come under scrutiny in recent
months. The city continues to have laws on the books that
restrict open tendering of projects, including an ofcial fair wage
policy that requires all bidders to meet the specied conditions
for salary and benets. This policy restricts competition since it
blocks some companies from even bidding, while making sure
that the costs for all bidders are raised to those of union-only
shops, thus raising costs for taxpayers.
Toronto is also bound by decades-old certifications with
unions representing electricians, carpenters, plumbers, brick-
layers, painters, glaziers, sheet metal workers, asbestos workers
and ironworkers in the industrial, commercial and institutional
sector. In addition, the Toronto Transit Commission (TTC)
engages in a voluntary closed tendering process, requiring bid-
ders to have membership in the building trades council.
All this incurs a major cost to the taxpaying public. Dur-
ing the 2010 municipal election, Rob Ford said the city would
save $80 million a year $320 million in his rst term as mayor
by scrapping the citys fair wage policy. According to a Cardus
study, construction projects in the city worth approximately
$591,000,000 were subject to restrictions due to construction
labour monopolies and Toronto Councillor Karen Stintz has
put the price of restrictive union rules at $100 million a year.
Another key development in this ght around open tender-
ing is taking place in Ontario where the provincial Conservatives
have proposed a policy that would x the situation in Toronto.
The Conservatives have recognized the harm that union-only
tendering has brought to that province and have committed to
abolish the practice of closed tendering across Ontarios munic-
ipal and broader public sector. The party is currently the ofcial
Opposition in Ontario with an election expected in the spring of
2014. If the Conservatives are elected, this could lead to Ontario
being the first province in Canada to legislate open tendering
provisions in public sector infrastructure contracting.
Open tendering is about fairness for taxpayers. Govern-
ments have an obligation to use their money efficiently. Real
competition ensures that infrastructure dollars go further.
Moreover, companies that pay federal taxes should not be
Since then, Merit Canadas public engagement has continued to
draw attention to outrageous examples of what happens when com-
petitive bidding is not allowed. Consider the lowest bid to build a sim-
ple brick public washroom in Kitchener: $564,744. This is 40 per cent
higher than budgeted and a whopping 150 per cent more than the
average cost to build a house in Kitchener.
There are other examples from the hall of shame in the area. Con-
sider that the City of Waterloo was forced to appeal to the Ontario
Labour Board in its effort to open a public tender for a $140 million
sewage treatment plant to 27 contractors, rather than just two.
There are many more examples like these across Canada, where too
many jurisdictions continue to practice closed tendering, in which spe-
cic unionized contractors afliated with the building trades unions
are given privileged access to public sector contracts. This arcane and
indefensible practice means that right off the top, seven out of 10
Rob Ford said the city would save
$80 million a year $320 million
in his rst term as mayor by
scrapping the fair wage policy.
The $500,000 Toilet
precluded from bidding on public contracts paid for with their
tax dollars simply because they do not belong to the right union.
The open tendering ght is also taking place in Manitoba,
though in this case it is more focused on the rights of workers.
Merit Canada has partnered with its provincial afliate to launch
a court action against Manitoba Hydro over the so-called Mani-
toba Hydro scheme. The scheme requires all contractors who
obtain work on certain large-scale Manitoba Hydro projects to
agree as a condition of obtaining the work that their employees
working on the project will become union members, pay union
dues and be covered by a collective agreement. A similar scheme
has been put in place for work on the Manitoba oodway.
Merit Manitobas challenge of both schemes is based on two
principle arguments from the Canadian Charter of Rights and
Freedoms. The rst is that the requirement to join a designated
trade union in order to work on the project and/or remit dues to
that union, whether or not the employee wishes to be a member
of that union or any other, violates the affected employees free-
dom of association, which is protected by s. 2(d) of the Charter.
The second argument is that, having been compelled to join
a union and/or remit dues to the union in order to work on the
project, the employees freedom of expression, which is pro-
tected by s. 2(b) of the Charter, is violated by the unions public
expressions of support for political parties or policies that the
employees do not support.
These breaches of employees freedom of association and
expression are not justied in a free and democratic society as
required by s. 1 of the Charter. This Charter violation is nowhere
more apparent than where unions are participating in the polit-
ical process, and are using union dues for political or other
purposes outside of representation of workers in collective bar-
gaining or contract administration.
These battles continue in 2014 and Merit Canada will hap-
pily take them on because the issues at hand deal with funda-
mental rights for workers and fairness for taxpayers. It is time
for governments to abolish these policies. If not, they will be
forced to publicly defend them to taxpayers.
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hen comparing the Government
of Alberta capital plan with the
capital plan proposed by the of-
cial Opposition Wildrose Party,
there are some similarities and some very
key differences. But we should take care that
we are comparing apples to apples when we
compare the two plans.
The governments capital plan, which
it presented as part of Budget 2013, is a
three-year plan that ends in 2016, while the
Wildrose plan lays out that partys prior-
ities for a 10-year period. For comparison
purposes, this analysis will compare the
governments three-year plan with the first
three years of the Wildrose plan.
For the period 2013-2016, the Government
of Alberta plans to invest an average of
$5 billion per year: $5.209 billion in 2013-14;
$5.172 billion in 2014-15; and $4.660 billion
in 2015-16, for a total of $15.041 billion over
three years. In comparison, the Wildrose
plan proposes an average annual invest-
ment of almost $4.3 billion per
year: $4.121 billion in 2013-14;
$4.282 billion in 2014-15; and
$4.449 billion in 2015-16, for
a total of $12.852 billion over
three years.
The key differences between
the plans are in categories
rel ated to i nvestments i n
resource stewardship, post-sec-
ondary institutions and overall
W
INFRASTRUCTURE
BY PETER PILARSKI
How does the Alberta Progressive
Conservative governments capital
plan stack up against the one
proposed by the Wildrose
ofcial Opposition?
Perspectives On
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000OM-RBC-FP.indd 1 2014-03-27 10:38 AM
maintenance. Specifically, the govern-
ment plans to invest approximately $1
billion in a number of energy-related
projects, including $585 million towards
the Shell Quest and the Alberta Trunk
Line Carbon Capture and Storage projects
and a number of smaller projects through
the Climate Change and Emissions
Management Fund.
According to the Alberta govern-
ments Capital Plan, these funds are
used to work on cleaner production of
traditional forms of energy, reducing
greenhouse gas emissions from agri-
culture, forestry, municipal wastes, and
enhancing biological sequestration.
The governments plan also includes
$36 million in 2013-14 to conclude
the Canada eco-Trust initiative. On
these items, the Wildrose plan states
that, whether its carbon capture and
storage, or fancy new MLA offices,
this government blows hundreds of
millions each year on pet projects and
corporate welfare grants disguised as
capital spending.
Another difference between
the two plans is the fact that the
Alberta governments plan specif-
ically mentions a $1.2-billion
commitment to support and
maintain aging schools and
post secondary facilities, roads,
health facilities, water infra-
structure and provincial parks.
Maintenance is an important
component of any capital plan
and, while the Wildrose plan
does not specically set aside
money for maintenance, we
should assume that it would have
to spend money to keep the prov-
inces infrastructure up to date.
As such, the provinces ongoing,
day-to-day maintenance needs
would impact the infrastruc-
ture spending the Wildrose plan
would have to undertake.
The governments Capital Plan
also sets aside $282 million for new
post-secondary facilities at NAIT,
NorQuest College, University of
Calgary, Lethbridge College, and
Mount Royal University. The
THE KEY DIFFERENCES
BETWEEN THE PLANS ARE
RELATED TO INVESTMENTS IN
RESOURCE STEWARDSHIP, POST-
SECONDARY INSTITUTIONS AND
OVERALL MAINTENANCE.
Perspectives on Infrastructure
/
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www.journalofcommerce.com
Weve
had Alberta
covered
since1911
Available in print and digital formats
INDUSTRY NEWS PROJECT LEADS ECONOMIC FORECASTING
101 - 4299 Canada Way, Burnaby, BC V5G 1H3
T +1(888) 878-2121 F +1 (604) 433-9549
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C452-13
Wildrose plan does not mention specific
spending for post-secondary infrastructure.
The Alberta governments plan specif-
ically mentions funding for affordable
housing, improvements to the Alberta First
Responder Radio Communication
System, an Affordable Supportive
Living Initiative and the Alberta
Electronic Health Record.
The government s pl anned
investment into post-secondary
infrastructure and these other initi-
atives is $838 million. The Wildrose
plan has a section called govern-
ment and other capital with $1.13
billion earmarked and its likely that this
fund would be used to pay for these types
of initiatives. The $300-million difference
between the governments amount for
these initiatives and the amount set aside
in the Wildrose plan could also be used to
help fund infrastructure maintenance.
The Wildrose plan contains several
ideas and concepts that do not appear in
the governments plan, such as publishing
an infrastructure priority list for four key
areas: provincial transportation network;
schools; health care and equipment; and
other government facilities. It ranks items
on these four priority lists according to
consistency, public disclosure and objec-
tive criteria.
The Wildrose plan takes a different
What do the Progressive Conservative Alberta government and the Wildrose ofcial Opposition have to say about
making capital plans? Here is a side-by-side comparison.*
approach towards municipal funding than
does that of the government. The Wildrose
plan proposes a so-called 10-10 plan for
municipalities, which proposes sending 10
per cent of all provincial tax revenues and
10 per cent of all provincial cash surpluses
to municipalities. The current govern-
ment has funded municipal infrastructure
through the Municipal Sustainability
Initiative and their Capital Plan continues
with that approach.
The Wildrose plan has a section called
innovation, where it offers ideas about
making sure that capital spending in
Alberta takes advantage of the most inno-
vative and creative ways to save money. The
ideas that could have the greatest impact
on the construction industry include:
improving tendering practices to ensure
construction rms arent unfairly gaming
the system; ending the practice of cost-plus
contracts; refraining from making building
announcements until project planning is
well advanced; and allowing developers
to build schools as a feature of their new
neighbourhoods whenever practical, inte-
grating all or part of the cost into the homes
surrounding them.
Perhaps the biggest difference
between the two plans is that the
Wildrose plan would be debt-free,
while the current government
plans to borrow $12.7 billion by
the end of 2015-16 to help nance
the pl an. The government s
pl an al s o ment i ons us e of
public-private partnerships to
finance capital proj ects. The
Wildrose plan does not mention such part-
nerships specifically, but its plan makes
multiple references to being open to new
partnerships, collaborating with devel-
opers and builders and nding innovative
ways build infrastructure.
The similarities in the two plans are in
the amount of funding to K-12 education
(the government earmarks $1.4 billion;
Wildrose promises $1.014 billion), overall
funding for municipalities (government
$5.8 billion; Wildrose $5.7 billion) and
health care infrastructure (government
$2.1 billion; Wildrose $1.99 billion).
Additionally, the Alberta government
plans to invest $3.4 billion into the provin-
cial highway network, while the Wildrose
commits $2.8 billion.
Note: Total capital investment does not perfectly correlate to average annual spending numbers below because the
governments Capital Plan is presented on a scal year rather than a calendar year and rounding errors.
Provincial
Highway
Network
Municipal
Funding
K-12
Education
Health Care Government
and other
Capital
Post-
Secondary
Maintenance Resource
Investment
Total Capital
Investment
Government
Capital Plan $3.4 billion $5.8 billion $1.4 billion $556 million $2.1 billion $282 million $1.2 billion $1.2 billion $15.74 billion
Wildrose
Capital Plan $2.8 billion $5.7 billion $1.014 billion $1.99 billion $1.13 billion N/A N/A N/A $12.63 billion
Perspectives on Infrastructure
FOR THE PERIOD 2013-2016,
THE GOVERNMENT OF ALBERTA
PLANS TO INVEST AN AVERAGE
OF $5 BILLION PER YEAR.
A LONGER LOOK
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EMPLOYEE
INDEPENDENT
CONTRACTOR
OR
BY WILLIAM JOHNSTON (LAWYER WITH THE FIRM MCLENNAN ROSS)
There are plenty of people
working hard on your site. You
should know where the potential
pitfalls lie that may blur the line
between employee and contractor
T
he use of independent contractors (or direct service
providers) in business is a means for companies to reduce costs.
However, improperly classifying a worker as an independent
contractor can have serious implications. Regardless of the parties
written agreement or any clear understanding of the intention that
a worker is an independent contractor, courts, Labour Tribunals and
the Canada Revenue Agency cannot be bound. The government will
assess the putative employer to determine his liability for unpaid
taxes, workers compensation premiums or other levies owing in
an employment relationship. The employer may amass penalties if
the essence of the relationship is actually one of employment. The
independent contractor can also potentially be awarded damages
under employment standards legislation or human rights legislation
if the relationship is truly an employment relationship.
There are different definitions of
employee in various pieces of legisla-
tion, some more inclusive than others,
but most tend to follow the common law
test of employment, where ve consid-
erations are of pri-
mary importance:
control, ownership
of tools, chance of
profit/risk of loss,
integration of serv-
i ces i nto payor s
operations, and fre-
quency of payment
under cont r act .
Other factors will
also receive consid-
eration, particularly
the type of services under contract, and
the overall circumstances. There is no
exhaustive list of relevant indicators, and
we consider each case in context.
Control is perhaps the most important
consideration of all. The ability to delegate
tasks on an ongoing basis and to circum-
scribe the manner and hours in which
the work is to be completed are typically
essential in an employment relationship.
In making these demands, the payor will
typically also impact the persons abil-
ity to make a profit, since he isnt free to
innovate, or increase productivity. For the
payor to achieve control, the contractor
requires direct and ongoing supervision,
which is not usually indicative of an inde-
pendent enterprise and therefore points to
an employment relationship. In the lists of
factors set out above, it is easy to perceive
control as a common element throughout.
In addition to the above factors, it is
also noteworthy to consider the nancial
dependence of the independent contrac-
tor, particularly in lawsuits against the
payor company for wrongful dismissal
and for matters relating to unpaid tax
remittances and unemployment benets.
Courts are sympathetic to independent
contractors terminated after a long his-
tory of service and whose livelihood has
become dependent on the parties business
relationship. These people typically pro-
vide the overwhelming majority of their
services to the other party. The loss of the
contract without warning has profound
implications to the contractors economic
Independent Contractor or Employee
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trust and condence in our dynamic team!
Determining if a worker is an
employee or an independent
contractor is not about
whether he is performing
services as his own business.
Companies must be aware that in pursu-
ing this type of business relationship with
a contractor they may not achieve the arms-
length relationship intended and could be
liable just as though the independent con-
tractor were actually an employee.
What are the factors that inform
whether an ostensible arms-length
independent contractor is actually an
employee, despite to the intentions of the
parties? The answer should drive home the
implications of improperly designating a
worker as an independent contractor.
FACTORS INFORMING THE NATURE OF
THE PARTIES RELATIONSHIP
The tests labour tribunals rely on, in tax
court and in regular court, are all very
similar although there may be a different
emphasis on the various factors, depending
on which type of issue is under review.
The intention of the parties is important
but is absolutely not determinative. Beyond
the intention of the parties, adjudicators
look at other factors to discern the essence of
the relationship. Context is extremely impor-
tant as different types of independent con-
tractors will necessarily present features of an
employment relationship due to the nature
of the work. No one factor is decisive, and
each factor may have a different importance
in the assessment depending on the type of
services under contract and the forum in
which the question is being decided.
well-being. If successful in their action,
courts will assess damages for the period of
reasonable notice which should have been
given in a similar fashion to regular cases
of wrongful dismissal of an employee.
IMPLICATIONS OF A DEEMED
EMPLOYER DESIGNATION
Independent contractors in a deemed
employment relationship can sue for
damages when the contract is terminated
without reasonable notice. You might
think that a termination provision in the
contract saves the day but termination
provisions that are less than required by
the relevant employment standards legis-
lation will be void. The payor can also be
liable for unpaid overtime, vacation pay,
holiday pay and other benefits provided
under employment standards legislation.
Claims may proceed either in court or in
an employment standards tribunal. If suc-
cessful, damages for the employer who is
improperly holding wages and benefits,
as well as damages for failing to provide
reasonable notice prior to termination,
will be awarded to the independent con-
tractor. Though uncommon, if the man-
ner in which the contract was terminated
was egregiously wrong or careless, and the
independent contractor suffers emotional
harm, the court may also award damages
over and above the typical damages for
wrongful termination.
The payor may be liable to the inde-
pendent contractor under human rights
legislation with the potential for damages.
An independent contractor whom the
court or tribunal deems an employee might
claim that the payor discriminated against
them on the basis of a protected ground,
such as denying maternity and paren-
tal leave, discriminating on the basis of
family status, or failing to accommodate
disabilities.
Another unexpected consequence for
employers is that labour boards may be
prepared to accept applications for union
certifications that include signatures of
dependent contractors and may certify bar-
gaining units that include these people.
A ruling in any court or tribunal that
decides this type of issue is not binding
on any other. These decisions are made by
reference to the purpose of the legislation
or right that will be affected. Therefore,
General Contracting
Project Management
Butler Building Systems
Design/Build Contracting
Elan Construction Limited
#100, 3639 - 27th Street N.E.
Calgary, AB T1Y 5E4
Tel: (403) 291-1165
Fax: (403) 291-5396
www.elanconstruction.com
elan
even if a court or tribunal decides that a
dependent contractor is not an employee
for one purpose the possibility remains
that the same person will be an employee
for a different purpose.
INDEPENDENT CONTRACTOR FROM THE
CRA PERSPECTIVE
The distinction between classifying a per-
son as an employee rather than an inde-
pendent contractor for income tax, the
Canada Pension Plan (CPP), Employment
Insurance (EI), and Goods and Services Tax
(GST) purposes is crucial for determining:
Income tax withholding obligations
of the payor. Employers are responsi-
ble for making proper income tax with-
holdings from payments of employment
income to employees; no such require-
ment exists for payments to contractors.
Contri buti ons and premi ums
required in respect of CPP and EI.
Employers are required to make appro-
priate EI and CPP contributions and
wi thhol di ngs from an empl oyee s
income, again, something not required
with regard to payments to contractors.
Deductions for the recipient in com-
puting taxable income for a taxation
year. Contractor businesses (with the
exception of personal service businesses
addressed below) may deduct numerous
expenses used for the purpose of earn-
ing income, while employees have only
restricted deductions available to them.
Whether services provided by the
recipient are subject to GST. A contrac-
tors services will likely be considered a
taxable supply subject to GST, while an
employee is obviously not required to
charge and collect GST.
The test to determine whether a
worker is an employee or an independent
contractor is whether or not the person is
performing the services as his own busi-
ness, on his own account. We base this
question on a two-step process of inquiry:
first, by looking at the subjective intent
of the parties; second, by looking at the
reality of how the work is being accom-
plished to see whether the objective real-
ity matches the parties subjective intent.
The objective reality considers all rele-
vant circumstances focusing on the same
factors as above. Even if the parties believe
they have not created an employment
relationship, if the circumstances do not
support that conclusion, the CRA and the
courts may still nd that an employment
relationship in fact exists. The unfortu-
nate outcome for the payor/employer is
that they can be liable to pay unpaid remit-
tances for income tax, CPP and EI.
TRAP FOR THE UNWARY: PERSONAL
SERVICE BUSINESSES
Given the added responsibilities, both
under employment law and tax law, a
payor wishing to avoid being an employer
may choose to hire workers as independ-
ent contractors as opposed to employees.
One of the ways employers will help push
workers into the contractor classication
is by only paying corporations.
Paying only corporations reduces the
risk (from the payors perspective) that
the CRA will consider the payor to be an
employer. Workers often believe being
paid through a corporation they own and
control is a good idea, as there are numer-
ous deductions and tax planning options
available to a Canadian small business
corporation engaged in an active business.
However, both parties should be cautious.
Under subsection 125(7) of the ITA, in cir-
cumstances where a worker would reason-
ably be regarded as an employee, but for
the existence of their corporation, the CRA
could conclude the workers corporation is
a personal service business.
Importantly, as the personal service
business classication is an anti-avoidance
provision, the Tax Court has indicated that
the intention of the parties is not relevant
to determining whether the corporation
is a personal service business, even though
intention is relevant in determining whether
a worker is an employee in other
parts of the ITA, the CPPA, the
EIA, and the ETA.
Personal service busi-
nesses are taxed at a higher
rate and deni ed many
deductions. While these
corporations can take tax
planning steps to limit
the impact of being clas-
sified as a personal ser-
vice business, at best the
worker will end up being
taxed similarly to an
employee. If he doesnt
take proper planning
steps, the worker and
his corporation may
end up paying significantly
more taxes than he would if
he had had simply been an
employee. As a result, it is better
for the worker to be classified
as an employee than a personal
service business. While the direct
risk of being found to be a per-
sonal service business is largely
borne by the worker, there may
be business reasons and overall
liability reasons why a payor may
prefer not to place this risk on
their workers.
Resist the temptation to
treat employees as
contractors. You
should only do
so when i t i s
clear that there
is a good argument
that they are trul y
independent contractors.
Independent Contractor or Employee
The unfortunate outcome
for the payor/employer is
that they can be liable to
pay unpaid remittances for
income tax, CPP and EI.
YOUR PEOPLE
HAVE PEOPLE TOO
CONSTRUCTI ON BENEFI TS | SERVI CES | TRAI NI NG
www. meri t al bert a. com
000OM-MeritContractors-FP.indd 1 2014-03-25 7:53 AM OPENMIND_14_p20-25.indd 24 2014-04-01 3:39 PM
YOUR PEOPLE
HAVE PEOPLE TOO
CONSTRUCTI ON BENEFI TS | SERVI CES | TRAI NI NG
www. meri t al bert a. com
000OM-MeritContractors-FP.indd 1 2014-03-25 7:53 AM OPENMIND_14_p20-25.indd 25 2014-04-01 3:39 PM
I
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A how-to approach to nd the right
person and establish a relationship
that could change your career
BY MICHELLE LINDSTROM
A
n executive coach has a relationship with a company leader
much like a sports coach does with an athlete. The sports
coach pushes the athlete to improve habits, endurance,
knowledge and ability to be better at his or her sport. But
the coach cant do the work for the athlete.
FMI Corporation, one of many business-coaching options out
there, purposely uses player-to-coach relationship principles when
working with executives in the construction industry. Jake Appelman,
a principal at FMI, says the fundamental purpose of executive
coaching is to help business leaders get better results via a customized,
coach-to-coached relationship.
Most executive coaching relationships
start with the two parties creating a
goal-focused plan that notes specic items
the executive wants to improve upon with
the coachs help. Its a plan both can refer
back to along the journey, which typically
lasts six months to a year.
Appelman says for FMI, the coachs
rst conversation with
a client establishes the
criteria for success,
which breaks down
how many meetings
the two will have, who
will contact whom
and confidentiality
ground rules. Some company owners
will sponsor coaching sessions for one of
their executives and request to hear the
details and plan of what the pair covers
each session. The coach makes certain how
much detail the coached person is willing
to share, and with whom.
From there, we build our coaching
plan, which is a critical document that
shows how were going to measure success
at the end of it all, Appelman says.
Executive coaching is a foreign concept
to many company leaders and therefore,
few purposely seek out such assistance.
Appelman says much of the coaching
business FMI gets is from referrals, but it
stems from the consulting work FMI does
for overall organizational improvement.
Consulting typically involves a compre-
hensive analysis of a company, followed
by a full report with recommendations of
areas on which to improve. Consultants
would typically leave it to the company
to implement the items in the report
afterwards, Appelman explains. If were
working with a company around its
succession plan, ownership transfer or
leader development in general, well bring
in executive coaching as a way to accelerate
that process and to drive individual change
or help it change an organization.
Not all coaches take FMIs two-pronged
approach, but Appelman says that guiding
an entire organization, in addition
to one-on-one leadership training,
tackles a challenge organizations tend
to face during phases of change and
improvement.
If you just do the individual executive
Coaches Corner
work, the executive goes back in and no one
else has changed, he says. Its the same
culture with people who arent supportive
and dont give feedback so the coachee
[coached person] is trying out all this new,
great stuff he learned with his coach but
the environment just rejects it.
Exective coaching is not therapy,
stresses Dr. Marvin Washington, an
associate professor for the Alberta School
of Business at the University of Alberta who
also coaches a few executives each year. The
relationship with a coach is meant to be a
safe platform to talk about the challenges
an organizational leader faces, he says. It
is also to guide the conversations, keeping
the executive focused on his or her profes-
sional goals.
This type of coaching is geared to the top
two or three levels of a company because,
the higher up in an organization you go,
the fewer people there are who have gone
where youve gone and who have a sense of
what youre going through, Washington
says. This means you have people looking
outside of the organization to get that sort
of mentoring, coaching and development.
Knowi ng when to seek out that
outside advice may not be as obvious as
some would think. Washington says the
right time should be at the middle-point
between a companys roller coaster ride
of crisis and growth. When youre in
crisis, your first job is to solve the crisis,
Washington says of company executives.
If youre in a rapid growth phase, youre
probably just trying to manage the
growth. Between
those two extremes,
execut i ves woul d
benefit from setting
aside some time to
invest in themselves.
The real value of
executive coaching
is that its designed to work for very busy
executives, Appelman says. Instead of
saying, Were going to send you off for
a four-day program and pull you out of
operations and executive leadership for
four days, we integrate it into their daily
routine. Most of them can spare an hour
for a phone call every two or three weeks.
With each check-in phone call, the
coach and executive refer to the initial
coaching plan and confirm things are on
track. A coach may check if an executive
had that planned tough conversation with
an employee to see how it went. Also, a
coach may suggest a book to read or listen
to that pertains to the executives current
situation, and may ask for feedback at the
next scheduled call. When company leaders
have a specic request, such as guidance on
how to better develop talent for the orga-
nization, Appelman has asked executives to
Executive coaching starts with two parties
creating a goal-focused plan around areas
the executive wants to improve.
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find you a cheerleader, he says, adding
that a good coach will have relationships
with other ones to be able to refer clients
appropriately.
He jokes that to determine if a rela-
tionship will work for him and a client,
its a three-date thing. He doesnt count
the first meeting as one of the dates
because it is just for coffee and its free.
If theres enough of a match after that
to go further, then they meet two more
times to discuss the goals and overall plan.
The third date is to nalize a few things and
ensure both parties feel this will be a good
use of their time. If they dont, both can walk
away and no harm is done.
It s an i nti mate rel ati onshi p,
Washington says. I dont want to waste
your time, but I also dont want to waste
keep a journal, noting at the end of each day
the success, failure, and general progress of
an initiative.
The regularly scheduled check-in calls
also present an opportunity for the people
being coached to provide feedback about the
relationship. If they arent getting what they
expected, then they need to speak up early
on and be clear about what they really want
and need. This way the coach can adjust his
or her guidance.
Appelman says a good executive coach
has no ego and remains committed to
the executives success. He also cites other
attributes a coach
should have: great
listening skills to
provide guidance,
n o t a n s w e r s ;
flexibility to the
days concerns of
an executive, which
can compl et el y
change the focus of a check-in call; and
candor because the hi gher up i n an
organization an executive goes, the less
direct feedback he or she will receive
from colleagues.
I would say that the executives should
be prepared for anywhere from four to ve
hours of homework in between check-in
calls to really make it work, Appelman says.
Hes wary of anyone who requests coaching
but then hesitates with the mention of the
effort that both parties have to contribute
to this type of relationship. His company
has walked away from engagements
with potential clients who were not
committed enough.
The coachee really has to be willing to
learn, do the work and show up literally
for the calls and not skip them. He must be
committed to the process, Appelman says.
For that reason, we usually recommend the
ideal coachee to be someone who is already a
high-performer.
From an executives perspective, its
important that he finds the right coach
to motivate him, and sometimes the first
coach isnt the right one. Washington
compares executive coaches to personal
trainers at a gym. If Im a yeller-in-your-
face, and you need somebody to hold
your hand and be a cheerleader, instead
of me trying to become that, let me go
Coaches Corner
Knowing when to seek outside
advice may not be obvious. The
right time should be at the middle-
point between crisis and growth.
my time because I could be doing this with
someone else.
When a good connection is made,
Washington guides executives to structure
their thinking. They have spent years
running from crisis to rapid growth and
back again and lost the ability to think
effectively. We know that when they do
think, good things happen, Washington
says. The hour of structured thinking
time [with a coach] will solve many hours
of problems.
After working his way up through the
company his parents founded, Cory Jodoin
became a co-owner of Jen-Col Construction
Ltd. in 2000. Then last year, he bought his
parents out, becoming the sole owner and
president of the 36-year-old commercial
contracting company in Stony Plain.
The shift from managing to leading
triggered Jodins memories of an attempt to
self-train for an arduous backpacking trip
years ago. He trained alone but didnt pace
himself properly or do the specic exercises
needed to be truly prepared for the trip and
paid for it physically.
At the end of the day, it really boils down
The International Coaching Federation (ICF) is currently
the leading certification body for executive coaches.
Certication levels are based on the number of hours a
person spends coaching and whether he or she has
taken an accredited coaching training program.
See coachfederation.org for more information.
Once you identify a potential coach based on the coachs certication level
or resum, its time to interview him or her with the following questions:
REFERENCES: Can I speak to a couple of people you have coached?
STYLE: What is your coaching approach? How do you get results?
BENCHMARKING: How do you measure results and mark progress?
EXPERIENCE: How many people have you coached? How long have you been
coaching? What level of executives do you coach?
SPECIALIZATION: Do you focus on any particular industry? Do you understand
my business at a day-to-day level? Have you worked in my industry before? (Note:
The U of As Dr. Marvin Washington coaches all industries police, health care,
small-business entrepreneurs and says if the relationship is good, a coach can
provide effective guidance across industries.)
WHERE CAN I GET ONE?
to this, he says, You dont know everything
and, to be truly successful, you need to
surround yourself with the best people to
help you achieve your objective. It doesnt
matter how high up the ladder you are, you
do not know everything and everyone can
learn and grow.
In construction, Jodoin says that when
competitors talk it is never to share industry
insight or to ask for advice. Its just simple
chit chat. So if the solution isnt in-house,
where do you go?
Jen-Col hired FMI to consult the
company through its leadership transition,
which led to Jodoin and two other executives
signing up for about a years-worth of
executive coaching. He liked that FMIs sole
focus is the construction industry, then he
didnt have to spend time explaining what
he does and why.
He wanted coaching because the timing
felt right but also he saw the folly of taking
the same approach to issues over and over
and expecting different results. Coaching
funnels you in the right or different
direction to analyze something or look
at it differently, Jodoin says. When you
become a leader of a company, you change
from doing to leading, and leading
is basically working with your people
and coaching them to achieve the vision
and goals.
He doesn t suggest taki ng the
coaching route if its just another thing
to check off your to-do list. Youre not
going to get what you want out of it,
he says. But if youre really committed
to growing, coaching is a great way of
doing it.
The benef i t s come back t o a
sports analogy. The vast majority of
executives spend 90 per cent of their time
performing and 10 per cent of their time
practising, Appelman says. If you look
at really great performers from an athletic
perspective, they spend the vast majority
of their time preparing to perform.
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Regional Merit organizations are making a splash in their
respective home provinces as they continue to advocate
for a fair open shop approach
All over Canada, Merit Contractors Association is having an effect on the
training, compensation and continuing advocacy for the construction
industry. Their efforts are transforming our industrys landscape.
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Across
NATION
Merit Alberta
This year the Alberta
association has stayed
strong with its com-
mitment to training by
redeveloping and intro-
ducing more updates
t o t he Leader shi p
De v e l opme nt f or
Supervisors course,
focused on harnessing
an employees natural
leadership abilities and providing him or her with the skills
to truly mentor and lead within an organization.
On the public policy front, Merit Alberta has contin-
ued to work to improve construction competitiveness by
participating in an industry stakeholders consultation
led by former Alberta Labour Relations Chair, Andy Sims.
That process has been completed, and the report has been
submitted to the government for review and action. The
association is now engaged in a lobby effort to encourage
the government to amend legislation in such a way that it
improves competitiveness.
Merit Alberta has also taken a lead role on the Alberta
Coalition for Action on Labour Shortages. This group of
industry associations, representing 21 industries across the
country, advocates for changes to immigration laws and
enhancements to the temporary foreign worker program.
For another year in a row Merit Alberta saw growth in
the Merit member employee hours worked under the Hour
Bank program, as well as growth in the number of new
firms participating in the program. The growth allowed
Merit to lower rates and increase coverage for a second year
in a row, putting Merits plan head-and-shoulders above
the rest.
Merit Saskatchewan
Meri t Contractors
Association of Sask-
atchewan celebrated
its 25th Anniversary
in 2013. The associa-
tion has continued to
grow and now provides
services for approxi-
mately 250 members,
with close to 5, 000
employees.
In 2013, Merit Saskatchewan launched an annual
awards program to recognize the achievements of employees
of member companies.
Merit Saskatchewan continues to be very vocal as an
advocate for the open shop construction sector, lobbying
for change to various legislation and regulations pertain-
ing to labour standards, workers compensation, OHS,
and procurement.
Across the Nation
OFFERING THE
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Across the Nation
Merit Manitoba
Mer i t Cont r act or s
Association of Manitoba
continues to expand
its footprint across the
province. The mem-
bership is currently
growing at about 10
per cent annually, and
comprises 235 com-
panies with more than
5,000 employees.
In 2012, a group of construction workers, supported by
Merit Manitoba, led a statement of claim in the Court of
Queens Bench challenging the Manitoba NDP government
policy, and Manitoba Hydro PMAs that put the interest
of trade unions over the charter-protected rights of work-
ers who chose to remain non-unionized. Essentially Does
the Canadian Charter of Rights and Freedoms protect the
rights of open shop or non-unionized workers?
In 2013 the case began to slowly nd its way through the
court with briefs and afdavits led, and preliminary hear-
ings set for 2014.
Merit Manitoba continues to provide a voice for open
shop construction and is very active in providing Gold Seal
Credit Courses and other education and training opportu-
nities to members.
New construction in all sectors has sustained a fairly
high level of activity across Manitoba, which is experienc-
ing a lack of skilled trades. And although Merit is well rep-
resented on trade advisory committees, this situation is
only exacerbated by the fact that the apprenticeship system
has refused to relax apprenticeship ratios that would per-
mit two apprentices to each journeyperson.
Merit Ontario
Under the leadership
of Premier Kathleen
Wynne, the minority
Liberal government,
pr opped up by t he
NDPs, conti nues to
stand in the way of an
equitable and competi-
tive marketplace for con-
struction in Ontario.
In May, 2013, Merit
Ontario stood alongside MPP Michael Harris as he tabled
Bill 73, the Fair and Open Tendering Act, which was
designed to preserve and maintain open bidding for public
infrastructure projects tendered by Ontario municipalities
and school boards. In September, despite overwhelming
support from municipalities, local contractors and tax-
payers throughout the province, the Liberals and the NDP
joined forces and voted against Bill 73. As a result, thou-
sands of contractors who have been unfairly barred from
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and surcharge city list applies. Thrifty features a wide selection of quality vehicles. Registered Trademark
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The Electrical Contractors
Association of Alberta is the voice
and industry information center of
the electrical industry;
a self-governing body working to
ensure a professional membership
through education, safety and
strong stakeholder relationships.
WWW.ECAA.AB.CA
Across the Nation
working on public infrastructure in
the communities where they live, work
and pay taxes continue to have their
rights ignored.
Since its official opening in April
2013, Merit Ontario continues to call
into question the integrity of the Liberal-
backed Ontario College of Trades. Most
recently, MPP Gareld Dunlop has writ-
ten to the attorney general of Ontario
asking for an independent investigation
of the apprentice-to-journeyperson ratio
review completed by a Ontario College
of Trades panel in 2013. The panels
chairman failed to disclose a 20-year
professional relationship with the
International Brotherhood of Electrical
Workers (IBEW) union. The IBEW made
a recommendation to the Ratio Review
Panel that the panel accepted. The out-
come has served as a prime example of
the lack of process and accountability at
the College.
With a provincial election on the
horizon for the spring, issues in con-
struction and labour in Ontario will no
doubt remain at the forefront of politi-
cal debate.
Merit New Brunswick
After mourning the tragic passing of
the highly respected Linwood Hupman,
former executive director of Merit New
Brunswick, and facing the huge void he
left, the Board of Directors decided to
hit the reset button. A new commitment
to improved communication, member-
ship, training and awareness of Merit
NB became the new mandate.
A strategic planning process leads the
way, almost immediately after hiring a
new executive director, Graeme Scaplen.
He brings extensive management, mar-
keting, sales and communication skills
to the association. Completion and deliv-
ery of the new strategic plan (including
its goals and actions) is at the top of his
challenges. Reaching out to our exist-
ing members, and delivering Merits out-
standing success story and Hour Bank
benefits program to all New Brunswick
open shop contractors are my top priori-
ties, Scaplen says.
The premier of New Brunswick has
ofcially announced a provincial manda-
tory health benets program that affects
all employers and employees. Now is the
time for open shop construction contrac-
tors to embrace and secure an affordable
company health benets plan for them-
selves and their employees before the
government mandates their program,
which will not be comparable to Merits
in terms of coverage and cost.
Merit Nova Scotia
Ready to celebrate its 20th anniversary
in 2014, Merit Nova Scotia is proud of
its efforts in 2013, which included suc-
cessfully lobbying for amendments to
Nova Scotias restrictive First Contract
Arbitration law, and making workplace
safety a priority by calling for more safety
oversight and stricter rules on all work-
sites across the province.
The year ahead will provide new train-
ing opportunities for open shop employ-
ers and employees and focus on changing
union-favourable labour legislation that
The Merit Hour Bank benet plan is a
strong differentiator for our members, as they
continue to grow their business in a highly
competitive marketplace.
hurts open shop contractors of all sizes
on any given day.
Merit Newfoundland and Labrador
Members of the Merit Contractors
Association of Newfoundland and
Labrador are experiencing the benefits
of an economic boom in the province.
Construction in all sectors is at an all-
time high, which brings with it a new set
of challenges: recruiting and retaining
qualied people to get the work done.
The cyclical trade demands of the
natural resource mega-projects have put
a strain on open shop contractors that
will continue through to 2017 with the
development of both the Hebron oil
project and the Muskrat Falls hydro-
electric project. The Merit Hour Bank
benet plan is a strong differentiator for
members, as they continue to grow
their business in a highly competitive
marketplace.
Merit has been tireless in its efforts
to reverse the decision to replace secret
ballot voting with automatic card-based
certication when deciding the fate of an
employer to be unionized or not. It has
the ire of the entire business commu-
nity. We are also excited to be working
on the harmonization of apprentice-
ship systems across Atlantic Canada,
and providing input to a new provincial
immigration strategy and workforce
development strategy, says executive
director Paul Dub. This will be a very
busy year.
The Merit Hour Bank benet plan is
a strong differentiator for our mem-
bers, as they continue to grow their
CONGRATULATIONS TO ALL THE FINALISTS AND WINNERS
OF THIS YEARS AWARDS!
Co-Presented by Sponsored by Dessert Sponsor
Alberta Venture, Merit Contractors Association, and the
Alberta Roadbuilders and Heavy Construction Association
extend their thanks to the generous sponsors and to everyone
who attended the Contractor of the Year Awards gala!
THANK YOU
George Pinckney,
Director Business Development
Suite 1250
10303 Jasper Avenue
Edmonton, Alberta
Phone (780) 429-3500
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hat a difference two years make! Or not. In the two years
since the Progressive Conservatives handily snatched their
40-year dynasty back from the jaws of what looked to be
certain defeat in a nail-biter of a provincial election, Albertas
political and economic engines have settled very much into a business-as-
usual rhythm, with the government pursuing the path of least resistance
on most fronts. For the leaders of Albertas open shop construction
sector, this business-as-usual course has been a mixed bag.
While the governments pledge to carry on
the ambitious infrastructure overhaul that
began under Ed Stelmach has seen con-
siderable follow-through, other election
commitments have yet to see any decisive
action. On the labour front in particular,
open shop contractors still eagerly wait for
action on much vaunted promises.
In the two-plus years as premier of
Alberta, Alison Redford was character-
ized by critics from both sides of the polit-
ical spectrum as a flip-flopper on a wide
range of issues, ranging from education
funding to infrastructure borrowing. In
the case of labour code legislation, how-
ever, controversy began even before her
election victory. In early 2012 the PC Party
released its exhaustive election manifesto,
Alberta By Design. It detailed, among many
other things, initiatives aimed at ensuring
greater union transparency and worker
freedom with regards to opting out of
union dues allocated to non-union-related
causes as well as promoting more efcient
labour relations by way of multi-craft col-
lective bargaining units. However, within
a week of election day, Alberta Federation
of Labour President Gil McGowan ques-
tioned the partys true commitment on
these fronts in a contentious interview
with Edmonton radio host Dave Ruther-
ford, in which he insinuated that the PCs
were making counter-promises to labour
leaders behind closed doors.
These allegations, while alarming to
many within the construction industry,
ultimately did not harm the party who,
buoyed in no small part by a string of con-
troversial statements by members of the
Wild Rose Party, came back from behind
to win a majority government on April 23.
But the governments early promises to the
open shop sector have not been forgotten
by the sectors leaders, who are still await-
ing action. Elsewhere, construction leaders
could scarcely be happier with their gov-
ernments performance.
INFRASTRUCTURE
It is somewhat ironic that the area in which
the PC government has garnered the most
consistent approval from construction
leaders is the one area where very few con-
crete campaign promises were made. That
said, former Premier Alison Redford made
clear her commitment to continuing the
Stelmach governments infrastructure
program from the outset. In a pre-election
interview with Open Mind in early 2012,
Redford asserted that her government was
committed to a continuing infrastructure
build that is very similar to what weve seen
W
BY BEN FREELAND
Two years after the election, Albertas
leaders have delivered on some
key campaign commitments.
What about the rest?
tion that you cant stop building infrastruc-
ture, especially in this type of economy. And
the government understands that.
TEMPORARY FOREIGN WORKERS
While the Alberta governments 2012 elec-
tion manifesto made scant mention of
infrastructure, it did reference another area
of concern to the provinces construction
industry, namely temporary foreign work-
ers. The document stated that the party
was committed to working with our fed-
eral counterparts to improve the tempo-
rary foreign worker program. Specically,
the party promised to act to encourage
the federal government to significantly
increase the quota or completely remove
the cap that Alberta is allowed under the
National Immigrant Nominee Program,
while streamlining foreign qualification
recognition across a wide range of skilled
trades in order to expedite the process of
hiring temporary foreign workers.
On this front, the government has real-
ized some progress and more will hope-
fully be forthcoming. A spokesperson for
the Ministry of Jobs, Skills, Training and
Labour said it has made progress in provid-
ing opportunities for some temporary for-
eign workers to apply to stay permanently,
especially when they are working in areas
where we expect shortages to continue.
Moreover, the government contends that
changes to the Alberta Immigrant Nom-
inee Program will help skilled temporary
foreign workers to become permanent
workers. This program is the mechanism
whereby the province nominates people for
permanent residence. Changes to the pro-
gram allow workers in particular trades to
apply for nominations on their own behalf.
And, while the federal government has
yet to make changes to the provinces TFW
cap, the Alberta government has contin-
ued to push for such changes, with then
Human Services Minister Dave Hancock
(current interim Premier) saying he would
like to see the cap either removed or dou-
bled to 10,000.
Even with such changes still pending, the
government gets a solid grade on the tem-
porary foreign worker front. Theres cer-
tainly been progress, says Kushner. Wed
like to see more but were denitely moving
in the right direction.
LABOUR CODE AND CONSTRUCTION
COMPETITIVENESS
Of all the election promises made by the PC
party ahead of the 2012 provincial election,
the section called Amend Albertas Labour
Legislation was the one that attracted the
most attention from Albertas open shop
contractors. Page 30 of the party man-
festo pledged to introduce a Paycheque
Protection, Transparency and Freedom to
Choose act that would make it mandatory
for unions to provide current and prospec-
tive members with a detailed breakdown of
how they spend union dues. (This is simi-
in the past three years, while expressing
her frustration with calls by other parties to
curtail spending on capital projects, which
she alleged would harm the future of the
province and its economy. This commit-
ment to steadily building infrastructure
has remained a hallmark of her premier-
ship, with the premier holding rm to this
commitment, even amid late-2012 calls for
reductions in the face of a $3-billion decit.
On the infrastructure front, the PC gov-
ernment gets top marks from the open
shop sector. Were really happy with the
continuing strong commitment to infra-
structure were seeing from the govern-
ment, says Merit Contractors Association
President Stephen Kushner. Last years
f looding in southern Alberta was a real
litmus test of this commitment, and what
we saw was a government that quickly set
about rebuilding the south, without cancel-
ling other projects. Thats most denitely a
good news story. What the construction
industry needs more than anything is pre-
dictable levels of investment in infrastruc-
ture, without the sort of big swings weve
witnessed in the past. Kushner adds that
Albertas unique economic and demo-
graphic challenges have served as a strong
impetus to the governments commitment
to infrastructure spending.
Theres no question that this trend is
strongly coupled to oil and gas and to the
large-scale migration to the province were
seeing, Kushner says. Theres a recogni-
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Mixed Results
lar to the federal Bill C-377.) It would allow
members to opt out of dues allocated
to causes unrelated to collective bargain-
ing and grievance administration. Addi-
tionally, the party pledged to amend the
provinces labour code with a view to ban-
ning the imposition of nes against union
members for working for non-union or
non-signatory unions; closing the so-called
frivolous lawsuit loophole and enabling
parties to negotiate single collective agree-
ments encompassing multiple trades.
These promises were further empha-
sized in Redfords early 2012 interview
with Open Mind. We need to ensure that
there are structures in place so that mem-
bers can hold associations accountable,
said Redford, in reference to union trans-
parency legislation. And if theres work
that we need to do with respect to that, we
will. She also took a clear stance in favour
of an opt-out option for union members for
non-union-related spending. Union mem-
bers should be permitted to opt out of any
portion of their dues that supports political
advocacy or political parties that they dont
agree with, she asserted. I agree with their
intention of making sure that union mem-
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bers arent made to pay for causes they dont
support but I think theres another way to
do it. And that would be allowing union
members to opt out of that portion of dues
that would go towards political advocacy.
Two years later, the open shop sector is
still waiting for signs of life on this front.
Since the election, the pro-
vincial government has
been silent on the issue of
union disclosure in spite
of polls that demonstrate
public support for such
legislation. Support is even
higher among union members. And the
open shop sector still awaits movement
on previous government pledges aimed
at greater construction competitiveness,
including the closing of loopholes in Alber-
tas existing anti-job targeting legislation.
Kushner argues that, while high oil prices
and a booming economy have reduced the
sense of urgency surrounding these issues,
the province is in no position to dither.
For us theres still a sense of urgency
around competitiveness, he asserts. We
cant simply rely on the high price of oil to
draw projects, because we know a drop in
oil prices is likely at some point in time. As
for job targeting, its a question of fairness
more than anything. Alberta was a leader
in anti-MERFing legislation back in 2008,
and the government has recognized that
there are still holes in this legislation.
MERF is short for market enhancement
recovery funds, which minimize risk for
union shops bidding on contracts.
Open Mind gave the PC government the
opportunity to reiterate its intentions to
uphold these now two-year-old campaign
promises, but the government declined
interview requests. Albertas open shop
leaders still hold out hope for action on this
front. Were not giving the government an
X-mark in this area, but were not giving
them a checkmark either, says Kushner.
To date were giving them an incomplete.
The spring/fall session would be an oppor-
tune time for the government to start fol-
lowing through on these pledges, as theyve
still got two years to go and governments
tend not to do controversial things at the
tail end of their mandate. The Alberta Pro-
gressive Conservatives were really the rst
political party to take these issues on board,
and as such were still hopeful. Its going to
be a question of whether the government
will fulll its promises made to Albertans
in the 2012 election.
RESULTS REVIEW
Incomplete, with improvement needed.
Thats the open shop sectors assessment
of the PC governments performance on
labour code amendments. The Alberta gov-
ernments interim report card indicates nei-
ther honour roll material nor grounds for
a failing grade. But with two years yet to go
in its mandate, there is still time to achieve
accolades.
On the infrastructure front, the
PC government gets top marks
from the open shop sector.
erit Contractors
Association, Alberta
Roadbui l ders and
Heavy Construction
Association (ARHCA)
and Alberta Venture magazine pres-
ent this years Contractor of the Year
Awards. The finalists include those
compani es and i ndi vi dual s who
strive for efficiency, innovation and
practicality. Their successes reect best
practices in the industry. We celebrate
their leadership.
Public and private companies that
have a regional ofce in Alberta are eli-
gible to enter these awards. The orga-
nizations sell construction services,
employ tradespeople, and/or contract
out labour supply in the industrial,
commercial, institutional, residential,
civil, road building or oileld construc-
tion sectors.
The six award categories include:
General Contractor Under $50 Million,
General Contractor Over $50 Million,
Trade Contractor Under $15 Million,
Trade Contractor Over $15 Million,
Heavy Civil, and Construction Person
of the Year.
Keep reading to nd out which com-
panies were chosen by this years adju-
dication panel and why.
GENERAL CONTRACTOR UNDER $50 MILLION
WINNER: Rockwood Custom Homes
CEO Allison Grafton, Calgary
CEO Allison Grafton wanted people in Calgary to start talking about great experiences
in construction. She wanted clients to boast about how well the company, Rockwood
Custom Homes, treated them. With a track record of coming in on or under budget
nearly all the time, people were talking. But Rockwoods commitment to the client goes
deeper than budge adherence.
As the oodwaters of June started to rise, Rockwood started buying mitigation tools,
such as pumps, generators, protective clothing, fans and dehumidiers. Rockwood pre-
pared for the worst, describing it as their responsibility to clients in the area. Despite the
ooding, none of the homes Rockwood had under construction at the time fell behind.
Recently, Rockwood became the builder for two new neighborhood developments. The
company is developing a subsidiary to focus on high-end multi-family developments.
CEO Grafton is condent Rockwood can maintain its focus on quality.
An example of Rockwoods
custom mastery
KEY Players
This Years
BY ALLISON MYGGLAND
The 2013 Contractor of the Year Awards recognize construction
professionals who are building a better tomorrow
GENERAL CONTRACTOR OVER $50 MILLION
WINNER: GCS Energy Services
CEO Greg Schmidt, Red Deer
Greg Schmidt started Gregs Contracting Services Ltd. in Hardisty,
Alberta as a teenager in 1994. The one-man operation has since
grown to include three branches across Alberta and Manitoba
with 400 full-time employees. Schmidts business, now called GCS
Energy Services, specializes in industrial oileld service.
Schmidt credits GCSs 20 years of success to a good manage-
ment team with a focus on safety and mentorship that capitalized
on its in-house bank of expertise, through something called the
Gold Hand Mentorship program. It identies experienced eld
staff to provide insight and assistance to anyone on site, recogniz-
ing that speaking to a supervisor can be intimidating. A peer level
program, it captures eld expertise and spreads the knowledge.
FINALIST: Strike Group Inc.
CEO Stephen Smith, Calgary
Now a decade old and with 1,000 employees, employee-owned
Strike builds on expertise in the western sedimentary basin, spe-
cializing in larger production and process facilities for the energy
industry. A comprehensive incident reporting system gives manage-
ment tools for prevention and identies areas for improvement.
FINALIST: Maverick Oileld Supplies Ltd.
CEO Craig Challis, Calgary
Thirty-five-year-old Maverick specializes in delivering leader-
ship in oil and gas, with the support of its heavy haul division.
An emphasis on safety, an adherence to budget and great skill
development programs have helped grow the companys market
share prots.
FINALIST: Carbon Constructors Inc.
CEO Terry Androsoff, Calgary
Carbon Constructors is a commercial general contractor.
The company works to match the right team to the right project.
It tailors the best approach to achieve performance, quality and
safety, whether the company is working on a church, a historic
building or a waste facility.
FINALIST: Synergy Projects Ltd.,
CEO Dennis Mozak, St. Albert
This employee-owned construction manager and general con-
tractor has the capacity to perform small and large scale work
from its service division and its special projects division. ISO cer-
tied in environmental and quality management, Synergy packs
large-project management capability.
TRADE CONTRACTOR UNDER $15 MILLION
WINNER: Altapro Electric
CEO Bert DeBruin, Edmonton
Owners Bert and Jeanette DeBruin at AltaPro Electric are advo-
cates for creating better business strategies that benet employees
and clients. The DeBruins aim to remove the barriers between the
ofce workers and those in the eld by improving remote access
from the eld. The company recently purchased laptops, printers
and wireless hubs for eld crews, allowing them to access infor-
mation from the ofce from anywhere.
The company has also created Standard Installation Procedures
(SIPs) for equipment AltaPro installs. What previously required
stacks of paper instructions is now accessible with a Dropbox link.
Custom labour tracking software enables workers in the eld to
save a trip to the ofce by submitting time sheets wirelessly. Other
innovations include a peer recognition program developed by
AltaPro employees.
Demolition at its nest by R3
FINALIST: EverLine Coatings & Services
CEO John Evans, Calgary
Clear communication and a focus on the nished product lets
EverLine bring visibility to the business of line painting for park-
ing lots and roadways. With new, longer-lasting products that
reduce volatile organic compounds, EverLine is at the forefront.
FINALIST: Falco Electrical Systems Ltd.
CEO: Miles Gillham, Calgary
With a focus on projects that promote health and tness, such
as the Trico Centre and the Centennial Arena in Calgary, and by
providing employees a gym and shower facilities in the office,
Falco promotes health and wellness to its team of 68 employees.
Greg Schmidt, CEO
GCS Energy Services
Altapro Electric Kearl Lake Substation

TRADE CONTRACTOR OVER $15 MILLION
WINNER: NCSG Crane and Heavy Haul
CEO Ted Redmond, Edmonton
With one of the youngest crane eets in the industry, NCSG is
a prime contender in the crane and heavy haul industry, and
CEO Ted Redmond is looking to grow the company. In the past
year, NCSG acquired companies in such locations as Tumbler
Ridge, Wabasca, and Cold Lake, deepening its expertise in coal,
upstream oil and gas work, heavy oil and wind projects. NCSG
recognizes that aboriginal partnerships are a growing part of the
Canadian economy and it fosters connections with the commu-
nities in which it works.
With dangers inherent to the crane business, training and
apprenticeship programs are integral. Redmond recently
invested in a state-of-the-art crane simulator to provide opera-
tors with experience. And NCSG employs a team of more than
20 people who oversee safety on site and provide company-wide
training and resources.
FINALIST: Epcor Technologies
CEO David Stevens, Edmonton
Epcor has had a hand in electrical work everywhere in Alberta.
Recent projects include streetlight replacements in Lethbridge
and Edmonton and installation of road weather information
stations, which provide information to Albertas new 511 road
report system.
FINALIST: Concept Electric
CEO Dave Kinley, Calgary
Concept Electric runs a full gamut of operations, from commer-
cial and industrial electrical design-build projects to a service
division that provides technical maintenance for building oper-
ations, ranging from energy management and billing to security
services.
Pidherneys equipment at work
HEAVY CIVIL
WINNER: Pidherneys Trucking
CEO Mervyn Pidherney, Rocky Mountain House
Pidherneys Trucking started in 1957, after Mervyn Pidherney
sold his Chevy Bel Air to buy one gravel truck. And then I had
to diversify, he says. Today, Pidherneys Trucking employs more
than 400 people and operates in heavy civil construction, oil-
field construction and remediation, and gravel and concrete.
Pidherney believes strongly in providing the best equipment,
safety and job training. The company also offers a retirement
savings program unusual in an industry where seasonal turn-
over is the norm. We want them around for the long haul,
Pidherney says.
Philanthropy is important, too. In 2013, Pidherney and his
wife Earlyne completed fundraising efforts to upgrade the Red
Deer Curling Centre; the facility was subsequently renamed for
them. Generosity extends across the province. We look after the
wagon races, we look after 4H, and we look after the hospitals.
As with his business, Pidherney describes his philanthropic
work as still in progress.
NCSG Crane and Heavy Haul Hauling a 350,000 pound vessel
on a project site using a 12-line hydraulic platform trailer.
FINALIST: PCL Constructors
CEO Paul Douglas, Calgary
Since 1906, PCL has become one of Canadas top contracting
organizations. Industry insiders know it for in-house employee
training programs and sustainability directives. Waste diversion,
energy reduction and equipment maintenance demonstrate PCLs
commitment to excellence.
FINALIST: Graham Construction
CEO Grant Beck, Calgary
With 1, 300 employees and 13 branches, Graham has suc-
cessfully diversified, winning contracts for large commercial
developments, transportation infrastructure, as wel l as
unusual projects. It recently created a new sh habitat near the
Athabasca River.
This Years Key Players
LES LAROCQUE, President,
Botting & Associates, Calgary
P
H
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O

B
Y
:

C
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R
T
I
S

C
O
M
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A
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Merit, the Alberta Roadbuilders and Heavy Construction
Associ ati on and Al ber ta Venture magazi ne thank the
adjudication panel for assisting with the Contractor of the Year
Awards. This years judges include Bruce Moisey, former partner
of Alberco Construction and a past chairman of the ARHCA,
Carl Knowler, Canadian Western Bank, and Aminah Robinson,
University of Alberta.
CONSTRUCTION PERSON OF THE YEAR: Les LaRocque, President, Botting & Associates, Calgary
Les LaRocque may be a humble, salt-of-the-
earth type of guy, but he is also a tour de force in
his industry. I have a passion for the construction
industry, he says, and Ive watched it grow from
being the secondary choice of individuals looking
for a career to being a primary pathway for people.
In addition to his duties as president of mechan-
ical contractor Botting & Associates, LaRocque
has played an active role in shaping the standards
of the industry and working to advance Albertas
training and apprenticeship program. Fabrizio
Carinelli, president of CANA Construction in
Calgary, emphasized the role LaRocque has
undertaken as an industry leader. The biggest
thing about Les, from the work-side perspective, is
the amount of time that he gives back to the com-
munity with respect to the industry, Carinelli
says. He rattles off LaRocques involvement in
the youth employment program, the registered
apprenticeship program, an education fund with
the Calgary Construction Association and the
Canadian Construction Association. Hes always
looking at what can he do, what can he give back
to make the industry better.
LaRocque says he has always felt that appren-
ticeship opportunities are key for both young
people and the industry, and from 2002 to 2007
he served as part of the Alberta Apprenticeship
and Industry training board. He helped develop
Albertas government structure around appren-
ticeship and worked to ensure there was a balance
between training opportunities for young people
seeking careers in the trades, and industry look-
ing for those young people. He is also a past Chair
of Merit Contractors Association of Alberta
Carinelli says LaRocque also plays an inte-
gral role on several industry-related boards,
where hes not afraid to put up his hand to
contribute to any issue that you might ask him
about, Carinelli says. And hes not afraid to
ask questions.
LaRocque credits his mentor Walter Botting
for his success. He was a huge inuence on me,
LaRocque says. I learned all my business sense
and everything in this industry from him and I
owe him a lot.
Ultimately, for LaRocque, his work is more
than just a job. I think our industry does a lot of
good, it drives the economy, he says. Its a huge
net adder to our provincial economy and our
national economy.
Lets look to successful models that
encourage respect, rather than
legislating a poor solution
anada is experiencing a serious shortage of qualied tradespeople, which
will only get worse in the next decade as we are not training enough appren-
tices to keep up. In fact, according to the International Labour Organization,
Canada had only 30 apprentices per 1,000 employees in 2011, well below
Germany with 39, Australia with 40 and Switzerland with 44. To address this problem,
governments, employers, industry associations and unions have all implemented a
variety of programs, strategies and regulations to get more apprentices into training.
They have experienced varied levels of success.
While some government programs such as tax credits, employment insurance
programs and grants, have provided incentives for workers and employers to utilize the
apprenticeship training system in greater numbers other government regulations have
created disincentives to apprenticeship training. Now, some governments have been
suggesting that mandating a minimum ratio of apprentices on government infrastruc-
ture project sites could be a way to increase the number of apprentices being trained.
Unfortunately, these governments have made this suggestion with no evidence that this
approach will actually increase apprenticeship training numbers.
C
BY PETER PILARSKI
BUILD
BETTER
APPRENTICESHIPS
8303 Roper Road, Edmonton, AB T6E 6S4
Tel: (780) 465-7591 Fax: (780) 469-1821
www.territorial-electric.com
Contact us today to discuss your unique project needs
QUALITY WORKMANSHIP HONEST PRICE
Build Better Apprenticeships
But more regulation might not solve
the problem. Government regulation
of apprenticeship training could be
detrimental to the industry.
According to the 2013-14 World
Economic Forums global competitive-
ness rankings report, amongst the most
problematic factors for doing business
in Canada are insufficient capacity to
innovate, restrictive labour regulations
and an i nade quat e l y e duc at e d
workforce. Some of these issues were
recently studied by the C.D. Howe
Institute, too. Its study, called Access
Denied: the Effects of Apprenticeship Restric-
tions in Skilled Trades found that overall,
strict provincial regulations on the rate
at which firms may hire apprentices,
which is relative to the number of
certified workers they employ, reduce
the number of people who work in a
trade. The study also concluded that
trades in provinces with the strictest
regulations on hiring have lower levels of
young workers.
In other words, if provinces want
more workers in the trades, they should
allow firms to hire more apprentices
and should loosen restrictions on entry
into apprenticeship training and into
the trades.
The C.D. Howe study examined the
impact of journeyperson-apprentice
ratios and found that, among other
things, these ratios reduce the incentive
for a firm to grow: if the firm wishes to
hire additional apprentices, it would rst
have to hire more journeypersons (which
may not exist or be available), thus
increasing the effective cost of labour.
This disincentive to grow is problematic
and can be most harmful to smaller
businesses that do not have multiple
certified journeypersons; this problem
will be exacerbated as the number of
certified journeypersons retiring from
the trades increases substantially over
the coming years. With a growing need
to train more apprentices and an aging
and retiring workforce, apprenticeship
ratios could have a crippling effect on
the industry going forward.
The study found that in trades
in provinces where there is a journey-
person-apprenticeship ratio above one,
there are 44 per cent fewer workers as
a share of the provincial workforce
relative to otherwise comparable trades
for which there is no fixed ratio. The
study further found that ratios above
one result in 38 per cent fewer young
workers those between the ages of 25
to 34 in a trade.
One of the reasons often cited for
high journeyperson-apprenticeship
ratios is that they increase the quality
of training and thus protect consumers
from unqualified tradespersons. The
studys analysis of the data, however,
found no evidence to support these
claims. Further, the report concluded
that, while formal apprenticeship
does impart valuable skills, there is no
evidence that barriers to entry, such as
strict journeyperson-apprentice ratios,
are necessary to increase skills training.
Similar to how restrictive policies
such as journeyperson-apprentice
ratios distort the number of people that
participate in apprenticeship training
and the ability of companies to grow,
potential government policy that
would mandate a minimum number of
apprentices on government infrastruc-
ture projects would create unnecessary
market distortions.
For example, regulating a minimum
number of apprentices on jobs could
mean that smaller rms may not be able
to participate on those jobs, especially if
journeyperson-apprentice ratios make
hiring more apprentices cost prohibitive.
It also means that the most qualified
and experienced firms may not be able
to participate because they dont have
enough apprentices available, or because
their apprentices are working on a
different jobsites. Such a policy could
also create a disincentive for companies
to help their apprentices to become
journeypersons. After all, such a move
would put a company out of line with
its arbitrary contractual obligation to
employ a set number of apprentices
on a job.
Another interesting finding in the
study is that the length of apprentice-
ship training matters. The study found
that, relative to trades with appren-
ticeship terms of less than two years,
employment is 48 per cent higher in
trades with apprenticeship terms of
between two and three years. Trades with
apprenticeship terms of three to four
years have 34 per cent higher employment
than trades with less than two years
of apprentice training. The authors
concluded that lengthier apprentice
programs induce workers to enter a
program, but there are diminishing
returns for the longest programs. This
nding is particularly useful given the fact
that it takes roughly one-third longer to
qualify as a carpenter or welder in Canada
than it does in Germany,
whi ch i s i nternati onal l y
recognized as having one of
the most effective appren-
ticeship systems. There is
value in aligning the length
and structure of apprentice-
ship training in Canada with
countries that are achieving
better outcomes.
We don t ne e d mor e
regulation based on unproven
claims and assumptions in the apprentice-
ship system.
What we need are policies and part-
nerships that get to the root of why
apprenticeship numbers are not as high
as we would like them to be. According to
the Canadian Council of Chief Executives,
resistance to so called blue-collar work
remains much stronger in Canada than
in many other countries, especially in
Europe. This finding is consistent with
a recent Canadian Apprenticeship Forum
research paper called Youth Perceptions
of Careers in the Skilled Trades. The paper
found that, youth did not feel their
parents, guidance counsellors or friends
encouraged them to consider the skilled
trades. It also said, consumers and the
general public do not value the contribu-
tion that tradespeople make to society;
stereotypes exist that prevent women
from pursuing many trades careers; and
negative impressions of the skilled trades
are perpetuated in the media. The C.D.
Howe study comes to a similar conclusion
about the reasons behind the shortfall of
skilled tradespeople in Canada.
So, rather than continuing to pursue
counterproducti ve, protecti oni st
policies such as restrictive journey-
person-apprentice ratios, and rather than
regul ati ng a mi ni mum number of
apprentices on government infrastruc-
ture projects without the evidence to back
such a policys effectiveness, governments
should partner with industry. This
partnership could reveal real solutions
to identied problems mainly, a lack of
appreciation and respect for what have
become some of the best paying, highly
technical and most exciting careers
available in the country.
A CANADIAN APPRENTICESHIP
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Insight congratulates the 2014 Construction Award Nominees & Recipients
000OM-InsightInsurance-FP.indd 1 2014-03-20 9:33 AM OPENMIND_14_p46-50.indd 50 2014-04-01 3:44 PM
Merit
Canada
WORKS FOR
erit Canada continues to move issues forward that are of concern to the
open shop construction sector and, beyond that, people who share our
free-enterprise philosophy. As the federal government considers whats
important for the next two years of its mandate, Merit Canada is focus-
ing on three priorities, which the organization developed in response to a considera-
tion of many examples of agrant waste. (See We Couldnt Make This Stuff Up on the
following page.)
The examples we listed in the sidebar are just a handful from a longer list of
questionable union activity and bizarre outcomes from union-friendly public
policies. The long list could ultimately stretch on for several pages. All of these
examples are linked by a simple underlying fact: existing laws governing labour
organizations have created an environment ripe for abuse, with no accountability to
union members, taxpayers or the general public.
It is time to tilt the balance back in favour of transparency, accountability and respect
for taxpayers, and there are at least three immediate measures the federal government
can implement to make that happen.
M
BY TERRANCE OAKEY
Three federal-level measures that will tilt
the balance back in favour of transparency,
accountability and respect for taxpayers
First, Parliament needs to pass Bill
C-377, which will establish new report-
ing requirements for unions, including
annual nancial statements, the amount
of time spent on political activities and
financial support for
social causes, such as
legal defence funds
for NDP MPs. Cases
of inappropriate or
questionable finan-
cial activity by union
bosses will persist as
along as unions collect over $4 billion
annually in forced contributions, and as
long as they have no obligation to report
how that money is spent to their mem-
bers or the public even though they
receive $400 million in tax breaks annu-
ally. How can there ever be accountability
without transparency?
It is stories like those coming out of Que-
becs Charbonneau Commission about
inappropriate expenses and links between
organized crime and union bosses that
led countries like the U.S., Britain, France
and Australia to implement union trans-
parency legislation. Canadas peers have
had legislation in place for years decades
even in some cases. Continued opposition
to Bill C-377 after these latest revelations
is confounding and troubling and ulti-
mately raises more questions about what
may really be going on behind the scenes.
The current system is ripe
for abuse both from union
organizers and employers.
Merit Works For Canada
WE COULDNT MAKE
THIS STUFF UP
Merit Canada chose to adopt its
three federal-level policies in a
consideration of the following and
other similar events taking place
in Canada.
A former union executive told
the Charbonneau Commission that
Quebecs largest labour union was
controlled by high-ranking mem-
bers of the Maa and Hells Angels.
Union bosses in Quebec helped
rebuild a biker strip club that had
burned down, and included a
$1 million investment from a
union-controlled fund.
A union boss allegedly led
more than $125,000 in fraudulent
expenses over a six-month period.
The lowest bid to build a simple
brick public washroom in Kitchener,
Ontario came in at $564,744, which
is 40 per cent more than budget-
ed and more than 150 per cent in
excess of the average cost to build
a house in the city including the
cost of the lot.
The City of Waterloo was forced
to appeal to the Ontario Labour
Board in its effort to open a public
tender for a $140-million sewage
treatment plant to 27 contractors
rather than only two.
Rank-and-le members from at
least 17 unions contributing thou-
sands of dollars to a legal fund for
NDP MP Pat Martin to defend him-
self in a defamation suit that had
nothing to do with labour issues.
Second, to address the issues highlighted
by the Kitchener and Waterloo examples
mentioned at the outset, it is time to end
the privileged access to public sector
contracts enjoyed by unions in many
parts of the country, known as closed
tendering. Under this system, bidding
on public sector projects is restricted to
specic unionized contractors afliated
with the building trades unions.
This arcane and indefensible practice
means that right off the top seven out
of 10 construction workers in Canada
are excluded from employment on these
projects because they do not belong to a
union. To make things even less competi-
tive, specific unions also have privileged
access to these contracts over other unions,
further limiting fair competition.
It does not take a degree in economics
to know what happens when 70 per cent
of any industry is barred from compet-
ing. Quality goes down and costs go up.
The example of the half-million-dol-
lar bathroom in Kitchener is just one
of many. A study conducted by the City
of Montreal found closed tendering
inated project costs anywhere from 30
per cent to 85 per cent.
Ottawa should take a leadership role
Finally, the third area in need of reform
surrounds union voting. It is time to bring
basic democratic practices to unions and
guarantee federal workers a secret ballot vote
when deciding to join a union. The current
system is ripe for abuse both from union
organizers and employers. A secret ballot
is the best way to ensure that a decision to
join a union is conducted in a fair manner,
without any threat of intimidation or offer
of reward for voting one way or another.
Such a system will help ensure that
an employees decision to join a union is
based on sound personal reection not
fear of reprisal. In addition, if unions were
also forced to operate in a more trans-
parent manner, as outlined in Bill C-377,
potential members could better under-
stand the priorities of the organization
they are being asked to join.
These three policy changes extend the
principles of transparency and accountabil-
ity which are the underpinning of all our
democratic institutions to unions as well.
This is long overdue and those who con-
tinue to oppose timely change risk doing
irreparable harm to Canadas labour
movement since the general public will
not tolerate more stories like the ones
listed here.
on this issue and ensure that projects
that use any federal funds be tendered
openly. This policy should be included
in all infrastructure agreements and
apply to all Crown corporations and
any other federal mechanisms used to
fund infrastructure.
Open tendering is about fairness for
taxpayers, since governments have an
obligation to use their money efciently.
Moreover, companies that pay federal
taxes should not be precluded from bid-
ding on public contracts paid for with
their tax dollars simply because they do
not belong to the right union.
Capital expenditures for construction in Alberta
(in $ millions):
2012
2013
79,192.2

87,046.8
(preliminary actual)
88,108.8
(intentions)
Value of building permits in Alberta (in $ millions)
Residential:
Non-residential:
Alberta total:
593.1 739.1
350.0 679.6
943.1 1,419.3
Yearly value of all
building permits
in Alberta ($ millions)
2012
2013
14,662.9
17,358.0
2012 2013 2014
97.1
102.2
90.7
91.1
Wholesale merchants sales by industry unadjusted ($ millions) across Canada
2012 2013
Building material and supplies 81,522.1 83,637.2
Electrical, plumbing, heating and air-conditioning equipment and supplies 25,660.9 25,792.2
Metal service centres 18,827.8 18,694.8
Lumber, millwork, hardware and other building supplies 37,033.4 39,150.2
Machinery and equipment 128,177.2 127,204.1
Average number of employees covered under the
Merit Hour Bank Benet Plan:
2012 2013
48,015 51,169
(SOURCE: Statistics Canada)
Construction price index
for apartment buildings:
2012
2013
Calgary
167.2
170.7
Edmonton
163.1
165.1
% change Calgary
3
2.1
% change Edmonton
3
1.2
Total person hours worked
under the Merit Hour
Bank Benet Plan:
2012
2013
96,729,350
103,774,392
(
S
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U
R
C
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:

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r
i
t

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s

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s
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)
New housing
price index
($ thousands)
Calgary Edmonton
THE
WAY
WE
WORK:
ALWAYS KNOW YOUR
NEXT MOVE.
10
no.
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Jan. 2013 Jan. 2014
NUMBERS BY THE
THE
WAY
WE
WORK:
ALWAYS KNOW YOUR
NEXT MOVE.
10
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000OM-CWB-FP.indd 1 2014-03-18 11:15 AM OPENMIND_14_p54-56.indd 55 2014-04-01 3:45 PM
THE
WAY
WE
WORK:
ALWAYS KNOW YOUR
NEXT MOVE.
10
no.
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000OM-ACSA-FP.indd 1 2014-03-14 11:55 AM OPENMIND_14_p54-56.indd 56 2014-04-01 3:45 PM

Open Mind Alberta 2014

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