Artificially restricting bidders on the basis of their workers’ union affiliation would be both fundamentally unfair and detrimental to the goal of building Canada strong.
This article was originally published in The Hill Times on November 17, 2025.
If the federal government isn’t careful, one of the key parts of its 2025 budget plan will become a massive policy pitfall.
The recently unveiled Build Communities Strong Fund promises to spend $51-billion over the next 10 years on infrastructure projects, including roads, bridges, hospitals, and post-secondary institutions. Crucially, the federal budget promises to “consider factors such as use of unionized labour, and use of Community Employment Benefits agreements” in the selection of federal projects under this fund.
No doubt, the federal government’s intentions are good, but it must be very careful about implementation. A Community Employment Benefits agreement, more commonly known as a Community Benefits Agreement (CBA), can be good for communities. However, some governments have also misused CBAs to exclude workers from some labour unions from working on infrastructure projects, leading to reduced competition, large cost overruns, and unfairness for workers.
CBAs are agreements between the proponent of a construction project (in this case, the federal government) and the developer that will build it. As Cardus has detailed, these deals can cover a wide range of policy goals. Sometimes, the community benefit is an extra component to an infrastructure project, such as a bike lane along a new bridge. Sometimes, the goal is to increase diversity in construction employment by making a special effort to recruit and train women or other groups that are not well-represented in the industry.<
Other times, though, CBAs can be used to restrict rather than expand workforce diversity. These are called “restrictive” CBAs because they limit the kinds of workers who are allowed to work on a construction project, usually based on their affiliation with a particular kind of labour union. When governments regulate the kind of labour that is eligible to work on an infrastructure project, they also restrict the firms that can bid on the work. Fewer bids means less competition. Less competition means higher prices for taxpayers.
This is what happened in British Columbia with that province’s CBA. That agreement required all workers on affected construction projects to join one of a set of building trade unions, effectively giving those unions a monopoly on the labour for those projects. When faced with cost overruns for projects under the CBA, the B.C. government blamed labour shortages. But it failed to acknowledge the harm from its own policy that restricted the labour in the first place.
The City of Toronto faces similar problems with its construction projects. According to Cardus research, restricting the supply of labour to building trade unions inflates the cost of the city’s construction by more than 20 per cent. This drives up the overall cost of construction in Toronto by an estimated $347-million a year.
The federal government must avoid the same mistakes. There are ways that it can implement its infrastructure fund without unfair and expensive restrictive conditions on labour supply.
First, Ottawa should clarify its CBA policy goals. As outlined above, they can cover a vast array of different things. Being clear on its intentions will help to avoid both unintended consequences and misunderstandings among stakeholders.
Second, it should design CBAs that maximize the suppliers eligible to bid on federal infrastructure projects. As long as a construction company can do the work safely and well, it should be eligible to bid. To do otherwise unnecessarily restricts competition, and drives up prices. With a deficit of almost $80-billion, Canadians can’t afford unfair restrictions that inflate construction costs.
Third, it should respect the right of workers to affiliate with the labour union of their choice—or not at all. The Charter of Rights guarantees workers’ freedom of association. No government should violate that right.
The Nov. 4 federal budget rightly recognizes that “communities and regions across Canada are facing high costs to improve and expand important infrastructure.” So the Liberal government should avoid anything that worsens that situation. Artificially restricting bidders on the basis of their workers’ union affiliation would be both fundamentally unfair and detrimental to the goal of building Canada strong.
Fortunately, there is a path to implement CBAs that avoid the pitfalls. The government’s commitment to fairness and open competition is the first step along that path.
- Renze Nauta is work and economics program director at Cardus.
November 17, 2025
