Region of Waterloo Construction Contracting Policy Unfair, Uneconomic, and Uncompetitive
March 1, 2018
OTTAWA – A new study finds that the Region of Waterloo’s policy of favouring one particular union for its construction contracts leaves taxpayers and most of the local construction industry out in the cold. Public policy think tank Cardus analyzed the awarding of $351.3 million worth of regional construction contracts between 2009 and 2017 for its report No Longer the Best: The Effects of Restricted Tendering on the Region of Waterloo.. The report found that the July 2014 decision to restrict construction contract bids exclusively to firms affiliated with the Carpenters’ Union had several negative effects:
• Almost 84% of construction firms were shut out of the region’s construction contract work.
• The average number of bidders for each project fell by 50% to less than four.
• Construction firms that couldn’t win open competitions for Region of Waterloo contracts began to win contracts when their competitors were disqualified.
• Contract prices began to face significant upward pressure.
“The Region of Waterloo has created a coercive oligopoly that disproportionately benefits a small group of construction firms, which are able to increase their profits at taxpayers’ expense,” says Brian Dijkema, Work & Economics program director at Cardus. “This uncompetitive policy bars someone from working on a public project because of a private choice they’ve made not to be affiliated with a particular, favoured union. This is unfair, uneconomic, and uncompetitive.”
Building competitive and livable communities requires effective procurement policies for construction. Cardus’s Work & Economics research program includes developing an understanding of how a competitive labour pool model can improve on some of the bidding policies employed by buyers of construction, including municipalities. As municipalities face increased infrastructure construction, maintenance, and repair costs, they will be forced to find innovative ways to ensure that their projects are completed in a cost-effective and sustainable way.
Download a free copy of No Longer the Best: The Effects of Restricted Tendering on the Region of Waterloo.
To arrange for interviews with Brian Dijkema, please, contact Daniel Proussalidis
Cardus - Director of Communications
Cardus is a non-partisan think tank dedicated to clarifying and strengthening, through research and dialogue, the ways in which society's institutions can work together for the common good.