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A New Lens: Considering Work in Construction and Its Impacts on Canadians

September 1, 2008

Ray Pennings

Work & Economics

Policy Brief

We must think about what it means to have a construction industry that is served by various labour pools.


I would like to make a modest proposal. We need a new lens through which to look at construction work organization and its impacts on Canada’s economic performance. But while $130 billion of annual investment in non-residential construction 1 1 Statistics Canada's estimate for 2008 (Found at:, September 2008). I am using non-residential construction since for the most part the residential construction industry is organized very differently and faces a different set of issues than those presented in this paper.  and an industry involving almost 7% 2 2 Found at:, September 2008.  of the workforce is nothing to sneeze at, for the 93% of Canadians who don’t think about construction except when frustrated by a road detour or admiring a new building down the street, the connection between construction work and our economy isn’t usually top of mind. Except for the general economic data that makes its way into news reports that are ignored by all but policy wonks, discussion of construction work organization usually takes place in the context of recruitment, training, and safety programs or contract negotiations — not subjects that usually inspire widespread interest.

Why go here? Let me suggest three reasons. The skilled labour shortage now experienced in the construction industry significantly influences Canada’s immigration and education priorities, to name just two of several areas affected. In 2007, 42,000 new jobs were created in the construction sector. Over the next eight years, some 162,000 new workers will be required to replace retiring baby boomers. An additional 94,000 workers will be required to meet rising demand. 3 3 Construction Looking Forward: An Assessment of Construction Labour Markets from 2008 to 2016. Ottawa: Construction Sector Council, 2008, p. 1.  Given Canada’s low birth rate, recruiting and training these workers pose a considerable challenge.

Secondly, the capacity — or lack thereof — of Canada’s construction industry to build factories, refineries, and other infrastructure required for a twenty-first century economy will determine the pace at which our economy can grow and adapt. Until factory, refinery, and other infrastructure capacities are built, no one can use it. Building capacity requires people, and their acquiring the skills and expertise necessary to physically constructing that capacity.

Thirdly, how workers are organized determines their accessibility to specific projects and contractors. This raises the question of labour mobility, given that construction projects are not undertaken where many skilled workers and their families live. This also raises questions regarding the competitive bidding process and the competitiveness of the industry more generally. Until recently, the major contractors with capacity to build major projects all had bargaining relationships with traditional craft unions. This meant that while a construction buyer might solicit multiple bids for a project, all of these bids would be premised on the identical labour contract assumptions. Although this is still true in many regions of the country, in some regions, especially Alberta and British Columbia, this has changed. A construction buyer for almost any major project will likely obtain bids from contractors who rely on a non-union, alternative union, and traditional union workforce to complete the project. In other parts of the country and other sub-sectors, alternatives to the traditional “building trades only” option are also contracted. Is this emerging model an aberration? Or, does it signify the beginning of a new model for how workers are organized in construction? Depending on the answer to these questions, there are policy and economic implications. At a time when inter-provincial trade agreements are implemented, that include expanding the opportunity for labour mobility, 4 4 One example is the Trade, Investment and Labour Mobility Agreement between the Governments of Alberta and British Columbia. For more information, see the extent of these concerns is apparent.

To facilitate a discussion of these challenges and questions, I make a modest proposal. These issues, considered to date mostly in the context of the industry, require rethinking in a broader context. We must think about what it means to have a construction industry that is served by various labour pools. Given that the challenge of the future involves employment over unemployment — that is, a worker shortage instead of a worker surplus, what sort of policy changes need to be considered to facilitate these issues? In an era of changing technologies and new construction methods, how do we adapt our present policy and organizational infrastructure, both at the industry and government levels, to get beyond our present presumption of an almost exclusively craft model of work?

Emerging questions

To date, these questions have been discussed primarily by construction labour relations practitioners, and then somewhat reluctantly. This is understandable given the significant organizational self-interests that are in play. It is only natural for those with a stake in the industry to try adapting to the changes, to keep change within their organizational control, and to evolve in a way that maintains their influence and avoids “outside interference” which is harder to control. Hence, one looks in vain for extensive broad —based discussions of these issues and, instead, finds most of the work on these issues within an “intramural” industry context.

Over the past decade, there has been some limited attempts at broader discussions. However, they still unfolded in the context (or avoidance) of labour relations’ “hot potato” issues. Primarily through its annual Best Practices conference, 5 5 These Conferences have convened since 1993 and report on work that is undertaken by COAA committees throughout the year. The COAA has involved non-union, alternative union, and traditional union representatives on the committee since the outset. The conference addresses best practices in the industry and industry-wide concerns. The labour market information program , now conducted on a national basis by the Construction Sector Council, began as a program of the COAA. For more information, see the Construction Owners Association of Alberta has engaged the industry in a broader discussion which involves all sectors. Attempts have been made with various research initiatives, including those of the Construction Sector Council, to document developments in all parts of the construction sector. But full cooperation from all sectors of the industry has been difficult to achieve as some sectors object to the Council’s representational composition. In 2003, the Work Research Foundation published Competitively Working in Tomorrow’s Construction which documented a variety of localized variations on the dominant model of work organization across the country. The report concluded that there “is a continuum of organizational models, with the pure craft model on one side and a pure multi-craft, wall-to-wall model on the other.” 6 6 Ray Pennings. Competitively Working in Tomorrow's Construction. Mississauga: Work Research Foundation, 2003, p. 49. It proceeded to posit seven potential implications of this emerging continuum, which provided fodder for a conference involving major representatives from across this continuum. 7 7 A summary of this conference is available on p. 55-59 of Competitively Working.

In 2005, we convened a symposium in Calgary, co-sponsored by employee and employer groups from across the spectrum. 8 8 This included the Building and Construction Trades Council, the National Construction Labour Relations Association, the Christian Labour Association of Canada, the Progressive Contractors Association of Canada, the Canadian Coalition of Open Shop Construction Association, and the Canadian Construction Association.  By this time, a labour shortage was realized in various regions of the country and the conference focused on the common problems that were being felt across the continuum of work organization types in recruiting and retaining workers. Some of the structural dynamics that contributed to these challenges were considered, from the lack of a cohesive approach on the part of government’s dealing with construction issues (which in most jurisdictions, involves five to seven ministries) to the nature of data collection and sharing and the need to focus on supply-side solutions rather than simply engaging in demand competition. While all of these efforts engaged all segments of the industry to greater or lesser degrees, none of them has succeeded in really addressing the broader issues directly.

What became obvious is that it is really not accurate to speak of a “Canadian construction industry” given the starkly different developments that were occurring in different regions of the country. Although “Red Seal” programs and a centralized program for labour market information stemmed from certain national assumptions, very different dynamics were present in different parts of the country. While there were (and are) variations in every jurisdiction in the country, it was clear that some jurisdictions, as with British Columbia and Alberta, had the full continuum at work, other jurisdictions, as with Ontario, were dominated by the single, traditional craft model.

At a time when various provincial governments are negotiating “Trade, Investment and Labour Mobility Agreements” (TILMAs), where there are labour shortages (or surpluses), and in which construction costs and construction’s contribution to overall economic performance are being debated, one should ask how the structures of construction labour fit into the equation. How do work organization structures and frontline work condition issues factor in overall economic performance? Is there a connection between the overall economic performance and economic opportunity in a province and the systems that underlie it?

This is an important discussion. But if it is held simply in the context of ideological perspectives regarding desired outcomes for more or less unionism in the construction industry, it will descend into polemic instead of reasoned discussion. Similarly, expecting to deal with the questions as if they were purely economic ones similarly betrays a philosophical predisposition that will stifle conversation. The issues involve a complex intertwine of economic, social, legal, and technological issues and sorting through them involves a broad mix of stakeholders. Reducing a discussion of social architecture, involving the roles and responsibilities of various institutions, to a single dimension brings results similar to reducing a discussion of physical architecture to a single component. No matter how beautiful or unique the windows are on a house, they only serve as windows when they are placed within a wall and the other parts of the building.

Given that this paper is simply arguing for the need for a differently framed discussion, and that entering into that discussion goes beyond its scope, I will briefly sketch the history so that the discussion can be put into context. That history will help illustrate some of the complexity and identify some of the questions which to date have been unexplored but which could be profitably followed up.

Historical Perspective

Construction trade unions are organized by craft, meaning that each trade (carpentry, plumbing, electrical, et al.) has its own union. This horizontal model of organization, in contrast to the vertical model where all employees of an employer are organized into a single union as typical in most other industries, has historical roots reaching back to the guilds. In Canada, craft unions have dominated the construction industry since the 1800s, with the Confederation of National Trade Unions (CNTU) in Quebec providing the only major exception to this model. 9 9 H. C. Goldenberg and J. H. G. Crispo, Construction Labour Relations. Canadian Construction Association 1968, p. 16.  After World War II, the various jurisdictions implemented labour legislation that modeled the principles of the Wagner Act which had been passed in the United States in 1935. 10 10 Labour legislation in Canada is primarily a matter of provincial jurisdiction in respect of the construction industry.  This provided unions with the legal recognition and the basic framework of labour law that continues through today.

During the 1950s and 1960s, there was significant labour instability which resulted in a series of commissions and studies. During the sixties, strikes were commonplace, with person-days lost in Canadian construction increasing over 300% over the previous decade, while wages increased 207 per cent. 11 11 Joseph B. Rose, "A Canadian View of Labour Relations in Construction." Industrial Relations 18 2 (Spring 1979):156.  The Globe and Mail editorialized construction as “the sick industry”, noting that:

the industry is afflicted by a large number of fly-by-night, irresponsible contracting firms; that exploitation of workers and particularly immigrants, is common, involving not only payment of sub-standard wages but in some cases failure to pay even the wages agreed on; and that labour relations are generally turbulent and unsatisfactory, marked by frequent strikes and acrimonious jurisdictional disputes between unions. 12 12 The Globe and Mail (28 March 1962):6.

The Ontario government commissioned Carl Goldenberg in 1961 “to inquire into and report upon the relations between labour and management in the construction industry in Ontario and such other matters as in the opinion of Our Commissioner may pertain thereto.” 13 13 H. C. Goldenberg, Report of the Royal Commission on Labour-Management Relations in the Construction Industry, March 1962, p. ix. The recommendations of this Commission, later refined in a publication that Goldenberg authored with John Crispo in 1969, entitled Construction Labour Relations, became the template followed by most jurisdictions. These recommendations included:

  • The establishment of special provisions within the Labour Relations Act for the construction industry;
  • A special panel within the Labour Relations Board to adjudicate cases that arise from the construction industry;
  • Certification of the union by contractor, covering all work they perform within a defined geographic area (rather than certification by site or project, with limited exceptions);
  • The ability of trade unions representing the crafts to deal jointly as a council or as a confederation of trade unions in their dealings with employers;
  • The coordination of bargaining between the various unions and trades with common expiration dates;
  • Various suggestions regarding expedited and binding dispute settlement
  • Granting the Labour Relations Board the authority to adjudicate jurisdictional disputes between unions;
  • The establishment of rules regarding successor rights, meaning that once a company was certified to a union, projects undertaken by the principals of that company would be covered by that agreement, even if they were completed under a different corporate entity; and
  • The establishment of minimum wages for construction workers with protection and enforcement for the collection of wages and vacation pay. 14 14 Goldenberg, pp. 71-76.

The story of how these various recommendations were implemented is complicated and varies by province, with implementation in Ontario taking the better part of two decades and many further studies. However, the direction established by Goldenberg in 1962 ultimately prevailed in shaping the framework of construction labour relations in Canada. It was actually the Construction Labour Relations Association of British Columbia, formed in 1969, that became “the first provincial association devoted exclusively to labour relations and signified the initial phase in the movement towards integrated bargaining.” 15 15 Rose, 160.

Unique Characteristics of Construction

Responses to the wisdom of the Canadian construction relations paradigm predictably vary according to one’s philosophical orientation regarding collective bargaining in a free market economy. But care must be taken to account for the role that construction unions play which is quite different from unions in other industries. As former British Columbia Labour Relations Board Chair Paul Weiler wrote in 1980, “there is a great deal the law can and should do to reshape collective bargaining relationships in construction. But the intelligent use of the law requires understanding of the real-life phenomenon with which it deals. A great deal of damage is done by well-meaning reformers who blithely ignore that truth . . . There are many established ways in which the building trades deal with the contractor that do not conform to the standard legal model we have all learned from industrial relations in a typical plant.” 16 16 Paul Weiler, Reconcilable Differences: New Directions in Canadian Labour Law. Toronto: Carswell , 1980, p. 186.

The rhetoric of choice is one that has utilized by those on all sides of construction labour relations battles. Those who believe that the control that traditional craft unions have been able to exert over sectors of the industry is a bad thing, argue that such dominance prevents choice and effectively “forces” construction workers to join a union, whether they want to or not. Defenders of union practice argue that the various job protection mechanisms employed by unions to prevent work from being assigned to anyone not covered by a union contract are simply means to protect the choices that are made by union members. Construction work is by definition erratic. When one job is completed, there is no guarantee that there will be a similar job for the workforce to move. It is seasonal — the Canadian winter is hardly an ideal environment to complete certain construction projects; on the other hand, deep freeze temperatures that allow access are the only conditions in which certain other projects can be completed. It is more subject to economic peaks and valleys than other industries — governments have found infrastructure spending to be a useful lever in macro-economic policy. Therefore, one can understand that protecting access to work is a significant concern for construction trade unions.

There is a number of unique characteristics of construction that have resulted in construction unions’ playing a role very different from traditional industrial unions.

Construction trades people often work for many different employers. Given that building projects require large numbers of specific trades for relatively short period of time, it makes sense for the same workers to perform the same task for different contractors. Although a factory may take a year to build, the different trades arrive sequentially and typically only for a few weeks or months, before they move on to the next job. The union provides a hiring hall service to employers, and trades people are placed through the union to specific jobs. This provides workers with more steady employment since any particular contractor will only rarely be able to arrange their work so precisely that there is continuous employment for the trades people they require. It works to the advantage of all for the union to provide this placement service. Trades people obtain most of their work through the union as well as health and retirement plans, training programs, and other provisions often presumed “employer responsibilities” in other sectors. In construction, these are administered by the union. The result is that workers identify themselves often more closely with their union than they do with any particular employer.

Labour laws still provide processes for employees to “choose” their union through the certification processes. But in practice most of the relationships between employers and unions in the construction industry today are either the legacy of long-standing relationships or the choice of employers who enter into voluntary agreements with a union in order to access the labour pool that the union is able to provide. Although there is an industry of legal niceties that has developed in order to ensure compliance with labour codes, the raw politics of front-line construction labour relations today requires that the union provide services that maintain the confidence and loyalty of their members. In turn, the union markets the labour capacity of their membership to employers and obtain work that will keep their members productively employed.

Challenging a Consensus

In the mid-1980s, a model developed through a combination of public policy, the activities of the various unions and contractor groups, and the ancillary construction and training organizations in which the capacity to complete major construction projects rested almost exclusively with the traditional craft unions. It was after the recession of the early eighties in Alberta and during the lead-up to Expo 86 in Vancouver, and the construction projects that accompanied it, that this consensus was challenged. The result thirty years later is that in Alberta and British Columbia, although also in other regions to lesser degrees, a very different model is in operation.

Several factors contributed to these changes. The non-union sector organized themselves with aggressive associations that began to provide union-type services. Both the Independent Contractors and Businesses Association of British Columbia (formed in 1975) and the Merit Contractors Association of Alberta (formed in 1985) have developed portable health and benefit programs and training programs to allow non-union contractors as a group to develop a workforce that could help them compete with unionized contractors.

There were also various efforts by non-craft unions to organize in the construction industry. Unions like the Industrial Wood and Allied Workers of Canada (IWA) and the Communications Energy and Paperworkers Union of Canada (CEP) held bargaining rights for workers at various plants, and mills sought to represent workers who were doing construction work on those projects. 17 17 For example, in 1980 the British Columbia Building Trades union filed a complaint against the IWA that was performing construction work on a new sawmill, seeking to use non-affiliation clauses to protect their craft union rights. See Duke Point Development Ltd. V. Vancouver Island Building and Construction Trades Council, [1980] 1 Can L.R.B.R. 220 (BC).  Then there was the growth of the alternative union sector: certain traditional industrial unions, including the International Woodworkers, and alternative unions such as the Christian Labour Association of Canada (CLAC), had actively represented workers in the construction industry in various jurisdictions across Canada since 1963. These increased their presence. Instead of organizing workers by craft, CLAC organizes them on a “wall to wall” basis, avoiding the jurisdictional disputes that come along with the craft model. CLAC has employed a very different philosophy of bargaining emphasizing partnership. However, until the mid-eighties, it operated on the fringes of the construction industry and had not developed any significant capacity to deliver major projects. The Canadian Iron, Steel and Industrial Workers Union (CISIWU) and the General Workers Union of Canada (GWU) also formed during this period and operated in the construction industry using the industrial model.

These developments combined with various amendments to labour legislation, labour board decisions, and some bold initiatives led to change within the parameters of labour relations. When the Building Trades Council of Alberta filed a complaint in 1996 with that province’s Labour Relations Board arguing that the legislation was designed to allow only craft unions to represent construction employees in that province, their application was dismissed. The Board noted that the application was in effect “a multi-faceted reconsideration application” 18 18 Construction Labour Relations — an Alberta Association et al. V. TNL Industrial Contractors Ltd. Et al. [1996] Alta. L.R.B.R. 497. in which the Building Trades argued that:

in Construction Labour Relations, Goldenberg and Crispo set out a system which was subsequently adopted by virtually every jurisdiction in Canada. The nutshell treatment of their text was to the effect that stability in the Construction industry could only be achieved where there was one Collective Agreement across a discreet portion of the Construction Industry having one Collective Agreement, one expiry period, and, if necessary, one strike or lockout per dispute. These provisions were subsequently imported into the Albert Labour Act, 1970, and have continued in one form or another until the present. 19 19 Ibid. p. 6.

In response, the Labour Board decision noted that:

the panel recognizes that our scheme of construction industry relations shares its intellectual roots with the rest of Canada, and that the exercise engaged in by Crispo and Goldenberg was as influential here as it was elsewhere. The Construction Industry in this Province, however has been shaped in equal measure by our own unique experiences. Our most recent construction labour law amendments were enacted in 1988 and have as many of their roots in more recent history as they do in Crispo and Goldenberg. 20 20 Ibid. p. 6.

A New Model?

“Recent history” continues to unfold in Alberta and British Columbia in respect of alternatives to the craft model becoming commonplace in the construction industry. Where once virtually every contract tendered to a non-craft organized employer attracted attention of the unwanted sort involving litigation or protest, today the presence of multiple labour pools available to major construction projects is simply part of the construction marketplace. A construction buyer in Alberta can put out a tender and realistically expect three bidders who will each employ a different labour pool and model if they win the project. These differences are factored into the bids with the result that over time, the marketplace is being changed for all of the participants, including the craft unions and their employers.

While one can find many anecdotes about what the changes have meant, for better or for worse, there has been little formal study regarding the impacts of this model. Has the existence of competitive labour pools resulted in a difference in the cost of construction? Are there efficiencies or productivities being achieved as a result of this competition not evident in other jurisdictions where the craft model continues to dominate? How have these factors affected workers? This model has developed during a time of overall economic growth in these jurisdictions. How will it survive the inevitable economic downturns to come?

As noted at the outset, these are not just questions for construction industry. They hold implications for the wider society. Is there any correlation between the economic growth experienced in western Canada and these developments? Have the changes encouraged investment? Are there lessons for jurisdictions like Ontario, in which the craft system remains very entrenched and the ability for other models to compete is restricted? As the construction workforce experiences significant growth and turnover over the next number of years, is our training infrastructure, built on presumptions of craft organization, in need of an overhaul to adapt to the changing way in which construction work is delivered on the ground?

As economies and societies change, our institutions must understand and adapt to that change. Sometime new institutions must develop alongside old institutions or even take their places. When it comes to ensuring that we have a construction workforce capable of building the infrastructure needed for our changing economy, it is clear that we face challenges in finding these workers, training them, and organizing them in a way that is safe, productive, and competitive. Pretending that this is just another chapter in an old union versus non-union turf debate doesn’t adequately account for all of the dimensions that must be considered and addressed. Instead, we must engage in an honest discussion and study of the issues, comparing and learning from what is developing. If we do, Canadians can be confident of the benefits that a capable construction capacity offers and provides.