Promoting a Flourishing Society

Tuning Up Ontario's Economic Engine: A Cardus Construction Competitiveness Monitor Brief

April 9, 2015
Toronto rightly calls itself the economic engine of Ontario. But Toronto's performance is hampered by legislation which prevents it from getting the best value for its construction projects. Why?

One of the reasons can be found in a 2008 Toronto city staff report which studied the cost implications of closed-tendering in Toronto. This paper reviews that staff report and finds significant methodological problems with it that lead to faulty conclusions. Particularly, the report failed to account for the variety of ways in which competition works. Instead, it focused on one small segment of competition: labour costs. The fact that the City's fair wage policy specifically restricts competition on labour costs makes the report's conclusion misleading. Further, the report focuses too heavily on the unionization or non-unionization of firms, rather than examining a wider range of variables which would affect competition and cost.