March 17, 2010

British Columbia open shop association takes issue with Burnaby’s ‘fair wage’ policy

RICHARD GILBERT

staff writer

VANCOUVER

B.C.’s open shop association is criticizing the city of Burnaby’s fair wage policy for increasing construction costs and taxes, but the mayor said it is just good social policy with a 20-year track record of success.

“Burnaby is clinging to an outdated, ill-conceived policy of forcing building trade union wages and benefits to be paid by private sector employers, who are awarded city construction contracts,” said Philip Hochstein, president of the Independent Contractors and Businesses Association (ICBA).

“They are repaying their political supporters in the trade unions, with Burnaby taxpayers’ money.”

A fair wage policy is a set of contract instructions that compel contractors and suppliers to provide specified minimum wages, benefits, training, safety standards, disability, minority hiring and other working conditions to their employees, while working on city contracts.

“If we wanted to pay back unions ... I would probably say only union companies can bid on municipal work,” said Burnaby Mayor Derek Corrigan.

“But we haven’t said this. Any company can bid on municipal work, as long as they are paying fair wage rates.”

Corrigan said he believes this is just good social policy and all governments should be doing it.

“We are creating good paying jobs and giving people an opportunity to use their skills,” he said.

Burnaby councillor Pietro Calendino said paying fair wages is a progressive policy that allows people to earn higher wages and contribute more to the local economy.

“We have unionized wages like every other municipality in B.C.,” said Calendino.

Hochstein argued that this policy has nothing to do with a livable wage, because it does not apply to suppliers from other industries.

He believes there is no need for this policy in construction, since workers in the industry already earn above-average wages.

In response, Corrigan maintained that not all construction workers are paid adequate wages.

He said this includes many workers in the open shop construction sector.

Corrigan said that Burnaby doesn’t award contracts on the basis of a low bid or who can cut wages to the absolute minimum.

“We have a prequalification process that looks at the skills and capacity of the contractors, instead of selecting the contractor with the low bid,” he said

Corrigan said this approach also allows the municipality to avoid hidden costs that are associated with low bids, such as numerous change orders and shoddy work.

On May 15, the City of Burnaby will finalize next year’s budget and city staff will likely recommend a tax increase just less than four per cent.

Hochstein said there would be no need for higher taxes, if the city allowed contractors working on city projects to pay their workers a competitive salary.

In response, Calendino said there are no costs in the budget related to the fair wage policy.

Corrigan said this has to do with the fact that this year the majority of the budget relates to operating expenditures and not capital expenditures.

Last year, Burnaby was ranked as the best-run city in Canada by Maclean’s magazine’s first survey of municipal governments, conducted by the Halifax-based Atlantic Institute for Market Studies, a public policy think tank.

Burnaby’s overall cost of government, $148 per person, is substantially below the $235 national average.

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