Open Mind 2011 National

PENSION PLANNING: AS BABY BOOMERS RETIRE, PENSION DISCUSSIONS ARE FRONT AND CENTRE

A FORUM ON OPEN SHOP CONSTRUCTION

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Volume 19 • Issue 2 • Summer 2011

Coast to Coast

Across Canada, Merit Contractor Associations are working to support the construction industry, its employers and employees

Publications Mail Agreement #40020055 Non-deliverable mail to Circulation Department 10259-105 Street Edmonton, AB T5J 1E3

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Contents

Volume 19 • Issue 2 • Summer 2011 Publisher

Ruth Kelly

Executive Editor

Stephen Kushner

Associate Editor

Anna Schuurman

Editor, Contract Magazines

Cailynn Klingbeil

Copy Chief

Kim Tannas

Art Directors

Charles Burke Lindsay Maclachlan

Assistant Art Director

Colin Spence

Production Manager

Vanlee Robblee

Production Co-ordinator

Betty-Lou Smith

Circulation Manager

Nick Jamison

Vice-President Sales

Anita McGillis

Volume 19 • Issue 2 • Summer 2011

Advertising Representative Diane Toomey

Sales Assistants

4

Julia Ehli, Karen Crane

Contributing Writers Lawrence Beaudry, Cailynn Klingbeil, Shilo Neveu, Bill Stewart, Joel Thompson

Contributing Illustrators and Photographers Michael Byers, Jen Hsieh, Heff O’Reilly, Sonia Roy, Colin Spence Open Mind is published two times per year by Venture Publishing Inc. for Merit Contractors Association.

Venture Publishing Inc. 10259-105 Street, Edmonton, Alberta T5J 1E3 Tel.: (780) 990-0839 Fax: (780) 425-4921 admin@venturepublishing.ca www.venturepublishing.ca Merit Contractors Association 103-13025 St. Albert Trail, Edmonton, Alberta T5L 5G4 Tel.: (780) 455-5999 or 1-888-816-9991 Fax: (780) 455-2109 meritedm@meritalberta.com www.meritalberta.com

4

Open for Business

With a newly opened national office in Ottawa, Merit Canada is taking another step forward as the national voice for open shop contractors

By Bill Stewart

9

Coast to Coast

Regional updates from the eight provincial associations

18 Freedom 55?

As more of the workforce approaches retirement age, pension concerns are looming large for both employers and employees

By Joel Thompson

Merit Contractors Association is a non-profit organization that offers human resource services to the open shop construction industry.

24 24 Rectifying an Imbalance It is time to free workers from being compelled to financially support the political ambitions of union leaders

By Bill Stewart

Printed in Canada by Rhino Print Solutions The opinions conveyed by contributors to Open Mind magazine may not be indicative of the views of Venture Publishing Inc. or Merit Contractors Association. While every effort is made to ensure accuracy, neither Venture Publishing Inc. or Merit Contractors Association assume any responsibility or liability for errors or omissions.

29 Unleash the Potential Chart your company’s path to success with the help of a strategic plan

By Lawrence Beaudry

Canadian Publications Mail Product Agreement #40020055

33 More Power

Copyright © 2011 by Merit Contractors Association No part of this publication should be reproduced without express permission of Merit Contractors Association.

Modified tools may give you more power on the worksite but they can also bring greater liability in the court room

By Shilo Neveu

38 By the Numbers The latest Canadian construction stats

33

OPENMIND SUMMER 2011

3

TEWART

BY BILL S

4

OPENMIND SUMMER 2011

ILLUSTRATION BY: MICHAEL BYERS

F

orty years ago, Canada’s construction industry was mostly

unionized. Approximately 75 per cent of Canada’s construction workforce worked for companies that bargained collectively with American-based craft union affiliates of the AFL-CIO. Now, seven out of 10, or more than 700,000 Canadian construction workers, deal directly with their employers.

Massive changes transformed the construction industry beginning in the late ’50s and early ’60s in the USA and the late ’70s and early ’80s in Canada. These changes came about because escalating labour costs, poor productivity, and excessive work disruptions by the building trade unions were strangling the industry. The transition to open shop contracting was facilitated by improved management skills, increased capacity, and sophistication of contractors and their employees to safely execute projects on-time and on-budget. It also provided open shop contractors a voice for their issues in the political arena.

OPENMIND SUMMER 2011

5

Open For Business From a Movement to a Business While the Associated Builders and Contractors (ABC) formed in the USA in 1950 to help open shop contractors counteract aggressive building trade union tactics, no comparable organization existed in Canada until 1975. It was in that year in Trail, British Columbia that the Independent Contractors and Businesses Association (ICBA) formed in an effort to lobby the provincial NDP government to open up public work bids to non-union contractors.

Believing that open shop approaches were simply a better way to do construction, the ICBA leaders recognized the need to go beyond being a political movement to address human resource issues within their sector of the industry. They introduced the Construction Industry Benefit Plan to B.C.’s construction market place along with a suite of services for member companies and their employees.

Alberta and Saskatchewan were similar to other provinces in the dominance of their construction industries by craft unions.

During the energy fuelled ’70s and ’80s, both provinces experienced excessive labour strife and inflationary pressures. The economic collapse that followed the introduction of the National Energy Policy in 1982 put an end to those excesses. In Alberta for example, construction employment went from a peak of 120,000 in 1982 to 65,000 in 1984.

This period unleashed competitive forces, spurring a reversal in market share which saw open shop contractors completing 80 per cent of the work.

Recognizing the need to develop and sustain this new workforce, open shop contractors developed programsintunewiththenewemployeremployee relations dynamic.

In Alberta, construction contractors formed the Merit Contractors Association in 1986. The first program they introduced was an hourbank benefit plan that covered all employees as opposed to separate plans according to each craft. The second was a supervisory training program to give front line lead hands and supervisors training in how to manage and deploy construction personnel on an open shop job site.

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OPENMIND SUMMER 2011

To take advantage of the economies of scale that are derived from nationally available benefits and training programs, open shop organizations quickly formed and flourished in Ontario, Saskatchewan, Nova Scotia, Manitoba, New Brunswick and Newfoundland and Labrador.

Part of the national growth in other provinces is attributable to the series of national and international open shop conferences that the associations began holding in 1990.

These conferences served as a starting point for open shop contractors to explore common issues, strategies and program sharing.

This forum led to the formation of the Canadian Coalition of Open Shop Construction Associations, the first panCanadian effort to bring together the independent provincial associations. This coalition initially came together in 1999 to intervene in Supreme Court of Canada hearings challenging mandatory union membership requirements to work in Quebec’s construction industry. The landmark R. vs. Advanced Cutting and Coring case was the first ruling to affirm that Canadian workers were generally free from compelled association with certain union activities.

Merit Canada Takes its Place Merit Canada was federally incorporated in 2008 and is comprised of eight independent member construction associations operating across Canada (except in P.E.I. and Quebec where it remains illegal to work in the construction industry on an open shop basis). These associations currently represent approximately 4,000 construction companies.

Part of the launch of Merit Canada included the formation of the Merit College of Construction. There was also an accompanying national advertising campaign, a national toll free number and a Merit Canada website (www.meritcanada.ca ) that not only provided portal access to each member association’s website, but to Canada’s largest construction based recruitment website that is free for employers and employees to use (www.constructionjobstores.com ). Visitors to the site can also access MeritPerks (www. meritperks.com ) which provides a variety of regional and national discount offers to employers and employees.

“Get Into Politics or Get out of Business” Fuelled with immense financial resources from union dues and a plethora of checkoff funds, labour leaders have wielded tremendous political power throughout North America. In the U.S.A., the overt efforts of construction union leaders to eliminate competition prompted ABC’s 1976 national president Joe Rodgers to formulate the slogan, “Get into politics or get out of business”. Canadian open shop contractors particularly in British Columbia, Saskatchewan and Manitoba under successive NDP governments and in Ontario under the union friendly Liberals have been forced to get into the business of politics because of union-inspired challenges to their way of doing business.

Most human resource issues affecting contractors such as unionization election rules, apprenticeship, and public works procurement policies are provincially regulated.

This has caused open shop associations to focus their attention on provincial issues.

For example, the ICBA has effectively dealt

with union-only procurement, wage regulation and apprenticeship issues in British Columbia. In 2008, Merit Alberta successfully convinced the provincial government to amend labour legislation to address union “salting” and job-targeting funds. Merit Saskatchewan also achieved success in having the Crown Construction Tendering Agreement and abandonment guideline provisions included in recent legislative amendments affecting the construction industry in 2009.

On a national level, open shop contractors may be affected by federal government programs or policies when the federal government is directly or indirectly involved in funding. There are also programs and policies in place nationally within the exclusive jurisdictional domain of the federal government.

Contractors working on public construction projects are subject to wage regulations that don’t exist for any other industry. The federal government also contributes federal tax dollars to construction projects that contract solely with unionized contractors

Your home on the road.

at the expense of open shop contractors.

T he feder a l gover n ment i s a l so responsible for immigration, employment insurance, the Construction Sector Council, and Canada’s competition laws.

Merit Canada now provides the vehicle by which the open shop construction sector can now hold discussions with federal officials to ensure that programs and policies reflect a more balanced approach reflective of the composition of Canada’s construction industry.

In 2010, following the 6th International Open Shop Conference, Merit Canada’s board of directors adopted the first national budget for the organization which took effect in 2011. Staff are being recruited and a soon to be opened national office in Ottawa will be co-located with the Merit Open Shop Contractors Association of Ontario. Ottawa will also be the host city for the 7th International Open Shop Conference in 2012.

With Merit Canada now fully open for business, the future of Canada’s open shop movement on a national level looks bright.

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Leadership, Knowledge, Solutions...Worldwide.

ILLUSTRATION BY: COLIN SPENCE

Regional Update

Open Shop From

Coast to Coast A cross Canada, the eight provincial Merit organizations provide a

wide range of grassroots initiatives and beneďŹ ts to their member companies. Each association meets the unique needs of its members in the context of the regulatory, economic and industrial environment within which it operates. In this issue of Open Mind, regional updates from all eight organizations provide a snapshot of the activities and opportunities they are individually experiencing.

OPENMIND SUMMER 2011

9

Regional Update

Independent Contractors and Businesses Association of British Columbia

T

he story of the Independent

Contractors and Businesses Association began in 1975 in the small town of Trail, B.C. It’s a union town, rooted in the surrounding area’s mining history and tied to the world’s largest lead-zinc smelter. But it’s not just a union town – it’s also home to a pioneering spirit of self-sufficiency and independence.

It was that spirit drove the founding of ICBA after a number of open shop contractors were shut out of bidding on public works by the NDP government of the day because they were not affiliated with the building trade unions.

What started with a handful of contractors grew over the next three and a half decades to become the elder statesman of Canada’s open shop community and to represent the interests of 1,100 member companies in every corner of the province.

When the fight began in the 1970s, the traditional building trade unions built the vast majority of B.C. projects. Today, ICBA is the voice of an open shop sector made up union and non-union contractors alike.

Together they are doing more than 85 per cent of the work in British Columbia.

There were fights along the way – like contracts restricted to the building trades unions and so-called fair wage policies of the NDP in the 1990s. And there were victories. In the new century we spearheaded the return of secret ballot certification and the establishment of a skills trainings system designed to benefit learners and employers – not unions.

The eyes of the world were on British Columbia when Vancouver hosted the

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OPENMIND SUMMER 2011

2010 Winter Olympics in venues built ontime and on-budget by the open shop sector.

But long before the cameras arrived, ICBA led the group that fought off the efforts of the building trades and BC Federation of Labour to have venue construction done under a union-controlled project-labour agreement.

With 85 per cent of the market, the fight for the open shop sector’s right to compete has been won. What we fight for today is to ensure the province’s construction industry keeps growing. That’s why we continue to lobby governments of every stripe on issues like labour mobility, reduced red tape, and competitive tax regimes. If investment flows, construction grows.

ICBA also works hard to help its members remain competitive through our health and benefits programs tailored specifically for the construction industry. We keep our eye on the bottom line and get the best deals possible on a range of products and services.

We worry so our members don’t have to.

They can focus on landing the next contract knowing that they are getting the best value possible on the health and benefits packages – something that keeps their costs competitive.

Contact ICBA: President: Philip Hochstein Phone: 604-298-7795 Toll-free: 1-800-663-2865 Email: info@icba.ca Mailing: #211 – 3823 Henning Drive, Burnaby, BC V5C 6P3 Website: www.icba.bc.ca

Regional Update

Merit Contractors Association – Alberta

ILLUSTRATION BY: MICHAEL BYERS

M

erit Contractors Association

was established in Alberta in early 1986 to fill the need for open shop human resource services. In the beginning, 15 contractors came together to form an industry-wide, portable benefit plan for open shop workers.

Many people viewed open shop as a temporary phenomenon to be replaced by closed union shop practices once the Alberta economy improved in the late 1980s. Instead, to this day, open shop dominates the market place in the province.

Merit Alberta celebrates its 25th anniversary in 2011. From the original 15 members, it has grown to over 1,300 members, including most of Alberta’s large generals and trade contractors. Merit members employ some 35,000 – 40,000 workers in the province’s construction industry. Over the quarter century, Merit has introduced many management education seminars, including the Supervisor and Advanced Supervisor Training Programs. The association also supports apprenticeship training with tuition refunds for Merit member company apprentices.

Merit Alberta has been active in advocacy with all levels of government. In 2001, Merit, as part of the Coalition of Canadian Open Shop Associations, argued before the Supreme Court of Canada and won a decision that states the constitutional right to associate also includes the right not to associate.

Following this success, Merit set goals to prohibit MERFing, outlaw SALTing and change the revocation of certification period as part

of their political advocacy initiatives. The association has also been successful in lobbying the provincial government to rationalize apprenticeship ratios to two apprentices to one journeyman, address procurement policy such as the recent emergence of Public Private Partnerships (P3’s) and promote fairness and balance in employment and labour relations laws.

The Labour Relations Code Amendments Act (2008), which dealt with unfair union organizing tactics and bid subsidy schemes, came about largely because of concerns raised by Merit member companies and their employees.

One of Merit’s most popular initiatives has been its recruiting website, www. constructionjobstores.com,which allows construction workers to view job postings, apply for a specific job and post their resumes on-line. Merit member companies can post an unlimited number of employment opportunities on the site at no cost.

As a founding member of Merit Canada, Merit Alberta understands the value of unifying the voice of open shop construction across Canada and providing a platform for delivering human resource programs.

Contact Merit Alberta President: Stephen Kushner Phone: 780-455-5999 Toll Free: 1-888-816-9991 Email: meritedm@meritalberta.com Mailing: 103-13025 St. Albert Trail, Edmonton AB T5L 4H5 Website: www.meritalberta.com

OPENMIND SUMMER 2011

11

Regional Update

Merit Contractors Association – Saskatchewan

M

erit Contractors Associa-

tion of Saskatchewan was established in 1988 to support the human resource needs of open shop contractors in the province. The initial offering of a benefit plan for members’ employees built a strong base from which the association has since grown and flourished. From very humble beginnings of a handful of members, the Association has expanded dramatically to provide services for approximately 200 members with close to 3,000 employees.

Merit Saskatchewan currently offers a full range of benefit plans covering all realms of the construction industry, from small three-person operations to large contractors and their office staff.

While the benefit plan is the mainstay of the association, many members choose Merit for the additional services it provides. The Tuition Refund Program, for example, is an extremely popular offering that rewards employees for their training efforts by reimbursing their tuition fees for job-related courses.

Merit Sa skatchewa n ha s become known as the trainer of choice for the construction industry in the province.

Courses offered range from half day presentations on subjects such as Dealing with Difficult Employees to five-day programs on Project Management, Estimating, and Site Supervision. Training programs are always evolving to meet the needs of members, and the high calibre of courses is appreciated by all participants, both members and non-members.

One relatively new priority of Merit Saskatchewan is the role of advocate for

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OPENMIND SUMMER 2011

the open shop sector. Merit’s inf luence has been instrumental in directing several legislative and policy decisions at the provincial level. Perhaps one of the most important victories was achieved with the passing of Bill 80 in July 2010. Bill 80, although somewhat complicated in content, was a huge step toward leveling the playing field between open shop and unionized contractors. Together with the Saskatchewan Construction Association, Merit Saskatchewan championed the importance of Bill 80 to politicians, construction employees and the public.

In part due the strong provincial economy and construction sector, Merit Saskatchewan has recently embarked on a journey of renewal. While the organization has always been member-driven, future initiatives will focus on growth, enhancing member services, and becoming a stronger voice for open shop contractors. The benefit plan will continue to be the linchpin of the association, but a renewed sense of commitment to creating an engaged community of open shop contractors is emerging.

Contact Merit Saskatchewan Executive Director: Karen Low Phone: 306-764-4380 Fax: 306-764-4390 Email: info@meritcontractors.sk.ca Mailing: #102 70 - 17th Street West, Prince Albert, SK S6V 3X3 Website: www.meritcontractors.sk.ca

Regional Update

Merit Contractors Association of Manitoba

ILLUSTRATION BY: MICHAEL BYERS

M

erit Manitoba was incorpo-

rated as a not-for-profit open shop contractor association in 1994 to “serve the unique interests of open shop contractors” in Manitoba. The primary services provided by the association include a comprehensive and cost effective employee benefit plan, education and training programs in large part focused on supervisors, foremen, and superintendents, and government advocacy in support of open shop and non-union construction agendas.

Benefit plan savings may be the first thing prospective members notice, and working to increase the profile and power of the open shop sector is the long-term vision Merit Manitoba continues to pursue. As the support of its members grows, so will its collective voice and potential to achieve.

Currently, the association has over 200 member companies represented by more than 4,600 employees. Membership continues to grow as more and more open shop/ non-union companies become aware of our services. Over the past five years membership has expanded by more than 30 companies per year. Although this growth has been very positive and has made it possible for the association to expand the number and diversity of programs offered to members, the potential for growth continues to be quite extensive.

It is anticipated that new membership in the association will continue at or above this rate for years to come.

For the past six years Merit Manitoba has offered an array of Gold Seal courses discounted to members and at cost to nonmember’s employees. (For information on upcoming Gold Seal programs information is available on our website at www.meritmb. com) In addition, the CSTS (Construction Safety) program is available to member companies. This training program is offered online and is recommended as a gate-ready safety training program for new recruits on

a construction site. Construction workers who complete this program receive Manitoba Construction Safety Association credit on their safety passport and a certificate of completion from Merit Manitoba.

Apart from formal training programs the Association offers periodic seminars on topics requested by members or programs deemed to be of particular interest to open shop contractors.

In order to support the provincial apprenticeship training initiative in Manitoba members have allowed their names to stand for nomination and have been appointed to the apprenticeship trade committees that review trade regulations and training curricula for a large number of the construction trades. As a support to apprentices and to encourage young workers to be involved in the apprenticeship programs the Merit Contractors Association provides a Tuition Refund Bursary to apprentices employed by our member companies. For more information and applications for the tuition refund bursary please refer to careers on our website.

The Association Executive and Board of Directors elected from the membership at the Annual General Meeting has worked diligently in an effort to secure representation and the voice of open shop/non-union construction contractors on Government appointed Boards and committees. The immediate goal is in respect to the Construction Industry Wage Act (CIWA) review committee. This committee appointed by the Minister of Labour in 2004 had no provision for Merit Contractors to participate on the committee that was to bring wage recommendations to government and legislated under the Construction Industry Wages Act. In 2011 it is our goal, with the support of the other construction associations, to participate on the (CIWA) review committee to provide open shop input in the determina-

tion of recommended minimum wage rates.

Long-term goals are to effect change to the Labour Relations legislation pertaining to MERFing and SALTing, and to find an end to governm ent/government-agency imposed Project Management Agreements that force non-union workers to pay union dues and fees for services not rendered, not wanted, and or not available to our workers, and forced union membership.

Contact Merit Manitoba Executive Director: Harvey Miller Phone: 204-888-6202 Email: info@meritmb.com Mailing: 112 – 131 Provencher Blvd, Winnipeg, MB R2H 0G2 Website: www.meritmb.com

OPENMIND SUMMER 2011

13

Regional Update

Merit Ontario

A

t Merit Ontario, we are laying

the foundation for a fa ir construction industry. We are the voice of the majority of open shop construction in Ontario, making up more than two-thirds of the workforce. Originally founded by a group of contractors in the early ‘90s to combat the start of special interest monopoly tendering in the City of Toronto, we now focus on all issues of government regulation promoting open shop construction. In addition we provide human resources solutions and training, emphasizing our “best in the industry” group benef its package. Today Merit Ontario is an association of 240 companies across Ontario with a head office located in Toronto and a branch office in Ottawa. The Ottawa office opened in November 2010 to accommodate the needs of our growing Association. The number of member companies in Merit Ontario has doubled in the last year and has seen our Eastern Ontario membership grow from just one to more than 30 companies.

One of the major accomplishments the association has won was the passage of legislation to create a “non-construction employer” definition in the Labour Rela-

tions Act. In Ontario, major construction buyers such as school boards and banks can be forced into union-only tendering restrictions because they can be designated “construction employers.” With the introduction of the definition of a “nonconstruction employer” in 2000, many major construction purchasers were able to escape the restrictions allowing open shop companies to return to bidding their projects. Our work is not done on this yet, as the Labour Board interpretation of a nonconstruction employer remains narrow, and cities like Toronto and Hamilton are still trapped, but we are working hard to further amend the Legislation.

A second priority of the association is

to get rid of Card-based Certification. This is a process where a company can become unionized without a secret ballot vote.

On many occasions long-term employees of open shop contractors are denied their democratic right to vote on their future.

This is fundamentally unfair and we are determined to put an end to it.

A third priority is Ontario’s apprenticeship ratios which are the highest in Canada at 3:1. Working with other associations we are trying to reduce the ratios to 1:1, a model most other Canadian jurisdictions already have in place. This will allow for easier entry into the workforce and will help address the growing skilled trade shortages.

Contact Merit Ontario Manager: Frank Vitti Toll-free Phone: 1-888-303-9878 Email: info@meritontario.com Mailing: 638A Sheppard Ave. W, Ste 218 Toronto, ON, M3H 2S1 Website: www.meritontario.com

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OPENMIND SUMMER 2011

Regional Update

New Brunswick Merit Contractors Association

ILLUSTRATION BY: MICHAEL BYERS

T

he New Brunswick Merit Contrac-

tors Association is recognized as the voice of open shop contractors in New Brunswick. We are a non-proďŹ t organization dedicated to serving the needs of employers and their employees who work in the construction industry in the province.

Our focus is on the human resource needs of open shop contractors.

Any open shop construction company who participates in the New Brunswick construction industry can be eligible to join the New Brunswick Merit Contractors Association. It is interesting to note that in Atlantic Canada over 72 per cent of the 32,000 workers in the construction industry are employed in the open shop sector of the industry. It is also interesting to note that over 80 per cent of the apprentices in New Brunswick who work in the construction industry are employed by open shop contractors as well.

In 1994, the Electrical Contractors Association of New Brunswick (ECANB) brought Merit to New Brunswick to provide services and a voice for the large portion of the construction industry which operated non-union. Membership in Merit was to be offered to all open shop sectors of the construction industry; however, some problems soon became apparent. Offering the program under ECANB made it difficult to persuade open shop electrical and non-electrical firms and tradespersons to participate, as they were concerned about the potential of becoming unionized against their will. It was decided that formation of a separate group would be to everyone’s benefit. In the year 2000, a group of contractors met to revive the matter, by once again discussing the option of incorporating a new association. The paperwork was completed and in January 2001, the New Brunswick Merit Contractors Association became a reality.

We have grown in the last three years from an association of 14 member companies employing 250 employees to 28 member

companies employing over 600 persons who in 2010 completed over 1,200,000 person hours of work in our province.

Growth in our association is attributed to word-of-mouth and personal contact with construction employers. However, the biggest contributor to growth is the comprehensive and affordable benefit package which offers a portable Hour Bank Plan for hourly paid employees and a separate benefit plan for salaried office and supervisory personnel.

Merit offers a number of training courses, such as the Supervisor Training Program (STP) that Merit NB presented for the first time in 2010. We are proud that 15 employees from New Brunswick Merit Contractor firms completed the 2010 course and received their certificates.

This year we have offered the STP course again and are pleased to confirm that in January 13 employees completed the first day of the six-day course for 2011.

The New Brunswick Merit Contractors Association will continue to live up to our mission statement and represent our members with honesty and integrity. We believe in the freedom of choice and do support the right of open shop contractors and their employees to promote free enterprise.

We promote the right for all contractors to have equal opportunity to bid on all construction work in the province and ensure access for all employers and their employees on construction sites in New Brunswick.

Contact Merit New Brunswick Executive Director: Linwood Hupman Phone: 506-476-8813 Email: linwoodhupman@rogers.com Mailing: 99 Ashfield Street, Fredericton, NB E3A 3G1 Website: www.meritnb.ca

OPENMIND SUMMER 2011

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Regional Update

Merit Contractors Association of Nova Scotia

N

Contact Merit Nova Scotia Executive Director: Bill McLellan Phone: 902-453-6248 Toll Free: 1-877-525-9205 Email: info@meritns.com Mailing: 216-30 Damascus Road, Bedford, Nova Scotia B4A 0C1 Website: www.meritns.com

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OPENMIND SUMMER 2011

othing unites a group of people

like a shared passion to reach a common goal. This is especially true when that goal is preserving your livelihood and the ability to provide for your family and community.

That’s why Merit Contractors Association of Nova Scotia was formed – and the reason it continues to be an essential voice for open shop contractors in this province.

In 1993, the Supreme Court of Nova Scotia rendered a judgment known as the Steen decision. It mandated that any general contractor with a bargaining relationship with even just one union would be required to hire only union subcontractors. This far-reaching decision by the courts had the potential to dramatically reduce the competitiveness of open shops and even force some companies out of business.

The need to oppose the Steen decision mobilized a group of open shop firms to come together to form an organization originally called The Right to Work. We held demonstrations at the Nova Scotia Department of Labour, lobbied government officials and presented our case to various government agencies. Thanks to these tireless efforts, we were able to have the Steen decision overturned by legislation in 1994, giving Nova Scotia’s contractors the right to hire both union and non-union workers on their construction sites.

Our original group realized that we needed to continue working together to preserve the rights and abilities of open shops in this province. We formalized our relationship that same year and Right to Work became Merit Contractors Association of Nova Scotia – offering benefits and other services that would help give our members the ability to compete on a level playing field with unionized shops.

Today, Merit Contractors Association of Nova Scotia has grown to include over

135 companies, representing around 1,600 employees. In addition to acting as a leading voice for many firms in Nova Scotia’s construction industry, we offer our members safety training, apprenticeships, skills development training, a scholarship program, retirement planning and competitive medical benefits. We’re proud of our ability to deliver these services, as well as provide a network through which members can find new opportunities to grow their businesses.

Despite these accomplishments, we recognize that we can’t rest on our laurels – and this past year proved it. In November 2010, the Nova Scotia government introduced a new labour law, Bill 100, which would force unionized organizations to subcontract solely to other unionized contractors. It would have also shut out the vast majority of private sector employers from having a voice on future changes to labour laws in this province and make it tougher for Nova Scotia’s governments to find cost-saving solutions through the private sector.

Once again, Merit came forward to speak on behalf of Nova Scotia’s open shop contractors. Through partnerships with our allies and opposition parties that listened to our concerns, we convinced the government to change key portions of Bill 100 before it became law.

Regardless of this success, it reinforces the important role that Merit plays in this province. In addition to developing human resources programs for our members and building a strong relationship with our other Merit Associations in Atlantic Canada, the Nova Scotia chapter will continue to fight for the rights of open shop contractors and give them a strong voice in decisions that affect their livelihood. Through our work, we are standing up to ensure a strong future for our members and their employees.

Regional Update

Merit Contractors’ Association of Newfoundland and Labrador

ILLUSTRATION BY: MICHAEL BYERS

M

erit Contractors’ Association

of Newfoundland and Labrador (Merit NL) represents the interests of contractors and their employees in a wide variety of trades in the open shop sector of the province’s construction industry. The open shop sector, where membership in a union is not a condition of employment, comprises approximately 70 to 75 per cent of the whole industry here.

All around Newfoundland and Labrador, Merit members are involved in many construction projects. The new BMW dealership in St. John’s, water treatment plants at Bay Bulls and Petty Harbour, the new elementary school in Paradise, and the Eastern Health facility in Marystown are just a few examples.

Besides offering Merit Canada’s benefits plans to its members, Merit NL has lobbied on behalf of its members to prevent antireplacement worker legislation and has supported other employers’ associations in their advocacy work. In March 2008, to increase its profile and political clout, Merit NL joined the Newfoundland and Labrador Business Coalition – a group of 13 employer and business associations who advocate on behalf of the business community. The coalition also works as a part of the province’s Strategic Partnership, a unique group composed of representatives of business, labour and government representatives who work together to formulate good government policies for the province’s future needs.

For the past five years, Merit NL has been represented on the Provincial Apprenticeship and Certification Board by its executive director who expresses the association’s concerns and advocates to increase the apprenticeshipto-journeyperson ratio, which has happened once in 2008.

Jim Murray, president of JSM Electrical Ltd. in St. John’s, instigated the creation of Merit Newfoundland and Labrador. When Mr. Murray learned of Merit Alberta and the Hour Bank Benefit Plan, he realized that Merit’s

plan would be very good for his company and that more open shop contractors might feel the same way. In 1991, he organized a meeting of approximately 10 open shop contractors in the St. John’s area who became Merit NL’s founding members. Merit NL was incorporated in February 1992 with Mr. Murray as its first chairperson.

During the tough economic years of the 1990s, not much happened. In 2003, recognizing the need for promotion and growth of the association, the board of directors hired Merit NL’s first full-time general manager who set up Merit NL’s office in St. John’s. Since December 2004, Robin Bartlett has been Merit NL’s executive director and Janine Tobin is her executive assistant.

Since 2005, Merit NL has grown steadily with its membership tripling to 80 full member companies and six affiliate member companies, representing approximately 1,300 contractors and their employees. Miss Bartlett’s marketing and sales efforts and the competitive labour market have resulted in a greater demand and desire for contractors to offer benefits and other incentives to their employees. Merit NL’s membership growth has led to its having better resources to operate and the addition of a group RRSP and $1,000 student scholarship program.

Merit NL’s priorities for 2011-12 are: to continue to promote Merit NL to increase its membership; to increase its profile with government officials; to develop a student bursary; to develop a strategic plan; and to add other services according to members’ needs.

Contact Merit Newfoundland Labrador Executive Director: Robin Bartlett Phone: 709-57MERIT Toll-free: 1-877-416-3748 Email: merit@merit-nl.ca Mailing: Suite 209, Torbay Place 446 Newfoundland Drive,St. John’s, NL A1A 4G7 Website: www.merit-nl.ca

OPENMIND SUMMER 2011

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openminD summer 2011

As more of the workforce approaches retirement age, pension concerns are looming large for both employers and employees

by Joel thompson

centre stage in the news. A large segment of the Canadian population has begun to examine its retirement income and ask questions about whether it will be adequate.

This growing discussion has brought renewed examination of the Canada Pension Plan. While the CPP’s balance sheet has been effectively repaired in the past few years, there has been growing acknowledgement by both government and the public that CPP offers no more than a retirement supplement and even when combined with Old Age Security, few Canadians will be able to depend on it to fully fund their retirement. This recognition was highlighted recently by the federal government’s proposal to establish multi-employer pension plans for the benefit of small business and the selfemployed.

The construction industry employs a large contingent of baby boomers and the retirement income discussion is important for our industry. In addition to its concern for retiring workers, the industry has to consider its need to attract new recruits in the coming years. Offering new entrants a decent retirement plan will be essential in competing with other industries for labour and the construction industry does not have a particularly good record in this area.

Pensions have always played a significant role in construction industry labour relations.

openminD summer 2011

ILLUSTRATION BY: JEN HSIEH

s the baby boom generation approaches retirement, pensions have taken

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Freedom 55?

For many construction workers who were once union members, their dissatisfaction with union pension schemes was one of the prime factors that caused them to embrace the open shop movement. Google the phrase “Union Pension Scandal” and you will be confronted with a voluminous history of operational difficulties with union pension plans across North America. Some of these episodes are the result of criminal acts (and in the American cases, often linked to organized crime), some to negligence or incompetent management, and some to difficult economic conditions exposing an inappropriate plan design or one with unrealistic investment or actuarial assumptions.

The most spectacular meltdowns have occurred in the U.S.A., which are relevant here because virtually all Canadian building trade unions are affiliated with American parents.

Organized crime involvement with American union pensions has almost become a cliché and cases of Congressional enquiries leading

to racketeering charges are an oft-repeated scenario. Some of the larger unions involved include the Plumbers and Pipefitters who ousted former President Martin Maddaloni over charges of mismanagement of pension funds and fraudulent conduct involving real-estate deals in Florida. Robert Georgine,

former head of the Laborers’ Union and the AFL-CIO’s Building and Construction Trades Department, became embroiled in a stock trading scandal at ULLICO, an insurer owned by union pension funds. His appearance before a Congressional Committee was highlighted by Fifth Amendment pleas. Jake

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Despite the gravity of their responsibility in safeguarding the retirement income of their members, union pension trustees have often show no better discretion than gullible members of the general public.

West, the former head of the Ironworkers Union, was sentenced to three years in prison for embezzling union pension money.

While the pension funds of the Canadian locals of the International Building Trade Unions are generally segregated from their American parents, the history of pension fund management there causes mistrust among current and former union members.

Many loyal Canadian union members resent any transfer of funds from Canadian locals to their American parents and the pension scandals serve to heighten that resentment.

Unfortunately, the Canadian branches of the International Building Trade Unions have not been immune to pension scandals. One of the most notable Alberta examples involved the Edmonton Pipe Industry Pension Trust Fund. Because of industrial activity in Edmonton and Fort McMurray, the northern Alberta local of the Plumbers and Pipefitters usually ranks as the international union’s largest local. In 2001, the news media reported on a government-ordered audit that uncovered what the auditor termed “lack of due diligence” and of being “indifferent” to complying with the law. The investigation revealed that the pension fund administrator was the CEO of three golf courses the fund had purchased in North Carolina. Several of the trustees were also on the board of directors of the golf courses. Some of the trustees had purchased first class airline tickets at plan expense to visit these “investments” and had exchanged the first class tickets for two tourist class tickets so spouses could accompany them on these inspection tours.

In October 2009, the fund settled a $49 million lawsuit brought by disgruntled plan participants. In the explanation for the settlement contained in the fund’s annual report, an estimate was given that prolonging the litigation could result in a cost to the fund in excess of $1.2 million.

The situation at the Edmonton pipefitters pension fund was eventually cleaned up but remains a cautionary case history. Other instances also include allegations of illegal

activity but more often the funds incur serious losses or fail to meet investment return expectations due to lack of professional management. If one of the largest construction union locals in the country can run into serious difficulties in managing its pension plan, it is not surprising that some of the smaller unions also fail in the responsibility to manage the monies their members have entrusted to them. There is a separate union for nearly every construction trade and this fragmentation has resulted in some pension funds representing very small groups of employees. This results in administrative expenses eating up an inordinate amount of funds and makes it difficult to establish the professional management required to pro-

000OM.ReedConst_1-3S.indd 1

vide the required rate of return from secure and safe investments.

Despite the gravity of their responsibility in safeguarding the retirement income of their members, union pension trustees have often show no better discretion than gullible members of the general public in handing over large sums of money to what are later to be revealed to be no more than snake-oil salesmen. More frequently, those directing fund trusts have been lured into making big bets on investments such as commercial real estate rather than hiring professional money managers to oversee an investment plan with strict parameters. As a result, the balance sheets of most Canadian construction union pension plans show unfunded liabilities. A Toronto Star expose of the activities of the fund managing money for the United Food and Commercial Workers (one of the largest multi-employer funds in the country) revealed that current union members would

4/4/11 1:45:34 PM

Freedom 55?

be assessed significantly increased premiums to make up the plan’s shortfall. The article noted that millions of pension dollars had been lost in questionable investments in Caribbean hotel and resort developments.

The situation was exacerbated by the global financial crisis which saw even some of the best managed of pension funds incur substantial losses. Recovery in investment markets and strong construction activity bringing increased pension contributions from a larger workforce have helped some funds regain lost ground. Those unions which lost most of their market share to open shop competition may have little hope of having their pension funds meet their future obligations for payouts to retirees.

Trying to repair pension fund balance sheets has caused problems for the whole union When open shop employers began to organize to sector. Hefty pension contribution requirements by cooperatively deliver services to employees, they employers ($5 per hour recognized that retirement programs needed to for many trades) creates a substantial gap in gross be part of the package. wage packages between union and non-union ment plans and that contributions are inademployers in a very competitive market- to invest as they chose. place. This cost differential has been one While philosophically this may have been equate. The most common reasons are that of the main reasons that in most regions, the best fit with the wants of employees, in many construction employers consider union contractors are unable to compete in practice, it is unclear whether it will meet their operations too small to be able to offer the commercial market. the ultimate goal of providing an adequate a retirement plan and that a high employer Those on the non-union side of the con- retirement income. Too many employees contribution will erode their competitive struction industry may tend to gloat when- show little inclination to make the com- position and the ability to win work in a ever a new story of union pensions gone mitment to the disciplined savings required bid market.

Regardless of your perspective on the bad materializes, but the open shop sector to accumulate retirement funds. In this, has not necessarily solved the retirement they are no different than the rest of the pension issue, it remains extremely imporissue for their workforce. When open shop Canadian public which has a dismayingly tant for the whole industry, both union and employers began to organize to coopera- low participation in RRSP investments and open shop. While severe construction labour tively deliver services to employees, they rec- an even lower number making maximum shortages have eased, few would argue with the prediction that we will soon be facing ognized that retirement programs needed annual contributions. to be part of the package. Many of them Most employers acknowledge these short- even greater difficulties in meeting demands had workforces that had formerly been comings but are reluctant to take back the for labour. A recovering economy, growing union members and a substantial number control over retirement funds that they construction markets and the depletion of those were embittered by their experience promised to employees. The fact remains of existing forces through retirement dicwith union pensions. Given those feelings, that the group RRSP route provides no tate the industry will again be scrambling it was no surprise that open shop employers guarantees that every employee will enter to hire and train enough new recruits. chose RRSPs as the most appropriate vehicle retirement with the assurance of an ade- Construction will not be the only industry for employee pensions. To counter the quate retirement income. Much remains to facing this problem and Canada will not be distrust many employees felt, employers be done to educate employees and persuade the only country looking for talent outside setting up company RRSPs made pledges them to take personal responsibility for its borders. If the industry is to attract the type of people it needs, it needs to be able to to employees that there would be immedi- retirement planning. ate vesting of all funds and they would be A case can also be made that not enough offer a viable means of providing adequate under total control of individual employees open shop employers have instituted retire- retirement income.

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OPENMIND SUMMER 2011

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SUMMER 2011 OPENMIND SPRING 2010

ying f i t c e R an e c n a l a b Im It is time to free workers from being compelled to financially support the political ambitions of union leaders

BY BILL STEWART

ILLUSTRATION BY: SONIA ROY

O

n October 6, 2011, Ontarians will head to the polls to elect a new provincial government. The run up to election day may not be shaped by policy debates between politicians vying for election. Rather, the tone may be set by third-party advertisers.

As early as November 2010, the Provincial Building and Construction Trades Council of Ontario had “decided to start priming its pumps to support the Working Families Coalition (WFC) in order to combat Ontario’s ‘Regressive Conservatives’.” The millions of dollars the coalition will pour into attack ads will come at the expense of workers in unionized settings who are required to pay dues to unions in order to keep their jobs. It’s time that Canadian legislators changed this.

While unions have long been politically active, a major change in approach came during the Ontario provincial election in 2003 when five construction union affiliates of the Building and Construction Trades Council of Ontario joined three other unions to form the Working Families Coalition. This group used compulsory dues to finance a costly U.S.-style political attack ad campaigns – without the same kinds of check and balance rules that exist in the United States.

OPENMIND SUMMER 2011

25

Rectifying an Imbalance The $5 million, negative attack ad campaign that was run in 2003 helped bring down the ruling Conservative government.

Ontario’s construction industry paid heavily.

Early in their new mandate, the Liberal government removed the right of construction industry employees to a secret ballot vote in union-ization elections. All other industry sectors retained secret ballot voting.

A similar $5 million amount was reportedly spent to help the Liberals gain re-election in 2007. And for the 2011 election, one Ontario MPP has speculated that WFC could spend in excess of $10 million.

Elsewhere, in 2007, affiliates of the Alberta Building Trades Council helped organize, and were the major financiers behind the Albertans for Change coalition.

Emulating the campaigns in Ontario, the coalition spent more than $2 million on advertising which slammed Premier Stelmach and his Progressive Conservative government before, and during, the 2008 Alberta provincial election. This was more than the three opposition parties spent on advertising and even included spots that ran during the Super Bowl.

The enormity of these campaigns and the influence they have on the election process has prompted considerable discussion in legal, political and journalistic circles, think-tank research institutes and various advocacy organizations.

Nation-wide surveys conducted by Nanos Research in 2003 and 2008 found that over three-quarters of unionized workers opposed having their union dues go to fund political parties, political advocacy or attack style advertising. A similar number of Canadians felt the same way. A majority of respondents also liked the idea that unionized workers should be able to pay lower dues to cover the costs of collective bargaining but not be forced to pay additional dues for political related activities.

The Ontario division of the Canadian Federation of Independent Business (CFIB) released the results of a survey it had conducted in 2009 that found that 84 per cent of small business owners agreed that non-union employees in a unionized workplace should have the right to opt-out of paying dues. According to the CFIB, “these views are consistent with the views of most Canadians who favour an employee choice approach to union dues and suggest that it’s time to consider reforms to laws 26

OPENMIND SUMMER 2011

that govern labour relations in Canada.”

In 2010, the Ottawa-based Canadian Centre for Policy Studies issued a blue paper titled “Balancing Workers’ Rights and Union Privileges in a Mandatory Dues Environment.” After noting that, “Canada is the only country in the world where a majority of workers at a particular place of employment are able to compel the remaining minority to pay, against their will, full dues to a union to which they may not belong” the authors concluded that “Trade unions enjoy extraordinary powers as a result of this mandatory relationship including the power in practice to tax those who do not wish to be members.

Modernizing legislation in order to protect workers from potential abuse at the hands of their unions from these powers is both sensible and long overdue.”

The current union dues collection framework dates back to a 1946 arbitration decision by Justice Ivan Rand. In what is known as the “Rand formula,” he ruled that the best way to settle a long strike at Ford of Canada was to have employees pay union dues, regardless of whether they were union members or not. This was predicated on the assumption that all employees, regardless of their union membership status, benefited from having a union negotiate and administer collective bargaining agreements on their behalf. Designed to prevent “free-riders,” from receiving the benefits of collective bargaining without having to pay anything, a compulsory dues check-off mechanism ensured all bargaining unit employees paid the same for these services.

Ultimately, the federal and six provincial governments incorporated these principles into their labour laws. Unfortunately, they set few boundaries beyond internal

union self-regulation as to how the dues should be spent. This provides Canadian union leaders with vast resources to pursue political agendas.

Concern over this was taken to the Supreme Court of Canada in 1991. Merv Lavigne was an Ontario college teacher who complained that his union dues were directed to campaigns and organizations he disagreed with. Lavigne argued that this violated his “freedom of association” rights under Canada’s Charter of Rights and Freedoms because he was being forced to conform to the underlying ideology behind the causes he was ultimately contributing to.

The Supreme Court narrowly ruled against him.

Union leaders have long since argued that this decision is the final word on the issue.

For instance, during Alberta’s 2008 election, the Merit Contractors Association and the National Citizens Coalition joined together to publicly challenge organized labour’s use of compulsory union dues to finance preelection attack ads. Alberta Federation of Labour President Gil McGowan responded by saying the critical organizations were, “simply trying to put a coat of fresh paint on old, tired argument.” and noted that in reaching the decision it did in Lavigne, the Supreme Court of Canada “ruled that unions have a democratic right to use their members’ dues for political purposes.”

However, Canada’s political, legal and economic landscape has dramatically changed since Lavigne’s 1985 court challenge. Moreover, the assertion that the Supreme Court’s decision gives unions unfettered authority to spend dues on activities unrelated to collective bargaining and that federal and provincial governments are precluded from rebalancing individual rights against the political goals of union leaders is simplistic.

Indeed, key principles contained in strongly worded dissenting opinions in Lavigne were critical to the landmark R. v.

Advance Cutting and Coring case in 2001.

In this case, the Supreme Court ruled that “freedom of association” also included, within limits, being free from compelled association. Later decisions have also determined that governments are not constitutionally bound to provide unions with the most favourable mechanism to collect and use dues as set out in the Rand Formula.

Current Canadian labour laws are among the most archaic in the industrialized world.

While other countries are reforming their legislation and rules, Canadian laws and jurisprudence stand out in terms of how they force members and non-members to pay union dues that are often used for political purposes.

This could be challenged in a case currently making its way through Alberta’s courts. For 30 years, Old Dutch Foods negotiated numerous collective agreements that included an open shop arrangement, allowing employees to choose whether they would join the union.

Employees choosing not to join the union were not required to pay dues.

While this type of arrangement is unusual in Canadian unionized settings, Alberta’s Labour Code allows union security clauses to be settled at the bargaining table. When the employer refused to agree to include a requirement for all employees to pay dues, the ALRB ruled that Old Dutch was bargaining in bad faith. Moreover, the ruling declared

that Alberta’s labour code was unconstitutional because it did not “mandate a minimum union security provision” (i.e. a Rand Formula) to help finance the union.

A group of 21 employees that have never been union members or been required to pay union dues is in the process of appealing the decision. It’s disturbing that these employees have had to incur the trouble and expense of taking legal action when all of the other industrialized countries that Canada competes with globally have labour relations regimes that democratize the collection of union dues and the distribution of monies for political purposes.

Unionized employees in the 47-nation Council of Europe have a choice regarding union membership. Following a 2007 landmark Court of Human Rights ruling, it is now illegal for European unions to use unionized non-members’ dues for political activities.

In the USA, unions may use dues for political purposes but non-members are not compelled to support these activities.

Various formulas exist across many states that allow non-members to opt out of contributing to non-collective bargaining activities but pay a “fair share” of costs associated with core workplace-related union activities.

The principle is simple. Union members that want their union to engage in political activities are free to make their contribution. Those employees who do not wish to do so can opt out. There is no reason that similar structures could not be established in Canada.

While it may be argued that at one time unions were justified in spending dues for political campaigns, the magnitude of recent union-financed political advertising campaigns is reaching epic proportions.

The time is ripe for elected legislators to bring Canadian labour laws in line with the rest of the industrialized world and establish a framework that respects the democratic rights of individual working people, as opposed to the political ambitions of labour leaders.

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THANK YOU! Merit Contractors Association extends its thanks to our program partner, Alberta Venture, our sponsors, the Alberta Construction Safety Association, Canadian Western Bank and Lenmak Exterior Innovations Inc., as well as everyone who attended the awards gala for making the inaugural event a great success.

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UNLEASH THE

POTENTIAL Chart your company’s path to success with the help of a strategic plan

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O

ver the past 10 years, the construction industry environment has been characterized by dramatic swings in demand as the global and provincial economies have undergone periods of rapid expansion and contraction. These boom and bust cycles have placed significant pressures on construction companies and contractors. They have had to adjust quickly to periods where attracting and retaining the skilled workforce required to meet the high demand for quality services is the major challenge, and periods when contraction in the economy significantly decreases demand, increases competition, forces downsizing and shrinks profit margins.

OPENMIND SUMMER 2011

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Unleash the Potential Navigating these choppy waters requires vision, clear focus, and the ability to anticipate and deal proactively with emerging trends impacting the business environment. Those companies that built a sound business strategy are much better positioned to identify and capitalize on growth opportunities and weather the storms created by downturns in the economy.

Effective strategic planning unites

people in pursuit of a common vision and focuses energy and resources on those things most critical to success. It helps to ensure the organization does the right things well and at the right time. When both management and staff understand where the company is headed and see themselves as contributing to a successful journey, motivation, productivity and accountability increase.

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The strategic planning process usually includes a short vision development exercise designed to reach agreement on the preferred future to which the company aspires.

It describes the broad targets the company would like to achieve relative to such key elements as company growth, financial condition, geographic markets served, people the company attracts and retains, and profile in the marketplace. (See Figure 1) Having a clear sense of where management wants the company to be in 10 years and beyond is an important first step in the planning process. To quote Lewis Carroll’s famous line: “If you don’t know where you are going, any road will take you there.”

T he va lues a re st atement s of t he company’s core beliefs; they establish the moral and ethical framework that guides the organization’s activities. The principles establish the parameters within which company leadership and employees are expected to operate. The values and principles taken together defi ne what the company and the people in it stand for.

When a company consistently operates in accordance with clearly defined values and principles, customers know what to expect in their dealings with the organization and positive long-term business relationships result.

The mission describes the core business of the organization and who it serves.

Discussions related to mission often include an assessment of the core products and services the company provides, the geographic markets it serves, and its targeted client base.

The scan of the operating environment includes an assessment of internal company strengths and weakness, major trends and developments in the external business environment that may impact the company’s business, and an analysis of the competition. This environmental scan is used to identify high potential opportunities the company should be exploring, and

FIGURE 1

any threats to the company that should be mitigated.

The top half of Figure 1 can be viewed as the database used to bring the strategic priorities the company must address over the next three years into sharp focus to move toward achieving its vision. Experience tells us that usually 80 per cent of the benefits to an organization come from 20 per cent of the effort. One of the important outcomes of an effective strategic business planning process is that energy and resources are focused on those things most critical to success.

Once agreement is reached on a manageable number of strategic priorities, they become the pillars upon which the strategic plan is built. For each strategic priority, key results and strategies are developed.

Key results are measurable statements of the specific outcomes the organization wishes to achieve relative to each strategic priority. They are supported by specific performance measures and targets. Strategies are statements of how the compa ny will deploy its resources to achieve the desired results. Detailed action plans are developed for each strategy, providing the tactical, more granular steps that need to be taken to implement the strategy.

The development of strategies and action plans also includes an estimate of

STRATEGIC PLANNING PROCESS VISION/VALUE/PRINCIPLES For what do we stand?

MISSION/MANDATE Why do we exist?

OPERATING ENVIRONMENT SWOT Analysis

STRATEGIC PRIORITIES

What are the four to six areas that need attention?

KEY RESULTS

What do we want to achieve?

STRATEGIES

How do we go about it?

ACTION AND IMPLEMENTATION PLANS Doing it.

REGULAR REVIEWS Is it getting done?

Many strategic plans are built around a rolling three-year timeframe with provisions for quarterly monitoring of progress to allow for mid-course corrections as a result of unanticipated developments.

Effective strategic planning unites people in pursuit of a common vision and focuses energy and resources on those things most critical to success. the resources required to implement the strategy, lead role implementation responsibilities, and proposed implementation timelines. This information is used to help inform the development and fi nalization of the company’s annual budget.

Mechanisms are also required to update the plan annually to ensure it is current and ref lects emerging issues, challenges and opportunities.

The primary responsibility for developing the strategic business plan rests with

the chief executive officer and the senior management team (SMT). Some companies form a strategic planning team comprising the SMT, supported by an external facilitator to complete the strategic planning process. Including some front-line supervisors on the strategic planning team provides an opportunity for leadership development, helps to build broader employee ownership in the plan, and contributes to effective implementation. Organizations with a board of directors should ensure the board is appropriately engaged in the development and eventual approval of the strategic plan and budget.

The process to develop a strategic plan can usually be completed over a six week period and with minimum impacts on the workloads of the executive and staff. Engaging

OPENMIND SUMMER 20`11

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Unleash the Potential

SAMPLE STRATEGIC PLANNING WORK PLAN 1 Clarify Objectives and Approach: Meet with the CEO to establish objectives, approach and timelines.

2 Establish Planning Team: Create a strategic planning team including the CEO, senior executive and other selected representatives. If the organization has a board of directors, then members should be actively engaged early in the strategic planning process.

3 Current Situation Review: Review relevant documents and reports, financial data, market trends, etc. and document in the form of briefing materials to support the work of the planning team.

an external facilitator to work with the CEO and SMT to develop the process, facilitate meetings and develop drafts of the strategic plan for review may be helpful.

Effective strategic planning offers a cost effective and efficient vehicle to position construction compa nies to recognize and capitalize on opportunities, and anticipate and manage risks to their business. It imposes discipline and structures around the company’s business planning processes that increase the likelihood of the company focusing its financial and human capital on the issues and priorities that matter. An

effective strategic plan creates a shared vision, values and culture which increases commitment to the company and builds a strong sense of team. That, in turn, positions the company to anticipate, manage and shape its future.

4 Conduct Planning Meeting(s): Conduct planning session(s) with the strategic planning team to: • Develop the organization’s vision, values and operating principles; • Review the core lines of business and reach agreement on any changes in focus; e.g., new products and services, new markets, changes to existing products and services; • Reach agreement on the top four or five strategic priorities for the organization; • Reach agreement on the key results desired relative to these priorities; and • Develop strategies designed to achieve the desired key results

6 Implementation Planning: Meet with the executive team to refine the strategies, estimate resource requirements, and establish lead implementation roles and timelines.

5 Draft Strategic Plan: Document the results from the planning sessions in the form of a draft strategic plan.

9 Annual Update: Complete a comprehensive review and update of the plan to ensure its continued relevancy.

Lawrence Beaudry is a Director with the Western Management Consultants Alberta practice, specializing in providing strategic and business planning consulting services to private and public sector organizations and has worked with Merit Contractors Association and other construction organizations

7 Finalize Plan: Review the draft plan and resource requirements with the CEO/board; make any required modifications and get approvals.

8 Implementation and Monitoring: Establish procedures for quarterly reviews of progress on the implementation of strategies and make changes and course corrections as required as a result of these reviews.

KRAWFORD CONSTRUCTION (2011) INC. Construction Managers • General Contractors • Design Builders Specializing in: Commercial Construction • New Buildings & Renovations Industrial Construction Visit our website: www.krawford.com 000OM.Krawford_1-3H.indd 1

4438-97 Street Edmonton, AB T6E 5R9 Phone: 780-436-4381 Fax: 780-437-2766 E-mail: edm@krawford.com Bay #2, 11166-42 Street SE Calgary, AB T2C 0J9 Phone: 403-203-2651 Fax: 403-203-2657 E-mail: cgy@krawford.com

3/21/11 9:29:06 AM

ILLUSTRATION S BY RODRIGO LÓPEZ OROZCO ILLUSTRATION BY HEFF O’REILLY

Modified tools may give you more power on the worksite but they can also bring greater liability in the court room

BY SHILO NEVEU

OPENMIND SUMMER 2011

33

More Power

D

o yo u r e m e m b e r T i m

ILLUSTRATION BY HEFF O’REILLY

“The Tool Man” Taylor, the calamitous handyman from the 1990s TV show Home Improvement? Episode after episode we watched as Tim modified his tools to make them bigger and better. Then, in some haphazard fashion, Tim tested the modified tool, often causing havoc to everything around him.

What would happen if this scene was reenacted on a modern day construction worksite? Recently, we came across a very interesting

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OPENMIND SUMMER 2011

matter that could have been taken directly from a Home Improvement episode.

An employer required a very specific tool to perform a very specific job. The only way to get this tool was to combine a stock tool with a modification, which according to the supplier, was designed to be used with a variety of different stock tools. As such, it was assumed that the modification was safe to use with the stock tool.

This is not an uncommon situation.

With the ever-changing nature of construction, employers have to adapt new construc-

tion practices to the day-to-day construction environment. However, an employer must stop and consider what his responsibilities are to his workers to ensure the construction practices are both safe for use and being used safely.

In this case, the employer purchased the stock tool from an authorized dealer and had the dealer mount the modification to the stock tool, resulting in a modified stock tool or MST. Once the MST was assembled, it was shipped to the worksite where a worker, who was very familiar with the stock tool and its operation, was required to read the manufacturer’s specifications provided prior to using the MST. After a couple days of using the MST, a tragic incident occurred resulting in fatal injuries to the worker. The investigation that followed concluded that the modification made to the stock tool was too powerful for the tool, which created a fundamental defect in the MST and directly resulted in the fatality. In addition, a contributing factor to the incident was the improper use of the MST by the worker, attributed to his lack of knowledge about the MST. As a result of the incident, the employer was charged with not taking all reasonable precautions necessary to protect the health and safety of the worker and not providing a tool that met manufacturer specifications.

The employer felt that had there been a fundamental flaw in the design of the MST, the authorized dealer should have alerted him.

The employer wanted to know, “Why me?”

Our advice to the employer was very sobering and will likely surprise you.

In most jurisdictions in Canada, a supplier of equipment or a tool can be held liable for not supplying something that meets occupational health and safety (OHS) legislation.

However, this does not remove the employer’s responsibility under the OHS legislation for their employee.

You may be familiar with the term “internal responsibility system” or, as used by Justice Mary L. Hogan in a recent Ontario Superior Court of Justice decision, “belts and braces”.

These terms are used to describe the underlying philosophy of the OHS legislation in Canada. Paraphrasing Justice Hogan, the responsibilities under the OHS Act overlap, creating a redundancy which operates to the advantage of workers. This “belt and braces” approach to OHS uses more than one method to ensure workers are protected. If the “belt”

does not work to safeguard a worker, the back-up system of the “braces” might, or vice versa. If all workplace parties are required to exercise due diligence, the failure of one party to exercise the requisite due diligence might be compensated for by the diligence of one of the other workplace parties. The purpose is to leave little to chance and to make protection of workers an overlapping responsibility.

Conversely, with overlapping responsibilities comes joint and several liability. That means that everyone responsible for the safety of a worker can be held individually or jointly accountable depending on the facts of the incident. In the end, the Crown prosecutors decide who they will charge and with what charge. Generally, the Crown will go after all parties involved in the incident, as each party has a responsibility to protect the health and safety of the worker. It is safe to assume that if a worker gets hurt on a worksite, all potentially responsible parties are sitting in a “hot seat”, but the employer’s hot seat is generally a little warmer.

How does this apply to our MST? While the manufacturer likely contributed to the cause of incident and potentially could be charged, even if the manufacturer fell down on its responsibilities, a court is going to ask the employer what he did to prevent the incident

In many jurisdictions in Canada, once a tool is modified, the employer who introduces the modified tool to the worksite is responsible for the safety of the tool and ensuring its safe use.

000.Adroit_1-2H_nBL.indd 1

from occurring. The employer, and similarly other parties, can not point to the manufacturer or any other party for his due diligence.

A court will expect all parties to individually demonstrate what they did to prevent the incident from occurring.

The employer in this case study assumed, without asking anyone, that the MST was

safe for use by his worker. So, what should our employer have done?

In many jurisdictions in Canada, once a tool is modified, the employer who introduces the modified tool to the worksite is responsible for the safety of the tool and ensuring its safe use.

This is troublesome because the MST has no complete operator’s manual for its use and no guarantee that it is even safe to be used. Our employer would have one operator’s manual for the stock tool and another for the modification but not one for the MST. The Tool Man once stated that “A real man doesn’t need a manual”. Unfortunately, by law, you do!

When a new tool like the MST is intro-

3/16/10 9:27:54 AM

More Power duced to the worksite, your employee may understand all the individual hazards for the stock tool or the modification. But when you put them together, it’s a different story. How the MST operates and how it behaves in a particular working environment will be different than the stock tool and as such, the MST will have unique hazards that need to be considered and controlled.

Lastly, since the modification can be adapted for various stock tools, the manufacturer would have no ability to assess the proper operation of the MST or know the limitations of its use in every circumstance.

As such, it is the employer who needs to identify these hazards and associated controls to the worker. This is true for any new process, material or equipment being introduced to the work environment. Its specific use in your working environment needs to be assessed and proper controls put into use by the workers. The employer is the person who carries these responsibilities.

When assessing the types of controls which should be in place, the courts have

000OM.MacEwan_1-2H.indd 1

When assessing the types of controls which should be in place, the courts have been clear on the issue; the greater the consequences of using a new tool, process, material or equipment, the greater the steps required to ensure the safety of the worker. been clear on the issue; the greater the consequences of using a new tool, process, material or equipment, the greater the steps required to ensure the safety of the worker. Your actions should be proportional to the potential outcome. In the case of the MST, a minimum requirement would have been for the employer to insist on someone “certifying” the MST safe for use and issuing instructions on how to use the MST safely. To get these answers, the employer should have asked the manufacturer of the stock tool, the manufacturer of the modification, the authorized dealer or even better, a certifying engineer.

It was the responsibility of the employer to ensure someone gave this direction so it

could be communicated to the worker.

Construction is a very dynamic environment with projects continuing to get bigger, more unusual and ultimately more challenging. With this comes major risk for the employer and their workers. Ultimately, new processes, materials, equipment and tools will be introduced to the working environment (cue The Tool Man grunt) but responsibility for ensuring that these construction practices are safe for use and being used safely lies with the employer.

Shilo Neveu is an Associate with McLennan Ross LLP, focusing on Occupational Health and Safety and practices in commercial litigation.

4/5/11 8:37:57 AM

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4/1/11 4:30:15 PM

000OM.Rogers_1-2M.indd 1

4/8/11 8:34:33 AM

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Capital expenditure for construction 2007 in Canada (in $ millions): 5,394.5 Construction price index for apartment buildings in Halifax: Toronto: Calgary: Vancouver: New housing price index ($ thousands) St. John’s: Saint John, Moncton, Fredericton: Halifax: Toronto: Winnipeg: Saskatoon: Calgary: Vancouver: Yearly value of all building permits by province($ millions) Newfoundland and Labrador: Nova Scotia: New Brunswick: Ontario: Manitoba: Saskatchewan: Alberta: British Columbia: Wholesale merchants’ sales by industry unadjusted ($ millions) across Canada Building supplies: Metal products: Lumber and millwork: Machinery and equipment:

2008 5,860.5

2009 5,454

2010 p 5,834.4

2011 (est.)

6,076

2006 117.9 123.0 131.5 132.0

2007 123.1 129.9 156.8 150.2

2008 128.9 139.9 174.4 159.9

2006 95.2 99.1 94.5 97.4 89.4 72.0 86.1 93.3

2007 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

2008 119.6 102.5 107.9 103.6 110.2 120.6 100.6 102.3

2009 133.3 105.8 109.1 103.4 113.0 111.4 93.9 95.8

2010 141.2 107.5 110.1 106.1 118.4 114.6 95.6 99.0

2007

2008

2009

2010

2006

538.4 660.1 1,291.4 1,288.9 933.3 965.2 23,292.2 26,710.4 1,378.8 1,480.1 1,138.6 1,646.4 13,875.7 15,729.7 11,541.5 12,544.7 2006

2007

74,337.1 17,732.5 34,292.0 103,163.5

76,635.5 17,619.4 35,721.0 108,813.6

2009 130.4 136.8 160.7 136.0

802.5 766.4 1,326.7 1,368.7 1,113.8 1,148.2 25,414.6 21,880.5 1,636.7 1,560.7 2,185.8 1,890.3 13,141.2 11,276.9 10,577.2 7,629.9 2008

2009

2010 131.8 136.7 156.6 134.1

1,205.2 1,633.8 1,133.3 28,138.6 1,757.4 2,077.0 11,425.4 9,723.8 2010

77,235.9 67,196.8 18,972.7 13,163.1 34,099.6 32,001.0 115,358.6 103,211.3

74,713.9 15,331.3 35,304.3 110,474.1

Source: Statistics Canada

Number of employees covered under the Merit Hour Bank Benefit Plan: Total manhours worked under the Merit Hour Bank Benefit Plan:

2005 24,844

2005 2006 51,931,342 58,264,783

2006 28,291

2007 33,875

2008 38,314

2009 38,187

2007 2008 2009 69,743,223 77,595,931 74,140,547

2010 39,371

2010 79,583,013

Source: Merit Contractors Association

38

OPENMIND SUMMER 2011

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