Open Mind Alberta 2012

PM #40020055
A FORUM ON OPEN SHOP CONSTRUCTION

LEGALLY SPEAKING: DEFINING OWNERS AND SUBCONTRACTORS RESPONSIBILITIES
LEADING VOICES
Albertas politicians
answer Merits
questions
HELP WANTED: Skilled trades apply here
Volume 20 Issue 1 Spring 2012
Canadas construction
digital media tool of choice
OPENMIND_12_p01.indd 1 3/15/12 10:28:53 AM
| BUILDINGS | CIVIL INFRASTRUCTURE | HEAVY INDUSTRIAL |
At PCL, we aspire to be the most respected
builder by delivering superior service and
unsurpassed value to our customers.
00Om.PCL-FP-IFC 1 3/1/12 10:08:03 AM
OPENMIND_12_p02-05.indd 2 3/15/12 10:03:31 AM
| BUILDINGS | CIVIL INFRASTRUCTURE | HEAVY INDUSTRIAL |
At PCL, we aspire to be the most respected
builder by delivering superior service and
unsurpassed value to our customers.
00Om.PCL-FP-IFC 1 3/1/12 10:08:03 AM
OPENMIND SPRING 2012
See full interview on Merits
website meritalberta.com +
ON THE COvEr

makes the jump from its
parent .com site
Illustration by
Janet Freysholdt
36 Somethings Got to Give
Immigration reform determines Canadas future
By Bill Stewart
42 Recognition within Alberta
2012 Contractor of the Year
Awards acknowledge
top performers
By Alix Kemp and
Michelle Lindstrom
48 Dont Blame the Workers
Time-wasting management flubs get analyzed
By Bruce Buckley (reporting by
Jonathan Barnes) from original 2011
article posted on ENR.com
54 By the Numbers
Latest Canadian construction statistics
26
5 Executive Editors Column
By Stephen Kushner
6 Clause and Effect
Creative thinking by a subcontractor
pushes boundaries of the law
By Corbin Devlin
10 What the Leaders
Have to Say
Q & A with Premier Alison Redford,
Wildrose leader Danielle Smith and
Liberal leader Dr. Raj Sherman
By Ben Freeland
16 Job Targeting Revisited
Legislative progress with union subsidy
schemes gains ground in North America
By Bill Stewart
22 Laggard to Leader
Canadian construction industry
poised to embrace Building Information
Modelling (BIM)
By Ben Freeland
26 Merit Goes National
Open-shop movement battles
regulatory construction burdens
By Terrance Oakey
32 Easy as 1 2
Digital media tool Jobsite123 takes
construction industry by storm
By Ben Freeland
48
Contents
36
000Om_MatrixLabour-FPS.indd 1 3/14/12 4:22:23 PM OPENMIND_12_p02-05.indd 4 3/15/12 10:17:01 AM
Executive Editors Column
Publisher Ruth Kelly
Executive Editor Stephen Kushner
Associate Editor Ben Freeland
Editor, Contract Magazines Michelle Lindstrom
Production Co-ordinator Betty-Lou Smith
Production Technician Brent Felzien
Circulation Manager Heather Morrison
Vice-President Sales Anita McGillis
Advertising Representative Angela De Leon
Sales Assistants Karen Crane,
Kassie Mitchell

Art Director Charles Burke
Associate Art Director Andrea deBoer
Assistant Art Director Colin Spence
Contributing Writers
Bruce Buckley (ENR.com), Corbin Devlin,
Alix Kemp, Terrance Oakey, Bill Stewart
Contributing Illustrators and Photographers
Steve Adams, Isabelle Cardinal, Curtis Comeau
Janet Freysholdt, Kevin Ghiglione, Leanne Kroll,
Heff OReilly, Chris Pyle
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 4H5
Tel.: (780) 455-5999 or 1-888-816-9991
Fax: (780) 455-2109
meritedm@meritalberta.com
www.meritalberta.com
Merit Contractors Association is a non-profit
organization that offers human resource services
to the open shop construction industry.
Printed in Canada by Transcontinental LGM Graphics
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. nor Merit Contractors
Association assume any responsibility or
liability for errors or omissions.
Canadian Publications Mail Product Agreement
#40020055
Copyright 2012 by Merit Contractors Association
No part of this publication should be reproduced without
express permission of Merit Contractors Association.
000Om_MatrixLabour-FPS.indd 1 3/14/12 4:22:23 PM
On behalf of Merit Contractors
Association, welcome to the
20th anniversary edition of
Open Mind magazine.
Stephen Kushner
PRESIDENT
MERIT CONTRACTORS ASSOCIATION
As always, Open Mind focuses on unique issues
facing the open shop construction industry
in Alberta and across Canada with the aim of
promoting the free enterprise principle that
construction work and the employment
and compensation of personnel should be
awarded based on merit regardless of employee
labour affliation.
It was a momentous year in 2011, both for
Merit and the construction industry as a whole. Merits 25th anniversary year
coincided with its establishment of a national advocacy offce, Merit Canada,
in Ottawa just steps away from Parliament Hill and the Prime Ministers Offce.
Last year also saw the Canadian economy Albertas in particular make
a strong recovery with most sectors of the construction industry showing
impressive results after several years of recession. Nevertheless, a still-fragile
world economy coupled with a looming labour shortage in the construction
industry (results of an expanding economy and aging workforce) means that
full-fedged optimism in the industry is still in short supply.
This issue of Open Mind examines the labour issue on several fronts.
Immigration reform aimed at attracting skilled tradespeople is going to be an
absolute must in the coming years, which the article Somethings Got To Give
explains. Moreover, any immigration reforms must be coupled with a focus
on managing labour costs, an issue dealt with in Job Targeting Revisited
and Dont Blame the Workers. This issue also looks at two technological
innovations that are reshaping the industry, namely the growing phenomenon
of Building Information Modelling (BIM) and Jobsite123, a cutting-edge
digital media tool that has already made waves in the U.S. and now looks to
change how Canadian construction contractors do business.
On a celebratory note, we are also excited to announce the fnalists and
award winners of the second annual Contractor of the Year Awards presented
by Merit, the Alberta Roadbuilders and Heavy Construction Association
and Alberta Venture magazine. These awards give us the chance to celebrate
companies and contractors that have scaled new heights in an industry where
people seldom have time to sit on their laurels.
We hope you enjoy this 2012 issue of Open Mind, Canadas only magazine
dedicated to the open shop construction industry. As always, we encourage you
to give us feedback and suggestions on future topics. From all of us at Merit, we
wish you the best for 2012!
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By Corbin Devlin, PaRtNER Of McLENNaN ROSS LLP LEGaL cOuNSEL
Typical construction contracts encourage a
divide between owners and subcontractors
regarding liability ... that was until a recent
case blurred the division of responsibility
n a typical general contract scenario, a construction
owner has no contractual relationship with subcontrac-
tors or suppliers and, therefore, no contractual liability
to those parties. The grounds upon which an owner may
be liable to a subcontractor for unpaid fees and services are
very narrow. However, a recent case in Newfoundland and
Labrador illustrates the creative efforts that subcontractors
sometimes use in an attempt to attach liability to construc-
tion owners.
The legal doctrine of privity of contract provides that only
the parties signing a contract are bound by that contract.
As such, a subcontractor who signs a contract with a general
contractor has no privity of contract with the construction
owner. As a general rule, the construction owner cannot
sue the subcontractor for breach of the subcontract and
the subcontractor cannot sue the construction owner
for non-payment.
I
000OmWCB-FP 1 3/6/12 10:28:33 AM
the trial judge found Defence Construc-
tion directly liable to the subcontractor
on this basis.
Fortunately, the Court of Appeal exists
as a forum for sober second thought.
Defence Construction appealed the trial
decision that it was directly liable to
Air-Tite. The Court of Appeal, making
reference to the doctrine of privity of con-
tract, overturned this aspect of the trial
judges decision.
The Court of Appeal noted Air-Tite was
making a claim outside of the law of con-
tract (i.e. alleging negligence) for a pure
economic loss (as opposed to a claim for
injury or damages to property). Even if
Defence Construction was negligent, the
law in Canada does not recognize claims
for pure economic loss outside of contract,
except in certain specific cases. For exam-
ple, pure economic loss is recoverable in
cases of negligent misrepresentation (e.g.
if a construction owner made a false repre-
sentation to a subcontractor resulting in a
loss) or in cases of relational economic loss
(e.g. if a construction owner caused injury
or property damage that in turn resulted
in financial loss to a subcontractor). A
claim effectively seeking compensation
for unpaid services and materials from
someone who is not a party to a contract,
without more, is simply not accepted in
the law in Canada.
This Court of Appeal decision illus-
trates that a construction owner is not
generally liable to a subcontractor for
unpaid services and materials
(subject to the requirements
of provincial lien legislation).
However, the Air-Tite trial
decision shows that the situ-
ation is insufficiently clear
inasmuch as a construction
owner cannot necessarily
escape going to trial or even suffer an
adverse trial decision before escaping
liability. Creative subcontractors and their
legal counsel may find ways to implicate
construction owners where circumstances
permit. As the old adage goes, you dont
necessarily go to court for justice; you go to
court for a decision.
Of course, prudent construction
owners will not assume that these legal
concepts (privity of contract and pure
economic loss) exclude them from all
potential liability to subcontractors. As
mentioned above, construction owners
can be directly liable to subcontractors for
some forms of pure economic loss, such as
claims for negligent misrepresentation or
injury to persons or property causing rela-
tional economic loss. Further, the unpaid
subcontractor may be the driving force
behind a multi-party construction claim,
in which case a construction owner must
often deal with a subcontractor directly,
as a matter of practical necessity.
The most obvious exception to this
general rule is found in provincial lien
legislation. Lien legislation exists to pro-
tect subcontractors by providing a form of
security for payment. In practical terms,
lien legislation makes the construction
owner directly liable to lien claimants
but only to the extent of the statutory
holdback or lien fund.
Outside of provincial lien legisla-
tion, the potential liability of an owner
to a subcontractor for unpaid services or
materials is very narrow indeed. This does
not preclude creative attempts to attach
liability to a construction owner through
the courts. The recent court case Air-Tite
Sheet Metal Ltd. v. N.D. Dobbin Ltd. provides
such an example.
Defence Construction, which is the
construction arm of the Department of
National Defence, contracted N.D. Dob-
bin Ltd. to construct a large airplane
hangar. N.D. Dobbin Ltd. subcontracted
Air-Tite Sheet Metal Ltd.
to supply and install the
hangars heating system.
A significant payment dis-
pute arose as a result of
problems with the heating
system. Dobbin terminated
Air-Tites contract and hired
another subcontractor to complete reme-
dial work to the heating system. However,
at trial, the court concluded that Dob-
bin wrongfully terminated Air-Tites
subcontract and Air-Tite was entitled
to payment.
Air-Tite claimed not only against Dob-
bin as general contractor but also against
Defence Construction as construction
owner. The creative basis for this claim
against the owner was an allegation that
Defence Construction negligently admin-
istered the prime contract with Dobbin. In
particular, the prime contract contained a
fairly standard provision giving the owner
the authority to disallow the general con-
tractor from substituting subcontractors.
Defence Construction did not exercise its
authority to prevent Dobbin from ter-
minating the Air-Tite subcontract and
Defence Construction did not make any
investigation into whether Dobbin was
justified in terminating the subcontract.
In a decision that seems truly remarkable,
Clause and Effect
Outside of provincial lien legislation,
the potential liability of an owner to
a subcontractor for unpaid services or
materials is very narrow indeed.
000OmWCB-FP 1 3/6/12 10:28:33 AM OPENMIND_12_p06-09.indd 9 3/15/12 10:46:44 AM
10 OPENMIND SPRING 2012
Leaders
By Ben Freeland
With fles submitted by Michelle Lindstrom
Have to Say
y the time this magazine goes
to print, the date for the 2012
Alberta election will most likely
have been announced and the leaders of
Albertas provincial parties will be on the
campaign trail. Before all of that in early
February, we had a chance to speak with
three of Albertas political leaders to discuss
some of the more pressing issues facing
the open shop construction sector in
Alberta, including MERFing, spending
of compulsory union dues for political
purposes and strategies for making
Albertas construction industry more
competitive. Here is what Premier Alison
Redford (Progressive Conservatives),
Danielle Smith (Wildrose) and Dr. Raj
Sherman (Liberals) had to say.
WHat tHe
alison Redford,
Danielle Smith and
Dr. Raj Sherman
share their views on
union transparency,
proposed labour
code changes and
strategies for ensuring
competitiveness in
albertas construction
industry
B
Alison Redford
Premier of alberta
Raj Sherman
Leader of the alberta Liberal Party
Danielle Smith
Leader of the alberta Wildrose Party
OPENMIND SPRING 2012 11
Questi on #1: Sever al pr opos ed
changes to Albertas Labour Code would
improve the competitiveness of Albertas
construction industry, which recently
has fallen behind neighbouring B.C. and
Saskatchewan. These include ensuring
that Division 8 provisions (project carve-
out agreements) under our labour code are
not considered unconstitutional; removing
unions right to fne members for working
for non-union or non-affiliated union
frms; allowing newly certifed construction
frms fexibility on completing work under
the terms they bid the work rather than
having to abide by a provincial agreement
in which they had no say; and directing
our Labour Relations Board to recognize
all employee bargaining units. As party
leaders, where do you stand on these
policy positions?
Alison RedfoRd: The
first thing I want to say
is that I don t actually
agree with the first part of
the statement that weve
fallen behind in terms of
competitiveness. Theres
no doubt that as our economy gets hotter,
its more expensive to do things here.
But from the perspective of overall
profitability of projects as well as salaries
of members for organized trade unions or
employee associations, its good economics
for them.
Regarding Division 8, I think weve
found ways to deal with the issue without
having carve-out agreement provisions in
the labour code. That doesnt mean that
we wont do it, but it means that before
we do it we have to have better discussions
bet ween empl oyers and empl oyee
associations and unions. It s been a
conversation thats been going on for about
a year. Im very open to continuing that. Im
looking to have much better stakeholder
engagements before we move ahead with
that because in Alberta weve had some
examples of carve-out agreements that I
think have started to lead us down the path
of better relationships without actually
needing them to be carve-out agreements.
Weve made some progress. We can make
some more progress, but there needs to be
a different dialogue around that.
I t s i mpor t ant t o have l abour
mobility. I dont think its appropriate
for union members not to be able to
make decisions about their employment.
Minister Hancock (Alberta Minister of
Human Services) is looking at that issue.
(As for the rights of newly certified firms)
that becomes part of carve-out agreements
and what weve seen is there have been
agreements put in place to deal with
some of these issues without having to
put legislation in place with respect to
carve-out agreements. Again, Minister
Hancock is looking into this and we
will continue to work with employee
associations in this regard.
dAnielle smith: The idea of carve-out
agreements, where you have agreements
in place for the duration of a contract for
all the employee groups impacted by that,
makes some sense. I think theres been a
practice where we have seen these projects
go ahead and they can be completely
derailed if you dont end up having the
initial agreement abided by throughout
the full course of the contract. We believe
in freedom of association and part of that
means freedom not to associate. So if you
actually have the opportunity to work in an
environment thats nonunion, we dont
think that member should be punished
for that.
(Regarding the recognition of multiple
bargaining units within construction
proj ects. ) If you re referring to the
Christian Labour Association of Canada
(CLAC), which allows for the representation
of multiple trades under a single bargaining
unit, we see no reason that wouldnt be
recognized by the labour board. But if
theyre referring to something else then
I would have to do more consultation
with them to understand the nature of
the problem.
RAj sheRmAn: I see the role of provincial
government as creat i ng a cl i mat e
where there are jobs for everyone. Were
constantly working to create and maintain
a balanced and fair labour environment
in Alberta. I acknowledge this is a very
delicate balance. Listening to both sides
of the debate, between Merit Contractors
Association and organized labour, they
both have their interests and both seek
to gain concessions from government.
Our role as leaders is to be completely
independent and impartial. I fully under-
stand and appreciate Merits approach.
They agree that we need jobs, labour and
protection for the oil and gas industry.
But their approach might be a little bit
different. I do not favour any changes that
will significantly upset that fine balance.
I prefer to look at the win-win scenario.
Both sides have their respective points
of view. Most of the time
they will agree and in other
instances they will disagree.
Governments job is not to
pick winners and losers.
Unions have their rules,
just as political parties have
theirs. And its not for me to
say what their rules should be. Individuals
make decisions. Its a free province and a
free country.
Question #2: Shoul d constructi on
uni ons be permi tted to use moni es
collected from large industrial projects
t o subsi di ze uncompet i t i ve uni on
commercial contractors to help them
win more work a practice known in
the industry as MERFing?
AR: From our perspective, we passed
some original legislation in 2008 to
stop this practice. We think MERFing is
not good public policy and that its not
appropriate for unions to be able to do it.
But I understand that as a result of our
legislation, it has now been identified
that there may still be a few gaps that are
allowing for it to continue and our minister
is working very closely with Merit to make
sure that we close these loopholes.
ds: My understanding was that the
government passed legislation in 2008
saying that this practice would no longer
We believe in freedom of association
and part of that means freedom
not to associate.
- dAnielle smith
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What the Leaders Have To Say
AR: There are two ways to try to stop
unwarranted political action by trade
unions. One is that you can pass this sort
of legislation. The other is you can put in
legislation that prohibits their activities.
I believe that associations and Albertans
need to be able to be involved in political
action but only if their members believe
that its appropriate for the association
to do that. We need to ensure that there
are structures in place so that members
can hold associations accountable. And if
theres work that we need to do with respect
to that, we will.
Historically in Alberta we have taken
the alternate approach with respect to how
to control unwarranted political action by
any organization, not just trade unions,
which is to limit campaign contributions
and to ensure that there are restrictions on
third-party election advertising both for
corporations and trade unions. Weve taken
that approach, but if there are ways that we
can strengthen the power of members to
hold their own associations accountable,
thats the question that we need to ask.
be permitted and that we
already have legislation to
limit this practice. If theres
a need to take another look
at it were more than happy
to do that.
RS: I was in the legislature when Bill 26:
The Labour Relations Amendment Act
2008 was passed. I know that Merit is very
supportive of restricting these practices,
which it views as a major problem within
the construction industry. I appreciate
their concern. Government should not take
the approach of punishing or rewarding
anyone. We have to be neutral here. I know
Merit sees this as a major problem and
organized labour has a different perspective.
QueStion #3: The use of mandatory union
dues to finance social and political causes
has become a major issue at both the fed-
eral and provincial level recently. Bill C-377,
introduced in the House of Commons, seeks
to amend the Income Tax Act so as to
require that all labour unions publicly disclose
their financial statements. Meanwhile, the
Workers Dues Transparency and Rights
Act tabled recently in the B.C. legislature
would limit the use of union dues for
purposes related to collective bargaining and
grievance administration. As leader, would
you support similar legislation in Alberta?
DS: Labour unions are
given the power to collect
their dues off of the pay
cheques of their employees
so there is a level of account-
ability. Theres a level of
power theyve been granted
through legislation. And with that kind
of power comes accountability. We know
that governments have to have their books
opened and scrutinized, as do corporations.
Labour unions should also have to have
the public disclosure of their financial
statements.
I dont have a problem if workers choose
to direct their union dues to purposes other
than collective bargaining and grievance
administration. Putting a limit on it and
saying they dont even have the choice of
supporting any other activities is probably
going too far. But union members should
be permitted to opt out of any portion of
their dues that support political advocacy
or political parties that they dont agree
with. I agree with their intention of
making sure that union members arent
made to pay for causes they dont support
but I think theres another way to do it. And
that would be allowing union members to
opt out of that portion of dues that would
go towards political advocacy.
We need to ensure that there are
structures in place so that members can
hold associations accountable.
- AliSon ReDfoRD
Continued on page 14
00Om-UofAFacultyofExtension-FP.i1 1 3/7/12 10:29:06 AM
00Om-UofAFacultyofExtension-FP.i1 1 3/7/12 10:29:06 AM
Silver Memories
RS: What youre really talking about is
transparency. I have no problem with
requiring greater transparency on the part
of organized labour so that transparency
and accountability apply equally to all
persons that finance any social or politi-
cal cause. Unions have their democracy.
You vote and the people are democrati-
cally elected. If you use or misuse funds, the
members can democratically remove their
leadership. I believe when youre demo-
cratically elected youre held accountable
by the members who elect you; they have a
genuine say in your activities. Thats how
democracies work. Absolutely I believe in
greater transparency for everybody includ-
ing government, unions, corporations and
Merit as well.
QueStion #4: Current infrastructure
expenditures in Alberta stand at around $7
billion per year. What can we expect over
the next two to three years?
AR: We believe that infrastructure invest-
ment is critical. Its frustrating for me to
hear some political parties say that we need
to cut back on capital spending and capital
projects because if we do that, two things
happen: one is that we lose the long-term
benefit of making the right decisions of
having enough schools and hospitals. The
other is that it impacts the economy and
peoples ability to find jobs. We are com-
mitted to a continuing infrastructure build
that is very similar to what weve seen in the
past three years. Im not sure exactly what
the numbers are but the point is, we are not
cutting back on infrastructure spending
because we think it is irresponsible to do
that.
DS: Weve provided an alternative budget
for the past two years in a row and we know
that $7 billion per year is not sustainable
when were running record deficits. We
proposed a level of infrastructure spending
last year that we do feel is sustainable. Its
based on the per capita amount thats being
spent in other large provinces Ontario,
B.C. and its in the $4.1 to $4.2-billion
range. We think that amount of money
would allow us to ensure that were clearing
our infrastructure defcit, staying ahead of
strategic investments but also maintaining
a level that we can sustain in the long run.
We would also make sure that this kind of
spending is increased relative to a reasona-
ble infation rate so were not falling behind
in our investments.
RS: The current governments penchant
for building buildings and public infra-
structure for which we have no operational
funding is ridiculous. Its absolutely shame-
ful that maintenance for the buildings we
do have has been deferred. They all have
leaky roofs. Rule number one is youve got
to make sure the roof isnt leaky and your
foundation is good. When you build it,
youve got to maintain it, right? Im a guy
who builds houses. Ive got a construction
company. The government has deferred
all the maintenance and over the course of
the years weve had a massive infrastructure
deficit. Suddenly at the peak of the boom
they woke up and said, Oops, weve got to
build highways and bridges. These should
have been built when the economy wasnt
booming, when Alberta needed jobs and
things could have been done better for one-
third the price.
The complete interviews had eight questions we
posed to each leader but could not print due to
space constraints. For the complete, original
interviews and questions, such as outsourcing
apprenticeship training to building trade
unions, the impact of the proposed Keystone XL
Pipeline on Albertas petrochemical industry and
the proposed new arena in Edmonton, visit
meritalberta.com
What the Leaders Have To Say
Suddenly at the peak of the boom the
(PC government) woke up and said,
oops, weve got to build highways
and bridges.
- RAj SheRmAn
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Congratulations
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000Om.ARHCA_1-6V.indd 1 3/7/12 9:36:29 AM
OPENMIND_12_p10-15.indd 14 3/16/12 3:33:17 PM
Imagewear keeps you
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Imagewear has the largest selection of
leading innnovative industrial wear
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To ensure your workers are comfortable
and have the safest gear, we offer a
voucher program and/or employee
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ability to give workers the chance to
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000Om.Imagewear-FP 1 3/1/12 9:54:59 AM OPENMIND_12_p10-15.indd 15 3/15/12 11:32:13 AM
ince the early 90s, Canadian and U.S. open shop contractors
have had to deal with a variety of unfair yet legal building trade
union market recovery schemes. Variously known by terms such
as Job Targeting Funds (JTFs), Stabilization Funds (STABs) or
Market Enhancement Recovery Funds (MERFs), they are all, in the words
of the International Brotherhood of Electrical Workers (IBEW), Part of
a strong organizing program aimed at securing monopoly of local labour
markets.
How effective were these schemes? In Portland, Oregon, it reportedly
took only six years for IBEW Local 48 to increase its market share from 40
to 85 per cent. Dealing with this potential threat to fair and competitive
construction markets is one reason why North American contractors could
ultimately be helped by groundbreaking changes in Alberta and Idaho.
On June 5, 2008, the Alberta government passed Bill 26: The Labour
Relations Amendment Act 2008. The act brought in specific labour law
amendments to curb the use of bid subsidy schemes called MERFs.
S
TargeTing
Revisited
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The legislative progress of dealing
with union subsidy schemes is gaining
ground in Canada and the U.S.
By Bill STewarT
The legislation also specified that for a
MERF to lawfully operate, employees must
authorize deductions in writing and the
deduction amount and purpose must be
separately shown on both employee and
employer payroll records. The law also made
it an unfair labour practice for a union to
expel or suspend a person from membership
or take any other disciplinary action against
anyone who refuses to contribute to such
schemes.
If it waddles and quacks
like a duck
Despite the intent of Albertas legislators
to end this practice, the respective Building
Trades Unions (BTUs) wasted little time in
developing new schemes to circumvent the
law. Indeed, within six weeks of the royal
assent of the amendment act, one BTU
business manager reported to members that
it would be business as usual and that the
union would have in place an alternative way
of ensuring that [unionized] contractors will
be competitive for this work. Some union-
ized contractors also mentioned anecdotally
that relief was being provided under some-
thing we dont call MERFs anymore.
Legal counsel for unionized contractors
also noted, They [BTUs] know how to
read legislation and have the ability to
change their tactics to accomplish their
objective of seeing more construction
work done by contractors bound to
their respective collective agreements.
This change in tactics was evident
when efforts were made to have unions
comply with the act and the related
Market Enhancement Recovery Fund
Distribution Regulation in 2009.
The collective agreements for each of
the respective unions continued to include
specic references to MERFs. In April 2009,
the Alberta Labour Relations Board (ALRB)
received notification that none of the
MERFs identified in six current collective
agreements had complied with S.2 of the
regulation requiring the filing of disclo-
sure reports. The ALRB did not initiate an
investigation as contemplated by the act but
accepted written arguments. As part of their
submissions, the union legal counsel raised
numerous issues challenging whether any
party outside their
Fuelled by high energy prices, Albertas
economy expanded rapidly over the past
two decades. In parallel to this expansion,
building trade unions such as the IBEW and
the United Association of Plumbers and
Pipetters Union (UA) convinced a number
of major oilsands project developers to grant
them labour supply monopolies for the
building of the provinces largest construc-
tion projects. The projects provided the
nancial means for exploiting blind spots in
Albertas Labour Relations Code.
In Alberta, these schemes emanated
from collective bargaining agreements and
amounted to cross-sectoral transfers of
economic rents from a group of industrial
construction owners and contractors to
contractors and owners in the institutional
commercial sector. Essentially, this occurred
because some large oilsands developers
willingly paid a premium on their multibil-
lion-dollar construction projects to gain
access to pools of unionized tradespeople.
Why would major oilsands owners turn a
blind eye to paying higher costs for labour?
The answer lies seemingly in Albertas royalty
regime, which mitigates higher costs by
allowing developers to pay lower royalties
to Albertas treasury until they recover their
capital construction costs. The unions
involved in orchestrating these schemes
successfully used the funds to subsidize
the labour costs of unionized contractors
working in institutional and commercial
construction, wherein the prevailing industry
custom is to award contracts based on having
projects built on schedule for the lowest
price. In practice, MERFs are a tax on the
economic rents that unions extract primarily
from the energy sector being redistributed
to commercial construction projects where
similar economic rents do not exist because of
competition from open shop contractors.
In Alberta, the schemes were initially
outlined in collective bargaining agreements
stipulating that contractors were required
to remit part of the total wage package (up
to $2.32 per hour) into the union-controlled
fund, which other unionized contractors
could apply for subsidies on a project-by-
project basis. In certain instances, the hour
rate subsidy was estimated to be as high as $15
per hour multiplied by the total estimated
hours of labour required for the project.
In passing Bill 26, Alberta legislators
intended to ensure that the labour code was
not used to promote, sanction or provide
a legal haven under the guise of collective
bargaining for this type of unfair activity.
Accordingly, Albertas law sought to restrict
how MERFs were collected and disbursed.
Payments from employers to unions and
unions to contractors aimed at under-
cutting the bids of more competitive
contractors were prohibited. And although
unions and their members were legally
permitted to establish lawful subsidy funds,
the law stipulated a transparent and volun-
tary process, which was a rst in Canadian
labour law.
WHY WOULD MAJOR OILSANDS
OWNERS TURN A BLIND EYE TO
PAYING HIGHER COSTS FOR LABOUR?
POSSIBLY BECAUSE OF ALBERTAS
ROYALTY REGIME?
Continued on page 20
000Om.MacEwan-FP 1 3/2/12 10:18:14 AM
Job Targeting Revisited
000Om.MacEwan-FP 1 3/2/12 10:18:14 AM
tive agreement, the parties acknowledged
that the added cost of maintaining the
added cost [had] a negative impact on the
ability of signatory contractors to compete,
secure work and offer gainful employment
opportunities to members of the union.
This problem is then dealt with in the fnal
paragraph stating, All current and future
commercial work may, at the Employers
discretion, be enabled by waiving the employ-
ers obligation to contribute on behalf of its
employees to the Health and Welfare and the
Pension Plan.
In the case of the Insulators, the value of
this relief is equivalent to $6.50 per hour
worked. This raises concerns about other
similar arrangements with other union locals
because charges for vacations, pensions and
other funds are approximately 30 to 33 per
cent of the basic negotiated hourly wage
rate. Under normal bidding conditions,
these costs are added to the hourly charge a
contractor would include in a bid estimate.
From an open shop perspective, the legis-
lation passed in 2008 was clearly intended
to end subsidizing the bids, tenders, fees
and prices of unionized construction
contractors. A subsidy is a subsidy is a
subsidy. To put it another way, if it waddles
and quacks like a duck, chances are it is.
Thi s and other i nformati on was
presented to a panel of lawyers who
submitted an initial confdential report to
the responsible minister in March 2011. A
second report was commissioned and at the
time of writing the contents of their report
remain confdential.
Idaho also passed legislation
addressing job targeting funds
In 2011, the State of Idaho passed the
Fairness in Contracting Act (FCA) to promote
fairness in the construction bidding process
in that state. This legislation is a further indi-
cation of how union bid subsidy schemes are
being viewed by other jurisdictions as a matter
that needs to be addressed in order to properly
protect the public interest.
The significance of this law cannot be
overstated, as it sets the precedent for other
states trying to become more competitive.
This concise one-page law addresses the issue
directly so as to ensure that labour unions do
not attempt to circumvent it in the same way
that their Alberta counterparts have.
bargain had the legal standing to raise this
issue and that there was no lawful basis for
their clients to disclose any information
whatsoever. In turn, the board ruled that it
could not determine whether the MERFs
referred to in the same collective agree-
ments that were in force before and after
Bill 26 provisions and related
regulations came into effect
were regulated by the MERF
Distribution Regulation.
I n t i me, t he vari ous
collective agreements were
amended and the picture
became clearer. While the
names of the MERFs were
changed, the sums that
contractors were required
to pay into newly created
funds remained the same. For
example, the collective agree-
ment between the Electrical
Contractors Association of
Alberta and the International Brotherhood
of Electrical Workers Local 424 prior to the
2008 statute was referred to as the Market
Target Recovery Trust Funds (MTRF) and
the amount contractors were required to
contribute to the fund was $0.93 per straight
time hour worked by each journeyman. In
the subsequent collective agreement, the
formerly referenced MTRF became the
Membership Development Fund and the
amount contractors remained obligated to
remit continued to be $0.93 per straight-
time hour worked by each journeyman.
How is the money being spent? The answer
is likely similar to the solution reached by
Construction Labour Relations An Alberta
Association (CLR-A) and Local 110 of the
Heat & Frost Insulators and Allied Workers
Union. In a fashion similar to the other
collective agreements, the previously named
MERF was renamed the Promotion of the
Insulation Trade Trust (PITT). The hourly
contribution rate remained unchanged at
$0.50 per straight-time hour worked.
What did change, however, is found in the
Letter of Understanding attached accompa-
nying the revised collective agreement. After
agreeing that non-signatory contractors
operating in the commercial/institutional
sector do not offer Health and Welfare
and Pension packages to their workforce
equivalent to those contained in the collec-
Job Targeting Revisited
All cuRRENt AND futuRE
cOMMERcIAl wORk MAy, At
thE EMPlOyERS DIScREtION,
bE ENAblED by wAIvING thE
EMPlOyERS OblIGAtION tO
cONtRIbutE ON bEhAlf Of ItS
EMPlOyEES tO thE hEAlth AND
wElfARE AND thE PENSION PlAN.
Insulators union
letter of understanding
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The FCA is the frst piece of legislation in
the U.S. that deals directly with construction
union bid subsidy schemes. Unlike Albertas
amendments, the Idaho legislation made
it illegal for a contractor or subcontractor
to directly or indirectly receive a wage
subsidy, bid supplement or rebate on behalf
of its employees, or provide the same to its
employees, the source of which is wages,
dues or assessments collected by or on behalf
of any labour organization(s), whether or
not labelled as dues or assessments. The bill
also prescribed fnes of $10,000, $25,000 and
$100,000 for violations.
Given the high stakes involved, it is hardly
surprising that this act, as well as another
Idaho act related to project labour agree-
ments, are currently before the Idaho courts.
Initially, the union legal counsel used the
existence of a national labour relations code
in the U.S. to successfully argue that the
legislation was outside the state of Idahos
jurisdiction, as it is related to labour rela-
tions. However, the Inland Pacifc Chapter
of the Associated Builders and Contractors
(ABC) of the United States intervened and
is making the case that it is within Idahos
jurisdiction to adopt and implement the
legislation based on the fact that Idaho is a
Right-to-Work State.
The ABC is asserting that the FCA directly
serves a broad state interest by prohibiting
unfair bid subsidy programs that undermine
the right of Idaho citizens to choose to not
be represented by a labour union and that
job targeting activity, by its very defnition,
is aimed at unduly coercing and restraining
Idahos non-union employees in their deci-
sion not to join a labour organization, by
undercutting their employers ability to get
work. The ABC also asserts that the loss
of available non-union work based upon
artificially lowered bids by union contrac-
tors funded by their employees is a far more
compelling state interest than the right of
union employees to engage in such activity
for the preservation of their jobs. The courts
initial ruling, they argued, was based upon a
decision that compulsory unionism trumps
the right to choose. Existing right-to-work
laws in Idaho very specifcally protect Idaho
citizens from compulsory unionism and give
them the right to choose.
Given the high stakes involved, it seems
likely that there will be considerable and
lengthy litigation around this legislation.
Efforts by the Alberta and Idaho legisla-
tures to end unfair union subsidy schemes
are groundbreaking developments that
could dramatically rebalance the construc-
tion industry across North America. Open
shop contractors now have two examples
of signifcant government responses to the
unique labour relations challenges in the
construction industry. While there may be
delays and setbacks in achieving legislative
justice, it seems apparent that the door is
now opening wider and wider to end these
abusive job subsidy schemes.
The Canadian construction industry is poised
to move into a role of prominence, embracing
Building Information Modelling technology
eople often say that Canada is not a nation of early adopters.
In actual fact, this clichd view holds little water. Canadian
business was well ahead of the curve in harnessing the power of
social media and the evolution of the Smartphone was in large part
a Canadian story thanks to RIM and its BlackBerry. However, when
it comes to Building Information Modelling (BIM), there is more than
a grain of truth to this clich. While a number of countries (notably
in Europe) have raced ahead to implement BIM, Canadas construction
industry has shown some reticence in embracing this innovation.
Nevertheless, the last few years have seen substantial growth in BIM
use in Canada. An increasingly prominent role in the creation of
international industry standards for BIM promises to catapult the
country from laggard to leader in the feld.
P
By Ben Freeland
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Laggard to
Leader
BIM is, in broad terms, the process of
generating and managing building data
in parallel with the life cycle of the build-
ing. It involves 3-D, real-time, dynamic
building modelling software aimed at
increasing productivity in the design and
construction process. However, BIM goes
well beyond the parameters of established
3-D design techniques in its inclusion of
geometry, spatial relationships, light analy-
sis, geographic information and quantities
and properties of building components.
As such, BIM is an industry paradigm shift
that requires unprecedented collabora-
tion between architects,
contractors and building
owners for effective use.
BIM cant be seen just
from the perspective of a
contractor, an architect or
an owner. They become
mutually inclusive thats
the key to it, explains Dave
Pelletier, president of D&G Mechanical
Inc. in Kelowna. Mr. Pelletier is the current
chair of the Institute for BIM in Canada
(IBC), a consortium set up to lead and
facilitate the co-ordinated use of BIM in
design, construction and management of
the Canadian-built environment.
Determining levels of BIM use is a
far from straightforward matter as
statistics often do not differentiate
between companies making full use of
the technology and those who use it just
as a f lashy 3-D modelling sales tool.
Nevertheless, the latest findings show
that BIM use worldwide is highest in
northern Europe (with Finland using
BIM in an astonishing 93 per cent of its
new projects) and parts of the Asia-Pacifc
region. North America and Canada in
particular has trailed behind the rest of
the industrialized world. Speaking at the
CanaData Construction Industry Forecasts
Conference in Toronto late 2009, Daily
Commercial News reporter Will Koroluk
expressed dismay at the reluctance he
saw on the part of Canadian construc-
tion firms to embrace new technological
developments such as BIM. The future
has a nasty way of rising up and biting you
unless you pay attention to it, he says,
adding that Canadians generally arent very
good at paying attention to the future.
Fast forward to early 2012, however,
and the picture appears to be changing.
While Canada has yet to become a world
leader in BIM, the construction industry
in this country has made significant
progress to adopt BIM. A 2010 IBC
survey showed that 60 per cent or more
of commercial and institutional projects
in Canada were employing BIM, with use
in the commercial and residential sectors
approaching the 50-per-cent mark.
Were at a transitional stage, explains
Pelletier. The larger construction frms are
ahead of the curve. Its the smaller firms
that need help. He notes that in certain
sectors in Canada, most notably the oil and
gas industry, BIM has been in full-fedged
use for many years now but that it is still
relatively new to most of the vertical
building in the industrial, commercial,
and institutional (ICI) sectors. There is also
widespread interest across the industry. We
have a lot of contractors and other industry
partners who recognize its value but need
help implementing it, he says. Thats
exactly what the IBC was set up to do.
In addition to helping
small- and medium-sized
contractors with the BIM
learning curve, IBC works
t o est abl i sh i ndust r y
standards and best practices
for the technology together
with its sister organization
CanBIM. The latter organi-
zation made considerable progress in
building bridges between academia and
industry in the quest for best practices,
particularly regarding the handover of
buildings from contractor to owner within
the context of the BIM process. BIM is more
than a technology, its a process, says Allan
Partridge, CanBIMs vice-president and
executive director of Group2 Architecture
in Edmonton. Any really diffusive change
in the industry goes from being ad hoc to
managed, to integrated, to leveraged. Weve
definitely moved out of the ad hoc phase
here in Canada and are well into the
managed, and touching on the integrated.
BIM is, in broad terms, the process
of generating and managing building
data in parallel with the life cycle
of the building.
Laggard to Leader
Were not at the leveraged stage yet, but thats the goal.
The potential for bona fide international collaboration
in building design that the technology promises has yet to
materialize due to a lack of international standards. This,
according to Partridge, is an area in which Canada has the
potential to emerge as a world leader. CanBIM is already
working with leading BIM software designers Nemetschek
(producers of Vectorworks) and Autodesk (designers of
Autodesk Revit Architecture) in establishing global standards.
We are currently working on developing standards with
Australia and the U.K., he explains. We are also working
with our partner buildingSMART alliance in the U.S. on the
National BIM Standard (NBIMS) V2. This is being set up as
an eventual ISO standard for BIM and CanBIM is becoming
a major conduit for this. We were pleased to see the recent
announcement by buildingSMART International that
NBIMS V2 will be adopted as a global standard of standards
related to utilizing BIM-enabled technologies.
With BIM technology approaching the maturity stage
in some markets and the high-growth stage in others,
evidence of its benefits are widespread. A recent McGraw-
Hill Construction survey indicates that BIM users are seeing
overwhelmingly positive payback from its implementation.
The survey found that two-thirds of U.S. BIM users reported
positive return on their investment in the technology. Among
expert users, that fgure rises to 87 per cent, with a further 93
per cent of users believing in the potential to gain more value
from BIM in the future. Among specifc business benefts, the
most commonly cited was reduced rework. Others include
reduced conficts and changes during construction as well as
better multi-party communication and understanding from
3-D visualization and improved project process outcomes,
such as fewer RFIs and feld co-ordination problems.
While a sense of immediacy surrounding BIM has yet
to fully permeate Canadas construction industry, a
growing chorus of Canadian contractors is urging the rest
of the industry to get on board. Contractors really need to
start looking at modelling, says Russell Bridgeman, senior
construction manager at PCL Builders in Edmonton. As
of now, there arent many owners who are requesting it but
theres nothing to stop designers from using it to improve
productivity. Bridgeman adds that BIM is already gaining
considerable traction in eastern Canada as well as in the U.S.
while the western provinces trail behind. He anticipates that
this will soon change. He also says that companies not look-
ing into BIM as a design tool are doing themselves a disservice.
The cost of using it is far outweighed by the effciency and
productivity that is gained through it.
The challenge ahead, most experts agree, is the human
challenge, namely the recasting of relationships that this new
process requires. Fortunately, the range of BIM educational
resources now available far outstrips what existed just a year
ago. Merit Contractors Association introduced an online
BIM awareness course in 2011 as part of the Merit College of
Constructions expanding suite of e-learning courses while CanBIM
now provides extensive BIM educational resources tailored to the
needs of architects, engineers, builders and owners. With any major
change theres human resistance, says CanBIMs VP Partridge. Its a
disruptive change and CanBIM is working to break down those fears
through best practices and our regional sessions.
IBCs Pelletier agrees, adding that the most pressing issue for
the next few years will be educating the industry so that contractors
and other stakeholders are not ambushed by the technology once
it becomes universal. We dont want anyone to feel that theyre
being forced to adapt overnight, Pelletier says. We want everyone to
be well-informed ahead of implementation.
Slow but steady this aptly characterizes the state of BIM in
Canadas construction sector. While other jurisdictions remain
ahead in terms of implementation, BIM has made impressive strides
in Canada in recent years. This is largely due to the educational and
advocacy efforts of CanBIM and IBC and Canada is poised to emerge
as a world leader in the technology over the course of the coming
decade. Moreover, Canadas slow-but-steady approach to the
technology and the efforts of organizations like CanBIM and
IBC to lay the groundwork should make for a relatively smooth
process whereby BIM becomes a universal ingredient in Canadas
construction industry.
000Om.Urban Scaffolding-1_4.indd1 1 3/5/12 11:24:54 AM
The open-shop movement
battles regulatory burdens
in construction that no
other industry has to face
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anadas open-shop movement marked a signifcant milestone in 2011 because
that was when the vision of the eight provincial open shop construction asso-
ciations became a reality, with the establishment of a national voice for Merits
member companies.
Merit Canada is needed because federal government policy, legislation and
consultations continue to disproportionately refect the views of union leaders. Conse-
quently, the narrow interests of organized labour are refected in federal legislation
and policies, despite that an overwhelming majority of Canadian workplaces operate
on a union-free basis.
Merit Canada now has an office steps away from Parliament Hill and the Prime
Ministers Offce and we have met with key decision makers to discuss the issues that
impact our members. While Merit Canada became operational as recently as June 2011,
its impact is already being felt in Ottawa.
C
By Terrance Oakey, the frst full-time president of Merit Canada
000OM.Totem_1-2h.indd 1 3/8/12 11:12:47 AM
One tangible result for open shop contractors has been
the defunding of the old Construction Sector Council (CSC).
The board of the CSC was not refective of the industry, with
the vast majority having ties to the building trade unions.
Merit Canada has long called for a rebalancing of the Board
of Directors of the CSC in order to refect the reality that
the open shop sector compromises more than 70 per
cent of the industry. Merit also raised concerns about
the CSCs approach, methodology and focus on the
needs of the unionized sector of the industry. Given the
Boards inability to address any of these concerns, Merit
Canada supported the governments decision to phase
out its core funding by 2013. It also participated in an
announcement with the minister of human resources
and skills development to develop a new grants-
and-contribution program. Merit Canada is now
participating in a construction stakeholder group to
keep those elements of the CSC, that were of value to the
industry (e.g., Labour Market Information or LMI) while
ensuring the open shop has appropriate representation.
This was an important step for Merit Canada as provincial
government policy makers used to use the results of the LMI
surveys to develop programs and services without input from
the open shop sector.
The ability to compete for work in an open and fair manner
is at the heart of what Merit Canada members believe. Only
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a business environment in which construc-
tion contracts are awarded on the basis of
corporate merit ensures that taxpayers
receive the best possible service at the best
possible price. Therefore, construction
projects financed in any way with
federal funds must be tendered
without any precondition
requiring that contractors be
signatory to any union or abide
by the terms of a specifc collective
agreement. Providing
equal opportunity for all
contractors to submit
their best bids will ensure
that Canadian taxpayers
receive the best value for
their money.
Canadian taxpayers
expect that their hard-earned money is being spent in the most
cost-effective manner, particularly now that the country is
beginning to emerge from one of the worst economic crises
in our history. Studies in Canada and the U.S. indicate that
taxpayers can save between 12 and 18 per cent on projects that
have more inclusive tendering approaches that do not favour
union or non-union frms.
All Canadians pay for federally funded public works projects
equally. It stands to reason that all Canadians should have an equal
opportunity to provide the services for which these funds pay. There
are many jurisdictions in Canada where open-shop contractors more
than 70 per cent of the entire construction industry are excluded
from bidding on public works projects, even though these contractors
would be able to provide the same or better services at a signifcantly
lower cost. This unfair practice must end.
Merit Canada also played a public and private role in ensuring that
unions provide greater fnancial transparency to everyone who pays
union dues as well as those who may be considering joining a union.
MP Russ Hiebert introduced a
Private Members Bill (C-377)
that would require unions to
publically disclose detailed
financial information. This
will be of particular benefit
to the open shop contractor
community, as the way unions
spend dues will become another factor in the certifcation process by
providing valuable information to employees who are considering
joining a union. Merit Canada will continue to work with members
of parliament from all parties to ensure the passage of this important
piece of legislation.
Another issue that impacts the open shop contractor community
at the federal level is immigration. Over the next decade, Canadas
Over the next decade, Canadas
construction industry will have to
attract at least 320,000 workers or face
serious shortages in the labour supply.
are in place at embassies and consulates
throughout the world to improve effi-
ciency of applications intake. In addition,
the federal and provincial governments
need to streamline and bolster the Tempo-
rary Foreign Worker program and the
Provincial Nominee program in order to
alleviate regional differences in labour
requirements. The federal government
also needs to streamline its work visa and
foreign credential recognition processes
for journeymen and update its labour
market opinions.
Another pressing issue for Merit Canada
is the regulated minimum wage policy
for construction workers. Merit Canada
members believe that wages and working
conditions should be determined through
direct dialogue between employers and
employees. If not that way, then through
collective bargaining processes, as
freely chosen by the parties, within
the boundaries of the law. For this
reason, Merit Canada has called on
the government to repeal the Fair
Wages and Hours of Labour Act,
which creates a national system
of regulated minimum wages for
the construction industry with
work undertaken in relation to
public works and contracts.
Given the relatively high
wages of construction workers,
construction industry will have to attract
at least 320,000 workers or face serious
shortages in the labour supply. While
the industry is dedicated to training and
recruiting Canadians into the construc-
tion industry, it has become clear that this
strategy by itself will not suffce.
Continued economic growth depends
considerably on the maintenance and
improvement of Canadas infrastructure
and capital projects.
Labour shortages in the
construction industry
will lead to delays in
critical infrastructure
and capital construc-
tion projects. These
delays will directly
undermine the ability
of Canadian businesses to compete in a
global market, reduce foreign investment
in Canada and limit economic growth.
Current immigration regulations
disproportionately favour immigrants
with high academic qualifcations and give
insufficient weight to professional skills
and achievements. As a result, less that
0.2 per cent of immigrants admitted each
year into Canada are skilled construction
workers or construction industry profes-
sionals, even though the construction
industry employs more than eight per cent
of Canadas labour force.
Merit Canada is asking the federal
government to increase the point system
recognition for technical and/or trades
skill training and experience in occupations
where long-term trade skills shortages are
anticipated under the Economic Immigrant
Class Program. Merit is also calling the
government to streamline its immigration
procedures and ensure adequate resources
Merit Goes National
Merit Canada members believe that
wages and working conditions should
be determined through direct dialogue
between employers and employees.
we are at a loss to understand why the
federal government chooses to single out
the construction industry and impose
regulated minimum wage rates across an
industry that consistently pays workers 25
per cent more than the Canadian industrial
average. Why, for example, is it necessary
for the federal government to regulate
minimum wages for elevator construc-
tors in the Metro Toronto area at $43.53
per hour? This type of regulatory
oversight burdens no other industry
and construction workers are one of
the best-paid classes of employees
in the country when operating in a
free market. As such, this policy is
completely unnecessary.
These are just some of the issues
on which Merit Canada will focus
over the coming months to ensure that
open shop contractors will operate on a
level playing feld.
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000Om.Nait-FPi 1 3/7/12 12:25:43 PM
By Ben Freeland
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t started out as a simple idea. A group of construction contractors in
south Florida were examining the possibility of creating an easy-
to-use online directory to help them fnd the resources necessary
for jobsite mobilization quickly and within their geographical
area. At the time, the only resource available for this purpose was the
Blue Book Building and Construction Network, which contractors
did not fnd particularly user-friendly given that it divided Florida into
two geographical zones (north and south) and provided no company
information beyond names and numbers. Clearly something better
was required.
The result was Jobsite123.com. It is currently the fastest grow-
ing online tool for the commercial construction industry with over
500,000 companies in its database and it appears to be taking Canada
by storm, too.
In the beginning, we focused on building a directory of jobsite
mobilization resources, explains Coty Fournier, Jobsite123.coms
founder and CEO. There was nothing on the web like it and it started
to take off. Before long, contractors and other suppliers had begun
asking, Why not put the whole industry on it?
I
Thats when we knew the potential for Job-
site123.com was even bigger than we had
originally envisioned and we set out to take
the free online community concepts started
by web titans like LinkedIn and Facebook
and customize the company profle content
so that each company had the ability to show-
case the answers to 95 per cent of the most
commonly asked questions in the market-
place. Investors jumped in and version 2.0 of
Jobsite123.com was developed and launched
in summer of 2009, says Fournier.
Since its inauguration, Jobsite123.com
has established itself as the gold standard
for digital communication tools in the
construction industry in the United States,
where it is quickly gaining ground as the
commercial construction industrys coun-
terpart to Facebook or LinkedIn. The serv-
ice caters equally to the buy and sell sides of
the equation. It provides buyers with quali-
tative and quantitative data on prospective
contractors or suppliers while simultane-
ously giving firms an easy way to show-
case themselves online. The name comes
from the expression Easy as 1 2 3, says
Fournier. Weve built a tool that anyone
with rudimentary
computer skills can use. If you can type, you
can build a phenomenal company profile
inside Jobsite123, that when fully com-
pleted, will rival the look and feel, and most
importantly, the useful content of most
construction company websites out there.
It literally solves the problem of how to get
effective content about your company onto
the web. And its completely free.
The notion of creating a free online hub
for the industry gained early support from
Fourniers industry backers. While the site
does derive revenue from profle upgrades
and other additional forms of marketing
exposure (known as freemiums), con-
tinued industry support has allowed the
site to remain free of charge. However, the
freeness of the site would ironically prove
to be an obstacle at the outset. Free is not
a word you hear very often in the construc-
tion industry, the sites CEO notes. One of
our challenges early on was convincing con-
tractors that this service actually was free
and that there werent any catches. How-
ever, the timing of Jobsite123s genesis was
at the height of the worst recession in post-
war U.S. history, which meant that once
companies overcame their initial hesita-
tions, they wasted no time getting on board.
In some ways the recession made
it easier, says Fournier. Most
companies needed more work and
were looking for new,
cost-effective ways
of marketi ng them-
selves. The fact that our
customized profiling
platform is free meant
that compani es had
nothing to lose by trying it out.
Jobsite123s rapid expansion
has been facili-
tated in large
part through
Easy as 1 2 3
connectivity
with vital indus-
t r y s of t war e
providers with
company data-
bas e s i ns i de
their user platforms,
such as project management and invita-
tion-to-bid software programs. These tech-
nologies can now connect their database
to the Jobsite123s database for auto-feeds
so that companies Jobsite123 profles can
be viewed or accessed within various soft-
ware platforms. The first partnership of
this kind was launched in October of 2011
with SmartBidNet, one of North Americas
leading providers of construction bid man-
agement software with well over 200 major
general contracting clients across the U.S.
and Canada. These and similar connections
link prospective buyers directly to the Job-
site123 database when additional resources
are needed for any given project bid, while
Jobsite edits appear automatically in the
linked databases.
In late 2011, a three-way partnership was
established between Jobsite123.com, Merit
Contractors Association and the Calgary-
based JuneWarren-Nickles Energy Group
to create the Canadian version of the site.
Jobsite123.ca was officially launched in
Alberta in October 2011 and in its frst four
months drew some 5,000 companies. Plans
are underway to make the service available
to contractors and all other construction
professionals nationwide this year.
Meanwhile, back at Jobsite123.coms
head offce in Fort Lauderdale, Fournier and
her colleagues are already looking beyond
North America for future expansion pos-
sibilities. Were looking at possible expan-
sion into South America and Europe, she
notes. Theres nothing confrmed yet but
its our intention to expand further.
000Om.Jobsite123-1_2h.indd 1 3/13/12 11:47:08 AM
Anticipation over the Canadian
version is already running high. Its
a fantastic tool, says Bill Whitelaw,
JuneWarren-Nickle Presi-
dent and CEO, whose firm
is overseeing marketing,
digital advertising and integra-
tion solutions for Jobsite123.ca.
It builds on the way the con-
struction industry has always done
business while also giving people a range
of extra tools. Companies can cover all
the prequalifying elements insur-
ance coverage, bonding capacity, cli-
ent relationships, project portfolios,
safety records and build themselves a
very compelling prequalifying story for
buyers. And from the buyers standpoint,
its a very powerful search tool. Whitelaw
sees few obstacles to the sites spread in Can-
ada and further expects the free access aspect
of the service to be a plus in todays social
media-saturated marketplace. Its expected
now, he says. You cant put a tool like
this out there without a free component.
There are many purchasers and general
contractors in this sector who require free
access to this type of website to find the
services they need.
What began as a simple solution to a
local need evolved quickly into a stand-
ard construction industry tool across the
United States and has altered the industry.
Ive already noticed an evolution in how
contractors behave, says Fournier. At
first contractors were hesitant to display
their credentials out in cyberspace. That
has changed completely. Fournier
notes that Jobsite123, like LinkedIn,
has a built-in performance rating
request function, allowing contractors
to request reviews of their work
from buyers following the com-
pletion of a project, which they
can then display on their profile.
Also, they can allow companies
to connect their profile to compa-
nies they enjoy doing business with and
would readily recommend. What this tool
has done is create a much greater emphasis
on managing content and online reputation
management, she says. In the construc-
tion industry, we have all too often lingered
at the trailing edge of technology and inno-
vation, but we are working hard to change
that, as times have changed irrevocably. Our
industry needs to step up our game.
The Canadian version of Jobsite123
is now a reality, and judging by its success
south of the border, it shouldnt be long
before this digital media tool is industry
standard in this country.
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36 oPenmind sPrinG 2012
by Bill Stewart
Somethings
Got to
Give
n the near future, Canadas construction industry
will be plagued by labour shortages as will any
others reliant on workers with trade skills.
The single largest factor leading to this shortage
is our aging workforce. In 2005, the proportion of
Canadas adult population 55 years or over was 29
per cent and is estimated to grow to 35 per cent by
2015. Between 2005 and 2015, an estimated 3.8 mil-
lion workers are expected to retire. Specifcally in the
construction industry, 210,000 workers will likely
retire from the 1.2 million-strong industry over the
next eight years.
According to a 2011 study released by the Construc-
tion Owners Association of Alberta (COAA), the gap
in Albertas construction industry could be as great
as 40,000 workers. Such shortages in needed trade
skills will result in an industry unable to respond to
owners needs for on-time, on-budget projects. While
this impending demographic tsunami has been
known for years, solutions are complex and clouded
by politics.
I
By Bill Stewart
Canadas future
depends on
immigration reform
What is clear, however, is that a variety of
strategies are needed to combat the problem.
Apprenticeship and training programs are
important to pursue, along with outreach
initiatives to attract youth and others from
traditionally under-represented communi-
ties. Such efforts are making good headway.
According to Statistics Canada, three of the
largest construction-related apprentice trades
involve carpenters, electricians, plumbers,
pipefitters and steamfitters. In 1991, the
number of apprentices registered in these
trades across Canada totalled over 83,000.
Despite the recession, the numbers of regis-
tered apprentices increased by 86 per cent to
almost 155,000 in 2009. However, developing
new resources takes time. Canadas appren-
ticeship systems are based on a combination
of time accumulated in on-the-job training
supplemented by technical in-class training.
The normal timeline from initial intake to
obtaining a journeypersons credential is
about four years.
Despite the best efforts of governments,
business associations and contractors,
various forecasts indicate that there will be
a signifcant shortfall in domestic resources
to meet demands. For example, the COAA
estimates that almost 160,000 offshore
construction workers will be needed within
Top 20 Trades Canada - permanent residents (skilled Worker - principal applicant only) 2005-sept. 2010*
the next eight years to satisfy all the projected
workforce needs. Unfortunately, Canadas
immigration system is extremely ineffcient.
It also does a poor job of targeting immigra-
tion for high-demand construction occupa-
tions, particularly for people seeking to come
to Canada permanently under the Skilled
Worker Program (SWP).
During the last construction surge, many
contractors attempted to use the federal
Temporary Foreign Worker (TFW) pro-
gram after fnding that all domestic supply
sources had been exhausted. Unfortunately,
contractors that availed themselves of this
program found it expensive, cumbersome
and time-consuming. Moreover, contrary
to assertions from the federal government
that it has improved the program, new
regulations and procedures introduced in
2010 in fact made using this program even
more convoluted than before for construc-
tion contractors.
permanenT immigraTion
under The skilled Worker
program
The diff iculties that underemployed
immigrant professionals such as doctors,
accountants and engineers face are well
known due to the extensive media attention
that they have received. Have you heard or
read about an underemployed or unem-
ployed immigrant with a construction
trades background? This is unlikely given
the fact that Canadas immigration system
is heavily biased in favour of university-
trained applicants and against applicants
with construction trades skills and train-
ing. Our system simply does not permit
many tradespeople to immigrate, and the
few who do gain entry are quickly absorbed
into Canadas construction industry.
The federal governments selection crite-
ria under the Skilled Worker subcategory
are intended to aid in selecting immigrants
more capable of adapting to the evolving
Canadian labour market. Changes in
legislation in 2002 established selection cri-
teria based on a human capital model. In
the words of the government of the day, the
new criteria were intended to help select
skilled workers with a range of fexible skills
needed in Canadas new economy rather
than workers whose skills qualified them
for employment in a single occupation.
The basic premise was that the more edu-
cation an immigrant has (as opposed to
specifc occupational skills and training),
the more likely he or she is to succeed in
settling in Canada.
Trade 2005 2006 2007 2008 2009
Jan-sept
2010
Total avg.
7242 - industrial electricians 155 150 105 60 65 85 620 108
7246 - Telecommunications installation and repair 85 50 90 75 55 50 405 70
7241 - electricians 45 35 65 55 65 80 345 60
7271 - Carpenters 35 35 45 80 75 60 330 57
7265 - Welders 45 40 45 30 40 55 255 44
7311 - Construction millwrights 35 25 35 30 50 40 215 37
7312 - heavy-duty equipment mechanics 30 30 30 30 25 40 185 32
7313 - refrigeration and a/C mechanics 15 25 20 35 30 30 155 27
7251 - plumbers 5 10 20 25 20 40 120 21
7281 - Bricklayers 15 10 10 25 35 20 115 20
7219 - supervisors, other Construction Trades 15 15 15 20 25 15 105 18
7272 - Cabinetmakers 15 15 25 20 15 10 100 17
7243 - power system electricians 20 20 5 20 15 15 95 17
7215 - supervisors, Carpentry Trades *** 5 5 5 10 35 60 10
7217 - supervisors, heavy Construction equipment 5 *** 10 10 15 20 60 10
7252 - steamftters, pipeftters & sprinkler system 5 10 10 *** 15 15 55 10
7263 - structural metal and platework Fabrication 5 5 *** 5 10 10 35 6
7261 - sheet metal Workers *** 10 *** *** 10 10 30 5
7253 - gasftters *** 5 *** 5 10 5 25 4
7282 - Cement Finishers *** *** *** *** *** 15 15 3
sub-total: Top 20 Trades 530 495 535 530 585 650 3,325 578
others 20 30 20 60 80 70 280 49
Totals 550 525 555 590 665 720 3,605 627
Source: Citizenship & Immigration Canada
Somethings Got to Give
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To be admitted as a skilled worker, the
principal applicant must score at least 67
assessment points out of 100. Up to 25 points
are awarded for educational achievement;
24 points for language profciency in either
English or French; 21 points for prior work
experience; 10 points for age (ages 21 to 49
are preferred); 10 points for having a job offer
waiting; and six points for being adaptable
in terms of having prior work experience or
relatives already living in Canada.
Prior to the 2002 amendments, points were
awarded for specifc vocational preparation
and being part of a targeted occupation or
occupational group. In an ostensible effort
to streamline the system, the points for these
criteria were rolled into broader categories. In
2000, however, the auditor general of Canada
noted that the government had not updated
its list of occupations in demand in Canada
in the previous seven years.
The maximum 25 points in the educa-
tional component requires a PhD or masters
degree and at least 17 years of full-time study.
By comparison, an applicant with apprentice-
ship training and at least 12 years of full-time
study is only awarded 12 points.
This emphasis on educational achieve-
ment means that gluts of immigrants
are being admitted to Canada to work in
professional occupations at the expense of
high-need occupations that require trades
training and skills. In fact, according to
a Citizenship and Immigration Canada
(CIC) evaluation published in 2010, 46 per
cent of admissions under the SWP held a
masters or PhD, while less than three per
cent were trade apprentices or holders of
formal trade certifcation.
This is evident in the table on page 38,
which shows that, on average, only 627
tradesmen with trade training and experi-
ence have been admitted to Canada annu-
ally over the past fve years.
AlternAte ImmIgrAtIon
ProgrAms
Overall dissatisfaction with the Federal
SWP has led the federal government to
develop other programs and initiatives
intended to be more responsive to labour
market requirements particularly out-
side Quebec, which manages its own im-
migration program. These include various
Provincial Nominee Programs (PNP), the
Experience Class managed by CIC and the
TFW program, which is managed jointly
by CIC and Human Resources and Skills
Development Canada (HRSDC).
Through joint agreements, the PNP
programs allow the provinces to nominate
potential immigrants for permanent
admission based on selection criteria
established by the province (i.e. the federal
point system is waived). According to a 2010
CIC evaluation study, Provincial govern-
ments prefer the PNP, citing perceived
advantages such as greater responsiveness
to immediate labour needs and provincial
priorities, the ability to attract workers who
wish to settle in destinations other than
major urban centers and shorter processing
times. However, as the provinces move to
increase their PNP numbers, CIC needs to
reduce the number of immigrants admit-
ted under the SWP because of annual limits
on total immigration set by parliament.
With the ongoing backlog of immigration
applications that by law it must process,
the federal government is understandably
reluctant to allow the provinces to select too
many potential immigrants. Consequently,
in 2010 almost 14,000 provincial nominees
along with almost 23,000 family members
were admitted to Canada.
To provide permanent immigration
opportunities to workers or students who
seek to remain in Canada following the
expiration of a temporary work or study
visa, the federal government introduced
the Experience Class category in 2008.
While the program was resoundingly
welcomed by the business community,
the number of admissions it targeted was
relatively small. In 2010, only 2,500 appli-
cants along with 1,400 spouses and dependents obtained landed
immigrant status through this program.
Given the disproportionately low number of immigrants with trade
skills entering Canada under the SWP, is it any wonder that construc-
tion contractors find the need to resort to short-term employment
solutions through the TFW program? While this is perhaps the most
important last resort in a contractors recruitment tool box, it is also
the most maligned.
At the height of the construction surge in 2005 to 2008, reports
by employers attempting to supplement their workforce through
the TFW refect a litany of complaints and frustration. Part of this
frustration is attributable to the program being jointly adminis-
tered by two different federal departments. Prior to offering tempo-
rary employment to a foreign national, the employer must obtain a
Labour Market Opinion (LMO) from HRSDC. HRSDCs role is to
certify that the employer has frst made reasonable efforts to recruit
within Canada and that the terms and conditions of employment
are not fraudulent and are in accordance with prevailing local wage
rates and employment standards. Once the LMO is obtained, the
employer and prospective employee must then satisfy both CIC and
the provincial regulatory authorities responsible for accreditation
that a candidate is eligible to work temporarily in Canada. For
some, overcoming the bewildering array of regulatory requirements
caused them to abandon their attempts.
According to Canadas auditor general, the number of LMO
applications increased by 124 per cent between 2002 and 2008,
with the largest
increase (26 per
cent) occurring between
2007 and 2008 at the
height of economic surge.
Much of this surge was
due to oilsands developments in Alberta and the preparations
for the 2010 Winter Olympics in Vancouver. And while the auditor
general applauded HRSDC for establishing pilot projects, such as
the expedited LMO (a process that has since been disbanded), she
also delivered a scathing critique of the manner in which the LMO
process was administered. In particular, she noted that, We found
that directives on how to assess whether employers meet some or
all of the factors outlined in the regulations are not clear or incom-
plete; interpretations vary from one regional offce to another and
even within the same offce. For example, directives on determining
prevailing wages do not provide specifc guidance and are not well
understood. Furthermore, each regional offce uses labour market
information differently to assess and determine prevailing wages.
The Challenge ahead
In Alberta, the most recent inventory of major projects lists
$191 billion in construction investments across various con-
struction sectors over the next few years. While oilsands con-
struction dominates the investment picture, billions will also
be spent on residential, commercial, institutional and infra-
structure related projects. This construction is taking place as
demographic and workforce demand/supply forecasts have
consistently pointed to persistent and ever-increasing shortages
of skilled construction workers.
Alberta is not alone. Saskatchewan and Newfoundland and
Labrador long vital sources of construction workers for Alberta
are currently experiencing record levels of construction activity.
According to recent news reports, Newfoundland and Labrador
is in the midst of an energy boom that is straining the provinces
ability to keep up. Indeed, according to one Globe and Mail report,
Finding enough workers to complete some $43 billion worth of
major projects underway and planned is proving to be a monu-
mental challenge.
In light of all this, how is it possible to reconcile the fact that
only 55 steamfitter/pipefitters a trade vital to industrial proc-
ess construction and maintenance on energy related projects
were permitted into Canada under the SWP from 2005 to 2010?
Furthermore, why were LMOs authorizing up to 4,300 steamft-
ter/pipeftters to be brought into Canada from 2007 to 2009 under
the TFW program?
Is Canadas ImmIgraTIon sysTem PrePared
for ImPendIng shorTages?
It is important to recognize that shortages of skilled workers have
occurred and will continue to be experienced despite record levels of
apprenticeship training taking place across Canada.
It seems abundantly clear that the current immigration system is ill
prepared to handle the impending storm of skilled worker shortages
in the construction industry and that dramatic and decisive reforms
are needed to address this problem.
Somethings Got to Give
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000.Adroit_1-2H_nBL.indd 1 3/16/10 9:27:54 AM
his years Contractor
of the Year Awards, pre-
sented by Merit Contrac-
tors Association, Alberta
Roadbuilders and Heavy
Construction Association (ARHCA)
and Alberta Venture magazine, puts a
spotlight on the companies and people
that have taken innovative and success-
ful strides in the construction industry.
Eligible entries had to include public
or private companies that sold construc-
tion services, employed trades people,
and/or contract out labour supply in the
industrial, commercial, institutional,
residential, civil, road building or oil-
field construction sectors. Also, these
companies had to have a regional offce
in Alberta.
This year had six award categories:
general contractor under $50 million,
general contractor over $50 million,
trade contractor under $15 million,
trade contractor over $15M, heavy civil
and construction person of the year.
Read on to learn more about the winners
and fnalists chosen by this years adju-
dication panel.
General ContraCtor Under $50 Million
WINNER Emcee Construction & Management Ltd. takes advantage of being
smaller, although it recently needed to expand into a larger offce. With only 36 employ-
ees, Emcee is doing well since everyone knows one another but the company is still big
enough to tackle various building projects. Some projects include environmentally
friendly building practices, such as the Alberta Municipal Place that was outftted with
a windmill and solar power. Emcees new west-side Edmonton offce is even aiming for
silver LEED certifcation. Emcee was previously called Ernest Construction and spe-
cialized mostly in residential home renovations until Mark Lindquist, Emcees current
CEO, bought half of the company in 2004. Thats when he and partner Ernest Blouin
renamed the company and pursued commercial construction. Lindquist purchased the
rest of the company in 2007.
A successful Emcee Construction project
for Mill Creek ATB Financial, Edmonton.
By Alix KEMp And MiChEllE lindsTroM
2012 Contractor of the year Awards acknowledge top performers
General ContraCtor over $50 Million
WINNER Paul Douglas, PCL Constructors Inc. CEO and
president, employs 3,400 employee owners and he credits them
with helping the company survive 2008s economic downturn.
With offces across Canada, the U.S. and now Australia, PCLs
decentralized, employee-driven approach allows independent
units to react to their own marketplaces without blind orders
from Edmontons head office. Another part of PCLs strategy
was the move into public-private partnership (P3s), actually
leading Albertas frst P3 project: southeast leg of Edmontons
Anthony Henday ring road. P3 partnerships have become an
enormous part of the companys business across North America.
In 2011, PCL donated $2 million to United Way of the Alberta
Capital Region as it considers community building as part of the
companys structure.
2ND PLACE Home builder Willowbrook Homes Inc. special-
izes in the design and construction of custom luxury homes in
and around Calgary. It just expanded its business into Invermere
and Fairmont, B.C. The company founder, Cecil Jenkinson,
decided in 1993 to build quality instead of quantity and that
methodology continues today. Willowbrook sets itself apart by
working closely with clients to design their dream home using
software that allows customers to easily keep track of changes,
costs and scheduling.
3RD PLACE Glen Armstrong Construction Ltd. serves
northern Alberta with a range of general contractor services from
bridge building to pipeline excavation and oilfield construc-
tion. The companys strong commitment to its employees means
90 per cent of them have been with Glen Armstrong for over 10
years. Thanks to an experienced workforce and excellent safety
program, the company has gone eight years without a lost-time
injury and was acknowledged as a 2008 Best Safety Performer
by Work Safe Alberta.
2ND PLACE Clark Builders has been specializing in large-
scale infrastructure projects across Alberta for 38 years.
A company partnership interest was recently sold to American
behemoth Turner Construction Company, allowing Clark
Builders to expand its project scope and increase its production
rate. Recent projects include Calgarys Atlantic Avenue Art Block
and the new Go Community Centre on the University of Alberta
campus in Edmonton.
3RD PLACE Graham Group Ltd. is Canadas sixth-largest
construction company. They are environmentally conscious
with extensive experience in general contracting, design-build,
construction management and P3 projects. Theyve announced
the retirement of their current CEO, Bill Flaig, to be succeeded
by Grant Beck in July of this year. They worked on the Anthony
Henday ring road in Edmonton, the Chinook Regional Hospital
Parkade in Lethbridge and the Mitchell Business Centre in
Calgary.
trade ContraCtor Under $15 Million
WINNER Danijel Slisko, a second-generation painter, went into
business for himself at 21 and founded United Decorating Inc.
by taking any project he could get. His company now employs 74
people compared to 12 in 2009 and revenues have more than dou-
bled since. Company effciency comes from its custom-built soft-
ware that is a cloud-based project management program called
United Decorating System. The companys frst industrial bridge
project, Schooner Landing Bridge in Calgary, established a good
reputation with the city due to Uniteds innovative solution to
lack of construction site space. United Decorating is one of the
top 10 painting contractors in Calgary, and the next goal is to be
top three in the province.
U of As Centennial Centre for
Interdisciplinary Studies by PCL.
Bell Dental Group in Calgary had its offce
worked on by United Decorating.
2ND PLACE LSM Lees Sheet Metal Ltd. has grown in its 48
years of business from four employees in a 2,000-square-foot
shop to 100 employees in a combined 27,000-square-foot shop
and offce. The company now provides commercial, residential
and industrial sheet metal. It also does heating, cooling, air con-
ditioning, powder coating and custom manufacturing. Recent
projects include the Grande Prairie Airport and major renova-
tions of the city services building in Grande Prairie.
3RD PLACE When CMN Electrical Systems Ltd. frst opened
in 1989, it specialized in basic residential electrical needs: plugs,
switches and appliance hook-ups. In the past few years, though,
CMN has expanded to become a full-service electrical needs pro-
vider, installing home theatres, security and central vacuuming
systems. This has led to an unprecedented level of success for the
family-owned business, which has established itself as a leader in
the Greater Edmonton residential construction market.
2ND PLACE With offces located throughout Alberta, B.C. and
Saskatchewan, Wrapex provides industrial insulation, scaffold-
ing and building systems to Western Canada. Wrapex is unlike
competitors who offer only one type of building service. Its more
than 30 years of experience and all-in-one approach have allowed
the company to grow as a successful general contractor and
subcontractor and work on projects for big names like Suncor,
Cenovus and MEG Energy Corp.
WINNER A bird is the symbol of
Alberta Glass Company Inc.s
50/50/50 initiative: an auda-
cious plan to land 50 projects in
50 months and become a top-
50 employer. The initiative was
launched in October 2011, and
by early January, Alberta Glass
already had f ive construction
projects done. For CEO Paul
Heyens, its part of a plan to keep
the company moving forward in
a sustainable way. The company
has certainly been growing with
around a dozen people working in
the new Edmonton offce and the
home-base in Calgary taking on
projects like hanging the glass on
the Bows iconic inside curve. For
employee motivation, at the end
of the 50-month plan, if the com-
pany accomplishes its three goals,
all employees will be treated to a
Las Vegas excursion.
Trade ConTraCTor over $15 Million
3RD PLACE Dynamic Concrete Pumping Inc.s empha-
sis on maintaining good client relationships has paid off the
concrete leader boasts a 95 per cent rate of return business. It is
also dedicated to remaining environmentally friendly. The com-
pany installed a slurry reclaiming machine in its new facility,
and uses fsh-friendly oil in its pumper trucks. Most recently, it
worked on the base of Calgarys Bow Tower, setting the record
for longest continual concrete pour in Canadian history at 36
hours, using over 1,000 trucks worth of concrete and involving
500-plus workers.
Heavy Civil
WINNER The Calgary offce of Flatiron Construction Corp.
only employs 12 full-time staff, but backing from its U.S.-based,
larger parent company has allowed it to compete and thrive in
Albertas construction market. Flatirons Canadian division had
two projects named 2011 Top Projects by Alberta Construction
magazine and it is building three of Canadas Top 100 Projects
according to Renew Canada magazine. Also in 2011, the company
was recognized by the ARHCA for clocking over 200,000 hours
(2.8 million hours actually in Canada over three years) without
a lost-time injury.
2ND PLACE Sureway Construction Group Ltd. is one of
Albertas largest privately-owned civil construction contractors.
It includes Sureway Trucking, Yellowhead Aggregates and other
companies under the umbrella of Sureway Construction Group
of Companies. Founded in 1973, Sureway specializes in urban
land development, infrastructure and industrial construction
and received an award from the Consulting Engineers of Alberta.
Sureway recently worked on Highway 727s realignment west
of Spirit River (northwest Alberta), which turned out to be a
$37.9-million project. Continued on page 46
Alberta Glass installed
the Unitized Curtain Wall
on Calgarys Eighth
Avenue Place.
Flatiron constructed Fort McMurrays
Athabasca River Bridge. Its 108-foot wide
by 1,548-foot-long deck is Albertas largest.
Recognition within Alberta
PRESENTED 8Y SPUNSURED 8Y
K?8EBPFL
Un behaI! o! AIberIa VenIure, our program parIners
MeriI 0onIracIors AssociaIion and AIberIa RoadbuiIders
& Heavy 0onsIrucIion AssociaIion and sponsors 8&8
DemoIiIion LId, 0anadian WesIern 8ank and Lenmak
ExIerior InnovaIions Inc., :FE>I8KLC8K@FEJKF
8CCK?<=@E8C@JKJ8E;N@EE<IJaI Ihis year's
0onIracIor o! Ihe Year Awards 0aIa.
8C9<IK8M<EKLI<K?8EBJ@KJJGFEJFIJ=FI
K?<@IJLGGFIK in making Ihe 2012 0onIracIor o! Ihe
Year Awards 0aIa a greaI successl
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Un behaI! o! AIberIa VenIure, our program parIners MeriI
0onIracIors AssociaIion and AIberIa RoadbuiIders & Heavy
0onsIrucIion AssociaIion and sponsors 8&8 DemoIiIion LId,
0anadian WesIern 8ank, 0arbon 0opy DigiIaI and Lenmak
ExIerior InnovaIions Inc., :FE>I8KLC8K@FEJKF8CC
K?<=@E8C@JKJ8E;N@EE<IJaI Ihis year's 0onIracIor
o! Ihe Year Awards 0aIa.
8C9<IK8M<EKLI<K?8EBJ@KJJGFEJFIJ=FI
K?<@IJLGGFIK in making Ihe 2012 0onIracIor o! Ihe
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Merit, the Alberta Roadbuilders and Heavy Construction
Association and Alberta Venture thank the adjudication panel for
their assistance with the Contractor of the Year Awards:
Dr. Aminah Robinson Fayek, University of Alberta, Robin Kotyk,
Alberta Construction Safety Association and Carl Knowler,
Canadian Western Bank.
ROBERT WALKER, northern Alberta
vice-president of Ledcor Construction
Recognition within Alberta
ConstruCtion Person of the Year
WINNER Robert Walker, northern Alberta
vice-president of Ledcor Construction, joined
the company 14 years ago. He has paved the way
for some of Edmontons most controversial
projects such as City Hall, which was completed
in 1992. Walker followed up on City Hall by work-
ing on the Rexall Place renovation, Telus Field,
River Cree Resort and Casino, the Art Gallery of
Alberta and the Epcor Tower downtowns frst
high-rise offce tower in 20 years. Most recently,
his company won the contract to build the new
Royal Alberta Museum.
When hes not causing a furor with his projects,
Wal ker helps other organi zations do some
building of their own. Hes on the board for the
Kids with Cancer Society as well as The Banff
Centre and hes also involved with the City of
Edmontons business advisory committee, among
others. These are positions hes happy to fll and
also why he has been recognized by all three levels
of government for his community contributions
and why co-workers say his positivity has been a
good infuence on them.
2ND PLACE Les LaRoque has been president
of Botting & Associates Alberta since 1989
and has grown the company from a small busi-
ness with only 10 employees to one of the larg-
est mechanical contractors in Western Canada.
Hes known for his commitment to health and
safety and advancing the workplace through
innovative technology and human resources.
LaRoque is also involved with a number of com-
munity organizations, including Kids Up Front,
the Alberta Childrens Hospital and the Calgary
Zoological Society.
3RD PLACE Bill Knight, founder and CEO
of B&B Demolition (based in Edmonton),
has been instrumental in building the rep-
utation of demolition as a trade and business.
Knights active role in the Edmonton commu-
nity and construction industry has gotten B&B
involved with several local organizations, such
as the Entrepreneurs Organization and the
Edmonton Regional Safety Committee. As an
individual, Knight has supported a number of
charitable organizations from the Edmonton
Humane Society to the Youth Emergency Shelter
Society.
P
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O
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780.451.5482
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Toll Free 888.451.5482
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780.451.5482
www.lenmak.com
Toll Free 888.451.5482
Flawless from Fabrication to Finish
Smart Transformations
Lenmak Exterior Innovations Inc. has been recognized for our operational and
environmental effciencies with our StrataClad
panel systems.
StrataClad
panel systems are not just smart and effcient; they are architecturally
designed with custom details in mind:
Divorsity in doptn and dimonsion
Soamloss intogration witn oxisting aronitootural oaturos
Dosign hoxibility o roundod and taporod oompononts
Froodom o oolour onoioo
Lovorago tno strongtns o our prooision, hoxibility and sustainability.
As a custom metal fabricator, we specialize in light gauge sheet metal and architectural panels for exterior
applications. Through automation we can produce custom designed precision pieces quickly and cost effectively.
000Om.Lenmark-FP.indd 1 3/14/12 4:37:25 PM OPENMIND_12_p42-47.indd 47 3/15/12 2:17:16 PM
Dont Blame
the
Workers
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How measurement-minded
companies attack time-wasting
management fubs that frustrate
workers and slow production
raig DeFinis enjoys watching a craftsperson lose 15 minutes of work time
about as much as he likes discovering that he just left his wallet in the back seat of a
taxi. As the owner of Pittsburgh plumbing and HVAC contractor DeFinis Mechanical
Contractors, he grants his union plumbers a quarter-hour morning break, even though his
contract doesnt require it, and hopes the workers dont stretch it the way the half-hour lunch
break sometimes goes to 45 minutes. Because each worker costs about $60 an hour in wages and
benefts, extra minutes add up over the long run. Multiply that by eight guys, fve days a week,
for six months thats a lot of money, he says.
DeFinis does more than gripe about breaks. He holds meetings with foremen every week to
ensure timely delivery of tools, materials and information to his crews. Further, he stays alert to
errors in the plans his crews work from. Some engineers are better than others, he says.
Overall, DeFinis refects both the old and new ways of thinking about wasted work time.
From the 1960s through the 1990s, owners, contractors and academics noted with frustration
and alarm a steady lag in productivity within the construction industry, especially in periods
of infation. While technology had driven increased non-farm productivity ahead by 200 per
cent from 1964 to 2003, one controversial study showed, construction in the same period
actually slipped by nearly 20 per cent. Years ago, fngers may have pointed to union work rules
and contract terms as factors, but a decline in trade-union market share in the last 30 years has
changed that argument.
With a few exceptions, new research on productivity is giving managers the tools to maximize
wrench time. Equipped with stopwatches and PCs to crunch their data, big owners, contractors
and university researchers have turned to measuring and charting disruptions that can hit a
jobsite daily. By drilling into the workday minute by minute, gauging output with new precision
and zeroing in on ways to turn downtime into wrench time, researchers are cutting through the
fog of confusion over what takes place on jobsites and, in the process, dispelling myths about
lazy workers. Now, a major question is what to do with the rich harvest of activity data and how
to exploit it consistently. A few measurement-minded companies are learning how.
C
by Bruce Buckley (wIth REPORtING by JonatHan Barnes)
Dont Blame
In 2009, the Construction Industry
Institute based at the Cockrell School of
Engineering at The University of Texas
at Austin, launched the most ambitious
study of craft productivity in its 28-year
history. The five-year Craft Productivity
Improvement Program aims to compile
a comprehensive collection of innovative
analysis techniques, common metrics and
best practices for craft productivity.
The new research team,
called RT 252, determined
that project teams lacked
a suffcient understanding
of the issues that keep
crafts workers off their
tools.
Workers already had been polled on
the subject. As part of a 2006 CII survey,
1,996 crafts-persons listed what kept them
waiting around: no forklift to move the
Sheetrock, no reply from the engineer about
unclear plans and specs, fxing prefabricated
items and looking for tools, among other
responses.
Productivity engineers argue that most
contractors fail to investigate fully how
these types of shortages and idle time
disrupt production.
Crafts guys want to be productive,
says Chris Buck, president of Productivity
Enhancement Resources (PER) in Simpson,
N.C. Youre going to have your exception
here and there, but the vast majority want
to be productive. If we can take away the
barriers for them to produce, they will take
the reins and go.
Buck is among a small group of
productivity professionals engaged in
the emerging technique of activity
analysis. When it is hired by an employer
or owner, Bucks firm is sent to a site to
make thousands of detailed observations
about how crafts workers spend their time.
While parsing the data and comparing
it with historical norms, Buck looks
for unusual spikes in non-direct work.
He then goes back and interviews workers
to find out why so much time is spent
off-task. Once issues are identified, PER
develops strategies to optimize the time of
crafts workers.
The on-site observations produce
mountains of data. Between March 2009
and February 2010, PER made 74,000
observations open-shop crafts labour on a
Gulf Coast refnery project. The study led to
Dont Blame the Workers
an implementation plan that reduced total
travel time for employees of an EPCM frm
by 16 per cent and cut operator idle time by
49 per cent by taking downtime and using
it for inspections of rigging equipment,
cleaning of cranes and other machinery, and
planning for lift co-ordination during the
shift, says Beck.
PER then analyzed personal delays by
the hour, showing a spike in the second half
of the shift when
temperatures were
higher, he adds.
So Beck advised
super vi sors to
plan and schedule
activities in the
shade provided by existing structures,
moving from one side of the project to
another during the day.
The concept of observing direct and
non-direct work rates isnt new, but activity
analysis represents an evolutionary step
in productivity science. In the 1920s,
Leonard Henry Caleb Tippett developed
the snap reading method, which calculates
the ratio between production and delay
based on observations of work activity.
Over time, some contractors began to
gravitate towards the work-sample method,
which splits a workers time into direct work,
support work and delay.
Crafts guys want to be produCtive,
Chris Buck, president of Productivity Enhancement Resources (PER)
Categories of Work
Through activity analysis, productivity
engineers take sampling several steps
further, breaking work into multiple
layers that allow for more focused study.
In July, CIIs RT 252 team released
a comprehensive Guide to Activity
Analysis. The guide suggests seven prime
categories of work: direct work, preparatory
work, materials handling, waiting, travel,
personal, and tools and equipment
(see above). Each category can be broken
into subcategories to add detail.
To date, activity analysis has developed
largely in silos in which companies have
developed definition sets to meet their
specifc needs. Faithful + Gould, Seal Beach,
Calif., established its own work-sample
methodology, dubbed Time on Tools,
in 2003. Dan Leng, vice-president at the
cost-management consultancy, says
the system breaks non-direct work into
nine main categories as well as smaller
subcategories.
Although activity analysis appears
laborious, Leng maintains that it is
necessary in order to root out specific
problems. Processing of permits, for
example, can be broken down into many
separate activities. We break it down into
type of permit, time waiting for someone to
sign a permit, the signing process and so on.
Eventually, you discover that a key person
on the permitting process is constantly
running 30 minutes late to sign a permit,
for example.
The payoff for micro-level information
can be significant. Leng says his system
saved $1.7 million by cutting logistics
delays in half on a major turnaround job
at a refinery, saved $835,000 by reducing
breaks to 30 minutes from 55 minutes, and
saved $330,000 by reducing by 10 minutes
the owner pep talk during all-hands
meetings.
To me, its the most basic thing, Leng
adds. If you have a project with 30 per cent
direct work, why would you spend time and
money improving that
direct work when you can
try to fix the 70 per cent
[not spent on task]?
Identifying issues is only
the frst step, notes Steve Toon,
productivity engineer at Bechtel.
Toon says activity analysis needs to be
an ongoing process of assessing problems
and applying solutions.
The thing that is not addressed with
traditional work sampling is what to do
with the data, he says. We need to identify
solutions, implement those solutions and
follow up with another study to either
validate that those solutions addressed the
issue and increased productive time or [fnd
ways to improve].
In a typical two-day period on a Bechtel
site, Toon says, he might collect 2,000
observations to serve as indicators of
possible problems. He then surveys
workers and foremen in the feld to identify
common restraints that cause delays.
Armed with that data, he crafts solutions
and presents them to the site manager and
the project superintendent.
Youd be surprised how many times we
sit down and Ive seen [managers] have an
epiphany, he says. Often, I come in with
a set of data that validates everything they
thought, but now they have the data.
Not everyone likes being watched. Mark
Stofega, principal construction support
engineer at Fluor, says workers think
he is checking up on them, when,
in fact, he usually seeks management-
based problems.
When you explain the process, there
are very few things you can blame on the
[crafts workers] other than late starts or
early breaks, he says. What you find are
management issuesthe materials arent
there, designs arent there, equipment is not
there. All of a sudden, the [crafts workers]
see what youre doing, and they open up.
Just as researchers hope to get better
at identifying productivity issues, work
is under way to develop a framework for
applying effective solutions. As part of
the first phase of CIIs project, the RT 252
research team is investigating the relation-
ship between craftsperson productivity and
best practices. For example, CII maintains a
benchmarking and metrics database that is
used to identify possible best practices.
In the first of the projects five phases,
the team focused on the mechanical
trades. It reported a significant relation-
ship between improved productivity
and best practices in materials management,
safety, team building, front-end planning,
and automati on and i ntegrati on.
Research showed that projects that were
advanced implementers of these practices
experienced as much as a 50 per cent
average productivity advantage over weak
implementer projects.
The teams analysis of electrical crafts produced similar
results, indicating that the more productive projects are
associated with a high level of safety-program implementation,
automation and integration of information systems, materials
management systems, team building and constructibility.
The practices are proven, and CII acknowledges that
many have been known for years, such as short interval
planning and work packaging. Still, the team says those
solutions are rarely implemented completely or consistently
from project to project.
Index of Best PractIces
Instead of supplying a laundry list of practices, the team is
developing an index of best practices with weighted scores
based on the relative infuence of each on improving produc-
tivity. Dubbed the Best Productivity Practice Implementation
Index, the system is designed to help determine which practices
or combinations of practices might help drive productivity.
General contractors may fnd there are limits to productivity
gains for contractors, owners and others that use subcon-
tractors. The common approach among productivity experts is
for each party to focus on its own part of the equation.
Rather than using activity analysis to identify issues
for managers, Chris Heger, a Turner Construction project
superintendent, tries to remove barriers for subcontractors.
Some strategies are basic, such as keeping materials on wheels
for easy transport.
Other strategies require extra effort. At a lab project
site at which portable toilets werent allowed in clean spaces,
a portable toilet was placed on three-story staging outside
the facility to reduce travel time. Those are the types of things
we can do to help [crafts workers] spend more time on task,
he says.
A steel erector working at Manhattans One World Trade
Center is taking a similar approach. DCM Erectors, New York
City, has arranged for a Subway sandwich shop to operate
from a platform that is jacked to rise with the skyscrapers steel
frame, thus helping the ironworkers avoid a trip of as much as
30 minutes down to the street to fnd lunch.
Hegers primary tool is tracking performance through the
development of detailed work breakdown structures for
subcontractors. The team focuses on the most predictable
aspects of the job and breaks tasks into short intervals to help
stay on top of issues. If performance begins to slip, the team can
quickly investigate and work toward solutions.
Dont Blame the Workers
Although it is a team approach, Heger says crafts workers can be left
to themselves to improve their productivity. Crafts workers know how
to do their jobs better than anyone. I try to set them up for success rather
than try to avoid failure.
Just as with safety, top-down pressure, rather than bottom-up
initiatives, may be needed to force change, says Paul Goodrum,
associate professor of civil engineering at the University of Kentucky
and a member of RT 252. In the end, it will take some leadership
from government agencies to push this forward, he says. Well
begin to see good breakthroughs on productivity once we get some
reliable measures on it. I dont think [the challenge] is as difficult
as people think.
Originally published in the Engineering News-Record (ENR.com)
June 1, 2011 and reprinted with permission.
CRaftS wORkERS kNOw hOw tO DO thEIR jObS
bEttER thaN aNyONE. I tRy tO SEt thEM uP fOR
SuCCESS RathER thaN tRy tO avOID faIluRE.
Chris Heger, Turner Construction project superintendent
Safe. Productive. FIexibIe.
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construction inoustry incluoing rsiontial, commrcial, institutional, civil, ano inoustrial.
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000Om-Merit-FP.indd 1 3/12/12 8:54:47 AM OPENMIND_12_p48-53.indd 53 3/15/12 2:33:59 PM
8
Openmind
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8.25 x 10.75
Page 55
Capital expenditures for construction in Alberta
(in $ millions):
2007
2008
2009
2010
2011
65,155.2 44,707.2 61,026.3 69,736.8 78,072.4
Construction price index
for apartment buildings in:
2007
2008
2009
2010
2011
Calgary
156.8
174.4
160.7
156.6
160.1
Edmonton
152.0
168.6
148.4
150.9
156.1
% change Calgary
19.2
11.2
-7.9
-2.6
2.2
% change Edmonton
17.8
10.9
-12.0
1.7
3.3
Value of building permits (monthly) in Alberta
Seasonally Adjusted
% change
Dec. 2010 Nov. 2011 Dec. 2011 Nov-Dec 2011 Dec 10-Dec 11
Residential:
Non-residential:
Alberta total:
(in $ millions)
3,742.9 3,851.7 4,470.7 16.1 19.4
1,911.5 2,311.6 2,376.9 2.8 24.3
5,654.4 6,163.4 6,847.6 11.1 21.1
Yearly value of all
building permits
in Alberta ($ millions)
2007
2008
2009
2010
2011
15,729.7
13,141.2
11,276.9
11,425.4
12,716.9
New housing
price index
($ thousands)
2008 2009 2010 2011
P
2012 (est.)
Calgary:
100.0
100.6
93.9
95.6
95.5
100.0
101.0
89.7
89.0
89.9
Wholesale merchants sales by industry unadjusted ($ millions) across Canada
2007 2008 2009 2010 2011
Building material and supplies 76,635.5 77,235.9 66,932.4 73,935.3 78,723.3
Electrical, plumbing, heating and air-conditioning equipment and supplies 23,295.1 24,163.6 21,783.2 23,245.9 25,161.1
Metal service centres 17,619.4 18,972.7 13,163.1 15,022.7 17,750.4
Lumber, millwork, hardware and other building supplies 35,721.0 34,099.6 31,986.1 35,666.7 35,811.8
Machinery and equipment 108,813.6 115,358.6 103,460.8 110,411.2 123,235.0
Average number of employees covered under the
Merit Hour Bank Beneft Plan:
2006 2007 2008 2009 2010 2011
28,291 33,875 38,314 38,187 39,371 43,089
Total manhours worked
under the Merit Hour
Bank Beneft Plan:
2006
2007
2008
2009
2010
2011
58,264,783
69,743,223
77,595,931
74,140,547
79,583,013
87,908,004
Edmonton:
5
BY THE NUMBERS
(Source: Merit Contractors Association)
(Source: Statistics Canada)
BUSINESS BANKING IS ABOUT A SHARED PERSPECTIVE.
Being headquartered in the West has its advantages. We understand the
construction industry here and make timely decisions, locally. As a bank focused
on entrepreneurs, we partner with you to fnd the solutions perfectly suited to your
business fnancial needs. Learn more at theworkingbank.ca.
THE
WAY
WE
WORK:
IT MEANS OUTWORKING
THE OTHER GUY.
3
no.
000Om.CWB-FP 1 3/1/12 12:40:30 PM OPENMIND_12_p54-56.indd 54 3/15/12 2:48:31 PM
BUSINESS BANKING IS ABOUT A SHARED PERSPECTIVE.
Being headquartered in the West has its advantages. We understand the
construction industry here and make timely decisions, locally. As a bank focused
on entrepreneurs, we partner with you to fnd the solutions perfectly suited to your
business fnancial needs. Learn more at theworkingbank.ca.
THE
WAY
WE
WORK:
IT MEANS OUTWORKING
THE OTHER GUY.
3
no.
000Om.CWB-FP 1 3/1/12 12:40:30 PM OPENMIND_12_p54-56.indd 55 3/15/12 2:57:10 PM
Untitled-2 1 2/29/12 12:16:18 PM OPENMIND_12_p54-56.indd 56 3/15/12 2:58:03 PM

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