by Graham Lane
Published in the Winnipeg Sun, October 5, 2018
The Pallister government is following through on its pre-election promise to open up bidding on the public works of the provincial government and Crown corporations. Bill 28 should bring about more and long-necessary competition. Taxpayers and the electorate should support Bill 28, now plodding its way through the legislature headed for eventual proclamation.
Supported and enacted by the NDP during its far too-lengthy 17-year stay in power, the provincial government and its enterprises basically shut out firms without unions from bidding and working on their major infrastructure works. While it is no surprise that the Manitoba Building Trades and other unions oppose Bill 28, best to understand that their focus is not on the costs of public works (which often have been out-of-control, soaring well past once supposedly reasonable initial forecasts). The focus of unions is having union members working and paying union dues.
Investment in public assets (such as roads, government buildings and the ill-fated Hydro expansion) are driving up public and utility debts. Total provincial government borrowing is headed towards $50 billion – a sizable mortgage hanging over every family in the Province. Interest alone on these debts, which include Hydro and other government entities, will exceed $1.7 billion this year. And, more debt and higher interest rates are on the near horizon. Bill 28 will bring about more competition for public works. Competition is expected to lower costs on new public works, and, given time, lower taxes and utility bills.
Right now, while taxpayers and utility ratepayers want value for money spent, rarely it occurs; competition staved off by union-friendly contracts. According to reliable industry sources, restricting tendering practices – by requiring only contractors that have unionized workers – results with public works costing 12 – 40% more than they would be if determined open-shop contractors were able to bid. When all qualified bidders are in the competition, quality goes up and costs go down.
Brian Pallister has promised to open up contract tendering (by allowing non-unionized firms to bid on all provincial contracts) since his Alternative Throne Speech of November 13, 2015. He, then leading the opposition, looked forward to “modernizing government tendering procedures by reducing barriers to participation“. Pallister recognized that forced unionization for government projects was unfair, damaging both the construction industry and taxpayers.
Open-shop construction firms could bid on major public sector projects only if their workers paid union dues. In Manitoba, approximately 70% of the construction industry is “open shop”. By basically shutting out about 70% of the construction industry from bidding, the public interest and value for money has not and could not be secured.
A January 2016 poll (NRG research group) found that a solid majority of Manitobans oppose open-shop construction firms being shut out of bidding for public works. Bill 28, passed and proclaimed, will bring a new brighter day for Manitoba’s construction industry and, finally, a glimmer of hope for now suffering taxpayers and utility ratepayers.
Bill 28 cannot recover the billions of dollars already wasted on Hydro’s expansion disaster or the hundred of millions over-spent on other public works, but Bill 28 should bring increased competition and lower price tags on public works in the future.