Competition in Ontario’sCompetition in Ontario s WWTP

Constr ction SectorConstruction Sector Toronto

March 1 2011March 1, 2011Ontario Construction Secretariat

IntroductionIntroduction

The OCS and the WWTP Construction Sector

The WWTP Sector

$Value of WWTP Construction Work

WWTP Construction Work Won by the Unionized Sector WWTP Construction Work Won by the Unionized Sector

The Non-Unionized Competition

Bidding Union/Non-Union Competition How Close How Often?g p

Stabilization, a short term solution?

Non-wage Modifications: Harmonized Hours, Overtime, Joint Crews, Apprenticeship Ratios

Pre-Qualification of Bidders (Generals and Subs)

Project Labour Agreements

The Path Forward – Next Steps

The OCS and The OCS and WWTP WWTP

ConstructionConstructionConstruction Construction

The OCS represents both the 25 separate t ti t d i i th ICI t d thconstruction trade unions in the ICI sector and the

contractors who are signatory with one or more of those tradesthose trades

While there has been significant investments in highways, schools, hospitals and transit over thehighways, schools, hospitals and transit over the past few years, the investments in water and wastewater treatment plants and associated works h b l di $1 billihas been very large, exceeding $1 billion per year Province wide.

$Value of $Value of Ontario Ontario

WWTP WorkWWTP Work Value of the WWTP Construction Work in Ontario in 2009 and

20102010

Value Projections for 2011 and Beyond

WWTP Construction Work excludes civil work such as sewers & watermains and relining of pipes

F t th t i th V l f th WWTP C t ti Factors that increase the Value of the WWTP Construction Work in Ontario, such as Legislation, federal stimulus funding and demographics

Factors that diminish the Value of the WWTP Construction Work in Ontario, such as fiscal pressures and competing prioritiespriorities

The WWTP The WWTP Construction Construction

SectorSectorSectorSectorThe increased expenditures in WWTP can be attributed to several factors,

including:including:

Aging of ‘baby boom’ infrastructure works – municipal water and wastewater plants built during the 1950’s, 60’s and early 70’s is either nearing or past its life expectancy;nearing or past its life expectancy;

The Provincial population continues to grow and new plants and pumping stations are needed to service outlying areas across S th O t iSouthern Ontario;

Many areas previously relying on septic tanks and well water are now demanding centralized treatment facilities; andg ;

Both the Province and Federal government are tightening the laws that regulate drinking water quality and discharges into the natural environment with the result that new and upgraded technologies areenvironment, with the result that new and upgraded technologies are needed for populations which are served by older technology plants.

The WWTP The WWTP Construction Construction

SectorSectorSectorSector

The only negative pressures against increased expenditures in WWTP construction is the fiscal capacity of the municipalities that own theconstruction is the fiscal capacity of the municipalities that own the facilities. Municipalities face rate payer opposition against property tax increases as well as opposition to any new or additional user fees and rates. Municipalities are also under pressure not to cut services related

li fi d d t t ti d t it i f t tpolice, fire and rescue and transportation and transit infrastructure.

$Value of $Value of Ontario Ontario

WWTP WorkWWTP Work Province Wide WWTP construction values based on the

il bl i f ti 7 l t d O t iavailable information on 7 selected Ontario zones or areas, namely Halton Regiong Peel Region York Region Simcoe and parts of Grey County Simcoe and parts of Grey County Eastern Ontario Northern Ontario, and Th Cit f T t The City of Toronto

$Value of $Value of Ontario Ontario

WWTP W kWWTP W kWWTP WorkWWTP WorkValue of Water and Wastewater Treatment Plant Construction Work based on Tender data from selected regions across Ontario

$1,400,000,000

$1,600,000,000

$1,000,000,000

$1,200,000,000

$600,000,000

$800,000,000

$0

$200,000,000

$400,000,000

$0Estimated 2009 Estimated 2010 Projected 2011 Projected 2012

Work won by the Work won by the Unionized Unionized

ConstructionConstructionConstruction Construction SectorSector

Two sources of work to the Unionized Construction Sector:

Work won by Unionized GENERAL Contractors

and

Work won by Unionized SUBCONTRACTORS

Work won by the Work won by the Unionized Unionized

ConstructionConstructionConstruction Construction SectorSector

Province of Ontario Province of Ontario Estimate for 2009 Estimate for 2009 -- 20102010

Won by Unionized Work won by Non Union Subcontractors,

$600,646,622, 24%Contractors,

$1,627,195,493, 64%

Won by Unionized General Contractors,

$314,324,504, 12%

Work won by the Work won by the Unionized Unionized

ConstructionConstructionConstruction Construction SectorSector

WATERLOO RegionWATERLOO Region

Won by Unionized Work won by Non ySubcontractors,

$69,881,199, 34%

yUnion Contractors, $129,779,370, 64%

Won by UnionizedWon by Unionized General Contractors,

$3,820,000, 2%

Work won by the Unionized Construction

SectorSector

City of TORONTOCity of TORONTO

Won by UnionizedWon by Unionized Subcontractors,

$90,311,612, 39% Work won by Non Union

Contractors, $60,207,741,

26%

Won by Unionized General Contractors,

$81,146,658, 35%

Work won by the Work won by the Unionized Unionized

Construction Construction SectorSector

Won by Unionized Subcontractors,

$66,111,789, 33%

EASTERN ONTARIOEASTERN ONTARIO

Won by Unionized General Contractors,

$10,590,232, 5%

Work won by Non Union Contractors, $122,779,038, 62%

NORTHERN ONTARIONORTHERN ONTARIO

Work won by Non UnionWon by Unionized Subcontractors,

$10,234,732, 14%

Work won by Non Union Contractors, $57,996,817,

83%

Won by Unionized General Contractors, $1,984,143,

3%

NonNon--Unionized Unionized CompetitorsCompetitors

Who are they?Who are they?KENAIDAN NORTH AMERICAN

MAPLE REINDERS TORBEAR CONTRACTING

KINGDOM CONSTRUCTION GRAHAM CONSTRUCTION

BENNETT CONSTRUCTION A-PLUS GENERAL CONTRACTORS

JEVISO CONSTRUCTION RASSAUN STEEL

SUPERIOR BOILER WORKS PEAK ENGINEERING

CECHETTO & SONS STONE TOWN CONSTRUCTION

N o nNon--Unionized Unionized CompetitorsCompetitorsCompetitorsCompetitors

YORK REGION YORK REGION

Bennett

A-Plus

YorkTorbear

Kingdom

Graham

Kenaidan

North American

Maple Reinders

0% 5% 10% 15% 20% 25% 30%

Kenaidan

Percentage of Tenders bid upon 2009-2010

NonNon--Unionized Unionized CompetitorsCompetitors

City of TorontoCity of Toronto

Bennett

A-Plus

Kingdom

Graham

Maple Reinders

Torbear

Percentage of

Kenaidan

North American

Percentage of Tenders bid 2009-2010

0% 5% 10% 15% 20% 25% 30% 35%

NonNon--Unionized Unionized CompetitorsCompetitors

Region of WaterlooRegion of Waterloo

Bennett

A-Plus

Kingdom

Graham

Maple Reinders

Torbear Percentage of Tenders bid 2009 2010

Kenaidan

North American

2009-2010

0% 10% 20% 30% 40% 50% 60%

NonNon--Unionized Unionized CompetitorsCompetitors

EASTERN OntarioEASTERN Ontario

Bennett

A-Plus

Kingdom

Graham

Maple Reinders

Torbear Percentage of Tenders bid 2009 2010

Kenaidan

North American

2009-2010

0 0.02 0.04 0.06 0.08 0.1 0.12 0.14 0.16

NonNon--Unionized Unionized CompetitorsCompetitors

NORTHERN OntarioNORTHERN Ontario

Bennett

A-Plus

Kingdom

Graham

Maple Reinders

Torbear

Kenaidan

North AmericanPercentage of Tenders bid upon 2009-2010

0% 5% 10% 15% 20% 25% 30% 35%

2009 2010

NORTHERN ONTARIO

Recent TENDERSRecent TENDERS

NORTHERN ONTARIORecent TENDERS Recent TENDERS

NO unionized bidders 93%

Only 1 Unionized bidd 7%bidder 7%

NORTHERN ONTARIO

Recent TENDERSRecent TENDERS

NORTHERN ONTARIO Recent TENDERS Recent TENDERS

( f t t l f 14 t d l 1 t d h d bid f( f t t l f 14 t d l 1 t d h d bid f(of total of 14 tenders, only 1 tender had a bid from a (of total of 14 tenders, only 1 tender had a bid from a unionized general contractor) unionized general contractor)

Best Unionized bid within 10-20%

Best Unionized bid beyond 20%

Competitiveness of Unionized

Best Unionized bid within 2 - 5%

Best Unionized bid within 5- 10%Contractor Bids in Northern

Ontario 2009-2010

% won by Unionized contractor

Best Unionized bid within 2%2009 2010

0% 2% 4% 6% 8%

NORTHERN ONTARIO

Recent TENDERSRecent TENDERSRecent TENDERSRecent TENDERS

Feb 2009 - Sault Ste. Marie, ALGOMA DISTRICT Wastewater Treatment plant SCADA upgradespg

S & T Electrical Contractor Ltd.S & T Electrical Contractor Ltd. $ 1,984,143.00$ 1,984,143.00

May 2009 Timmins, KENORA DISTRICT Mattagami River Water Pollution Control y gPlant

Leo Leo AlarieAlarie & Sons Construction & Sons Construction $ 1,058,000.00 $ 1,058,000.00 FBMC IncFBMC Inc $ 1,111,229.00$ 1,111,229.00ChartrandChartrand EquipmentEquipment $ 1 194 239 00$ 1 194 239 00ChartrandChartrand EquipmentEquipment $ 1,194,239.00$ 1,194,239.00

Sep 2010 - Dryden, KENORA DISTRICT Sewage Treatment Plant Replacement North America Construction $ 22,080,472.00 **North America Construction $ 22,080,472.00 PennPenn--co Construction Canadaco Construction Canada $ 22,150,123.00$ 22,150,123.00Kingdom ConstructionKingdom Construction $ 22,457,274.00$ 22,457,274.00

* C t t d d t P* C t t d d t P b d d t i ti b i i l t ffb d d t i ti b i i l t ff* Contract was awarded to Penn* Contract was awarded to Penn--co based on determination by municipal staff co based on determination by municipal staff that several of North American’s references were misleadingthat several of North American’s references were misleading

CITY OF TORONTO

Recent TENDERSRecent TENDERS

City of TORONTO Recent TENDERS Recent TENDERS

No Unionized BiddersOnly 1 Unionized Bidder

40%No Unionized Bidders 20%

40%

3 or more Unionized bidders 15%

2 Unionized Bidders 25%

CITY OF TORONTO

Recent TENDERSRecent TENDERS

City of TORONTO Recent TENDERS Recent TENDERS

Competitiveness f U i i d

Best Unionized bid within 10-20%

Best Unionized bid beyond 20%of Unionized

Contractor Bids in Toronto 2009-2010

Best Unionized bid within 2 - 5%

Best Unionized bid within 5- 10%

% won by Unionized contractor

Best Unionized bid within 2%

0% 10% 20% 30% 40% 50% 60% 70%

CITY OF TORONTO

Recent TENDERSRecent TENDERS

Dec 2009 - William H Johnston Pumping Station, supply, installation and commissioning f 3 d l t d t 205 2009of pump no3 and related components 205-2009

W. A Stephenson Mech Contr $ 1,386,000.00Comstock Canada $ 1,386,375.00Industrial Elect Contr Ltd. $ 1,607,686.00

Jan 2010 - Ashbridges Bay, replacement of PT1-9 electrical substation 209-2009Trade Mark Industrial $ 1,665,026.00 Ainsworth Inc. $ 1,767,663.00S th l d Sh lt Ltd $1 778 498 00Sutherland Shultz Ltd $1,778,498.00

Feb 2010 - Ashbridges Bay Screening Building Alterations Wastewater Treatment Plant 214-2009

Kenaidan $ 87 840 900 00Kenaidan $ 87,840,900.00Torbear $ 93,355,600.00Alberici Constructors $100,794,750.00

WATERLOO REGION

Recent TENDERSRecent TENDERS

WATERLOO REGION Recent TENDERSRecent TENDERS

No Unionized Bidders 57%

Only 1 Unionized Bidder 14%

57%

2 Unionized Bidders 21%%

3 or more Unionized Bidders 7%

WATERLOO REGION

Recent TENDERSRecent TENDERS

WATERLOO REGION - Recent TENDERSRecent TENDERS

Best Unionized bid beyond 20%

Best Unionized bid within 5- 10%

Best Unionized bid within 10-20%

Best Unionized bid within 2 - 5%

% won by Unionized contractor

Best Unionized within 2%

0% 2% 4% 6% 8% 10% 12% 14% 16%

WATERLOO REGION

Recent TENDERSRecent TENDERS

Nov 2009 ‐Middleton Pumping Station (Cambridge) Upgrades T2009‐025 Dakon Construction Limited  $4,984,350.00K&L Construction (Ontario) Limited $4 990 719 00K&L Construction (Ontario) Limited   $4,990,719.00SMA Project & Construction Managers $5,159,700.00Graham Construction and Engineering  $5,181,750.00H.I.R.A. Limited  $5,181,750.00Merit Contractors Niagara $5,208,200.00Kenaidan Contracting Limited $5,880,000.00

Dec 2009 Waterloo Wastewater Treatment Plant (Contract 2) Upgrades T2009‐026Dec 2009 Waterloo Wastewater Treatment Plant (Contract 2) Upgrades T2009 026 Stonetown Construction Limited  $26,311,000.00SMA Project & Construction Managers  $27,093,150.00North America Construction (1993) Limited  $27,937,144.00& C i (O i ) i i d $28 228 0 60K & L Construction (Ontario) Limited  $28,228,401.60

McKayMcKay‐‐Cocker Construction Limited Cocker Construction Limited  $28,245,000.00$28,245,000.00Graham Construction and Engineering  $28,295,400.00H.I.R.A. Limited  $28,558,950.00$ , ,Kenaidan Contracting Limited  $30,700,000.00 

PEEL REGION

Recent TENDERSRecent TENDERS

PEEL REGION - Recent TENDERSRecent TENDERS

No Unionized Bidders 59% Only 1 Unionized Bidder

36%

2 Unionized Bidders 5%2 Unionized Bidders 5%

PEEL REGION

Recent TENDERSRecent TENDERS

PEEL REGION - Recent TENDERSRecent TENDERS

Best OCS bid beyond 20%

Best OCS bid within 5- 10%

Best OCS bid within 10-20%

OCS bid lost but best within 2%

Best OCS bid within 2 - 5%

0% 5% 10% 15% 20% 25% 30%

% won by OCS contractor

PEEL REGION

Recent TENDERSRecent TENDERSAug 2009 - New Beckett Sproule Water Pumping Station, Brampton

(2009-190T) PreQual’d Torbear Contracting $28,535,881.00g , ,North America Construction (1993) Ltd. $30,879,651.00Asco Construction $32,680,000.00Bennett Contracting $32,977,000.00Maple Reinders Constructors $33,941,022.00pKing City Group $34,641,240.00Romag Contracting $34,937,000.00Kenaidan Contracting Ltd. $37,407,000.00

Feb 2010 – Clarkson Wastewater Treatment Plant Expansion, Site Prep, Mississauga (2009-660T)(First tender was cancelled due to document irregularity, then retendered)Gentile Contracting $2,705,510.00Torbear Contracting $3,077,000.00gB. Gottardo Construction $4,599,000.00Dig-Con $4,746,284.00Ambler & Co. $4,923,000.00Roni Excavating $6,994,900.00

WAGEWAGESTABILIZATIONSTABILIZATION

Stabilization Stabilization FundingFunding

Purpose Purpose –– to reduce impact of lower nonto reduce impact of lower non--union worker union worker wage rateswage ratesFundingFunding

Regional Variance

wage rates wage rates

While wage rates might be lower in parts of the Province outside of the GTA, the margin between unionized wage rates might still be similar

Funding levels also will vary based on total number of expected man hours per trade

Waterloo Region

expected man hours per trade

Depending on the trade, stabilization rates can be as high $10 t $15 h

Eastern Ontario

as $10 to $15 per hour

Depending on the trade, stabilization rates can be as high Eastern Ontario p g , gas $6 to $9 per hour

NonNon--WAGEWAGEModificationsModifications

Item DetailOvertime Saturday -1 ½; after 8 hrs double time

Sunday – Double-timeMonday – Friday (after 8 hours < 10 hours) – 1 ½

Material Handling & Staging

Flexibility on unloading (no jurisdiction)Possible use of composite crewStaging Possible use of composite crew

Harmonized Work Week

40 hours/week (5 -8’s vs. 4 -10’s)

Apprenticeship Ratios Ensure ratio is met as per agreement on the project

Encourage trades to adopt pre-apprentice programs

Contractor Contractor Prequalification by Prequalification by q yq y

MunicipalitiesMunicipalities

P lifi ti O t it t hi hli ht t bilit kill t i iPre-qualifications - Opportunity to highlight stability, skills, training, experience and safety records.

Are Municipalities convinced that Pre-qualification will save time and money?

Contractor Rating Systems by Municipalities

Project AgreementsProject Agreementsj gj g

P j t A t t t 163 1 f th L b R l ti A tProject Agreements pursuant to s.163.1 of the Labour Relations Act

This is a mechanism for temporary modification of certain provide id ll ti l b t th t i ht b id d twide collective labour agreements that might be considered to

enhance the competitiveness of unionized contractors in matters such as joint crews, standardized working hours for multiple trades, travel arrangements, etc.arrangements, etc.

Historically it has not been used for Municipally owned infrastructure such as water and wastewater treatment plants.such as water and wastewater treatment plants.

The Central Ontario Building Trades have recently been working on this issue and will be able to comment on recent efforts through the Panel Discussion

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