The Greater Oshawa Chamber of Commerce (GOCC) appeared as a delegation at the October 31st Durham Regional Council meeting regarding Report 2012-J33—an Update on Fair Wage Policies (FWP) for Industrial Commercial Institutional Construction Contracts. The joint Regional committee report before council called for the set up of a FWP, saying it would “level the playing field” for all companies bidding on a construction contract.
After listening to the delegations and after a lengthy debate, the policy that would have set wages and benefits contractors would have had to pay employees while working on a Regional project was defeated by a 16-11 vote.
During its presentation the (GOCC) noted it had reviewed the Staff report and discussed the issue with Regional staff and that the Chamber maintains its 2009 position that such policies limit SME’s ability to bid on government contracts and whether FWPs provide the best value to taxpayers at the most cost effective price.
The Chamber believed the Region must ensure that Durham remains competitive without jeopardizing jobs and the economy. Regional Council needs to understand what the impact such legislation would mean to the ratepayers of Durham and the backbone of Durham Region’s economy, small business.
Further, the (GOCC) agreed with the Region’s staff report that;
- the Region should continue to ensure consistency and equal treatment for all potential suppliers of goods and service to the Region;
- does not recommend the inclusion of a FWP within the framework of its ICI construction contracts or any other service sector or industry in which such fair wage policy could be applied;
- it is not appropriate to add additional process to construction contracts when it only adds cost without taxpayer benefit;
and urged Council to listen to its staff.
The GOCC also noted that the Ontario Chamber of Commerce (OCC) agreed that a FWP distorts the labour market, reduces competition and increases labour costs and can require the payment of higher than market-based wages, increases government procurement costs and program spending. It was felt the provincial government has many legislative tools at its disposal to address the economic and social needs of Ontario’s workforce. A minimum wage policy, combined with other forms of social assistance for lower-income individuals, has a greater positive impact on the standard of living in the province than does a FWP and that research indicates that the beneficial impact of the FWP is undermined by the increase in program costs funded by all taxpayers.
Many residents are already struggling to pay their property taxes and thousands of ratepayers in Durham Region have lost their jobs in the recent recession and with unemployment running at 9.1% in Durham Region up 2% over the same period as last year and over the National average of 7.4%, now was not the time to be discussing adding to the ratepayers tax burden. The Chamber and ratepayers expect government to lower the tax burden and find efficiencies.
During its presentation the Chamber asked Council: would a FWP result in higher costs to the Region, or could it increase the capital costs on a project; will it negatively impact the sub contractors who are medium to smaller business in Durham; and what would be the financial Impact in dollars to the ratepayers of Durham?
There were several letters supporting a FWP insisting it would level the playing field, and that a FWP ensured that the quality of work would be an integral part of every project and an effective tool to improve the quality of projects and increase the compliance with provincial statues. The Chamber argued that in its opinion it tilted the playing field toward a limited number of firms outside Durham Region, giving them a more competitive advantage on bidding and away from Durham businesses. And that the Region’s bidding process, Regional staff and the contractor would ensure the quality of projects and increase the compliance with provincial statues not a FWP. The central objective of a fair wage policy was to raise wages above the level that would prevail in the absence of a policy. This “leveling up” would result in economic inefficiencies and outputs falling below the level which would be produced under competitive environments. All things being equal, as far as quality and qualification, this FWP was bad policy and anti Durham jobs and of no benefit to the ratepayers of Durham.
Region of Durham Report 2012-J33 – an Update on Fair Wage Policies (FWP) for Industrial Commercial Institutional Construction Contracts.
Recommendation to Council October 31, 2012:
THAT staff be instructed to prepare a Fair Wage Policy for the Region of Durham, including thresholds on Regional contracts and comparisons to the three local area municipalities that currently have a Fair Wage Policy.