The Unionized Construction Industry in Ontario

Safety and Training:

Boasting a proven safety record, the unionized sector experiences 31% fewer injuries compared to non-union counterparts. This trend has strengthened over time, with a widening gap in safety performance.

Unionized construction workers benefit from extensive investments in apprenticeship training, health & safety training, and skills development programs. These investments, exceeding $146.4 million annually, translate to over 1 million hours of skills upgrades and safety training delivered each year. Unionized workers are not simply higher-paid non-union workers; they are highly skilled and safety-conscious professionals.

A network of over 100 union training centers, 60 of which hold trade TDA status for 32 trades, provides economies of scale, local responsiveness, and ensures a skilled workforce is ready for deployment.

Addressing Cost Concerns:

Fact: The Unionized Workforce in Ontario is professional, more productive, and safer due to its investment in and commitment to training

The Unionized sector has an extensive history of investment in apprenticeship training, health & safety training, and skills development. $146.4 million is spent annually in training, plus an additional $325 million in capital investments was spent from 2013 – 2019. Over 1 million hours of skills upgrade and safety training are delivered each year.  Union construction workers are not simply higher paid non-union workers. Training is a priority demonstrated by these investments and worker participation in the programs offered.

There are over 100 union training centres located across the province, of which 60 have trade TDA status for 32 different trades. This network creates economies of scale in delivering training, an ability to respond to local market conditions, and a means to train union workers before they are safely dispatched to a job site. No other state or province in North America has an equivalent training capacity.

Reference: 

• Ontario Construction Secretariat (2022) Training Investment in Ontario’s Construction Industry

Myth: Taxpayers pay 25% more when there is a Unionized Trade Contractors only bidding process (ex. City of Toronto, Ottawa Civic Hospital)

This claim has been featured on headlines for the past several years. It is in fact an unsubstantiated opinion that gets cited again and again. No credible research or report has ever been produced to substantiate that claim. There are over 7,000 trade contractors in the unionized sector, the sector is highly competitive. 

There is evidence that suggests a different conclusion. City of Toronto Managers (who see all bids submitted for city construction projects) estimated there would only be a 1.7% difference in lowest bid prices if non-union trade contractors were allowed to bid on City of Toronto construction. 

If winning bid prices are 25% higher because there are no non-union contractors bidding, it would mean profit margins for union contractors working for the City of Toronto are more than doubled compared to private sector construction projects. Non-union trade contractors would be foolish not to sign a collective agreement if that were the case. The reality is profit margins are similar for private and public projects as a result of similar levels of competition.

References: 

• Russell Ormiston - Institute for Construction Employment Research (2022) Project Labor Agreements: A Research Review
• Nooshin Mahalia (2008) Prevailing wages and Government Contracting Costs
• Gerard M. Waites (2017) Prevailing Wage Law White Paper: Review of Public Policy Research

Fact: The societal impact of Unionized construction trade careers is significant and impacts entire communities

The unionization of the construction trade workforce ensures fair wages, pensions, and health benefits. This workforce is compensated for its commitment to professionalism, safe practices, productivity, and personal investment in their career.

Social procurement initiatives are not tax expenditures but investments, transforming previously underrepresented communities into the middle class.

The communities that participate in social procurement initiatives eventually experience an increase in disposable income which boosts local economic activity. In addition, there are net positive fiscal impacts of reduced EI costs, higher income tax revenue, reduced medical costs, reduced subsidized housing and social assistance costs, and increased pension incomes. 

There is a growing trend for municipalities in Ontario to adopt a “Fair Wage” policy to equalize wages for prospective construction project bidders, union and non-union trade contractors.  This takes that portion of total bid price out of the competition, levels the wage playing field, and ensures workers are fairly compensated. This practice ensures the lowering of workers’ wages is not the reason a trade contractor wins a bid. 

References:  

• Illinois Economic Policy Institute (2021) The Economic and Fiscal Impacts of Collective Bargaining Agreements in Construction
• Education Policy Research Initiative and the Labour Market Information Council (2021) How Much Do They Make? New Evidence on the Early Career Earnings of Trade Certificate Holders
• IZA Institute of Labour Economics (2018) The Relationship between Union Membership and Net Fiscal Impact
• National Center for Construction Education and Research (2018) Restoring the Dignity of Work
• Canadian Centre for Policy Alternatives (2014) The Case for a Stronger Fair Wage Policy in Ontario
• Gerard M. Waites (2017) Prevailing Wage Law White Paper: Review of Public Policy Research

Fact: Unionized Trade Contractors are legitimate, and not part of the Underground Economy

Signatory Trade Contractors are registered companies who are bonded, and pay all required taxes and government regulated obligations (WSIB, EHT, EI, CPP, HST etc.).

These contractors are three times more likely to employ registered apprentices and journeypersons than their non-union counterparts.  In addition, 81% trade contractors support the apprenticeship training model.

Union trade contractors are not part of the underground economy, those who avoid paying taxes and take advantage of workers who may not be aware of their rights and/or not eligible to work in Canada. Estimates of lost revenue to the federal and Ontario provincial governments range from $1.8 to $3.1 billion annually. This does not reflect the human cost of unreported and/or improperly treated injuries, costs to the health care system, social assistance cost of workers with no or low EI or CPP contributions, and those with no WSIB coverage.

A common tactic of contractors seeking to gain an unfair competitive advantage is to style their workers as ‘independent operators’ (i.e., sub-contractors) rather than as employees. In this way, a contractor can avoid the cost of EI, CPP and WSIB contributions as well as requirements for overtime pay, vacation pay and statutory holiday pay. When all of these are taken into account, a contractor that styles its workers as ‘independent operators’ can save around 16.5% on its labour costs.

In the voluntary trades sub-sectors, the lowest bid process creates a downward pressure on wages and incentive to cheat.  The administrative process between unions and their employer partners does not allow for cuts to operational costs by not properly training its workforce, not paying a fair wage, or not reporting all governmental fiscal obligations.

References: 

• Prism Economics and Analysis (2019) The Underground Economy in Ontario’s Construction Industry: Estimates of the Revenue Losses to Governments
• Prism Economics and Analysis (2019) Just Not Credible

Fact: There is formal Union support to each step in a unionized construction trade career path

• Pre-apprenticeship programs
• TDAs and apprenticeship programs
• Joint Apprentice Training Committees
• Support for trade specific curriculum
• Mentoring programs
• Certificate of Qualification exam preparation
• Trade specific continuing education
• Supervisor/Foreman training
• University credits/recognition of Journeyman status for Bachelor of Business Administration
  (Trades Management)

Fact: The Unionized Sector has a proven track record of Social Procurement Partnerships

The unionized sector has demonstrated over many decades its commitment to recruiting and supporting many various groups of traditionally underrepresented groups in society. 

• The Oaks Revitalization Association (ORA), Skilled Trades Development Program (STDP)
• Helmets to Hardhats
• Ontario Building and Construction Tradeswomen
• Hammer Heads
• Tomorrow’s Trades
• DEI Training programs
• Working with First Nations groups, and many various groups in targeted communities

Fact: The Unionized Sector saves millions of taxpayer’s dollars through its health & welfare benefit programs.

Each construction trade labour/management partnership includes a health and welfare program that covers dental, medical, drug, and glasses expenses for members and their families. These expenses are covered by their specific plan. There are approximately 150,000 unionized construction workers in Ontario who are covered in these programs. These plans cover the majority of these expenses and are not claimed on an annual tax return, thereby saving taxpayers millions of dollars each year. In addition, these families enjoy full coverage and their personal budgets are not impacted by health issues that may arise, and their health issues can be dealt with without delay.

Fact: There are many benefits resulting from the Union affiliation structure 

Union Locals have autonomy within their geographical region but are connected to other Locals in the province (typically by District Council), across Canada, and in the United States as well. This network creates the ability to share best practices in training, recruiting, as well as increasing the benefits of economies of scale.  Locals can respond to its region’s workforce needs and issues, while drawing on resources from across North America.

Fact: Labour and Employer Partnerships result in mutual success and a professional workforce

Joint Labour/Management Training Trust Funds and Training Centres are able to respond quickly to acquiring new and innovative equipment and incorporating new construction techniques with economies of scale in delivery.

Local unions provide a human resources role (recruitment, training, benefits package) for contractors.  This partnership facilitates a small to medium sized contractor’s ability to scale up as they gain more construction project experience.

Joint Apprentice Training Committees (JATC) monitor and provide support for apprentices which increases completion rates and provides input for continuing education programs for journeyman.

Research has also shown workers with defined retirement benefit plans have higher productivity rates, are more committed to their work, invest more in their own skills, and have lower rates of absenteeism. 

Myth: Construction Unions make it impossible for employers to fire incompetent workers

Anyone who can be hired can also be fired, workers who are incompetent, lazy or chronically absent can be laid off. Unions work to ensure that employers have just cause for dismissing their employees. They also ensure that people are treated fairly in the workplace, regardless of their race, gender, physical ability or sexual orientation.

Fact: The Unionized Sector has demonstrated a long-time commitment to investing time and money in Local Communities

In 2019 over $12 million was raised by local unions and their contractor partners supporting a variety of charities and not for profit programs in 90 communities across the province.

Employer and local union participate in volunteering and supporting local initiatives such as:

• Food and Clothing Banks
• Toy Drives
• Renovations to special needs individual’s housing and to community use buildings
• Job Fairs and career days

Reference: 

• Ontario Construction Secretariat (2022) OCS Year in Review

Fact: The Unionized Sector supports its workforce in Substance Abuse Treatment

There is free treatment and support for workers and management who have substance abuse problems, plus support for their families at the De Novo Treatment Centre.  The industry recognized some of its members needed assistance so this program was created and fully funded by its unions and management partners.

Reference: 

• Denovo.ca

Myth: Financial success requires lower worker wages 

Costco and Walmart are two of the world’s leading retailers. Both companies are financially successful, but with differing philosophies with respect to employee compensation. Costco’s employees enjoy fair wages and generous benefit packages. Walmart’s employees experience low wages and minimal benefits. Costco has very low staff turnover, Walmart the opposite.

This is one example of a business model that demonstrates that low wages are not required to be successful and fiscally responsible.  Fair wages and financial success do not have to be mutually exclusive.  This is also true in the unionized construction sector, employers and their workers can both enjoy financial success working as partners, benefiting society and leveraging tax dollars.

Myth: Unions favour strike action

A common misconception is that unions only prioritize their own interests and disregard the public inconvenience caused by strikes. While strikes can certainly disrupt daily life, they are often a last resort. In reality, the vast majority of labor contracts—over 97%—are settled through negotiation without resorting to strike action. Unions prefer to avoid the hardships that strikes impose, especially on their own members. When strikes do occur, it's because crucial issues remain unresolved.