ICBA celebrates 50 years of serving open shop construction this year, and we are looking back every week at some of the significant moments, milestones, and people who helped ICBA become Canada’s largest construction association.
Today, we wind the clock back to the mid 1980s and a major ICBA policy piece that changed views on the construction industry.
The interviews and other original research on which the ICBA50 series is based were conducted by writer Kevin Hanson. We appreciate Kevin’s work capturing the people, events, and milestones that shaped ICBA’s first half-century.
As union/non-union confrontations go, it was pretty tame. It was the mid-1980s and Knappett was one of the first open shop contractors to build highway bridges in B.C. A crew was working on a job on the Skeena River near Terrace when they were joined by a group identifying themselves as Carpenters union members. “There’s me and my carpenter standing at this bridge site and 30 [union] members piled their cars around us and start threatening us,” John Knappett recalls. “We more or less plainly disagreed with them and they stood and kicked the dirt for a while, and then realized that none of them were actually going to throw us in the river and they got in their cars and drove away.”
John Knappett
The lack of greater provocation and stronger confrontation was indicative, perhaps, of a union movement that no longer felt as emboldened as it used to. And the very presence of an open shop contractor on such a job was certainly indicative of a sector that was on the ascendancy, and continuing to find new market opportunities and to expand its expertise under improving economic conditions.
Through the second half of the 1980s, the B.C. economy bounced back from recession, although unemployment continued to average just a little over 10 per cent. By late in the decade, construction activity finally surpassed its 1981 level. Negotiations between the Building Trades and unionized contractors began to take greater account of competitiveness in what remained a very cost-conscious construction marketplace. There were wage freezes in 1984-1988, and the three-year agreement for 1988-1991 was the first concluded without a work stoppage. The Building Trades began to relax their use of non-affiliation clauses, recognizing that they were becoming self-defeating as more and more work was done open shop. They also faced a new competition in the form of the emergence and growth of alternative and unaffiliated unions such as the Christian Labour Association of Canada (CLAC).
But the market share shift from the unionized to open shop sectors continued unabated, driven by lower costs, greater flexibility and growing expertise. “Non-union contractors have their union counterparts on the run in B.C.’s multimillion-dollar construction industry,” reported the Vancouver Sun in the summer of 1983. Chuck McVeigh of the Construction Labour Relations Association said non-union companies had tripled their business in the past year, while Roy Gauthier of the Building Trades Council acknowledged that more than half of unionized construction workers were out of work. Meanwhile, Bill Kerkhoff and another non-union contractor told the Sun that business had never been better. One survey found that a 33 per cent non-union market share in 1983 had risen to 54 per cent by 1985. Longer term trends were even more dramatic. By one estimate, only 10 per cent of framed construction (excluding single-family homes) had been done non-union in 1973, whereas by 1997 it was 90 per cent.
In 1986, ICBA released Replacing Fact with Fiction: A Report on the B.C. Construction Industry, providing the first detailed analysis of the rising open shop sector. These contractors were “no longer a small, inexperienced group.” Most had been in business five years or longer, and slightly less than half had completed projects valued at $500,000 or more. Large majorities, particularly among sub-trades, had employed apprentices in the previous year. Wages were found to be “not that far out of line with the rates paid in the unionized segment,” especially in non-residential. Bonding capacity was still a limitation among sub-trades, and relatively few contractors were offering health and welfare benefits. On the whole, though, the report reflected a sector whose stability and sophistication were growing concurrent with its market share.
“The open shop sector was a majority with a minority complex,” says Phil Hochstein, who helped develop the report. “In fact, they were always the majority, they just never realized it until ICBA started counting them all. And then you had to dispel the myths. We are responsible, we do pay properly, we have skilled labour, we can build things.”
Throughout the province at this time, open shop contractors were building their business relationships, dealing with the hurdles they continued to encounter, and establishing ever-broader capacities and credibility. Pile driving was an important sub-trade that Knappett needed for his bridge building contracts in northern B.C., for example, but the companies best positioned to do the work were under union pressure not to contract with him. His solution was to work with a small non-union company, even though this specific task was outside its usual scope. “But we helped them out, we showed them how to do it, and they rented some extra heavy equipment and we got through the projects,” he says. That year, his company built five highway bridges and nine railway bridges.
Joel Nauss arrived in B.C. in 1987, with a mandate from the Matthews Group based in Ontario to set up an open shop operation. He became the first open shop contractor to work at the docks in North Vancouver, on a pulp storage warehouse, with “the longshoremen on one side and the teamsters on the other.” He was called in at the outset of the work by a senior executive with the Port of Vancouver, who didn’t recognize some of the sub-contractors he had lined up and didn’t see any union affiliations. “He asked me how I was going to pull that off and I just said I’m going to do it,” Nauss says. The hurdles were considerable on the project, and much of the dialogue with the unions highly confrontational, but he successfully resisted the pressure to “chase all the non-union contractors off the site.” Nauss says he had strong support from the port.
“Behind the scenes a lot of people in senior management of these big institutions were getting tired of being beaten up by the unions all the time and paying too much for construction,” Nauss says. And he had the support of his employees, without which he says open shop progress wouldn’t have been possible. “The big part of our advantage was the workforce we could bring there,” he says. “And the sub-trades did the same thing. So some of the non-union employees they made some sacrifices too, the hourly guys without a question. And they were chastised and bullied by the unions.”
Collectively, Nauss says, the sector was clearly progressing. “It was like two steps forward and two steps back – over a course of years – and then it was two steps forward, and then it was just like one step at a time and we started to gain ground.” And the open shop reputation was growing accordingly. “Once you work for the Port of Vancouver, you work for UBC, you work for YVR, you work for SFU, and you work for different municipalities, they have a hard time shutting you down… Because we were starting to build resumes of successfully completed jobs and we started gaining a toehold into the business.”
