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 turn back the clock to the early 1990s, and another ICBA battle with NDP Labour Minister Moe Sihota.
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.
By the fall of 1992, Labour Minister Moe Sihota was taking heat from all sides. He’d become, as one commentator put it, “a magnet for negative publicity.” Another accused him of “hypocrisy, irresponsibility and dereliction of duty.” And just as the firestorm over his Labour Code changes was picking up speed, Sihota found himself in a curious side scandal: he’d hired a non-union contractor to build his house.
Now, that choice wasn’t all that surprising. Homebuilding had never been a stronghold for union labour. But it raised eyebrows given Sihota’s public criticism of non-union contractors. Cue some gleeful media coverage and awkward questions in the legislature.
Sihota defended himself by pointing to his own government’s recently introduced Fair Wage Policy, saying he was paying “fair wage” rates to his crew—and admitting his house was costing “a fair bit more” as a result.
That NDP Fair Wage Policy, rolled out in March 1992, was the government’s not-so-subtle attempt to slow the momentum of open shop contractors on public projects. It initially applied to contracts worth over $1.5 million, but that floor was soon lowered to $250,000. The scope widened too, expanding to roads, highways, and later including new rules around apprentice ratios and trade qualifications.
Sihota’s premise? That non-union contractors were winning bids by underpaying workers and pocketing the difference. If everyone had to pay the same (higher) wages, union firms might become competitive again.
It didn’t work.
“The flexibility and productivity of open shop firms to win the work” still gave them the edge, ICBA told its members. By spring 1993, even Sihota had to admit the policy hadn’t shifted much work away from open shop contractors. He promised more enforcement and fewer “loopholes.”
But the real impact of the policy was on cost. It imposed what were essentially “super minimums” – wages well above market rates. And it compressed the wage spread between skills. Labourers were suddenly making nearly the same as skilled tradespeople. One example ICBA flagged: a construction labourer earning double their open market rate – just slightly less than a skilled cement mason.
ICBA took that message straight to the public. The first campaign ran in Victoria, where the Fair Wage Policy had added $1 million to the cost of the new Commonwealth Games pool. Then ICBA wrote to school boards across B.C., asking them to request exemptions. We pointed out the policy’s cost was enough to build 1,660 more classrooms.
“So we won that battle. For sure we won the public relations battle,” said Phil Hochstein.
The full cost picture came into focus in 1993, when a Vancouver Board of Trade report pegged the added expense at $30 million – about 6 to 7% more on public construction annually.
“This arbitrary policy is simply an NDP payoff to their friends in the union movement,” said Hochstein, calling on the Auditor General to investigate.
ICBA followed with its own report, co-authored by professors from UBC and SFU. Their estimate? Over $100 million in direct annual costs. They also slammed the flimsy process behind the policy’s development. “With unemployment in the construction industry at 16 per cent,” Hochstein said, “ICBA would much rather see that money used to create jobs on new projects rather than pay more for the ones we’re already getting.”
ICBA challenged the policy in court – and won. But before the ruling could bite, the NDP entrenched the policy in law. What pushed them? Likely a demand from B.C. Federation of Labour president Ken Georgetti in April 1994. Three weeks later, legislation appeared. ICBA called the NDP on it – with a bit of flair. ICBA put $1,000 in a trust account, pledging to donate it to a charity of Georgetti’s choice if the NDP didn’t give him exactly what he asked for.
The cheque, of course, was never cashed.
“My impression is that Georgetti says jump and the NDP says ‘how high?’” Hochstein told the press.
Ironically, while the NDP was propping up its Fair Wage Policy, the rest of North America was moving in the opposite direction. No major jurisdiction had brought in such a policy in more than 20 years. Meanwhile, cities like Richmond, Vancouver, and Surrey were scrapping theirs – Surrey citing nearly $900,000 in expected savings annually.
In the end, the provincial policy did little more than drive up the cost of public construction, without shifting market share back to the Building Trades Unions. If the government was going to change that, it would need to go even further in tilting the playing field against open shop.
And as ICBA would soon find out, that’s exactly what they intended to do.
