HomeMy WebLinkAboutCS 28-10
Report to
Executive Committee
PICKERING Report Number: CS 28-10
Date: June 14, 2010
137
From: Gillis A. Paterson
Director, Corporate Services & Treasurer
Subject: Fair Wage Policy
Recommendation:
That Report CS 28-10 of the Director, Corporate Services & Treasurer regarding Fair
Wage Policy be received for information.
Executive Summary: At the meeting of Council held on April 19, 2010 direction
was given by Council Resolution #65/10 that CORR.29-10 from Terry Dorgan,
Business Agent and representative for Central Building Trades requesting the City of
Pickering review their Fair Wage Policy By-law in order to update their policy to mirror
other municipalities such as Oshawa and Clarington be referred to staff for report prior
to Council's summer recess.
After a thorough review, consultation with other municipalities and careful consideration,
staff have concluded that it is not necessary to implement any additional update to City
By-law or policy. This is consistent with the Region of Durham's position on this matter.
Financial Implications: There are no financial implications associated with the
Recommendation.
Sustainability Implications: There are no sustainability implications associated with
this report.
Background:
City's Current Policy and Practices
The City's Purchasing Policy begins with a Policy Statement which includes:
"That the City provide best value to the taxpayers of the City of Pickering through
the provision of open and fair, equitable, accessible and competitive bidding,
processes."
Report CS 28-10 June 14, 2010
Subject: Fair Wage Policy Page 2
. 1 ~ S2
The City's bidding processes have been open and fair, equitable, accessible and
competitive and without concern or conflict from the bidding community for over 30
years. The City's bidding processes continue to attract competition from the
marketplace yielding competitive pricing from qualified and skilled contractors and
savings to benefit the City and taxpayers. The City is responsible for ensuring that.
public funds are spent in a manner which maximizes the value obtained for
money spent in an open and competitive environment which ensures all suppliers
that wish to do business with the City are treated equally and fairly.
General Conditions within the City's tendering documents include the following Fair
Wage Clause:
"The Provincial Fair Wage regulations shall be applied to this contract and the
Contractor shall be prepared to provide such proof as may be necessary to
indicate that wages paid to employees are in compliance with the required
minimum. "
Criteria to select qualified contractors include, but is not limited to, the following:
• Rigorous evaluation of contractor's health and safety policy, qualifications, safety
record, insurance coverage
• Evaluation of experience in work of similar scope and value, and performance
reviews
• Backing by a recognized surety company
The City has a responsibility to hire qualified contractors and ensure compliance with
the regulations of the Occupational Health & Safety Act. The City already does its due
diligence to ensure only qualified contractors undertake work and comply with all ,
Federal, Provincial and Municipal statues and regulations.
The Ontario Chamber of Commerce (OCC) is a federation of 160 local chambers of
commerce and boards of trade in the Province of Ontario, representing an estimated
57,000 businesses of all sizes, in all economic sectors and from every area of the
province. The OCC's mandate is to advocate strong policies on issues that affect it's
membership through Ontario's business industry. In August, 2007 the OCC provided a
response on Fair Wage Policy (FWP) to the Director, Employment and Labour Policy
Branch - Ministry of Labour and this communication has been confirmed as the most
current. The following statements are contained in the response and bear repeating:
"To conclude, the OCC believes the FWP does not effectively provide for a fair
return on taxpayer dollars while it falls short of meeting an equitable social
objective. Therefore, the OCC recommends the government of Ontario to phase
:
out the FWP"
Report CS 28-10 June 14, 2010
Subject: Fair Wage Policy Page 3
139
The following conclusion appears in the most recent Region of Durham Report #2009-
F-38 presented to Regional Council:
"Given the core service issue and the debatable benefits associated with
incorporating such a policy, Regional staff does not recommend the inclusion of a
Fair Wage Policy within the framework of its ICI construction contracts or any other
service, sector or industry in which such a fair wage policy could be applied. The
Region should continue to ensure consistency and equal treatment for all potential
suppliers of goods and services to the Region and thus refrain from granting any
type of preferential treatment to a select number of recipients through the
implementation of the proposed (Region) Fair Wage Policy."
The foregoing conclusion within the Regional report resonates the City's
Recommendation as well,, that being the City continue to ensure consistency and equal
treatment for all potential contractors to the City and thus refrain from granting any type
of preferential treatment to a select number of recipients through the implementation of
a proposed City Fair Wage Policy.
Attachments:
1. Correspondence from International Brotherhood of Electrical Workers
2. City of Pickering Overview of Proposed Fair Wage Policy
3. Region of Durham Finance and Administration Report No. 2009-F-38 regarding a
Fair Wage Policy
Preps 'ed By: Approved/Endorsed By:
Vera A. Fel emacher Gillis A. Paterson
Manager, Supply & Services Director, Corporate Services & Treasurer
C.P.P., CPPO, CPPB, C.P.M., CMM III
Copy: Chief Administrative Officer
Recommended for the consideration
of Pickering C' oun it
Tony Preve el, P.Eng.
Chief Administrative Officer
F~
ATTACHMENT #-L-To PEPoRT#-L-~-/0
140
Request for Delegation C0PUZ 2q--ro
Debbie Shields
One The Esplanade
Pickering, Ontario, Canada
L1 V 6K7
To whom this may concern,
The Central Ontario Building Trades represents 60,000 skilled trades' workers in Central
Ontario. Most recently they have been active in promoting the adoption of modern Fair Wage
Policies throughout Ontario. This is to coincide with already implemented Fair Wage Policies in
municipalities and institutions such as; Oshawa, Thunder Bay, Hamilton, Sudbury, Clarington,
Toronto, the University of Ontario Institute of Technology and Durham College.
Within the City of Pickering's purchasing Bi-laws a Fair Wage Policy, dated 1995, has been
implemented over the past 15 years. The Central Ontario Building Trades view this policy as
being out dated and respectfully requests that the City of Pickering update their Fair Wage
Policy to mirror other municipalities such as Oshawa and Clarington.
Central Ontario Building Trades representative Terry Dorgan, requests to appear as a delegation
on April 19th 2010 in respect to modernizing the city's Fair Wage Policy.
Best Regards,
Terry ~orr~avl
Qus~r~eSS Ac~eY.
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ORIGINAI
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45A 1 41
Getting Serious about AdoRting Fair Wagg
ha is a Fair Wmye Requires all contractors to pay or provide the same wages,
benefits and hours to all workers.
Policy?
Municipalities pay their construction workers a "fair wage" for
the work performed and to ensure that workers are not
exploited or discriminated against.
J. Usually applies to construction (ICI) projects over $00,000.
Who has already adopted The Federal government, the provincial governments of
Fair Wage? Ontario, Manitoba and British Columbia, the municipalities of
Toronto, OshawaJondon, Montreal, Calgary, Edmonton and
Greater Vancouver, in addition to numerous agencies, boards,
commissions and universities/colleges all have adopted fair
wage policies.
What are the cost Minimal increases in,construction cost (2-4%)
implications of Fair Wage Significant cost savings (11-17%) based on higher productivity
gains resulting in lower renovation and repair work
Policy Adoption to (Source: Ontario Construction Secretariat)
projects?
What are the financial For small to medium sized Municipalities, it takes 20-40 hours
implications of Fair Wage per year to administer a Fair Wage Policy. r
1e s xes? Investigations fees (e.g. $2500 per investigation) would cover
administration costs and be an additional revenue source for the
Municipality.
! In the City of Toronto, administration revenues from Fair
Wage exceeded $27,000 in 2008.
What are the other (1) Stable labour relations with minimal-disruption.
Benefits of Fair Wage (2) A level playing field in competition for City Work.
(3) Protection of the Public
Policy Adoption? (4) Enhanced reputation of the Municipality for ethical and fair
business dealings.
ATTACHMENT #,,2TO REPORT #_C:YZ-/ 6
142
City of Pickering'
Overview of the Fair Wage Schedule and Policy Proposal
Contractors entering into ICI (Industrial-Commercial-Institutional) construction contracts
carried out by, and for, the City would.pay or provide wages, benefits and hours of work
to their employees while adhering to a "City Fair Wage Schedule and Policy". Similarly,
it would be the responsibility of the contractor to ensure the sub-contractor(s) are also
adhering to the terms of the City Fair Wage Schedule and Policy. The proposal outlines
a contract threshold minimum of $500,000 and therefore, contracts below a threshold
would be exempt from the terms of the proposed policy. A "investigation fee" would be
required to investigate complaints. Upon receipt of a Registered Complaint, together
with payment of an investigation fee, the City would take such action as it deems
necessary to determine whether the Contractor and Sub-contractor involved
or named in the Registered Complaint is in compliance with the Fair Wage
Policy and the Fair Wage Schedule. Sample investigation fees are $2,000 and $5,000.
Fair wage policies exist in relatively few municipalities from the survey undertaken
recently. Of the 28 municipalities and 3 public agencies surveyed, only 5 municipalities
have their own fair wage policies, 2 of which are Clarington and Oshawa. As identified
in the Region of Durham's Report #2009-F-38 on Fair Wage Policy "the City of
Toronto's Fair Wage Policy often serves as a benchmark for other jurisdictions and its
wage schedule is arrived at through review of stipulated rates of pay for various classes
of work produced. The City of Toronto's Fair Wage Office is made up of several staff
members solely-dedicated to the review of tenders and vetting of bidders to ensure
compliance, links to their schedule, to the complete wage package, inclusive of benefits
(excluding union dues, associate fees, etc) and is tied to collective agreements specific
to the local area. Review of the schedule by the City of Toronto's is done once every
three years and is adjusted annually for inflation. The City of Toronto's Fair Wage Office
provides auditing, administrative and schedule research and review service to other
municipalities with fair wage policies of their own."
Administration of a City Fair Wage Schedule and Policy would have to be designated to
be the responsibility to a Manager in Corporate Services or appropriate designate for
the review and administration of a Fair Wage Schedule and Policy and likely require
additional internal staffing to support the Manager.
Clarington implemented a fair wage policy as an interim process and applies on ICI
(Industrial-Commercial-Institutional) projects over $1,000,000 and Oshawa's applies on
projects over $500,000. Clarington has not seen any proof that there are any cost
savings flowing as a result of using the Fair Wage Policy. Clarington relies on the City of
Toronto to provide schedules and undertake audits otherwise, would need extra staff.
The following is abstracted from a City of Toronto staff report February 1, 2007 -
"Establishing fair wage rates and schedules are intended to minimize potential conflict
between organized and unorganized labour in the tendering and awarding of civic
contracts". This may be a factor in Toronto, however, there has been no conflict
whatsoever in over 30 years between organized and unorganized labour in the
tendering and award of contracts within the City of Pickering.
ATTACHMENT#J__TO REPORT # q Qr--10
Finance & Administration -15- April 15, 2009
Committee 143
MOVED by Councillor Kolodzie,
(160) "THAT the foregoing motion (159) of Regional Chair Anderson be
tabled.
MOTION DEFEATED
Councillor Kolodzie indicated that he wished to table the motion until he could
obtain an accurate accounting of what each Municipality has put into Durham
Region Transit (i.e., cost of buses, lands, etc)
The motion (159) of Regional Chair Anderson was then put to a vote and
CARRIED.
d) PROPOSED ESTABLISHMENT OF A FAIR WAGE POLICY ON ICI
CONSTRUCTION CONTRACTS BY THE REGION OF DURHAM
(2009-F-38)
Report #2009-F-38 from R.J. Clapp, Commissioner of Finance, was received.
R.J. Clapp responded to various questions from Councillor Kolodzie with
respect to whether or not there would be additional costs; why the fair wage
policy comparison chart (of GTA and other municipalities) shown on page 3 of
the report did not have more up-to-date comparisons; and the impact had a
fair wage policy been in place when the new water pollution control plant was
constructed in Courtice. A question regarding union versus non-union
workers was also raised and was addressed by R.J. Clapp.
MOVED by Councillor Parish,
(161) "THAT Report #2009-F-38 of the Commissioner of Finance be
received for information."
CARRIED
e) REGIONAL DEVELOPMENT CHARGE INDEXING (2009-F-39)
Report #2009-F-39 from R.J. Clapp, Commissioner of Finance, was received
as a handout. R.J. Clapp reviewed the recommendations contained in Report
#2009-F-39 with the Committee and also highlighted section 3.3 on page 6
which summarizes the potential foregone revenue (estimated $4.0 million)
from waiving the indexing of residential and non-residential development
charges and delaying the scheduled phase-in of non-residential development
charges for the ICI sectors in order to provide some relief for local
development and building industries during this economic recession.
Councillor Parish questioned the reason for doing this and also commented
there would be minimal impact in terms of stimulating development and
creating jobs. Councillor Parish also expressed concern with the loss of the
estimated $4 million in development charge revenue in 2010 and beyond.
R.J. Clapp noted there will be an opportunity to update the rates when a new
development charge by-law is completed. Councillor Parish also questioned
R.J. Clapp on whether consideration had been given to alternatives, such as
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The Regional Municipality of Durham
Report to The Finance and Administration Committee
From: R.J. Clapp, Commissioner of Finance
Report No.. 2009-F-38
Date: April 15, 2009
SUBJECT:
Proposed establishment of a Fair Wage Policy on ICI construction contracts by the
Region of Durham
RECOMMENDAMNS:
THAT the Finance and Administration Committee receive this report for information.
1.0 INTRODtJCnON
• This report considers the implications of incorporating a Fair Wage Policy into
the framework of the Region of Durham's lCl construction contracts: The
report briefly summarizes the Fair Wage Policy proposal put forth by local
union representatives and discusses current experiences with fair wage
policies in other municipalities for the purpose of establishing a Regional
position on the proposal.
2.0 BACKGROUND
• On November 14, 2007, with a UA Local 463 representative in attendance, a
representative from ISEW Loca'I 894, Oshawa and District provided a
presentation to Council' members regarding a Fair Wage Policy Proposal for
the Region intended to cover ICI construction oontracts carved out by, and
for, the Regional Municipality of Durham. Council members were also
presented with bound copies of the Fair Wage Proposal and a publication
from the Ontario Construction Secretariat (OSC) entitled "Impact of Fair Wage
Polies on the Construction Industry".
A Fair Wage Policy would allow the Region to require that all contractors
bidding on contracts for the Region provide wages, benefits and hours to their
employees in compliance with the Region's Fair Wage Policy. The policy
would also snake contractors responsible for ensuring that sub-contractors
also adhere to the policy.
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Report No : #2009-F-38 Page No.: 2
Terry Dorgan, the UA Local 463 representative, suggested that fair wage
policies assist in counter-balancing the propensity for suppliers in the
construction industry to engage in cut-throat competition driven by the low-bid
policies often adhered to by the public sector. It is argued that by setting a
wage floor for which contractors and sub-contractors must adhere to, and
essentially "taking the wages out of competition" such cut-throat competition
through the paying of lower wages can be minimized. They indicate that such
competition is also believed to erode occupational safety standards, weaken
industry investment in skills training and "promote" evasion of legal
obligations, such as the circumvention of El and CPP contributions. Mr.
Dorgan also commented that fair wage policies have been in Canada for
some time and that the City of Toronto policy often serves as a benchmark for
policies in other areas.
• A follow-up meeting took place January 2008 between Regional staff and
IBEW Local 894 and LIA Local 463 representatives to again discuss the
Region's proposed Fair Wage Policy. On April 2009, Regional staff met with
members of the Greater Oshawa Chamber of Commerce to discuss fair wage
policies and their potential impact on the Region of Durham.
3.0 OVERVIEW OF THE FAIR AGE POLICY _PROPOSAL
• Under the proposal, contractors entering into ICI construction contracts
carried out by, and for, the Regional Municipality of Durham would pay or
provide wages, benefits and hours of work to their employees while adhering
to the Region's Fair Wage Schedule and Policy. Similarly, it would be the
responsibility of the contractor to ensure that the sub-contractor is also
adhering to the terms of the Fair Wage Schedule and Policy. The proposal
outlines a contract threshold minimum of $500,000 where contracts below this
threshold would be exempt from the terms of the proposed policy.
Administration of the policy and wage schedule would be designated to be the
responsibility of the Manager, Purchasing Services or appropriate designate.
• Through its tender call, the Region would make the Fair Wage Schedule and
Policy available to every party bidding in ICI construction contracts. In a
manner that is acceptable to the Region, evidence of policy adherence would
be provided by the contractor and sub-contractors after substantial
performance of the construction contract. Contractors and sub-contractors
would be required' to post appropriate fair wages, wage schedules and labour
conditions in a conspicuous place at the work site and would be ordered to
maintain accurate records of employees detailing employee information, trade
classification, hours of work and wages; information that would be made
available for inspection upon request by the Region.
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Report No.. 92009-F-38 Page No_: 3
• A Registered Complaint could be filed by contractors, sub-contractors or
employees with the Region against any contractor or sub-contractor. Under
the proposal, the Region would investigate the complaint for abase
investigation fee of $2.500 being proposed by the unions and subject to the
conditions of substantial performance of the construction contract. Should the
registered complaint be found to 'be unsubstantiated, the Region would retain
the investigation fee from the complainant and take necessary action to claim
any costs in excess of the base investigation fete. Should the investigation
deem the contractor or sub-contractor to be in non-complla.nce, notice, would
be provided by the Region to immediately comply with the terms of the policy.
First time rron-compliance violations within a five-year time frame may result
in the contractor requiring accounting reports for the next three Region-
related projects of which the contractor performs construction work, declaring
adherenoe to the Fair Wage Policy. Multiple non-compliance offences by
contractors within a five-year time frame may result in restrictions to bid on
Region contracts for a period, of two years.
4.0 FAIR WADE POLICY EXPERIENCE IN QJjLER JURISDICTIONS
• Fair wage policies exist in relatively few municipalities across Canada. The
majority that do have fair wage policies are concentrated in Southern Ontario,
and include Toronto, Hamilton, Oshawa, London, Clarington, Sudbury.
Kitchener, Mississauga, Vaughan, and Brampton. To date, no regional
municipality has yet adopted a fair wage policy (i.e. Halton Region, York.
Region, Municipality of Waterloo) The table below provides a comparison of
fair wage schedule compensation by various municipalities across a select
number of common trade positions.
Fad Vhp Policy Comparbon -GTAand ocher municipal
C ofTororAoFak AQira-Feint BOAT
dd.'f" C* * t ~ Yal~haa ra orl + C 'T 4
.i 1i a f a i2W? MOI ^F -t fi f7 ~'.<'"~~f+ E x.+ir
y ,
Wap t, veu5on, WIPA VOW IN. Naysa via~on, W&P%vaa"",
Emi;1 1arAC*n0cns N1lidayPayend Wa o%You' Wldsy&F&p RdWramied ft" 11 F.W.W,ga NdihY4F4nP 13ot *IIF s
Camp Tn &Ndlda 11024ft P ds225 &VaesWAY lkrw S 11"1138
HridtWM&51anW&= W12 537.36 Wit 015 $355 $42.78 5175
$429 331.95 333179 sags 3M52 $4829 $311,41
Eieftims $45.44 $36.71 34549 33134 $2819 $44.911 $4137
.kdi3wne LdXt ers 5N.a $31.19 $36.96 t23.56 ZA2 $3449 33449
He" E%ow opfr bw 34118 53456 54351 $29.56 327.34 $4221 =A4.
iiaAF W*& 3096 WAS 3151 $28:52 Wo 0,57 $241
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Report No.: #2049-F-38 Page No.: 4
• The City of Toronto's Fair Wage Policy often serves as a benchmark for other
jurisdictions and its Wage Schedule is arrived at through review of stipulated
rates of pay for various classes of work produced. The City of Toronto's Fair
Wage Office, made up of several staff members solely= dedicated to the
review of tenders and vetting of bidders to ensure compliance, links their
schedule to the complete usage package, inclusive of !benefits (excluding
union dues, association fees, etc.), and is tied to collective agreements
specific to the local area. Review of the schedule by the City of Toronto's Fair
Wage Office is done once every three years and is adjusted annually for
inflation. The City of Toronto's I=air Wage Office often provides auditing,
administrative and schedule research and review services to other
municipalities with fair wage policies of their own.
Within Durham Region, Clarington and Oshawa each have their own fair
wage policies for ICI construction contracts and with the assistance of the City
of Toronto's Fair Wage Office, wage schedules are developed by linking
wages to local collective agreements within the appropriate Ontario Labour
Relations Board Construction Industry Area (Area 9 for both municipalities).
For both municipalities, in the event of a registered complaint, administrative
support and auditing services can be performed by the City of Toronto's Fair
Wage Office or appropriate designate as determined by the municipality. For
complaints that are deemed valid, the investigation fee is returned to the
complainant and the cost for the auditing service would be charged' to the
municipal budget. However, evidence of non-compliance by a supplier allows
the municipality to pursue the base investigation costs along with any other
costs the municipality deems appropriate and can deduct the amount from the
balance owing by the municipality to the supplier.
• Since the inception of its fair wage policy, Clarington has only seen two IiC1
construction projects exceeding the $1 million threshold level. Oshawa's fair
wage policy, with a lower contract threshold level of $500,000, has yet to
undertake a project above this amount. The lack of activity among the area
municipalities makes it difficult to assess the effects of their respective
policies.
5.0 THE REGION OF DURHAM'S CURRENT PRACTICE=S
• The Region of Durham s By-Laos No. 68-2000, as amended, defines
purchasing and tendering policies covering the acquisition of goods and
services projects by the Region. The Region of Durham currently undergoes
a thorough examination of all tenders and proposals, as well as a process for
qualification of suppliers of goods and services. It is the objective of the
Region to acquire its goods, services and works without favoritism through
the application of the highest standards of business ethics.
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Report No.,. #2009-F-38 Page No.: 5
The pre-qualification criteria to selecting a list of qualified suppliers includes,
but is not limited to:
Review of health and safety records of suppliers;
• Record of supplier working experience and evaluation of prior
performance; and
■ Examination of the prior bidding history of the supplier and financial
status of the supplier.
+ For projects above $100,000, prequalification of achieved via Council
approval for each respective project. A joint report is required by the
Department Head and "designated official" and is submitted to the appropriate
Standing Committee and Council for approval prior to prooeeding with
prequalification of the supplier. The Region has a responsibility to hire
qualified contractors and ensure compliance with the regulations of the
Occupational Health and Safety Act as well as any additional policies
mandated by the Region.
w Awarding of the contract Is usually based on the lowest responsible bid
assuming all specifications and qualifications have been met. In its
purchasing of goods and services, it is the responsibility of the Region to
ensure that public funds are spent in a manner which maximizes the value
obtained for money and to ensure that the solicitation, bidding and awarding
process is done in an open and competitive environment which ensures that
all suppliers that wish to do business with the Region are treated fairly and
equally. While there is currently no fair wage policy incorporated Into
consa uctlon contracts, Regional staff believes that the Region already
does its due diligence In ensuring that only qualified and reputable
suppliers partake in the supply of goods and services for the Region by
ensuring compliance to all Federal, Provincial and Municipal statutes
and regulations`
6.0 REGIONAL STAFF CONCERNS WITH-FAIR WAGE POLICY
Upon review of various literatures, research and experience in other jurisdictions and
entities, Regional staff suggests that there are several concerns with implementing a
Fair Wage Policy in the framework of ICI construction contracts. Some primary
concerns include:
+ The implementation of a Fair Wage Policy results in the Region
assuming the role as a third-party arbiter serving to resolve potential
disputes that occur between suppliers and their respective employees.
+ The Region would likely incur significant administrative costs as a
result of including and enforcing fair wage policies In its ICI
construction contracts. While the proposal outlines abase investigation fee
of $2,500 to help recover administrative and audit-related costs associated
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Report No.: 02009-F-38 Pa a No.: 6
with a Registered Complaint, these costs may not necessarily reflect the total
costs that may be associated with review and research of policies and wage
schedules, as.well as costs associated with inspections and audits during the
period of the construction contract. As a.result, while the Region can recover
base investigation fees from either the party named in the complaint or the
complainant, any costs exceeding the base cost investigation fee must be
pursued by the Region. Also to be considered are the opportunity oasts of
utilizing Regional staff resources towards monitoring policy compliance and
conducting complaint-driven investigations based on allegations which could
prove to be unsubstantiated. In addition, the required posting of the proposed
Fair Wage Schedule and Policy at every site provides Region contact
information to the public to answer any inquiries regarding the Fair Wage
Schedule and Policy: inquiries which may be unrelated to non-oomplianoe
issuer.
e To date, there have been no discussions with the City of Toronto's Fair Wage
Office regarding possible administrative support related to the Region's
proposed Fair Wage Schedule and Policy and it is not known if the Fair Wage
Office would have the manpower to provide such support to the Region
without having to increase their staffing requirements. if the Fair Wage Office
was incapable of providing administrative support to the Region under their
current structure, additional internal staffing would likely be required by the
Region to support the Manager, Purchasing Services in the review and
administration of the Fair Wage Schedule and 'Policy. Taking into account the
staffing requirements of the City of Toronto's Fair Wage Office and
considering the City of Toronto's population relative to that of Durham Region,
it could be assumed that the Region would require at least one full-time
employee dedicated solely to the administration and review of the fair wage
policy and schedule for the Region of Durham.
e The manner in which "fair wages" should be set for the Region remains
unclear. Some jurisdictions, with the assistance of the City of Toronto's Fair
Wage Office, develop Wage Schedules based on local collective agreements
according to the boundaries set by the OLRB Area Schedule. However, Area
9 represents all of Durham Region except for Pickering and Ajax, which fall
into Area 8 (which includes, but is not limited to Metropolitan Toronto, and
Peet and York regions). While it is likely that cross-regional overlap is a non-
issue when examining area municipalities, it is unclear how "fair, wages"
would be set for a regional municipality with overlapping OLRB Areas. For
example, 'IBIEW Local 894, which represents electrical workers, represents a
wide area including all of Durham Region. However, OLRB Areas 8 and 9
both cover large portions of Durham Region and it is unknown whether the
collective agreements from Area 8, including those for IBEW Local 353
(covering Toronto, Peel Region, York Region and a portion of Dufferin
County), would take precedence over the those of Area 9. or vice versa.
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Report No.: #2009-F•38 Page No.: 7
• The Ontario Chamber of Commerce (OCC) claims that the (Province of
Ontario has an ample amount of legislative tools to address the social and
economic needs of the Ontario workforce, including various labour policies
and minimum wage legislation. The OCC also claims that the positive impacts
of fair wage policies - benefits that are typically accrued to a limited number of
beneficiaries , are undermined by the overall increase in program costs. The
OCC continues to champion for the phasing-out of the Provincial Fair Wage
Policy as they claim it results in inflated wages for non-unionized employers
that otherwise would have been compensated fair, competitive market wages.
The Greater Oshawa Chamber of Commerce (GOCC) echoes the
sentiments of the OCC as they believe that such policies limit the ability
for smaller4omodium suppliers to bid on government contracts and
they questioned whether a fair wage policy works to provide the best
overall project value to the taxpayer at the most cost-effective price.
Similarly, the Canadian Federation of Independent Business (CFIB), a
not4or-profit, non-partisan organization which represents the interests
of small and medium=sized businesses, has long argued against fair
wage policies and claims that the government should not be involved in
seWng wages for private sector workers bidding on public ,sector
contracts.
• There have been cases in other jurisdictions, such as in British
Columbia, where fair wage policies were repealed on the grounds that
they increased project costs and increased the burden on taxpayers
while providing debatable banefits. Studies have found that IBC°s fair wage
policies, which mandated for wages that were up to one-third higher than the
prevailing competitive market wage rate, added approximately 7 per cent
(over $100 million annually) to the cost of public construction projects. It was
the belief that the return to an open tendering process would ensure optimal
value for taxpayers and the savings incurred as a result of the repeal of the
fair wage policy would assist in allocating funds to other riruch-needed
projects.
• While fair wage (policies exist In vans area municipalities and entities,
no regional municipality has yet to impose a fair wage policy. Given the
Region's geographic expanse and the potential administrative and opportunity
costs associated with implementing such a policy, the question arises as to
why the Region should assume the responsibility for establishing wages paid
by suppliers bidding on Regional tendered ICi construction contracts given
that there is no clear benefit to the Region for doing so. As noted, Regional
staff believes that the Region already undergoes a thorough evaluation and
vetting of potential bidders that ensures adherence to all statutes, regulations
and standards and ensures that the awarding of contracts is done in an open
and competitive environment where all potential suppliers are treated equally
and fairly.
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7.0 CONCLUSION
Given the core service issue and the debatable benefits associated with
incorporating such a policy, Regional staff does not recommend the inclusion
of a iFair Wage Policy within the framework of its ICI construction contracts or
any other service, sector or industry in which such a fair wage policy could be
applied. The Region should continue to ensure consistency and equal
treatment for all potential suppliers of goods and services to the Region and
thus refrain from granting any type of preferential treatment to a select
number of recipients through the implementation of the proposed Region Fair
Wage Policy.
R.J. Clapp, CA
Commissioner of Finance
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