Media Advisory: Labour monopolies cost Ontario cities millions

HAMILTON, ON, Oct. 25, 2012 /CNW/ - Labour monopolies increase costs for several Ontario municipalities by up to 10 per cent on nearly a billion dollars worth of Ontario construction projects, says a paper released today by Hamilton-based think tank Cardus.

The study shows restricted public tendering affects 25 per cent of Ontario taxpayers—and puts significant pressure on already alarming municipal infrastructure deficits. A survey of 43 of the province's largest municipalities found Toronto, Hamilton, Sault Ste. Marie, and Kitchener are all subject to varying restrictions on the public tendering of construction projects.

"That's a significant portion of Ontario's population but the real story is the amount of money affected," said Brian Dijkema, senior researcher in labour and economics at Cardus. "We're looking a baseline of two per cent in additional costs per year, and more likely in the 10 per cent range. When you consider we're talking about at least $750 million in construction projects, that's a lot of potential savings for cash-strapped municipalities."

Dijkema said it's crucial to keep in mind that those costs accumulate year over year, adding to the burden of municipal infrastructure deficits.  The study concludes a key solution is competitive bidding processes for construction projects in these municipalities. 

"For a city like Toronto, which spends billions every year on construction while at the same time fighting over budget cuts of $19 million, competitive bidding could be a boon to the bottom line," Dijkema said. "Schools and other major crown corporations could add similar savings; this is just the tip of the iceberg."

The paper is the first of a series of studies, dubbed the Cardus Construction Competitiveness Monitor, which will examine the impact of labour monopolies on public entities from municipalities to school boards and major public corporations. The next paper, studying the impact of restricted bidding on Ontario school boards, will be released later this fall.

The full version of "Cardus Construction Competitiveness Monitor: Ontario Municipal Construction Markets" can be downloaded at http://cardus.ca/go/cg

SOURCE: Cardus

Requests for interviews with Cardus researcher Brian Dijkema can be made by emailing Julia Nethersole, [email protected], or phoning [phone] x29.