Manitoba construction groups sound alarm on new project fees

Key Takeaways:

• Three major Manitoba construction associations have asked the province’s Auditor General to investigate an 85 cent per-hour, per worker fee charged on certain public projects that flows to union groups.
• The Manitoba Jobs Agreement at the center of this dispute requires unionized workers to be hired first on covered projects and gives unions effective veto power over new hires, which critics say disadvantages the roughly 88% of Manitoba’s construction workforce that is non-unionized.
• The associations argue the agreement particularly harms rural and northern Manitoba, where unionized labour is scarce and local contractors have long-established skilled workforces, and they are calling on the provincial government to end what they describe as discriminatory hiring requirements on public projects.

The Whole Story:

Three major construction associations have formally requested that Manitoba’s Auditor General investigate fees collected on Manitoba Jobs Agreement (MJA) covered projects that they say are handed directly to a union body with no public oversight or accountability.

The Winnipeg Construction Association (WCA), the Manitoba Heavy Construction Association (MHCA), and the Construction Association of Rural Manitoba (CARM) say the fee — collected from contractors and flowing to the Manitoba Building Trades — represents a hidden cost to taxpayers on public infrastructure projects, with no explanation of how the amount was determined or where the money goes.

The groups explained that every hour worked on an MJA covered construction project requires an 85 cent fee per worker to be collected from contractors.

“This fee is being sent directly to the Manitoba Building Trades without any clear oversight. Nobody in government has explained how the number was set, what it’s supposed to fund, or who’s watching the money. At the end of the day, taxpayers are the ones paying for it,” Ron Hambley, president of the WCA, said in a statement.

The associations say the fee is symptomatic of broader structural problems with the MJA. The agreement requires unionized workers be hired first on covered projects, effectively restricting opportunities for the majority of Manitoba’s construction workforce. According to Statistics Canada, approximately 88% of Manitoba’s construction workforce is non-unionized.

Under the MJA, open-shop contractors can begin projects with their existing workforce, but any new workers brought on during a project are subject to union hiring preference and require union approval. In practice, this gives unions veto power over staffing decisions on MJA-covered work.

“Transparency and accountability for public funds are absolutely critical. Neither the industry nor Manitoba taxpayers have been given a clear explanation of how this fee was determined or what it is intended to fund. That is not acceptable,” Chris Lorenc, president and CEO of the MHCA, said in a statement.

The associations argue the MJA’s union-first hiring requirements disproportionately affect rural and northern Manitoba, where unionized labour is less available and local contractors have built skilled workforces over decades.

“The MJA gives unions approval rights over the workforce on covered projects and hands them first access to any new hiring,” Shawn Wood, executive director of CARM, said in a statement. “That restricts competition, drives up costs, and puts rural Manitoba workers at a disadvantage getting work in their own communities.”

The three associations are asking the Auditor General to examine how the fee was set, who governs the collected funds, how those funds are reported publicly, and whether the MJA’s financial structure meets basic standards of transparency and value for money in public procurement. They are also calling on the provincial government to restore fair and open competition on public projects and end discriminatory hiring requirements.

The NDP government has said funds raised by the fee will go towards developing skilled workers locally for construction jobs, lessening the need to bring in workers from elsewhere.