SPEECH: Bill C-344, Community Benefits
Hon. Ratna Omidvar: Honourable senators, I rise today to speak on Bill C-344. I would like to thank the sponsor of the bill, MP Ramesh Sangha, of Brampton Centre. I’d also like to thank Ahmed Hussen, who first introduced this bill in the House before being appointed as a minister of the government.
I’m particularly pleased to be shepherding this bill through the Senate for three reasons.
First, it is a short bill. It is, I believe, a modest bill, but it has far-reaching impact. I hope my speech, too, will be appropriately modest, short but far-reaching. The bill has only four clauses whose purpose is to introduce community benefits into the federal procurement space.
Second, it is grounded in principles of shared prosperity, ensuring that when the federal government chooses to invest in infrastructure procurement, it leaves a legacy where the local community benefits, whether it is a community located around the new Government Conference Centre, a government building or a retrofit.
Third, although a very modest start, the potential for positive and rippling impacts across our country are significant for the labour market, business, employers, workers and inequality.
What are community benefits? Usually, these are economic and social benefits that accrue to a local community and that last beyond the lifetime of the actual construction project. In most cases, it is an infrastructure project. There is not only a community benefit during the build and during all the activity, but there is a legacy long after.
During the build, there are knock-on impacts through hiring; and opportunities for apprenticeship, training and small business start-ups that emanate from the construction. People who have potential but were often shut out of employment get an opportunity. I think particularly of young people, who could have a reasonable chance of entering a labour market with good wages that is destined to grow.
I think of small business that may be able to find its feet during the build but flourish long after. And I think of the new relationships that accrue to business and will provide a future fertile ground for recruitment downstream, into the future, particularly into communities that were previously hard for business to tap into.
Honourable senators, the bill seeks to make changes to procurement pursued by the federal government. It only applies to federal construction and repair projects tendered by Public Services and Procurement Canada.
First, Bill C-344 seeks to inject the language of community benefits into the purview of the minister. It gives the minister the ability to ask bidders to provide information on the community benefits to be derived from a project, should they be awarded the contract. These could include hiring local people, buying locally, building a community playground or planting trees.
Second, this bill also allows the minister to ask for an assessment from the contractors as to whether the community benefits were realized at the completion of the project. It essentially allows the minister to check and see if the stated aspirations turned into reality. This “check and see” mechanism will be an important evaluative tool to signal future direction.
Third, Bill C-344 will ensure transparency. The minister will provide to Parliament a report on an annual basis that highlights the overall community benefits provided by construction, maintenance and repair projects.
Finally, Bill C-344 defines community benefits as:
. . . a social, economic or environmental benefit that a community derives from a construction, maintenance or repair project, and includes job creation and training opportunities, improvement of public space and any other specific benefit identified by the community.
Although short, this bill lays out the framework to initialize community benefits within the federal government procurement space. I think of it as a first step and a modest start.
Tim Coldwell, President of Chandos Construction, of Edmonton, said:
“As a B-corporation, we believe that business can (and should) be a force for good. Chandos supports Bill C-344 and welcomes transparency relating to the community benefits derived from public projects in Canada.”
This bill does not place any obligation on provinces to include community benefit agreements in their infrastructure projects. It does not impact any efforts that come through the Ministry of Infrastructure or the new infrastructure bank. It does not have quotas or targets. It does not have any requirements on which type of labour is used, either union or nonunion.
If the bill passes, through my urging, the government has already committed to engaging with industry during the regulatory period. They will strike an advisory council at a deputy minister level with industry to ensure that everyone buys into the process and that it will create an open, transparent and fair process for bidders.
Let me now fill in the picture a bit more. When I was a child, I remember I used to do painting by numbers, and I think I have to do a bit of the painting by numbers. I am not new to the language and concepts of community benefits. I came across them some 10 years ago in my previous life at a private foundation that was dedicated to reducing poverty. We were intrigued by examples of community benefits from other jurisdictions. We wondered if there was a potential for application in Canada. We conducted informal research on these projects, and looked at how they were being implemented and applied. Consequently, after looking at the evidence, we promoted their use and application in Toronto, Ontario. Now I find myself here, promoting the idea in Canada.
Let me give you a few real-life examples that draw on the work of provincial community benefit agreements. These are what I would call mature community benefit agreements. In Toronto, there is a massive $8.4 billion infrastructure investment that is building the Eglinton Crosstown LRT. This is a partnership between the Province of Ontario, the city, community groups and, of course, the consortium of construction companies who are responsible for the project.
Projects of this size are not new to this country. What is new and somewhat unique is that a certain portion of all trade and crafting hours needed for the project will be performed by apprentices and journeymen who live along the transit corridor and who are challenged in finding a foothold in the labour market.
I think in particular of the York-Weston corridor in Toronto, which is a dominantly working-class neighbourhood. At the beginning of the project, it was understood that no one, single stakeholder could deliver on the community benefits. Rather, they needed to work together. The construction consortium, the private sector, the local community, the nonunion and unionized labour, the provincial and local governments — all working together to deliver this massive infrastructure project. Build a subway, relieve our traffic jams, but also ensure a legacy beyond the life of the project itself.
The construction consortium, consisting of EllisDon, SNC-Lavalin, Aecon and ACS–Dragados said this about their participation in the project after five years of experience in this space:
We are committed to our work in the community. We have a solid plan to build infrastructure, as well as people . . . .
. . . Our intent is to provide continuity of employment for the historically disadvantaged and equity-seeking apprentices and journey persons on the project. Our priority is the development of the Toronto workforce and the growth of the individuals who work with us.
So not only will Toronto realize the benefits of the LRT system, but the local community will benefit as well. This will not only change the lives of the much-beleaguered transit rider in Toronto and of the LRT but the lives of the local tradespeople that now have a foothold into this labour market.
Let me go west to give you another example. The Vancouver Island Highway Project, built in the 1990s, included a project agreement to boost the representation of diverse groups in the development. An evaluation report concluded:
The degree of success was impressive. In 1994, Indigenous peoples, women, people with disabilities and visible minorities worked just eight per cent of the total hours on the project, and by 1998 this had risen to just over 22 per cent . . . .
In addition, because the project was hiring locally, they saved project costs because workers came from the local market as opposed to being sourced from outside of Vancouver and indeed outside the borders of our country.
CBAs have also been deployed at the municipal level. During the construction of the Vancouver Olympic Village, $42 million was spent in purchasing from local businesses and 120 local workers were hired in various construction jobs.
In Los Angeles, where it is really the most mature, CBAs have been around for 20 years. Their existence and their work has led to the hiring of over 8,000 local, disadvantaged workers.
Another way of looking at the impact is in the assessment of reinvestment in the local economy. In Wales, 35 projects worth £465 million were studied, and it was determined that 85 per cent of the value was reinvested into local and small businesses. And for every £1 spent, there was around £1.8 worth of benefit to the community.
Honourable senators, beyond the here and now, community benefits can also help our country tackle some very pressing problems of the future.
First, we know that globalization and free trade have benefited our economy greatly. Open markets and free trade have resulted in millions of jobs across the region, and I hope that these will continue to be secured and indeed grow under the new USMCA. I believe that Canadians overwhelmingly support free trade.
But we also know that free trade and globalization create winners and losers. One of the reasons, and this is found on all sides of the political spectrum, is that free trade does not benefit everyone equally. The benefits that accrue are not shared at the community level equitably and not experienced in that way.
Think of the growth of the tech and digital services sector, on the one hand, and the hollowing out of the manufacturing sector on the other. So we are divided into two groups of people: those who are economically empowered and those who face immense obstacles. This growing disparity between those who have opportunities and those who do not is an “unignorable reality,” as Daniele Zanotti of the United Way has said.
Perhaps it’s time to inject some localism into globalism. Governments, businesses and communities will flourish with strategic infusions of localism into the economy, and that can, in part, be done by community benefits. And there is never — I will state that again — there is never any one, single route. We have to deploy many routes to get to our objectives.
A second very important and very practical reason to support community benefits is the future of the labour market, in particular the construction industry. Even today, shortages are being felt and the industry must often reach out to temporary foreign workers to meet demand. Those of you who may have any idea about the paperwork and the processes that an employer must go through to satisfy the standards, to tap into labour that is not in Canada but coming from overseas, understands and appreciates the pretzel shapes that employers have to twist themselves into to access temporary foreign workers. How much better to tap into local talent.
But this shortage is only predicted to get worse. According to BuildForce Canada, more than 250,000 construction workers are expected to retire in 10 short years. That is almost a quarter of their workforce in all disciplines: heavy equipment operators, electricians, masons, sheet metal workers, welders. They will all see massive shortages. This is a looming crisis which needs solutions.
To meet this growing need for employees, CBAs can start the process today by connecting new and underrepresented demographics into the skilled trades, and the industry knows this. Bill Ferreira, CEO of BuildForce Canada, said:
With increasing competition for a shrinking pool of young people, it will be necessary to . . . attract greater numbers of new Canadians, women, and Indigenous people to Canada’s construction workforce.
Robert Blakely from Canada’s Building Trades Union told us today in the Social Affairs Committee that in order to plug the gap in the labour market, the trades sector will need to recruit 500,000 individuals in order to fill the gap of 250,000 because it will take two apprentices to graduate one.
Women only represent 4 per cent of the construction workforce. I believe there is room for lots more. The construction industry has indeed worked diligently to tap into new labour streams and should be commended for it. I met with them, and they presented a really excellent proposal which would encourage the hiring of women into STEM industries in the construction trades. And I would support it. However, as I said, there is never one single route to Rome, but many. CBAs are one of the many tools in the toolbox that will help us connect demand with supply.
The Boards of Trade in Montreal, Vancouver and Toronto have all stated that CBAs are a good economic model to build local economies and to tackle the looming labour shortages. The Toronto Region Board of Trade has said:
Government, business, labour, non-profit and other organizations can advance social and economic prosperity in their communities through the expansion of the use of social procurement [CBAs]. . . .
Honourable senators, community benefits maximize the potential of companies and communities. They take public and private dollars that are already earmarked and use them in a way to deliver a double, triple, quadruple bottom line. They train and hire talented people from communities that have difficulty accessing the labour market and whom the labour market, in turn, has challenges in reaching, such as veterans, newcomers, youth, women and Indigenous peoples.
They support local business by targeting opportunities and investment for local suppliers, including social enterprises and small- and medium-sized companies.
For construction companies, a CBA can speed up approval processes and reduce red tape because it creates and sustains allies across the community before any shovels hit the ground. Concerns are addressed early on in the process, which prevents project delays and, I imagine, expensive lawsuits. It also helps, of course, build the company’s corporate brand as community champions.
Further, implementing this will not lead to excessive spending by the government.
The City of Toronto, which has a very mature social procurement program, billions of dollars, has hired only one extra person to lead their social procurement strategy. Essentially, CBAs are a change management practice and a change management exercise for governments and businesses similar to when health and safety practices were introduced in the 1980s.
In the short term, community benefits are an innovative and cost-effective way of achieving multiple benefits through public expenditures without increasing procurement costs. In the long term, they can go a long way to mitigating the festering problems of globalization and global supply chains and will ensure that the needs of the labour market are met by workers here in Canada.
Thank you, colleagues.
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