Thank you, Madam Chair, and members of the committee.
It's quite an honour to be here in front of you to present my private member's bill, Bill .
Community benefits are defined as the social or economic benefits that a particular community obtains from a federal infrastructure project above and beyond the project.
Now that I've defined that, the next step I'd like to take is to address some of the myths that have emerged regarding this bill.
It is a myth that my bill will increase red tape, and that this will be borne by small and medium-sized enterprises. Bill speeds up the approval process. Once the community is engaged, and it can identify the benefits emanating from an infrastructure project, then they are more likely to get behind the project, thus speeding up the approval process.
It is also a myth that business groups and organizations are opposed to Bill . The Toronto board of trade, the Vancouver board of trade, and the Montreal area board of trade have all identified and endorsed community benefit agreements as good economic policy and as a great way to tackle youth unemployment, as well as to include marginalized groups that are not included in the construction industry.
It is also a myth that there was no adequate consultations regarding Bill .
I consulted extensively across Canada. The groups and stakeholders I talked to include, but are not limited to, the United Way, the Toronto Community Benefits Network, the Atkinson Foundation, the Mowat Centre, Canada’s Building Trades Unions, Hassan Yussuff and the Canadian Labour Congress, the Carpenters Union, the Province of Ontario, the City of Vancouver, the British Columbia, Alberta, and Manitoba building trades, and many others.
The Mowat Centre and the Atkinson Foundation have jointly published numerous studies that stress the importance of community benefit agreements.
I've also consulted other levels of government in many provinces across Canada. Having said that, the consultation process is ongoing, and I have already planned many meetings to continue to consult widely on Bill .
It is also a myth that this bill will make it an obligation on provinces to include community benefit agreements in their infrastructure plans. This bill only applies to federal construction and repair projects. Furthermore, Ontario has already enshrined community benefits in their provincial legislation, namely with Bill C-6, and other provinces have had community benefit projects on an ad hoc basis without a legislative framework.
It is also a myth that this bill will introduce delays in the approval process for new development. This will just be another box on the form that asks, “Will this project have community benefits, and what will they be?”
Now I will give you some case studies. According to a joint report from the Mowat Centre and the Atkinson Foundation, the Government of Canada, the Province of Ontario, and the City of Toronto, for example, together have spent over $23.5 billion per year procuring goods and services, including construction.
Just imagine, ladies and gentlemen, how communities would thrive if even a portion of that had community benefit agreements tied to it. We could deliver more training, apprenticeships, and local jobs. Local businesses would thrive.
Community benefit agreements have been used for years in the United States and in the United Kingdom. There are great examples in our own country that highlight the benefit of community benefit agreements.
In Canada, there is the 2010 Olympic winter games' Southeast False Creek Olympic village. This community benefit agreement was formed to create opportunities for local low-income residents and businesses over the inner city in the areas of training and acquisition of goods and services.
In the Waneta expansion project, the Columbia Power Corporation signed a community benefit agreement with the Ktunaxa Nation Council for this project in B.C., which includes provisions for assistance to the community in small hydro development.
In my own riding of York South–Weston, and in many ridings across the city of Toronto, the Eglinton crosstown LRT project has a community benefit agreement to provide benefits to disadvantaged communities through equitable hiring practices, training, apprenticeships, and local supplier and social procurement opportunities, where possible.
Other provinces, such as Nova Scotia, Quebec, and Manitoba, are either exploring or have already moved towards implementation of a form of community benefit agreements.
In the United States, Los Angeles was one of the first successful pioneers of incorporating community benefit agreements. Since 2001, organizations in this city have negotiated several community benefit agreements, which range from living wage requirements to investments in parks and recreation.
In the United Kingdom, in 2012 they enacted the Public Services (Social Value) Act to promote social benefits through public sector procurement. According to the act, a commissioning authority must consider how the purchase “might improve the economic, social and environmental well-being of the relevant area”, where everyone can get a slice of the development pie.
Madam Chair, this bill is modelled on existing legislation of the Province of Ontario, namely Bill 6. The beauty of this, though, is that through our consultations, we were able to see what is working and what is not working with this Ontario piece of legislation.
Bill addresses the concern regarding implementation and measurement of outcomes, in two ways. First, it empowers the Minister of Public Works and Government Services to require bidders on government-funded projects to explain the community benefits that the project will provide and deliver an assessment as to whether that project has indeed provided the community benefits. It also requires the minister to report back to Parliament every year on what community benefits have been delivered. Community benefit agreements are also in line with the government's priorities and mandate items, such as procurement modernization and promotion of social infrastructure.
I'm asking my colleagues on this committee for their support of my private member's bill, Bill . Help me to enable communities across Canada to benefit from federally funded infrastructure projects.
I was elected to Parliament to represent my riding, and my role is to ensure that I propose and push for legislation that will benefit my constituents. Bill does exactly that, by dramatically increasing the local economic impact of federally funded infrastructure projects.
Colleagues, let us move forward on this initiative that will not only benefit my riding, your constituents, but communities all across the country. Thank you.
Thank you, Madam Chair, and honourable committee members, for inviting the Canadian Construction Association to appear before you today on Bill .
As those of you who were here last week know, CCA represents Canada's non-residential construction industry. I was before you on the navigable waters protection act.
We have 20,000-plus firms from coast to coast to coast across Canada. It is our members who will be most directly impacted by Bill , because they bid on projects that are awarded or let by PSPC.
We appreciate that in mandate letter, she was tasked with modernizing procurement practices to make them simpler, less administratively burdensome, and to include practices to support the government's economic goals, including green and social procurement. Clearly, Bill is consistent with this overall objective, so we are neither surprised by the bill nor opposed to its introduction.
However, our concerns deal specifically with how this is implemented, and, in particular, to make sure that any community benefits or social procurement objectives that are put into the procurement of a construction contract do not jeopardize the integrity of the competitive bidding system; or, put in another way that you might better understand, do not conflict with Treasury Board's own contracting policy guidelines with respect to tendering, etc.
For example, where an entity wants to have a certain public policy objective achieved through procurement of construction services, they must define that in the document that's soliciting bids. They must clearly define what it is they want the bidders to bid against, and to price. The opportunity has to be equal for all bidders competing. That's a very important point. The consultation process with respect to a local community, to define community benefits to go into a PSPC contract, would have to be done by the department prior to seeking bids. That's the only way that the procurement process would be in fact be complied with. That's an extremely important point.
I think, Madam Chair, I'm a little confused. I thought I was coming here to speak about Bill , but I suspect we're going to get into a very good discussion about social procurement and community benefits. That, we're prepared to do, but it's important to understand that first point I'm making. Your own rules, right now, do not allow you to go to bidders after the bids have closed and ask, “What can you do for us locally?” We had a commission of inquiry in Quebec that frowned on that kind of approach. It's very important that those requirements be spelled out in the tender documents so that all bidders have an equality opportunity, so that it's transparent, accountable, etc. That's very important.
Let's turn to Bill . As I said, we do not oppose the introduction of social procurement or community benefits into contracting. In fact, we see it all the time. It's the manner in which it's done that is so important, to ensure that taxpayers do get value for their money, and that it's done in a transparent way that supports the integrity of the bidding system.
Going to the specifics of what would be asked for in the community benefit agreement, our only question is on whether anybody has done their homework to determine whether in fact procurement is the best tool, or even an effective tool, to achieve that public policy objective. It may be a public policy objective that everybody agrees with—not a problem. Getting more employers to engage in apprenticeship is a laudable objective. We would absolutely support that. However, has anybody really done the exercise to determine whether that is the best means to do so?
Secondly, how do you measure it? How do you know, by putting this into the procurement of a particular construction project, that you are actually having an impact on the public policy objective you're seeking? With regard to the engagement, for example, of disadvantaged youth, is it happening only because it's a condition to get this particular contract? Is it really having an impact?
The Mowat Centre in Toronto did a study of the use of social procurement and community benefits worldwide in jurisdictions that have been doing it longer than Canadian jurisdictions. One of the things the study said was that it falls down if the conditions of the contract don't get enforced by the public sector contracting authority, or there's no metric to measure whether the use of those objectives in the procurement process is successful.
I guess we're here to say that, in general terms, we have absolutely no problem with the bill in what it's trying to achieve. The important point is the manner in which it's implemented. Public owners must define in their tender documents what it is they want the successful bidder to do. That's an absolute fundamental principle in competitive bidding. It's the only way to measure whether you're successful or not after the fact.
The worst-case scenario would be a situation in which, for example, a public sector agency said, “Give me a price on building the new hospital, but also I want to see another envelope as to what you're going to do for the local community.” That's the last thing we want to see in any procurement system. I think that's a key point. The only other thing I would close on is to say that this whole area is extremely important. Corporate social responsibility is becoming something that we are looking at very earnestly in our industry. It's a very important part of doing business today. We have a how-to guide coming out for our contracting members in the industry, but CSR is not social procurement. CSR is a voluntary program that a corporate entity takes on to ensure that what it does as a company meets environmental sensibilities, good HR practices, etc. Social procurement is a government coming out and saying, “If you want to do business with us, then you have to have a CSR policy.” I think that's a very important difference.
I'm going to conclude there, and I look forward to the discussion. Our biggest point is, and I'm repeating myself, but it is so important, that's how something like this gets implemented. When you read the bill, it's very clear we're talking about contracts that are awarded by the minister of PSPC. Those are federally funded projects that the PSPC would build themselves and would be the contractor on. Those projects, quite frankly, are fewer and far between than they used to be. It's not a huge area. Most of the infrastructure projects today are awarded or contracted by the municipalities or the provinces. It's important to keep that separation. Our speech is the same to municipal governments and provincial governments. If you're going to put community benefits or public policy objectives in your tendering, then define it up front. You want a building that is reduced in carbon emissions. You want a good environmental footprint. For Pete's sake, put that in the initial document, and allow all bidders an opportunity to come up with an innovative way to get you what you want.
Good morning, Chair, members of the committee and fellow witnesses.
Canada's Building Trades Unions represents 500,000 skilled trades workers across Canada working for construction companies large and small. We have 250 training centres funded by member and contractor contributions delivering provincial and industrial curriculum for contractors and the economy.
The average age of apprentices has changed over time. We now see apprentices who are on average 28, 29 or 30 versus a decade ago, when apprentices were coming to us straight out of high school. According to BuildForce Canada, over the next 10 years more than 250,000 skilled trades workers will be retiring forever, and industry will be short more than 25,000 workers. We need to capture that body of knowledge, and train young Canadians looking to enter the workforce. Canada's young people need some training.
Statistics Canada's labour force survey lists youth unemployment in the 13% range, certainly worthy of public policy attention. The component principles of Bill are an important step for Canada's infrastructure future.
Community benefits and, specifically, training on public infrastructure projects, in our view, are key components of Canada's workforce training plan. Large federal infrastructure projects present an opportunity to train young Canadians while stimulating the economy.
If we want apprentices for the new economy, we have to give them the opportunity to acquire the hours required for the practical component of their studies. As a purchaser of construction, the federal government has a choice of contractor, and can dictate the terms of proposals from trade contractors. If government wants apprentices on federally funded job sites, they are free to put it in the RFP requirements like the long list of other things Public Works requires of bidders.
The introduction of this bill gets us thinking about leveraging the upcoming infrastructure spend for a public policy purpose. In the energy sector in Alberta, there is a track record of hiring apprentices as part of the RFP process. Major players in Alberta have been doing it for close to 10 years on new construction.
The evidence from this process is strong. It has increased workforce loyalty, and increased propensity for large energy projects to have a ready-made workforce for subsequent maintenance of their multi-billion dollar facilities. It also helped hundreds of people become journey people. This helps the next project and helps the economy.
We think the government should set thresholds of projects wherein community benefits are required as part of federal funding. It doesn't make sense to apply the training community benefit filter to small micro projects. This can paralyze or exclude small companies from participating. There are plenty of large projects, and retrofit work where it would work well. Set a project bid minimum and go from there. We think the provincial governments and municipalities should get on board considering these issues.
The Province of Ontario will spend almost as much as the Government of Canada on infrastructure over the next decade. Imagine all the training opportunities if both governments worked together on this initiative. Ontario has Bill 6. We talked about that this morning. It's about a year old. So far, so good.
Encouraging construction companies to have a training plan, hire and manage apprentices, and in the end create jobs for people that need them makes good public policy sense. In industry, we struggle to get a majority of construction companies to actually train apprentices. The Canadian Apprenticeship Forum estimates only 19% of Canadian companies hire an apprentice. This has to change.
The graduation rate from Canadian apprenticeship programs is fairly stagnant, primarily because of a lack of work for apprentices who are actually trying to find work. The federal government has a chance to play a leadership role on this file.
I remain available to take your questions. Thank you for the invitation, and I look forward to our conversation with my industry partner.
Thank you, Madam Chair and members of the committee, for the opportunity to appear before you and support Bill .
This bill recognizes that every government purchase has a ripple effect. Every infrastructure investment, whether intentional or unintentional, has an economic effect and creates jobs. Bill offers government the opportunity to add an intentional social value as well, leveraging greater value from existing spending.
Buy Social works with social enterprises, which are often the partner businesses in social purchasing agreements. Social enterprises are small and medium-sized businesses that have a social purpose and reinvest the majority of their profits back into their social purpose.
Let me give you a few examples of how social purchasing agreements have stimulated social impact through subcontracting work between the construction industry and social enterprises, supporting not only the successful delivery of construction contracts, but also enhancing the social impact of existing projects.
In Vancouver's Downtown Eastside, one of Canada's poorest postal codes, EMBERS Staffing Solutions is a social enterprise operated by a registered charity. Its business model is to operate a socially conscious and supportive workplace in a day-labour company. Their revenues exceed $5 million annually. This year, they will create over 1,500 jobs for persons with barriers. These are people leaving prison, people recovering from addiction issues, and others seeking day-at-a-time entry or re-entry into the labour market. They operate primarily in partnership with the construction industry, providing needed skilled and unskilled workers to support the industry's construction contract requirements. They recently opened an office in Surrey to expand their business services and social impact into that community as well.
In Winnipeg, BUILD, a social enterprise working with youth at risk, primarily aboriginal youth, helps with pre-employment and entry-level employment, often leading to full employment in the construction industry. Everyone admires and appreciates their impact once you hear the amazing stories of former gang members moving from crimes on the street to productive employment with companies such as PCL.
The Cleaning Solution employs persons with mental health challenges. A simple but creative supply-chain partnership between the construction industry and a social enterprise has the Cleaning Solution cleaning the EllisDon offices at a construction site in Vancouver.
In Toronto, the Learning Enrichment Foundation, LEF, has for many years been actively engaged in supporting social impact spending as a means to support immigrants entering the labour force. LEF is a community partner in the current Crosslinx CBA initiatives.
What's fascinating is that in 2013 Ernst & Young research found that for every dollar spent on targeted employment by Atira Property Management, a social enterprise, there was a return of $3.32 to government.
We're also pleased to see this bill under consideration while simultaneously the Ministry of Innovation, Science and Economic Development, ISEC, and the Ministry of Employment and Social Development, ESDC, are engaged in developing a comprehensive cross-ministerial social enterprise strategy for Canada. Bill is an ideal way of integrating Public Works and Government Services into a larger cross-ministerial mandate focused on community, economic, and social development.
We believe that Bill will allow government to continue to create the intended economic stimulus that is created by government spending, but by adding a social impact element, that same money can be leveraged to address the most complex social issues our communities face. Community benefits agreements and social purchasing can include skills training and apprenticeships in the trades, as mentioned, and can create youth employment, address aboriginal economic challenges, and provide paths to integrate immigrants and new Canadians into the economy and social networks.
Without added costs or red tape, government can achieve a much greater return on the taxpayers' money: economic return, employment creation, and social impact. Adding intentional social value goals onto existing government construction and repairs spending will ensure our communities the greatest possible full-value return on taxpayer spending.
Thank you very much, and I look forward to the discussion and your questions.
Thank you, Madam Chair.
I want to start off by saying that there were two false statements made up front. One was that this can only be done or happen after bidding has closed. That's not the case. It can be done beforehand. A second point was that this may not help communities. I can say, with a lot of confidence, that it does. Having said that, the proof will be brought forward when the process is then being undertaken, whether it be by municipalities or the private sector.
I do want to preface my comments by saying something that I think was alluded to by Mr. Smillie, and that is equality, confidence, and consistency throughout the system and throughout the nation when these bids are being let out. I mentioned earlier the residual benefits and the returns on investments that can be included within those residual benefits. Again, I think Mr. Smillie was alluding to that with respect to the skills of the workforce and the benefits that can be built into these matrixes when they're actually being weighted. There is a ripple effect. These contracts can be leveraged, not only with respect to the obvious but also with respect to the leveraging that can happen because of the added value of a contract.
Ensuring that definition is built into bids was also mentioned. For the most part, I think that goes without saying. With that, and based on defined expectations contained within bid documents, am I hearing that it's beneficial that within those definitions a matrix be put in place and that matrix be weighted based on the priorities of the government? Just as an example, some of those priorities might include skilled trades apprenticeships. They might include the alignment with, for example, an asset management plan for future investments.
I say that deliberately and specifically to Mr. Atkinson. Although it's defined within bid documents, the methods may differ from the bidders to come to those conclusions. That's why we go to bid process. It's for that very reason. Those methods, because one may be less expensive than the next, are what the game is all about.
Going to your point, I take the point, however obvious it is, very seriously, because I think that's what drives the agenda. That's what drives more value added when it comes to the taxpayer.
That said, I'll go back to my questions. First, do you agree that this weighted matrix is the most appropriate mechanism, based on definitions, of course? And second, do you find that it's up to the bidder to do their homework and to find out how in fact they can add leverage to future investments based on what they're actually bidding on today?
My response is going to be not necessarily specific to what's going on in Ontario, but what's going on across the country, where different municipalities and governments generally are looking at using procurement to advance other public policy objectives, other than getting critical infrastructure into their community.
Our concern is the rigour that goes into that decision of why procurement. It's a fair question to ask. Why is procurement a good tool to achieve that public policy objective, which may be an objective we would all like to see? And two, if it is going to be an effective tool, how are we going to measure? How do we know it's working?
That's what the Mowat Centre said in its study of social procurement worldwide were the two things that they felt were absolutely required.
On the Ontario situation, I think it's still too early to see whether that's going to work or not, but it's so important, because, quite frankly, we don't want to see window dressing. If we really want to ensure we get greater employer engagement in apprenticeship training, then let's find the right measures, and tools, and levers, and push them all. Don't just say, you have to hire so many on a federal project, and walk away and say, we're done, we've done it.
What isn't measured doesn't get done, and if there is no way to measure that, it's too simple to simply say, we're done, we've done it. You haven't done anything. I think that's the key point, that as these policies are put in place, the first question that should be asked is, why procurement? Is this the best way or is there a better way? If it is a way to achieve this objective, how are you going to measure it? How are we going to prove to ourselves that this is actually the way to go?
That is going to be key, not just to the Ontario legislation, but all attempts to use procurement to achieve social or public policy objectives, because from a taxpayer's point of view, and they're ultimately footing the bill, that's accountability: is my dollar actually going to encourage the engagement of more disadvantaged youth, or is this just window dressing?
Thank you very much to our witnesses for your very helpful testimony.
Before I launch into my question, Madam Chair, for the sake of the sponsor of the bill, I have an issue with one comment that was made somewhere along the way. It was suggested that his testimony was simply just one line. I think his answer was a bit broader than that and suggested that there was also an opportunity to explain what the community benefit was.
I'd like to give each of the witnesses a chance to speak to this. One of the things that I see as a benefit from this proposed legislation is that it provides a platform for bidders to suggest how they might meet certain needs in a community.
Mr. Atkinson, your point is well taken. I think you said if you're building a penitentiary with a green space, that should probably be in the specs of the project. All other things being equal, if I know that the bidder on a project plans to hire, let's say, new graduates from the local community college, which will help them stay in Atlantic Canada when we have out-migration of youth, that's a very positive thing. If they're going to hire or contract out work to Summer Street Industries, a group in my community that employs special needs adults, I'd like to give them that platform. I don't see that currently being embedded into practices.
To each of you, do you think this legislation provides a helpful platform to bidders to take part in that portion of the analysis?
Thank you very much, Madam Chair.
I listened with great interest to the comments of our colleague who introduced his bill and to those of our witnesses. I have a lot of questions about the merits of Bill after what I've heard this morning.
I don't think this bill is being studied in the right place. It really should be studied by another committee. It talks about the rules for awarding contracts by the Department of Public Works and Government Services “for the construction, maintenance or repair of public works, federal real property or federal immovables”. All this is very far from our infrastructure investment plans.
Earlier, you made a comparison with the Ontario government's Bill 6, a very comprehensive bill. It probably enables Ontario to attain the objectives that our two witnesses mentioned, possibly even those of Mr. Atkinson.
The first clause of the explanatory note in Ontario's Bill 6 reads as follows:
The Government, and every broader public sector entity ... must consider a specified list of infrastructure planning principles when making decisions respecting infrastructure.
We see that this bill is comprehensive and helps to attain the objectives related to local economic benefits and hiring apprentices. If you take two quick seconds to read the bill, you'll see that it is indeed very comprehensive.
The bill before us indicates that the minister may seek information. Why does it read, “The Minister may ...”? Shouldn't she always do that? So that is one question.
According to the bill, this information that the minister would request would not enable her to demand accountability once the work is completed. She could do nothing else. She might request information before the work, and then she would ask whether what was promised was what was delivered. However, there is no obligation, no means in Bill that enables the minister to attain the objectives outlined by our witnesses.
My question is for Mr. Smillie.
Do you think Bill as drafted will lead to training more apprentices? Should we instead learn from Ontario's example and introduce a more comprehensive bill that would address the coming infrastructure plan?