Construction industry slams timing of gov't proposal to scrap their minimum wage act

A government proposal to scrap an act that guarantees a minimum wage for construction workers is being hammered by those in the industry, who say it caught them off guard and repealing it will destabilize their operations during an already turbulent time.

"Why would government throw a hand grenade at the industry ... in the middle of a pandemic when we're the crown jewel for their economy?" said Peter Wightman, the executive director of the Construction Labour Relations Association of Manitoba.

Wightman's association, along with other major players in the construction industry were shocked by the letter sent Wednesday by Finance Minister Scott Fielding outlining its intent to repeal the The Construction Industry Wages Act (CIWA).

"I don't understand where this came from, no one asked for this," said Chris Lorenc, president of the Manitoba Heavy Construction Association.

Act sets minimum wages for construction workers

The act sets minimum wages and rules for overtime pay on most Manitoba construction sites in the industrial, commercial, institutional and heavy construction sector.

Ron Hambley, president of the Winnipeg Construction Association, said this has never come up in previous meetings with government. He said one of the purposes of creating the act was to ensure that even during an economic downturn, wages don't crash.

He was surprised when the letter arrived three days before Christmas and in the midst of a global pandemic. 

"In poor economic times, there might have been an inclination to force wages down in order to be competitive," he said. 

"The reason the construction industry act was developed was to ensure that in poor economic times, wages didn't get beat up on."

In the letter sent to affected construction associations and others, Fielding says this type of legislation is only found in Manitoba and "it is unclear what the benefits of the CIWA are."

"The legislation has sometimes been justified on the basis that it provides a level playing field for bidders, protects against out of province competition, or that it enhances workplace safety," said the letter obtained by CBC.

"There is little evidence that the legislation benefits Manitobans."

The seven-page letter says that if the act was repealed, wages would be determined by the market or by the collective bargaining process.

Wightman's association acts as the chief bargainer for many construction companies during their contract negotiations with unions. He scoffs at the notions that there are no benefits to the act.

He says even with unionized jobs paying above the rate, it gives him a baseline each time they go to the bargaining table.

Scrapping act will reduce red tape: minister

Overall, he says it stabilizes wages so that Manitoba can compete with high-paying jobs in the oil sector or other industries across Canada.

"I don't even want to speculate about how bad the damage that this will create from a labour relations standpoint, and our ability to attract the workers we need to attract," he said. 

"I think it's a really ill-advised position that they're taking and for the life of me, I don't know why they would even raise it as this stage in the situation that we're in. It's just it's a bad idea."

In a prepared statement, Fielding said there is no intention to lower wages with this proposal, and that it's about cutting red tape. He remains open to consulting with the industry before any legislation is drafted, he said. 

"The current legislation adds a layer of complexity and administrative burden on the construction industry that doesn't exist in other provinces," Fielding said. 

Associations will meet with minister in January

The Manitoba Building Trades (MBT), which represents 13 member unions within the construction industry, said the timing of this could be "disastrous" for the sector.

In a prepared statement, MBT said that repealing the act will add more human resource burdens, force skilled trade out of Manitoba and make people less likely to enter the industry.

And it comes during a time when there is a skilled labour shortage across Canada and an increase of infrastructure project approvals.

"The continuation of construction employment has contributed to Manitoba's economic stability throughout the COVID-19 crisis," MBT said. 

The associations and representatives from Manitoba Building Trades are set to meet with the provincial government on Jan. 7, 2021, for further discussions.