openmind 2010

Volume 18 • Spring 2010

Publications Mail Agreement #40020055 Non-deliverable mail to Circulation Department 10259-105 Street Edmonton, AB T5J 1E3

Volume 18 • Spring 2010 Volume 18 • Spring 2010

A FORUM ON OPEN SHOP CONSTRUCTION

LABOUR STRATEGY: CANADIAN NATURAL’S HORIZON OIL SANDS PROJECT GETS IT RIGHT

WOMEN BUILD: Moving to an inclusive construction climate

GET CASH FLOWING: Strategies to help collect from clients

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OPENMIND SPRING 2010 3

5 Executive editor’s columnBy Stephen Kushner

12 Want More Business?Ensuring a positive customer experience during all phases of a construction job will help increase your client baseBy Scott Wood

16 Building the WorkforceWomen are making strides in the construc-tion industry, but there is still a long way to go before they make major inroads on job sitesBy Emily Senger

20 Cash: The Lifeblood of Every ContractorCompleting jobs is the easy part, it’s cash flow strategies that will make or break a contracting businessBy Anthony R. Stagliano

24 The Labour Strategy That WorkedSome wise negotiating allowed Canadian Natural Resources Limited to access the best open shop and union workers from across Canada for the Horizon Oil Sands Project By Denis Bobiy

30 Tendering LawThe search for the perfect exclusion clauseBy Ryan Kary and Corbin Devlin

6 ON THE COVERFinding the P3 BalanceGovernment and contractors are working together to examine the future direction of public/private partnerships in AlbertaBy Bill StewartIllustration by Leanne Kroll

32 More Than Their DueAn antiquated Canadian system allows union leaders to spend dues to support partisan causes, even when members don’t agree with the politicsBy Bill Stewart

38 Get the BenefitsA streamlined delivery process puts open shop health and benefit plans ahead of the pack By Joel Thompson

43 We Can Work It OutConstruction professionals, in their quest to build things, sometimes fall short in building relationshipsBy Lauren Pinch

46 The Last WordThe construction industry by the numbers

24

43


30

Contents

30

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Executive Editor’s Column

Publisher Ruth Kelly

Executive Editor Stephen Kushner

Associate Editor Anna Ravlikovska

Editor, Contract Magazines Emily Senger

Copy Chief Kim Tannas

Art Director Charles Burke

Assistant Art Director Rodrigo López Orozco

Production Co-ordinator Betty-Lou Smith

Circulation Co-ordinator Andrea Cruickshank

Vice-President Sales Anita McGillis

Advertising RepresentativesDennis McCormack, Zoë Morris, Lloyd Hamshaw,Tara Kochan, Jim Perry

Sales AssistantsStefanie Jackson, Karen Reilly

Contributing WritersDenis Bobiy, Corbin Devlin, Ryan Kary, Lauren Pinch, Anthony R. Stagliano, Bill Stewart, Joel Thompson, Scott Woods

Contributing Illustrators and PhotographersJohnny Bork, Kevin Ghiglione, Buffy Goodman, Leanne Kroll, Heff O’Reilly

Open Mind is published by Venture Publishing Inc. for Merit Contractors Association.

Venture Publishing Inc. 10259-105 Street, Edmonton, Alberta T5J IE3Tel.: (780) 990-0839 Fax: (780) 425-4921 [email protected] www.venturepublishing.ca

Merit Contractors Association 103-13025 St. Albert Trail, Edmonton, Alberta T5L 5G4 Tel.: (780) 455-5999 or 1-888-816-9991 Fax: (780) 455-2109 [email protected] www.meritalberta.com

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The opinions conveyed by contributors to Open Mind magazine may not be indicative of the views of Venture Publishing Inc. or Merit Contractors Association. While every effort is made to ensure accuracy, neither Venture Publishing Inc. or Merit Contractors Association assume any responsibility or liability for errors or omissions.

Canadian Publications Mail Product Agreement #40020055

Copyright © 2010 by Merit Contractors AssociationNo part of this publication should be reproduced without express permission of Merit Contractors Association.


On behalf of Merit Contractors Association, welcome to the 2010 edition of Open Mind magazine.

Stephen KushnerPRESIDENT MERIT CONTRACTORS ASSOCIATION

Although most industries went through a very diffi cult year in 2009, many signals indi-cate the economy is improving and surveys show there is more optimism with what 2010 and 2011 will bring.

While the construction sector may still struggle with tight bottom lines, lower work volumes and reduced profi t margins,

there are some very positive signals in areas related to natural resource development, housing and infrastructure.

Contractors now, more than ever, must focus on becoming more competitive through productivity gains, increased collaboration, and tighter controls to ensure success and to be well positioned when our work volumes return.

In this issue of Open Mind we examine various topics that will help contractors be better prepared for the future.

Increasing government infrastructure spending and public/private partnerships present both challenges and opportunities to the industry. Being involved in the building of many new public projects such as new educational facilities, health centres and road infrastructure under non-traditional funding models may be more prevalent in the future as governments work their way out of the recession.

Customer service and good client maintenance is something all of us can improve on. In this issue, you will fi nd an article discussing how you can create a lasting and benefi cial relationship with your clients to pro-mote repeat business and a loyal client base. Other key issues examined are the importance of cash fl ow to any contractor’s business and how Merit’s group insurance benefi ts plan provides a great and cost-effective program for your employees. The tips in these articles will give you some easy steps to increase your cash fl ow and boost net margins.

The controversial topic of mandatory union dues being used to advance the political agendas of union leaders is also discussed in the article “More Than Their Due.” This topic is becoming of greater impor-tance as unions are increasingly trying to infl uence the outcome of pro-vincial elections in Canada.

We hope you enjoy this issue of Open Mind, Canada’s only open shop magazine dedicated to construction industry news and topics.

6 OPENMIND SPRING 2010

the

Findingthethethethe

FindingFindingFindingFindingFindingFindingFindingFindingFindingFindingFindingFinding

BY BILL STE

WART

Balance


Balance

Government and contractors are working together to examine the future of public/private partnerships in Alberta

ublic authorities throughout the world are increas-ingly looking to the private sector to finance, construct

and maintain assets. The broad spectrum of potential opportunities for public/private sector joint ventures and partner-ships has spawned an equally broad array of contractual and busi-ness models. This contracting out takes many forms and is in place for toll roads and bridges, lease-back arrangements on government offi ce buildings and the operation of health centers, educational institutes, waste disposal facilities, penal institutions and airports, to name some examples.

Construction is Alberta’s fourth largest industry. In 2008, it accounted for eight per cent of Alberta’s gross domestic product, or $23.3 billion. At its peak in August 2008, more than 227,000 people, or roughly one in nine Albertans, were employed in the industry.

Until recently, the Alberta government followed a traditional procurement model for acquiring its physical assets. This is a pay-as-you-go approach, in which government underwrites 100 per cent of capital costs for the roads and buildings it owns, or helps fi nance through capital grants to school boards, health authorities or post-

secondary institutions. Under the traditional procurement model, government staff direct and co-ordinate extensive design, bidding and building processes that result in public ownership of the asset and full responsibility for future maintenance.

In 2003, the Alberta government approved a policy to recognize alternate project fi nancing. The scope included public/private part-nerships – known as P3s – as well as capital leases, capital bonds and other forms of borrowing.

This allowed the government to supplement traditional con-struction procurement with accelerated scheduling for “major and complex capital projects” that had “signifi cant ongoing mainte-nance requirements.” The policy sought to have new facilities and services brought on-stream on time, on budget and with “suffi cient quality to remain high standard throughout their life.” A key objec-tive was to bind contractors “into long-term operational contracts and carry the responsibility for the quality of work” being done.

While these objectives make good sense, consider the chal-lenges of bringing together government, fi nance, construction and maintenance interests under a single partnership arrangement.

P


Finding the Balance

between government and industry part-ners to explore ways government and industry could work together to review the recent experience with P3 projects and, where consensus could be reached, recom-mend adjustments. In January 2009, Merit and the Alberta Construction Association brought together more than 120 industry experts from architecture, engineering, civil construction, fi nance and insurance, and general and specialty contractor sectors to examine delivering P3 projects in Alberta.

The session was comprised of two parts. The fi rst part consisted of presenta-tions. The Hon. Jack Hayden, who was then Minister of Infrastructure, opened the forum, followed by senior govern-ment off icia ls. Design, f inance and construction managers with experi-ence executing P3 projects then provided their perspectives.

In the second part of the session, partici-pants formed working groups according to industry sector to discuss a series of pre-selected questions. Aided by facilitators, each group formulated recommendations on how the Alberta government might consider delivering future P3 projects. The results of these discussions and recommen-dations follow.

Industry FindingsConstruction contractors generally

agreed that under appropriate project and market conditions, P3 approaches aid gov-ernment in obtaining greater certainty in scheduling, completion dates, construc-tion costs and lifecycle maintenance costs. Standardizing requirements on large scale project bundles, or suites, enables economy of scale efficiencies. And, when specifica-tions and/or operational standards are clearly established at the outset, the risk

Legal, financial, technical, administra-tive and pursuit of project dynamics can become much more complex under P3s, compared to traditional approaches.

Large projects in Edmonton and Cal-gary initially served as pilot projects for P3 methodologies. The fi rst “pure” P3 was the southeast leg of the Anthony Henday Drive as part of the Edmonton Ring Road. This project was built at a capital cost of $365 million and included an additional $128 million for maintenance over a 30-year con-tract (total value $493 million).

In 2007, three major P3 projects were announced: the 21-kilometre northeast section of Stoney Trail in Calgary ($936 million), the 21-kilometre northwest leg of Anthony Henday Drive ($1.42 billion) and 18 K-9 schools. This latter project com-prised bundles of nine schools in each of Edmonton and Calgary ($634 million). The Alberta government estimated that building the two latter projects as P3s saved Alberta taxpayers $358 million, compared to the estimated total costs it would have incurred using traditional procurement approaches.

Consulting with IndustryThe Alberta government’s three-year

capital plan, covering 2009-2012, contains $23 billion in direct capital spending and capital grants. This makes the province one of the most significant purchasers of Alberta construction services. Suffice to say, a change in procurement policy can dramatically affect the industry.

Over the years, many contractors work-ing in specifi c industry segments developed considerable capacity and expertise while working with the Alberta government and its capital grant recipients. This is especially the case for construction and maintenance of roadways, bridges, schools and hospitals throughout the province. Much of their expertise and operational capacity was built on long term familiarity with traditionally fi nanced design/specify/bid/build procure-ment procedures. Hence, when the province expanded its use of P3s, many wondered about the effect this change would have.

In response, the Merit Contractors Association initiated a consultation

P3 IN ACTION: Steel girder construction on the future 66th St. interchange at Anthony Henday Drive.


to the public owner for costs of changing specifications while the project is under construction is reduced.

Contractors also felt that the Alberta government potentially benefitted from having access to large national and trans-national construction expertise and fi nance capital for large projects – especially when local markets are operating at capacity, as they were in 2007 and 2008. Increased pri-vate sector involvement, with its focus on fi nancial bottom line results, also provides additional oversight to projects in a man-ner that might not always be available to resource-strained, public sector projects.

At the same time, participants raised concerns about how projects were bundled, and how transferring certain risk elements from the public to the private sector could result in the Alberta government failing to realize potential cost effi ciencies that may be available from traditional or mixed pro-curement and fi nancing models.

In particular, bundling similar struc-tures to create an exceptionally large-scale project can result in fewer contractors with expertise in local market conditions and fewer relationships with local sub-contrac-tors and/or suppliers who are capable, or willing, to compete in the process. It was also submitted that misunderstanding local conditions could result in higher risk premiums being incurred. Higher capital costs would also be incurred when com-mercial terms are not reasonable, risks are disproportionately allocated to industry, or when completion schedules or cost expecta-tions are unachievable.

And while industry participants were unable to reach consensus on the extent to which the Alberta government should use P3 approaches, there was consensus that, when executed properly, these approaches were an important policy mechanism for the

government to meet construc-tion and maintenance service needs.

There was also a general consensus that incorporat-ing longer term maintenance into the government’s strat-egy for new construction procurement was a positive

development. The rationale was that hold-ing proponents responsible for maintain-ing the capital asset until ownership is returned to the public encourages inno-vation, including design and equipment selection geared to life-cycle optimization from the outset. It also ensures that fund-ing is dedicated for ongoing maintenance – a practice not always adhered to by govern-ments facing fl uctuating revenues.

RecommendationsWithin the context of a framework call-

ing for refining its P3 policy to provide best value for taxpayer-funded projects in

a manner supporting the capacity, capital investment and expertise of Canadian and Albertan construction companies, a series of 21 technical and process related recom-mendations were made.

In broad terms, it was recommended that the government regularly consult with industry to: Determine the appropriate balance

between traditional, mixed and pure P3 approaches to procurement and mainte-nance of capital assets.

Examine ways and means of improving the traditional procurement model.

Refi ne its P3 approach, particularly with respect to the appropriate levels and risk elements being allocated between gov-ernment and the private sector.

Ensure its procurement approaches are based on securing competitive bids and participation from the widest possible array of contractors and suppliers.Recommendations were also made

regarding types and sizes of projects that

Increased private sector involvement, with its focus on fi nancial bottom line results, provides additional oversight to projects.

CALGARY VIEWS: Construction on Stoney Trail NE at McKnight Boulevard.

Finding the BalanceFinding the BalanceFinding the BalanceFinding the BalanceFinding the Balance

industry felt lent themselves well to P3 approaches. There was also general con-sensus within industry that, as with other types of projects, P3 construction projects were delivered more cost effectively when they concentrated on a municipal or regional basis in proximity to larger urban municipalities.

Considerable attent ion wa s a lso attached to how risk in P3s is often “allo-cated to the party best able to manage and price it.” The government’s current P3 approach effectively transfers all risk and

related liabilities to the private sector part-ners. Industry participants suggested that this, perhaps, assumes that the private sector was more capable or willing to attach lower cost premiums to deal with the risk that uncertain conditions bring to any construction project.

It was suggested that, in certain circum-stances, the Alberta government and the agencies it funds were better able to con-

trol, or have infl uence over, certain critical pre-project activities that can signifi cantly hamper scheduled completion dates. This includes acquiring development permits and certifying environmentally compli-ant sub-surface conditions. By assuming responsibility for these types of uncertain-ties, it was suggested that the overall proc-ess would be more efficient, quicker and result in lower overall costs.

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P3 construction projects were delivered more cost effectively when they concentrated on a municipal or regional basis in proximity to larger urban municipalities.

BRIDGE AHEAD: Bridge deck construction at Anthony Henday Drive and Yellowhead Trail in Edmonton.

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Ensuring a positive customer experience during all phases of a construction job

will help increase your client base

By ScOtt WOOD


More specif ically, it includes the following elements:Know the client. Take the time to get to know individual clients and their unique needs. What problems or challenges are they trying to solve? What are their plans for the new property? Create realistic expectations.Don’t let technology replace timely and consistent personal communication with clients. Reach out to make clients feel valued and demonstrate that their satisfaction is the company’s ultimate goal. Provide expertise and guidance by suggesting the best course of action to take, explaining options and helping clients make decisions. “Each client has to think he or she is your only client,” says Joe Percario, president of Joe Percario General Contracting in Warren, N.J.Establish – and then exceed – quality standards. Because quality is subjective, its definition has to be mutually agreed on by contractor and client so both parties know when it has been achieved. Always strive to exceed the set standard. “Quality control is about having experienced project managers and supervisors,” Percario says. “Always account for those management costs in your bid. If your price is a little higher than a competitor’s, clients will hire you anyways, provided your initial presentation highlights your project management expertise.”Deliver on time. Failure to deliver on schedule raises doubts about whether the company always stands behind its word. “Clients’ time is money,” Percario says. “They don’t mind paying a little more for having their project completed in a timely manner so they can rent out properties or open businesses sooner.”Make customer service everyone’s job. Anyone at any point of contact with the client – whether in person, by phone or electronically – has the power to positively or negatively inf luence the client experience. This includes company owners, receptionists, accounts receivable personnel, salespeople, project managers, workers and subcontractors. “A good experience starts with a good first impression,” Percario says. “Our first response team is trained to make a masterful presentation to prospective clients. Our office staff, too, is trained to be the voice of the company.”

hat differentiates one businessfrom another is not only its product or service, but also the client experience. For instance,

why do so many people who’ve had a home built or remodelled say they’d never do it again? Because it didn’t turn out as they expected, or it was more complicated and protracted than they anticipated. In contrast, people who have a positive experience with a construction company

become loyal clients who return for future projects and refer the firm to colleagues, friends and family.

Give Clients What They Really WantClients want their money’s worth – a dependable contractor they can count on for work they can’t do themselves. A great client experience is all about the golden rule. Treat others the way you want to be treated.

W


Reprinted with permission from Construction Executive

March 2009

Determining if clients are having a positive experience is a

prerequisite for improvement.

Stay involved. Construction business owners need to stay involved throughout the project to ensure a l l staf f and subcontractors deliver excellent client service. Two companies may offer equally good products, but clients prefer the one that is organized, meets expectations, communicates regularly and listens well. “You have to own the client relationship as wel l as the cl ient-subcontractor relationship,” Percario says. “I ca l l subcontractors ‘exclusive representatives’ and consider them an extension of my company. They need to know the complete scope of work and understand the client’s needs. I involve them in project meetings and introduce them to clients early on. Solid project management is essential to ensuring neither the client relationship nor the subcontractor relationship is jeopardized.”

Besides generating repeat and referral business, a client-friendly environment enhances a company’s ability to attract and retain quality employees. People don’t wa nt to work for a company that treats its clients badly because, most likely, it will treat its employees poorly as well. Further, in smaller communities where bankers may know both the construction company’s personnel and clients personally, obtaining financing also may depend on creating a positive client experience.

Follow Up and Follow ThroughDetermining if clients are having a positive experience is a prerequisite for improvement . One method of m e a s u r e m e nt i s t o t r a c k r e p e a t business and referrals, as well as rework and warranty work. In addition, the promptness with which clients pay their bills may indicate satisfaction.

Most importantly, ask clients what they really think. An absence of complaints does not guarantee satisfaction. Getting feedback on completed projects has to be done in a non-threatening way. If the company owner personally visits clients and asks their opinion, the answers may be polite, rather than honest. It’s better to send a questionnaire people can complete in

private. However, wait a few weeks after the project has been completed before sending the survey; everything may seem perfect on the first day, but issues may arise later.

“Client surveys give you actionable i n f o r m a t io n a n d a r e a p o i n t o f differentiation to the marketplace because they let clients know you care,” Percario says. “Make sure to provide contact information in case they have questions about materials, installation or maintenance. This puts them back in touch with the lead qualifying department for up-sells, additional business and referrals. When clients don’t respond to the survey, we have a trained lead qualify team member call and get the questionnaire a n swered wh i le at t he sa me t i me discussing the benefits of repeat business and referrals.”

Positive client feedback also can be used for marketing purposes, as well as for employee incentive programs. Because followup with a questionnaire creates

expectations, it’s even more important to follow through with necessary rework or warranty work. “If there is a complaint, send an experienced professional to the site for an inspection,” Percario says. “The worst thing you could do is ignore those issues once you’ve been paid. After all the hard work you’ve done to build a great client experience, you’ll be viewed as just another money-grabbing contractor.”

In the current economic conditions, as businesses begin to recover, increased market share goes to proactive companies that streamline their operations and implement processes to deliver customer service excellence. Giving clients what they really want and treating them the way they want to be treated assures business success in any economic environment.

Scott Wood is director of client services with IPA, a management consulting firm in Buffalo Grove, Ill. For more information, visit www.ipa-c.com.

“A clIENt’S tIME IS MONEy. thEy DON’t MIND PAyING

A lIttlE MORE fOR hAvING thEIR PROjEct cOMPlEtED

IN A tIMEly MANNER SO thEy cAN RENt Out PROPERtIES OR OPEN A BuSINESSES SOONER.”

Joe Percario, president,Joe Percario General Contracting,

Warren, N.J.

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In high school, numbers were Julia Penner’s nemesis. She struggled to earn the mathcredits to graduate. While Penner spent many lunch hours sitting inside, doing extra work on math homework, she did look forward to one part of high school: welding class.

In fact, the welding class that Penner loved launched the farm girl from Stettler into a 15-year career in the trades. Now, at age 32, Penner worked as a journeyman welder for 12 years, earned her pressure ticket, owns a home, and, two years ago, she took a position as a trades consultant with the Alberta government.

When Penner looks back she’s happy with her career decision, even if it comes with the occasional burn. “To me, it was just the best opportunity,” she says. “If I could go back and do it all again, I would not change a thing.”

Penner’s decision to enter a career in the trades led to a job she loves and a comfortable financial situation, but she is in the minority. While women are gaining ground in other traditionally male-dominated fi elds, they remain under-represented in construction trades. In 2008, the Alberta government had more than 70,000 registered apprentices. Of those, just 5,745 were women. Attracting more women into trades is recognized as an important step to meeting future labour force demands and women are showing increased interest in careers in the trades; on these points, trade schools, government, industry and non-profi t organizations agree. But there is another consensus too: there is still a long way to go.

Building

Women are making strides in the construction industry, but there is still a long way to go before

women make major inroads on job sites

BY EMILY SENGER

Building

Workforcethe


them work in retail and food service. They’re working hard. They’re working over 30 hours a week and they still have to access the food bank to have something for the kids to eat.” About half the women who come through the program have kids. Most are single parents. Women Building Futures provides affordable housing for students who need it and for their children, too, eliminating the fi nancial barri-ers that prevent many women from seeking training or switching careers.

Paul Verhesen, president of Clark Builders, is a director on the Women Building Futures board. He’s been involved with the organi-zation for five years, since Clark Builders renovated an old warehouse in downtown Edmonton, transforming it into the Women Building Futures campus. Clark Builders has also hired many Women Building Futures grads as apprentices, with great success.

When Verhesen fi rst started working with Women Building Futures, the Alberta econ-omy was red hot. “At the time, when Alberta was booming, we were looking for all labour sources from all labour pools and women in our industry was a natural fit,” he says. “Typically, the hurdle has been training and just believing in them that they can do the job. That’s where Women Building Futures comes in.”

As the economy picks up, Verhesen believes a similar skilled labour shortage is on the horizon in Alberta. Both industry and govern-ment will need to step up to get more women into the construction labour force. “We’ve got some momentum going now, but could it be better? Yes,” Verhesen says. “Could industry do a better job? Absolutely. Could govern-ment do a better job of supporting Women Building Futures, and others non-profits? Absolutely.”

Verhesen’s call for the government and industry to do more has been answered, at least partially. In March, Lynne Yelich, fed-eral Minister of State for Western Economic Diversifi cation, announced a $267,500 invest-ment in Women Building Futures. Industry also chipped in, reaching a total $512,000 investment. The money will be used to fin-ish classrooms, to purchase new software to manage client relationships, and for video conference technology to reach women in rural areas.

Backed by investments like this, Archer

“I really encourage

women to get a trade because

it makes you self-suffi cient.”

Julia Penner, journeyman welder

At SAIT in Calgary, the number of women enrolled in programs in the School of Construction has increased since dean Larry Rosia took the helm 10 years ago. Rosia says he is encouraged by an increasing openness in construction. He says new technologies also help make construction careers more appealing, and available, to a wider range of women. “The fi rst thing that comes to mind is some of the physical work might be restric-tive to women but it’s certainly not,” Rosia says. “With the technology that we have today, and the machinery, that is no longer a factor.”

In 2000, when Rosia began at SAIT, there were about 280 women enrolled in programs at the school. Today, there are closer to 500. Still, women represented less than nine per cent of the 5,872 students in 2009. The gender split at NAIT in Edmonton is similar. In 2008, 13,028 students enrolled in apprenticeship programs at NAIT. Of those, 917 were female – about seven per cent.

In the SAIT School of Construction, female instructors in the plumbing, architecture, heating ventilation and air-conditioning (HVAC), and painting and decorating classes at the school provide compelling role models. Still, Rosia says, there is a long way to go to attract more female high school students to choose construction trades. “There’s still the stigma of parents saying, ‘I want my daugh-ter to go off to university, or take more tradi-tional-type programming and occupations,’” says Rosia.

At least one Alberta program is working with young women in high school to chal-lenge this stigma. The annual Girls Exploring Technology and Trades conference (GETT),

now in its ninth year, will host about 190 girls in Edmonton this May as part of the annual Skills Canada Alberta competition, which aims to promote technical and trade careers to Alberta youth.

An important part of the GETT conference is a roundtable session, where high school girls talk to women who work in the trades. One of the most frequently asked questions Skills Canada Alberta communications co-ordinator Shawna Bourke overhears the girls ask: “How much do you make?” Once the important questions are out of the way, par-ticipants try their hand at trades like welding, or a female mechanic might teach the young women how to change a tire. “It creates this opportunity for girls to think, ‘if she can do that, I can do that, too,’” Bourke says. “And that’s the whole idea. It’s for girls to con-sider that their options aren’t limited, they’re unlimited.”

Penner was a speaker at last year’s GETT conference. She promotes trade careers as a way for young women to gain fi nancial inde-pendence, like she did. “I really encourage women to get a trade because it makes you self-suffi cient,” she says.

One Alberta charity was founded on just what Penner talks about: using trades as a gateway to financial independence. In Edmonton, Women Building Futures pro-vides women with a 17-week pre-trade train-ing course, which prepares them to enter an apprenticeship.

“The reality is that a lot of women in Alberta, and across Canada, work full time and earn below the poverty line,” says Women Building Futures president and CEO JudyLynn Archer. “That’s because a lot of

TRADING INFORMATION: Welder Julia Penner (right) speaks with a high school

student at the 2009 GETT conference.

Building the Workforce

hopes to get more women to consider trades, but to be realistic about it, too, and to make sure that they do some research before plung-ing in. “It’s a tough road,” she says. “It’s not for everybody.” She also hopes to reach indus-try members who will need to look for non-traditional labour sources as the economy picks back up and baby boomers retire in the coming years. “We really encourage con-struction companies to consider hiring our graduates,” she says. “I know they won’t be disappointed.”

Women Build

Don’t fear the hammer: It was the lesson many women learned during a unique construction project sponsored by PCL.

In 2006, the company sponsored the Edmonton Women Build Habitat for Humanity project. The goal: complete a 2,200-square-foot duplex in Edmonton for two families in 3.5 months, on time and on budget, using women volunteers as labour.

PCL donated expertise – a female project manager and a female carpenter apprentice – to teach volunteers basic construction skills. That project manager was PCL employee Karla Horcica. “Part of the intent of the program was to teach women building skills,” says Horcica, who is currently a PCL construction co-ordinator.

Horcica, a civil engineer by training, managed volunteer builders and sub-contractors daily during Women Build. She also brushed up on her own skills. “How am I supposed to teach these women to use a skill saw when I don’t know how to use a skill saw?” she recalls. “A lot of the stuff, I’d never done before.”

The project is part of PCL’s com-mitment to encouraging women in construction trades. The company hires graduates from the Women Building Futures program, which provides women with pre-apprenticeship training. It also sponsors 16 scholarships at NAIT, worth $2,000 each. This year, five recipients were women.

General ContractingProject ManagementButler Building SystemsDesign/Build Contracting

Providing quality, innovative and cost effective solutions to our customers, on time and on budget.

Elan Construction Limited #100, 3639-27th St. N.E. Calgary, AB T1Y 5E4 Tel: (403) 291-1165 Fax: (403) 291-5396www.elanconstruction.com

000.Elean_1-3S_nBL.indd 1 3/23/10 9:31:42 AM

ICBA Benefit Services Ltd. is proud to offer The Construction Supplier Plan and The Owner/Operator

benefit plans to Merit Canada members.

These plans offer the advantage of group pooling and wholesale pricing to 1 and 2 person companies, engineers, consultants and wholesalers involved in the construction

industry.

For more information www.meritcanada.ca

a

partner

000.ICBA_1-3S_nBL.indd 1 2/25/09 8:43:38 AM


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Completing jobs is the easy part, it’s cash flow strategies that will make or break a contracting business

by aNthONy R. StaGlIaNO

CASHLifebLoodThe

of the Contractor


ake no mistake about it: Cash continues to be

the lifeblood that runs through the veins of every construction company. Unfortunately, many contractors are more comfortable bidding on jobs (and dealing with

problems and technical matters in the field) than collecting the money

they are owed.However, the ability to find and

maintain a positive cash flow remains at the heart of the most successful contrac-

tors. It’s a fatal fact of life that more contrac-tors go out of business because of a lack of cash flow than a lack of backlog or profit. Contractors do not have to be in business to make money, but they do have to make money in order to stay in business.

Cash flow management actually starts when contractors decide to bid on a job. Many contractors are more interested in submitting the lowest successful bid than in the importance of cash. However, their joy can be short-lived, especially if they have “left too much on the table.”

So, when making that important decision about whether or not to bid on a job, realisti-cally address the following questions: How busy will the company be when given notice to proceed? Has the company been success-

ful with this type of contract in the past? Is the job’s location feasible? What is the pos-sible impact of seasonal weather conditions? Are there any unusual contract clauses that could negatively affect cash flow?

In addition, carefully review the custom-er’s past payment practices for instances of over-inspection, improper or excessive back charges, and significant reductions in pay-ment requests. If the payment history is too questionable, it’s not prudent to bid the job.

Preventive Care: Contract TermsIf the decision is made to bid on a job, remember that because profit ultimately turns into cash flow, the margin or reward must justify the risk. Therefore, negotiate best payment terms before – not after – the contract is awarded.

Every contractor should seek to modify or eliminate contract retainage terms. For example, if a contract states that the stand-ard 10 per cent will be withheld, then nego-tiate for a reduction to at least five per cent when the contract is 50 per cent complete. As the contract approaches 75 to 80 per cent completion, the retainage should be further reduced to two per cent or less.

Withholding 10 per cent retainage until the end of a contract creates a serious drain on cash flow. And, a severe drain or loss

of cash (the “blood” of a business) can kill a company, just as excessive blood loss can kill a person.

In 2007, the Construction Financial Management Association’s annual financial survey reported that the average net earnings before income taxes (net margin) for all types of contractors is 2.7 per cent. It’s no coinci-dence that best in class contractors reported a net margin of 8.1 per cent.

For a contractor who performs work in the early stages of a project, the longer the retainage is held, the greater the probability of a cash flow problem. To speed up collec-tion of the remaining retainage, all punch list items should be completed as soon as possi-ble. If not monitored carefully, the last 10 per cent of a job can take 20 per cent of its cost to finish. The best companies in the business are known as “closers.”

daily exercise: The Collections PolicyIt’s a well-known fact that contractors face unique problems and issues when it comes to collecting their money. These include: retainage, pay-when-paid clauses, pay-if-paid clauses, right to stop work, back charges, approval of change orders, front-end load-ing, partial payments, mobilization, stored materials, claims, lien rights and disputes.

Given this context, your corporate culture


CASH: The Lifeblood of the Contractor

must reinforce your company’s right (not privilege) to collect owed money. Adopt a proactive attitude about collecting cash, and don’t be afraid to spread the word to your customers. Make collections a daily process. Eliminate those end-of-month panic attacks where a lack of cash starts to drain the life out of your company.

Keep in mind the old saying, “The squeaky wheel gets the grease.” Call early and often, and encourage everyone in your finance department to bill on time for the total amount owed. Bill aggressively, and don’t be ashamed to use a rea-sonable amount of front-end loading. Remember, it’s just good business practice.

Regular followup: billingKnowing each contract’s billing terms – including the timing for submission of bill-ing, the approval process and the contact person – is a must. Always deliver the first invoice in person as well as subsequent large invoices. Also, pick up checks to help elimi-nate delays and excuses.

After the initial meeting, do not wait until payments are past due to call again. Contact the controller seven to 10 days before pay-ment is expected to confi rm that everything is on schedule for timely payments, and ask if there are any questions or problems.

If you wait until your payment is past due, you may have missed your customers’ billing cycle for the next month and your second invoice might be incorrect and, therefore, also delayed.

Change orders: A PrescriptionProfi t fade and cash fl ow drain also result from the improper handling of change orders. It’s imperative that everyone on the job, especially your project manage-ment team (including PMs, superintendents, foremen, etc.), knows about work outside the original contract’s scope and communicates this information daily so that proper change orders can be issued.

Written documentation through field change orders singed by the customers’ authorized representative – as well as job dia-ries, meeting minutes, and digital photos – are excellent tools for substantiating your compa-

ny’s right to additional compensation.Also, monitor changes in on-site condi-

tions, accelerations of work, unusual weather conditions, stacking of trades or out-of-sequence work. Whenever possible, use your leverage to have these change orders signed, especially when customers need your help to meet their goals.

elective Procedures: other Cash Management TechniquesContractors must keep a tight grip on cash flow at all times to survive construction’s

volatile and high risk environment. So con-sider these additional cash management techniques:1. Mail checks as late as possible (but still keep within payment terms) to maximize the use of cash for investment activities. To create the most cash fl oat for balances over the weekend, mail or deliver checks so they

arrive late in the week.2. Use specialized accounts to maximize cash f low. A controlled disbursement account with a bank in another remote loca-tion can increase the float on checks from one to three days. Zero-balance accounts employ a central bank account and a number of separate accounts (like payroll) with no balances. The separate accounts receive only enough funds from the central account to cover the checks presented. This makes larger balances available on checks that clear the bank.

3. Invest excess or idle funds. This is a goal every contrac-tor should strive to achieve. Some com-m o n i n v e s t m e n t

vehicles include: certifi cates of deposit, gov-ernment securities, commercial paper, bank-ers acceptances, repurchase agreements, tax-exempt funds, mutual funds and bonds. However, if a company has a line of credit with an outstanding balance, first sweep available excess daily funds against the out-standing balance. This will result in net inter-

it’s a fatal fact of life that more contractors go out of business because of a lack of cash fl ow than a lack of backlog or profi t.

the controller seven to 10 days before pay-ment is expected to confi rm that everything is on schedule for timely payments, and ask if

If you wait until your payment is past

the job, especially your project manage-ment team (including PMs, superintendents, foremen, etc.), knows about work outside the original contract’s scope and communicates this information daily so that proper change

Written documentation through field change orders singed by the customers’ authorized representative – as well as job dia-ries, meeting minutes, and digital photos – are excellent tools for substantiating your compa-


est income because the interest rate earned on short-term investments is usually lower than the interest paid on a line of credit.4. Make remote cheque deposits. Due to a relatively new banking service, you can now scan and transmit critical daily deposits within minutes. Using this service will put your money to work faster, with the added bonuses of increased security and higher col-lection rates. Electronic deposits can be made outside traditional banking hours, and phys-ical cheques are no longer required by most banks. In addition, accelerating deposits can mean signifi cantly more net interest income earned. You can also shred these cheques at the end of your bank’s recommending hold-ing period.

Triage: expensive Sources of CashOther auxiliary sources of cash include the infusion of additional equity or loans by shareholders. The primary problem with this alternative is an owner’s ability to infuse after-tax cash into the company. A second source is borrowed money, primarily from a credit grantor (usually a bank).

Various types of financing are available for short-term cash shortages, including lines of credit, demand notes, factoring/receivable fi nancing and asset-based lending. However, keep in mind that borrowed money has its own catch-22 related to the negative impact on working capital, benchmarking ratios and such potential loan covenants as debt-to-equity ratios.

ConclusionA construction company can be as com-plex and mysterious as the human body. To maintain financial health, contractors must be committed to self-examination, consultation and diagnosis with their out-side fi nancial “doctors.” Isn’t it time for your company’s annual physical?

Anthony R. Stagliano is national director of Construction Industry Services for Mayer Hoff-man McCann P.C., and CBIZ MHM, LLC in Philadelphia, Pa. Stagliano is a CFMA instructor and a frequent author for CFMA Building Profi ts.

lethargic cash fl ow slows contractor growth and development, and a cash fl ow embolism means death to any business. Follow this pre-scription to help protect your company from these risks and infuse your operations with a vigorous cash fl ow.

1. Establish a suffi cient line of credit or have another source of funds available to pro-vide for temporary or emergency cash fl ow shortfalls.

2. have excess daily cash sweep fi rst against your line of credit because the interest rate earned on short-term investment is usually lower.

3. If appropriate, consider asking your bank or leasing company for a waiver or skip payments for two or three months during off-season periods.

4. have offi cers, owners and other related parties repay their loans as the fi rst step towards restructuring debt and enhanc-ing cash fl ow.

5. Negotiate for the lowest possible retention percentage, as well as the phase-out of retention, into the payment terms of each contract.

6. Require the same method of retention from your subs and suppliers to help offset your retention withheld by the owner.

7. Strongly encourage the speedy resolution of proposed additions and deletions to each contract by requiring signed authori-zation in the fi eld for scope changes before work begins.

8. Include a contract clause providing for attorney fee reimbursement. this is critical to ensuring the collection of receivables. It discourages the owner from withholding payment and helps make litigation more cost-effective should it become necessary to fi le a claim.

9. assemble a knowledgeable construction industry management team consisting of your accountant, banker, surety agent and

Twenty point prescription for a healthy cash fl ow

lawyer to advise your company on cash fl ow issues.

10. Prepare and maintain a 12-month mov-ing cash fl ow forecast or budget, with the fi rst three months functioning as an early warning system.

11. always perform a “lease vs. buy” analysis prior to acquiring any major purchase, such as equipment or rolling stocks.

12. Only pay bills on specially designated days of the month to enhance cash fl ow plan-ning and promote offi ce effi ciency.

13. Never miss purchase discount arrange-ments because the standard “two per cent, 10 days, net 30” approximates a 36 per cent interest rate.

14. Offer your customers discounts for early payment.

15. always know your customer’s approval and payment process, including the per-son who does the approving.

16. always deliver the fi rst invoice in person, as well as subsequent large invoices. also pick up cheques to help eliminate delays and excuses.

17. Make bank deposits electronically to earn additional interest and to verify your cus-tomers’ bank and account numbers, which allows for future verifi cation of suffi cient funds.

18. have your attorney prepare a series of standard form letters for problem custom-ers. Many people pay upon receiving the fi rst letter from an attorney.

19. Do not fear offending or alienating your customers. Remember, persistence pays. If you can shorten your collection cycle by fi ve to 10 days, you will have achieved a signifi cant number of extra days of cash.

20. Never lose sight of the fact that the collec-tion of your accounts receivable is a right, not a privilege.Reprinted with permission from CFMA

Building Profi ts Emagazine Sept./Oct. 2008


A CONSTRUCTION FEAT: The Horizon Oil Sands project north of Fort McMurray employed more than 800 contractors during Phase 1 of construction.

THE LABOUR

STRATEGY THAT

WORKEDBY DENIS BOBIY

LABOUR STRATEGY


hen it’s at full production, Canadian Natural Resources Limited’s multi-billion dollar Horizon Oil Sands project is targeted to produce a whopping

232,000 barrels-per-day. But transforming the project site from isolated fields and forest approximately 70 kilometres north of Fort McMurray into its present day state was no small feat, and required some innovative labour negotiations on the part of Canadian Natural in order to bring together more than 800 contractors, both open-shop and union, from all across Canada.

Construction began on the project in 2004 and will be completed in three stages. First production commenced in February 2009 with design capacity for 110,000 barrels per day of synthetic crude oil.

Prior to beginning the project, Canadian Natural’s project team undertook extensive reviews of previous projects in an attempt to learn, and understand, the factors of major project performance. It met with many owners, engineering fi rms and construction contractors.

The project team’s findings led it to adopt a number of key strategies, which included focusing on preparedness, breaking the project into manageable pieces and optimizing project defi nition before construction. Experiences of other major projects clearly identifi ed that the timely supply of qualifi ed labour and the avail-ability of experienced and competent contractors were signifi cant components of a successful construction execution.

Project Labour StrategiesPlans for Phase 1 of the project placed construction between 2004 and 2008, a time span when Alberta was to see the construction of a number of other major projects. The concern about the availability of skilled workers and qualifi ed contractors led Canadian Natural to adopt a “managed open site” labour strategy, which would ena-ble it to access the national construction community – contractors and tradespersons – regardless of their union status or affi liations. To further attract and retain workers, the owner undertook a large-scale fl y-in/fl y-out program, which provided free air transportation for workers from hubs near their primary residences, to the project

W


and then back to their residences again. Workers were also provided free room and board in on-site camps.

Labour stability was a prime concern for Canadian Natural. It wanted to establish a “level playing field” for all contractors and workers on the project. In addition, the planned construction duration of the project covered a number of construction industry collective bargaining periods. Canadian Natural was also seeking a labour relations vehicle which would provide labour stability and common employment terms and conditions for employers and their employees on the project, regardless of their union status/non-union status or specifi c union affi liation.

In the instance of non-union employers, the project’s labour execution strategy pro-vided representation for their workers by the Christian Labour Association of Can-ada (CLAC) and a benefi ts/retirement plan for workers if the employer was not a par-ticipant of a recognized industry plan, such as the Merit Benefi t Plan. In the event that a contractor became certified by a union, the non-union contractor was assured the right of maintaining the commercial terms under which it had contracted to do the work, through to work completion. Effec-tive management of site access (fl ights) and site logistics (busing and accommodation) were also key considerations.

The owner approached the affiliates of the Alberta Building and Construction

Trades Council in the fi rst quarter of 2004, with the intent to conclude a project labour agreement for the duration of construc-tion of the project. Discussions continued into the end of the third quarter in 2004 without success. Canadian Natural, con-cerned that prolonged and unsuccessful

negotiations could result in the absence of an acceptable project labour agreement, examined its alternative options. As a result of this review, Canadian Natural chose to make an application to the provincial gov-ernment to request Division 8 designation for its project, in accordance with provincial labour legislation. If granted, the designa-tion would provide the project a “no strike/lockout” status and enable the owner, or its principal contractor, to negotiate a project labour agreement with a union or group of unions. The review process was interrupted due to a provincial election fall 2004. Cana-

dian Natural was subsequently granted the Division 8 designation in early December.

Intensive negotiations continued between the affi liates of the Alberta Build-ing and Construction Trades Council and Canadian Natural in Q1 of 2005, but they did not reach an agreement. During

this same period, the owner approached CLAC to engage it in discussions related to a project labour agreement under the Division 8 designation. Negotiations with CLAC began in January, and in April 2005 the parties concluded an umbrella agree-ment for the project.

The agreement ensured a managed open site and set standard terms only in areas necessary to support labour stability. It established a level playing fi eld for both union and non-union employers and facili-tated successful management of site logis-tics and infrastructure. As an example, for employers affi liated with the Alberta build-ing trade unions almost all of the terms and conditions of their provincial collec-tive agreements were grandfathered in the Division 8 agreement. For CLAC affi liated employers, the Division 8 terms and condi-tions were closely aligned with key CLAC employer provincial collective agreements.

Negotiation OutcomesWith the completion of Phase 1, Canadian Natural had the opportunity to assess the effectiveness of the elected labour execution strategy. The adopted strategy produced a number of highly successful results. The project attracted a significant number of employers and employees from not only

The Labour Strategy That Worked

EXPERIENCES OF OTHER MAJOR PROJECTS CLEARLY IDENTIFIED THAT THE TIMELY SUPPLY OF QUALIFIED LABOUR AND THE AVAILABILITY OF EXPERIENCED AND COMPETENT CONTRACTORS WERE SIGNIFICANT COMPO-NENTS OF A SUCCESSFUL CONSTRUCTION EXECUTION.


ability of the project to optimize the engage-ment of its affi liated building trade union contractors and union members.

The perception by unions that the need for extended shift cycles was driven by anti-building trade union sentiment, or unwill-ingness to pay double-time, rather than the need to manage site logistics and ensure equitable treatment of the workforce, was a further impediment to the inability of the parties to effect a resolution to the negotiation process. Another significant disappointment was the project-wide level of productivity. Based on the degree of front-end preparation and commitment to

Alberta and Western Canada, but also from Central and Eastern Canada. Many of these workers were fi rst-time participants in the Alberta industrial construction industry who previously would not have been able to secure jobs and support their families. Many of these employers, and their employ-ees, remained in the province, and others will return for future opportunities. This bodes well for future Alberta projects.

The elected strategy, combined with the logistics of flights, shift cycles and camp facilities, clearly facilitated the engage-ment of workforce members and con-struction contractors, who might have otherwise been excluded from the project due to the potential for labour confl ict and instability. This included local workforce members, and local and aboriginal busi-nesses and contractors. As with the afore-mentioned instance, the introduction of new contractors to the oil sands will make the Alberta marketplace more competi-tive and will assist the industry in devel-oping new business opportunities. These new contractors also have the potential to increase and enhance employment and business opportunities for Canadians and Canadian companies.

The fly-in/fly-out program was a huge success and a major contributing factor in

the ability of the project to successfully attract and retain the required labour resources. With-out this service, many workers from other regions of the country would not have been able to access jobs at the site. The umbrella agreement facilitated by the Division 8 des-ignation continues to serve the project well in terms of providing the sought-after labour stability and the provision of terms and conditions conducive to a level playing fi eld for all participants.

The project also incurred a number of setbacks. The execution strategy was more diffi cult to implement than the more com-monly used traditional approaches in the industry. Initially, all contractors incurred diffi culty managing the workforce related to the shift cycles. Although some of the Alberta building and construction trade unions did agree to work within the Divi-sion 8 agreement, the inability to success-fully conclude an accord with all of these building trade unions detracted from the

Horizon Phase 1 Construction by the Numbers

Duration of the project

Date fi rst barrel of oil is produced at the site (fi rst shipment on March 18)

Total man-hours

Metres of large bore pipe installed

Approximate number of piles

Cubic meters of concrete

Lineal feet of cable

Contractors on the site

Flights in to and out of the site

Passengers transported in the fl y-in fl y-out program

January 2005 to May 2009

February 28, 2009

52 million

175,0002 3 , 0 0 0

143,0001.5 million

8009,7004 2 0 , 0 0 0

www.nait.ca/cit

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Develop your future leaders. Call us today.ph (780) 378.1230 email [email protected]

corporate andinternational training

000.NAIT_1-2M_nBL.indd 1 3/23/10 9:39:35 AM

make substantial changes to its original labour relations strategies, or to signifi-cantly depart from proven practices. The elected construction execution strategy engaged in the initial phase has proven to be viable from many perspectives. The company will rely on the lessons learned from Phase 1 to improve upon project implementation and execution.

Future project work may again be bro-ken into smaller pieces and competitively awarded to those fi rms with proven per-formance records with Canadian Natural or on similar type of work. Project managers will likely attempt to use the experience of workforce members and con-tractors who contributed to the successes of Phase 1, anticipating that they will be able to again access the entire Canadian construction marketplace, regardless of the union status, affiliations or non-affi liations of industry participants. The adoption of site logistics initiatives such as using a f ly-in/fly-out program, access to on-site camp facilities and the adop-tion of shift cycles will remain key com-ponents that drive employers’ abilities to attract and retain the required workforce. Similarly, the project continues to rely on the Division 8 Project Labour Agreement to provide the labour stability and stand-ardization of working terms and condi-

The Labour Strategy That Worked

preparedness for construction, actual results were less than anticipated. Addi-tional areas of project performance that were less than expected included some absenteeism, high employee turnover, early quits and late starts. Although the latter are comparable to industry standards, they are still deemed less than acceptable. Other

performance factors were, likewise, within industry norms. Overall, project costs were, certainly, in excess of budgeted amounts.

Going ForwardMoving from 110,000 barrels-per-day to 232,000 barrels-per-day, it does not appear Canadian Natural will need to

tions for the construction workforce. Concerns related to total project cost,

price certainty and workforce perform-ance will be key focus points of future project and expansion approvals. Owners will need a high degree of assurance that these projects can be delivered within the identifi ed costs and time frames.


Horizon Construction Man-hour Percentages by Union Affi liation

2006 2007 2008 Project Total Total Construction(EXCLUDING BUSSING & CAMP OPERATIONS)

BTU 53% 37% 32% 40% 24%CLAC 32% 49% 53% 45% 61%Non-union 14% 11% 13% 13% 13%CEP 1% 3% 2% 2% 2%

n Feb. 12, 2010, nearly 11 months after the appeal was heard, the Supreme Court of Canada released its decision in Tercon

Contractors v. The Queen in Right of the Province of British Columbia.

In a 5-4 split decision, the Supreme Court awarded damages to Tercon, the lowest compliant bidder, and ruled that the Province of B.C. had wrongfully granted a highway contract to an ineligible bid-der. However, on slightly different facts, or assuming a different exclusion clause, things could have gone the other way for Tercon, casting a further shadow upon the already cloudy arena of tender law.

O

The search for the perfect exclusion clause


BY RYAN KARY AND CORBIN DEVLIN

Alberta’s apprenticeship and industry training system produces high quality, certified tradespeople.

The key to this success is the commitment of Alberta employers, just like you.

When you hire and train apprentices, you are developing the skilled workforce your business and your community need.

Invest in your people, your business, your future.

Today’s Journeypeopleskilled and respected

Visit www.tradesecrets.gov.ab.ca or call 310-0000 and ask for the Apprenticeship & Industry Training office nearest you.

000.ABAdv_1-4S_nBL.indd 1 3/26/10 3:00:05 PM

The Tercon tender process was one in which only six pre-approved bidders were able to bid on the contract, and one of the bidders teamed up with an outside (non-approved) contractor to form a joint venture. When the province accepted the proposal from the joint venture Tercon sued, claiming it was the lowest compliant bidder and entitled to its lost profi ts.

The province relied upon an exclusion clause which stated that, “No Proponent shall have any claim for any compensation of any kind whatsoever, as a result of participating in this RFP [request for proposal].” At trial, the court refused to enforce the exclusion clause, and awarded damages to Tercon. On appeal, the B.C. Court of Appeal reversed the trial decision, ruling that the exclusion clause prevented Tercon from obtaining damages against the province.

The Supreme Court abandoned previously established case law based on “fundamental breach” of contract, and all nine judges agreed on a three-part test to determine if the province’s exclusion clause would be enforced:1. Does the exclusion clause apply to the circumstances established in evidence?2. If “yes” to question one, was the exclusion clause unconscionable at the time the contract was made?3. If “yes” to question one and “no” to question two, should the court nevertheless refuse to enforce the valid exclusion clause because of the existence of overriding public policy?

The majority (five judges) of the Supreme Court determined that the exclusion clause did not apply to the tender. The court ruled that since the province accepted a bid from a party (the joint venture) that was not one of the six approved contractors, Tercon did not suffer damages “as a result of participating in this RFP,” because this RFP involved a bidder who was not contemplated in the initial tender process.

The minority (four judges) felt that the majority analysis required a strained interpretation of the exclusion clause, and concluded that the clause clearly applied to the facts. More importantly, the minority stated the exclusion clause was not unconscionable, and public policy would not bar its enforcement.

Beyond the establishment of a new test for exclusion clause enforcement, the signifi cance of the Tercon decision lies in the “what now” factor, as the door has been opened for owners to draft exclu-sion clauses which will give them greater fl exibility (accepting non-compliant bids, for example) and legal protection from contractors claiming unfair treatment in the tender process. The law of tender has IL

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evolved, in part, to limit construction owners’ ability to accept non-compliant bids, or engage in bid-shopping, or evaluate bids based on undisclosed criteria. The Tercon decision suggests that owners have a legitimate means to regain at least some of these advantages by draft-ing more aggressive (and specifi c) exclusion clauses.

If owners are able to formulate legally sound “Tercon clauses,” the nature of tendering could be in for a signifi cant change in the coming years.

Ryan Kary is an associate and Corbin Devlin is a partner at McLennan Ross Construction LLP.

32 OPENMIND SPRING 201032 OPENMIND SPRING 2010

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MoreThan

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f asked, most Canadians would likely say that Canada’s unionization rules are more benign and neutral compared to European countries, with longer histories of democratic

socialist governments. However, the sad reality is that Canada is an isolated island in the industrialized world when it comes to the archaic and antiquated rules by which Canadian work-ers are forced to pay union dues.

DueBY BILL STEWART

An antiquated Canadian system allows union leaders to spend dues to support partisan causes,

even when members don’t agree with the politics


At the same time, there are virtually no restrictions on how Canadian union lead-ers use these dues, particularly for political purposes. Consequently, Canadian unions receive more than their due in terms of the funds they collect from employees. Broad sweeping reforms are needed to democra-tize how these funds are spent.

Canada’s trade union movement has historically aligned itself with left-wing political parties such as the Cooperative Commonwealth Federation (CCF) and its successor, the New Democratic Party (NDP). However, Canadian aff iliates of U.S.-based unions recently starting using compu lsor y dues to fi nance costly U.S.-style political attack cam-paigns – without the same kinds of check and balance rules that exist in the United States.

During the Ontario provincial election in 2003, five construction union affili-ates of the Building and Construction Trades Council of Ontario joined three other un ions to for m the Work ing Families Coalition. This group ran a $5-million negative attack advertising campaignt that helped bring down the ruling Progressive Conservative govern-ment in 2003. Shortly thereafter, construc-tion industry employees lost their right to a secret ballot in unionization elections.

In 2007, a f f i l iates of the A lberta Building Trades Council helped organize, and were the major source of funds for, the Albertans for Change coalition.

The coalition spent more than $2 million on ostensibly “non-par-tisan” advertising, slamming the premier and the Progressive Conservative govern-ment just before, and during, the 2008 Alberta provincial election. This was more than the three opposition parties spent on advertising, and even included spots that ran during the Super Bowl.

How We Got HereThe current union dues collection frame-work dates back to a 1946 arbitration decision by Justice Ivan Rand. In what is

known as the “Rand formula,” he ruled that the best way to settle a long strike was to have employees pay union dues, regard-less of whether they were union members or not.

This compromise formula assumed that all employees, regardless of their union membership status or political per-suasion, benefited from having a union negotiate and administer collective bar-gaining agreements on their behalf. Designed to prevent “free-riders,” from receiving the benefits of collective bar-gaining without having to pay anything, a compulsory dues check-off mechanism ensured all bargaining unit employees paid the same for these services.

Ma ny prov incia l gover n-ments incorporated these princi-

ples into their labour laws through what are termed “union security provisions.” Unfortunately, in so doing, they set few boundaries beyond internal union self-regulation as to how dues were spent. This provides Canadian union leaders with vast resources to pursue political agendas, regardless of member views.

Concern over this was brought to the Supreme Court of Canada in 1991. Merv Lavigne was a teacher in Ontario’s college system whose union dues were directed

to campaigns and organi-zations he disagreed with. Don a t ion s were m a d e to d i s a r m a me nt c a m -pa ig ns a nd ca mpa ig ns that opposed municipal funding to build Toronto’s Sk yDome st a d iu m , to

provide strike support for the National Union of Mineworkers in the United Kingdom and to a health-care workers’ union in Nicaragua. Donations were also made to the NDP. He argued this violated his “freedom of association” rights under Canada’s Charter of Rights and Freedoms because he was being forced to conform to the underlying ideology behind the causes he was ultimately contributing to.

Even though the Supreme Court nar-rowly ruled against Lavigne, key principles contained in strongly worded dissenting opinions were critical to the landmark R. v. Advance Cutting and Coring case in 2001. In this case, the Supreme Court ruled for the first time that “freedom of

More Than Their Due

There are virtually no restrictions on how Canadian union leaders use these dues, particularly for political purposes.


association” also includes, within limits, being free from compelled association.

The court narrowly upheld the Quebec government’s mandatory unionization rules because they were part of an overall scheme put in place to deal with the cor-ruption and destructive union violence that ran rampant across the construction industry during the ’70s.

Notwithstanding this, a number of jus-tices took the position that Quebec’s man-datory union membership requirement meant that all individuals were forced to share similar values with all other union members. This is an important consideration because many workplaces outside Quebec’s construction industry operate as closed shops where union mem-bership is a mandatory employ-ment condition.

The Road ForwardCurrent Canadian labour laws are among the most archaic in the industrialized world. While other countries are reform-ing their legislation and rules, Canadian laws and jurisprudence stand out in terms of how they force members and non-members to pay union dues that are often used for political purposes. Consider how the Alberta Labour Relations Board (ALRB) dealt with the following issue in a November 2009 decision.

O ve r m a ny ye a r s , a u n ion i z e d employer had negotiated numerous col-lective agreements that included an open shop arrangement, allowing employees to elect whether they would join and pay

dues to the union. Employees choosing not to join the union were not required to pay dues.

While this type of arrangement is unu-sual in Canadian unionized settings, Alberta’s Labour Code allows union secu-rity clauses to be settled at the bargaining table. When the employer refused to agree to include a requirement for all employ-ees to pay dues, the ALRB ruled that the employer was bargaining in bad faith and that Alberta’s labour code was unconsti-tutional because it did not “mandate a minimum union security provision” to

help fi nance the union. Given biased and expansive interpre-

tations such as this, the time is ripe for elected legislators to bring Canadian labour laws in line with the rest of the industrialized world and establish a framework that respects the democratic rights of individual working people, as opposed to the institutional interests of labour leaders.

R e s e a rc h su r vey s i nd ic a t e t h a t Canadians clearly support reforming how dues are collected and used by unions. A Nanos Research poll for the National Postand Global National on workplace issues, released in August 2008, found that only 16 per cent of working Canadians felt

union dues should be used to make politi-cal contributions to political parties. Similarly, only 17 per cent of respondents felt union dues should be spent on parti-san political advertising campaigns.

Only two provincial governments have ever attempted to set boundaries around how unions use dues. In 1961, the British Columbia government amended its labour relations legislation to prohibit trade unions from “contributing to or expend-ing on behalf of any candidate for politi-cal office, any moneys deducted from an employee’s wages or paid as a condition of

membership in the trade union.” In 1996, Manitoba enacted legis-lation further requiring unions to “consult each employee who is in a bargaining unit about whether they wish[ed] their union dues to be used for politi-cal purposes.” The legislation

further allowed employees objecting to such uses to have an equivalent amount redirected to a charity of their choice. These provisions were later repealed.

Other industrialized countries that Canada competes with globally have put in place formal mechanisms to democra-tize the collection of dues and the distri-bution of monies for political purposes. Since 1992, unions in the United Kingdom have been required to pass a “political reso-lution” that must be periodically voted on to establish a segregated “political fund” for which union members may voluntarily contribute to. Unionized employees in the 47-nation Council of Europe, have a choice regarding union membership.

The time is ripe for elected legislators to bring Canadian

labour laws in line with the rest of the industrialized world.


And, following a 2007 land-mark European Court of Human

Rights ruling, it is now illegal for unions to use unionized non-mem-bers’ dues for political activities.

In 1988, the U.S. Supreme Court ruled that unions may use dues for political purposes but that non-mem-bers would not be required to support these activities. Since then, a variety of rules and formulas have been developed to allow non-members to opt out of con-tributing to non-collective bargaining activities but pay a “fair share” of costs associated with core workplace-related union activities.

I n t he U. S . , Wa sh i ng ton St ate , Michigan, Ohio, Wyoming and Utah have all adopted paycheque protection provi-sions within election financing legisla-tion that prohibit unions from using dues for political purposes without specific authorization in writing from employ-ees. As such, unions are subjected to the same rigorous accounting, reporting, fi l-ing, compliance and enforcement meas-ures that all other organizations making political contributions are subjected to.

Approaches along these lines would likely fi nd wide acceptance in Canada. A 2008 Nanos Research survey found that most Canadian workers opposed manda-tory union membership. Most respond-ents also felt that it would be fairer to

pay lower dues to cover the costs of collective bargaining and agreement administration, but not be forced to pay for union activities relating to non-collective bargaining activities, such as supporting or opposing political par-ties and social causes. The challenge, therefore, is to create a transparent and accountable structure that equally bal-ances the rights of employees who sup-port their union being politically active, and want to contribute to furthering its political objectives, with the rights of employees who believe that any monies they are legally required to pay to a union should be limited strictly to negotiating and administering collective agreements.

To create this balance, Canadian unions should be expressly prohibited from spending dues that are legislatively mandated for purposes beyond what is needed to maintain a collective bargain-ing relationship with the employer. Funds collected for these purposes should be accounted for separately and segregated from monies that may be collected and used for other purposes.

The rights of unions and union mem-bers to voluntarily engage in political activism or support political causes and parties should also be expressly dealt with. Most jurisdictions address this by requiring separate political action accounts from which all voluntary dona-

tions and expenditures are accounted for, reported on and then audited. There is no reason that similar structures could not be established in Canada.

While it may be arguable that at one time unions were justified in spending dues for political campaigns, the magni-tude of recent union-financed political advertising campaigns is reaching epic proportions. Is it appropriate for unions to spend more on advertising than the political parties themselves during an election campaign? Is it fair that the millions they spend to support political campaigns and left wing social causes are being financed by working Canadians who are required by law to pay dues? Moreover, Canada should re-examine a system where, regardless of whether union members agree with the political views being expressed, Canada’s archaic and paternalistic labour laws dictate that Canadian workers must yield their politi-cal voices to union leaders who claim to speak on their behalf.

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INSURANCE ASSURED: Nancy Bochard, president of Mercon Benefi t Services, says a large client like Merit helps employees get the best insurance at the lowest cost.


A streamlined delivery process puts open shop health and benefit plans ahead of the pack

By JOEl ThOMPSON PhOTOGRAPh By Buffy GOODMAN

edical and dental benefit plans for employees have become widespread in commercial and industrial construction.

Merit’s biannual wage and benefit survey has tracked the steady growth of benefit coverage in the construction industry over the past 20 years. Percentages of employers offering benefit coverage for their field staff has grown from about 25 percent in the 1980s to 94 per cent in the June 2009 survey.

The residential sector has lagged behind in providing benefit cov-erage, but the majority of construction workers in the industrial and commercial sector are covered by medical and dental insurance plans and expect that, when they go to a new employer, benefit coverage will be part of their compensation package. Employee surveys by Merit also reveal that employees value benefit coverage and large majorities would choose the benefit coverage over an offer of a cash raise equivalent to the cost of coverage.

M

Get the Benefits


HOURLY BENEFIT PLAN GROUP PREMIUM

Boilermakers $2.25Bricklayers $1.10Carpenters $1.40Electricians $1.87 Elevator constructors $1.18Glaziers $1.25Insulators $1.50Ironworkers (structural) $2.00labourers (provincial) $1.60Plumbers and pipefitters $1.86Millwrights $2.50Operating engineers $2.00Refrigeration mechanics $1.55Roofers $1.40Sheetmetal workers $1.40Teamsters $2.00Tilesetters $1.70ClAC $1.25Merit Contractors Association (Alberta) $0.87

HOURLY COSTS FOR BENEFIT PLANS IN THE ALBERTA CONSTRUCTION INDUSTRY AS OF SPRING 2010

For open shop organizations, the wide-spread expectation in the construction work force that benefit coverage will be provided has locked in an important cost and competitive advantage. While the work force now assumes coverage will be provided, and it is difficult for employers to attract quality personnel without offering benefits, the cost of coverage varies greatly between employers. There is a striking gap between most building trade union plans and those available to open shop employ-ers. This difference is outlined in the table accompanying this article.

Merit Alberta began as a vehicle to pro-vide member companies with cost effective benefit coverage. In the 25 years since, the not-for-profit model of multi-employer, portable benefit coverage has expanded continuously and now covers construction workers across the country. That increased volume, accompanied by constant upgrad-ing of administrative procedures, has resulted in open shop employers paying considerably less for equivalent benefit cov-erage than their union competitors.

Merit benefits were modeled on tra-ditional union hourbank benefit plans. Open shop benefits were introduced to replace union plans, as much of the work force of the fledgling non-union sector had once been union members. With very simi-lar plan design and levels of coverage, why has the open shop industry been able to provide benefit plan coverage at a reduced cost?

Part of the reason is volume. Nancy Bochard is president of Mercon Benefit Services, the organization which admin-isters benefit plans for open shop associa-tions across Canada. She explains that a large employee group brings advantages. “Underwriting is very competitive and when we take our 50,000 life plan to the market we get excellent rates,” she says. “Insurance companies regard us as a very important client. Having a group as large as ours also insulates the plan from sud-den premium increases due to a period of bad claims experience.”

Multi-employer hourbank-based ben-efit plans are complicated to administer. They consist of many employers with a

wide range of businesses represented. The employee group, ref lecting conditions in the construction industry, often has a dis-jointed work history with frequent layoffs and changes of employers. It is a daunting administrative task to liaise with employ-ers and communicate with employees and their dependents who are spread across the country.

Coping with this complexity requires the use of the most up-to-date software and electronic communications. This

technology entails big investments that are beyond the scope of smaller plans, but provide huge gains in productivity and efficiency. “Ninety per cent of our hours

are now remitted by our employers elec-tronically,” Bochard says. “This gives us integrity of data because it goes right from our employers into our system. It frees up our staff from doing data entry and allows them to spend more time on customer service with the employees.”

Her staff of 17 administers the benefits for the 50,000 employees who make up the work force of the various open shop associations across the country. She cites a recent expansion of its group as an illus-

tration of system capabilities. Adding a new 7,000 employee group in the past year required only one additional staff person. She says pending system upgrades and

Rapid increases in internet access and usage has provided a tremendous opportunity to increase levels of customer service and satisfaction by using the internet to deliver plan information.

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new contact management software will further enhance efficiency and allow some new services to be offered with a retiree benefit plan (to be unveiled soon) and health spending accounts under consideration.

Employee surveys have revealed rapid increases in internet access and usage. This has provided a tremendous opportunity to increase levels of customer service and satisfaction by using the internet to deliver benefit plan information. Enrollees can use the benefit plan website to access basic information, submit enquiries, download claim forms or access information on their own personal accounts. While this internet-based communication requires ongoing investment and maintenance, it offers huge scope for improving service levels without the need to increase benefit plan staff.

While cutting-edge administrative sys-tems are essential to keep premiums low, overall management is also important. A board of trustees oversees Merit benefits, which includes independent outside insur-ance and construction industry experts, as well as member contractors. This ensures strategic planning that is predicated solely on the financial health of the benefit plan and is not affected by political considera-tions or reaction to short-term market con-ditions.

Similarly, the large financial reserves that every benefit plan must maintain are professionally managed by independent financial consultants. The various build-ing trade unions offer similar benefit plans, but for a variety of reasons, these plans cannot match the low premiums of Merit benefits.

One obvious reason is size. The build-ing trade unions are organized on tradi-tional trade divisions, each with their own jurisdictions and collective agreements. With more than 20 different construc-tion unions, separate benefit plans for every union mean that the union sector is unable to take advantage of economies of scale and generate the required funds to finance the technology to maximize administrative efficiency. Some of the smaller unions, with only a few hun-dred benefit plan enrollees, are in a situa-

“INSuRANCE COMPANIES REGARD uS AS A vERy IMPOR-TANT ClIENT. hAvING A GROuP AS lARGE AS OuRS AlSO INSulATES ThE PlAN fROM SuDDEN PREMIuM INCREASES DuE TO A PERIOD Of BAD ClAIMS ExPERIENCE.”Nancy Bochard, Mercon Benefits president

Get the Benefits

tion where underwriters’ administrative charges and profits can eat up more than 20 per cent of premiums.

Perhaps the biggest barrier preventing union benefit plans from improving their cost effectiveness is that there is no incen-tive for the unions to do so. Union benefit plan premiums are 100 per cent paid by unionized employers; there is no cost-share with employees.

This, in itself, is ineff icient from a taxation standpoint (long-term disabil-ity benefits are taxable when premiums are employer paid) and it means the work force has no stake in ensuring its benefit plan is cost effective. In fact, the situation is quite the opposite. Benefit plan premi-ums are factored into the gross wage figure and higher benefit premiums inflate that number.

For union leadership, who are a l l elected, it is good politics to be able to point to a high gross wage number in their collective agreement, even though an extra dollar an hour in benefit premiums make it more difficult for its contractors to com-pete in the marketplace and provide work for the union membership.

With some union benefit plans cost-ing close to three times open shop rates, it would seem obvious that, in a very com-petitive construction market, there would be pressure to address this disparity. There has been no indication of that as the strong historic attachment to the independence of the individual trade unions negates any possibility for co-operation and amalgamation, which could increase the cost effectiveness of building trade benefit plans.

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ILLU

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Construction professionals, in their quest to build

things, sometimes fall short in building

relationships. Architects and

contractors can fi nd themselves competing for

control and the good favour of a project owner

We canWe can WorkWe can

OutOutOutOut Work ItWe canWe canWe canWe canItWe canItWe canItWe canWe canWe canItWe canItOutItOutItOutOutOutItOutItOutItOutIt Work It BY LAUREN PINCH


lthough some rivalry is expected, the industry knows that too much tension can turn what should be a collaborative relationship into

an adverse one – perhaps delaying a project or driving up its costs.

Why do contractors and architects clash in some cases, but not in others? Can conflict be avoided? Or is a little tug-of-war impor-tant to building the best project possible for the client? A few industry experts weighed in to help answer these questions.

Steve Risk, president of Paul Risk Associ-ates in Quaryville, Pa., a firm that performs both design-build and bid work, offers insights from the contractor’s perspective.

A Thomas Howorth, FAIA, a participant in the American Institute of Architects Com-mittee on Design, which advocates for high-quality design and innovation within the industry, offers the architect’s perspective.

Giles Jacknain, a Chicago-based consult-ant for Zweig White, a firm specializing in enhancing the business practices of archi-tecture, engineering and construction pro-fessionals, offers a third-party perspective.

What is at the root of the tension between contractors and architects?

“I think the root of the tension comes from deciding who is really responsible for the client’s best interest,” Jacknain says. “The

contractor and the architect have a different set of incentives. The architect is looking to create or design something that makes the client happy; the contractor is looking to keep costs down.”

The duality is actually beneficial to bal-ancing the project, he says. “Some clients, particularly developers, want that conflict. They want the architect to constantly push a design to satisfy the client’s needs. At the same time, they want the contractor to be pushing back in the other direction to bal-ance the cost needs of the project,” Jacknain adds. “The architect should have an under-standing of what the owner wants and why he wants it built, whereas the contractor

We Can Work It Out

should have an understanding of how it should be built.”

A third-generation family-owned firm, Paul Risk and Associates became a forerun-ner in the design-build process more than 40 years ago – before it was even called design-build. With 75 per cent of its business com-ing from repeat clients across the health care, religious, commercial and institutional sectors, the company has succeeded in bal-ancing dual incentives.

“I try not to call it a conflict,” Risk says. “It’s more of a problem with communica-tion. The architect looks at the project like an artist, and the contractor looks at it as a

builder and pragmatist.” In addition, owners have become intently focused on “cost, cost, cost,” he says, putting pressure on both parties.

Howorth, who works with contractors on his-

toric preservation, government and institu-tional jobs, believes the traditional bidding process is a primary contributor to mistrust. “I think the main tension that architects have in relationships with contractors ulti-mately derives from the competitive real-ity in which contractors have to operate,” Howorth says. “Contractors are at the mercy of the bid market. Anybody that can get licensed or bonded will be considered quali-fied, along with their sub-bidders. In order to compete, they are bound to take the lowest price they can get, or run the risk of not get-ting the job. You wind up with an adversarial situation right out of the gate.”

And the potential for change orders adds to the discord.

“Some contractors don’t call obvious design omissions to the attention of the architect because they can take [the omis-sion] out of their bid to create a change order later,” Howorth explains. “This cre-ates unrealistic expectations for the owner, who thinks the contractor should have done something about the missing item and brought it to the architect.” (The bid speci-fications generally require the contractor to call omissions to the attention of the archi-tect and request clarification.)

Another issue is the volatility in the con-struction materials market. “An architect may design a beautiful building on budget, and then the price of the concrete doubles,” Jacknain says. “It’s a no win situation for everybody.”

Reprinted with permission from Construction Executive November 2007

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“It’s more of a problem with com-munication. The architect looks at the project like an artist, and the contractor looks at it as a builder and pragmatist.” Paul Risk, contractor


Capital expenditure for construction in Alberta (in $ millions):

2006 2007 2008 2009 p 2010 (est.)52,986.6 59,767.6 65,155.2 47,550.4 49,514.7

Construction price index for apartment buildings in

Calgary:Edmonton:

% change Calgary:% change Edmonton:

2005 2006 2007 2008 2009115.2 131.5 156.8 173.3 157.7114.6 129.0 152.0 164.4 145.6 6.6 14.1 19.2 11.2 -9.0 6.5 12.6 17.8 10.9 -11.0

Value of building permits (monthly)in Alberta

Residential:Non-residential:

Alberta Total:

Seasonally adjusted (in $ millions ) % change February January February Jan. 2010 to Feb. 2009 to 2009 2010 2010 Feb. 2010 Feb. 2010 240 614 691 12.5 188.0 301 279 319 14.7 6.0 541 892 1010 13.2 86.7

Yearly value of all building permits in Alberta ($ millions)

2005 2006 2007 2008 200910,201.7 13,875.7 15,729.7 13,142.2 11,276.9

New housing price index($ thousands) Calgary:

Edmonton:

2005 2006 2007 2008 2009 147.8 212.2 246.6 248.2 231.6 137.7 177.5 234.4 236.8 210.3

Wholesale merchants’ sales by industry unadjusted ($ millions) across Canada

Building supplies:Metal products:

Lumber and millwork:Machinery and equipment:

2005 2006 2007 2008 200939,687.1 42,997.3 45,330.3 46,094.0 43,506.116,072.5 17,711.1 17,774.9 19,421.2 13,760.013,762.0 13,222.6 12,894.5 11,269.1 8,783.346,488.4 50,966.0 54,540.5 60,135.4 50,703.8

Number of employees covered under the Merit Hour Bank Benefi t Plan:

2004 2005 2006 2007 2008 200921,238 24,844 28,291 33,875 38,314 38,187

Total manhours worked under the Merit Hour Bank Benefi t Plan:

2004 2005 2006 2007 2008 200943,693,974 51,931,342 58,264,783 69,743,223 77,595,931 74,140,547

Source: Merit Contractors Association

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The Alberta Construct ion Safety Associat ion (ACSA)and Alberta Employment and Immigrat ion (AEI) arecommit ted to helping employers and workers reduce losses caused by workplaceinjur ies through the “Certif icate of Recognit ion” (COR) program for ACSA members and associate members in Alberta. Together the ACSA and AEI alsopromote a “Small Employer Certif icate of Recogntion” (SECOR) program forcompanies consist ing of 10 employees or less.companies consist ing of 10 employees or less. The COR and SECOR are used asa pre-qual i f icat ion requirement for contractors tender ing work for many buyers ofconstruct ion services.

What is a COR?A “Certif icate of Recognit ion” (COR) is adocument issued by a Cert i fy ing Partner andAlberta Employment and Immigrat ion (AEI) .The COR recognizes that an employer ’s heal thand safety management system has beenevaluated by a cert i f ied heal th and safety audi torevaluated by a cert i f ied heal th and safety audi torand found to meet the Partnerships standard.

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openmind 2010

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