Adapt or Perish
Sam Kemble, the Executive Operating Officer for the National Construction Council (NCC) recently published an article posted on LinkedIn (May 18, 2023)[1] which explained what the NCC is and why it was created. He made some very compelling arguments and importantly provided a voice in the industry for change.
The construction industry in Canada is faced with many risks that threaten to impair Canada’s growth in important parts of the economy if we do not collectively and openly discuss the real issues and look for solutions. Kemble points out that these risks include:
People: how to attract, retain, engage and train,
Technology: how to respond to emerging industries and leverage new tools to improve,
Generations and Demographics: how to source, develop and bridge the gap between experienced, retiring and emerging tradespeople,
Needs and expectations of clients: how to deliver projects that meet or exceed requirements,
Society: how to contribute to environmental sustainability and social responsibility.
Further he acknowledges that all Labour Relations Models[2] have limitations. Implicit in his argument is the fact that labour relations in Canada’s construction industry is too complex and there simply are too many diverse interest groups vying for advantage and that the pursuit of these multiple agendas ultimately hampers innovation and is a barrier to the collaborative approaches needed to address the common issues faced in the construction industry.
It is one of those well-known facts that few want to openly discuss - there are too many unions under the one trade-one union model (aka the Building Trade Union model). The need for consolidation to create greater cohesion and to develop a more productive and flexible model is obvious. Yet the individual interests of each building trade union will simply not allow for any type of effort to join forces to succeed.
For example, in terms of completing new capacity in the renewable energy space we need to see a concurrent development of new skills, that might demand dual tickets across trades and/or the emergence of a specialized technician class. Cooperative efforts under an “all-employee” union model are more likely to yield the kind of skills development needed in this space than is possible under the restrictive work rules contained in existing building trade union collective agreements and under traditional jurisdictional boundaries.
For our part we advocate changes in legislation that allow for greater competition in the industry between competing contractors with different union affiliation or are non union. Competition leads to changes in order for the best solutions to emerge. The impetus for change also comes from leaders in the industry like the NCC who have boldly challenged the status quo and are more open to critically examining how the building trade unions have done things in the past with a willingness to innovate and make a difference.
Kemble points out:
“The building trades face many challenges in the industry that prove to be barriers to increased coordination and collaboration. These include silos and decentralized and fragmented organization structures, self-interests and misalignment. These factors often hinder their ability to serve their members, contractors and clients effectively.“
Ergo there has to be an effort to change the existing model and address past practices that impair productivity. If this does not happen the results will be felt by all of us. We already see that investors are leery about Canada because of the costs of getting through the permitting and consultation stages of project development but more importantly because the cost of construction has become prohibitive. This is largely the result of escalating labour costs. To be clear these costs are not driven by wages and other direct costs but rather are the product of poor construction management and eroding productivity.
What is needed is greater flexibility that will enable contractors to improve productivity, adapt to changes in the workforce and embrace technology available that is capable of delivering different outcomes. If this does not happen there will be projects that simply will not go forward in Canada. Other undesirable outcomes include the possibility that in key industries, including and especially in the construction and maintenance sectors, will not have the people available with the requisite skills necessary to get things done on time and on budget.
In Kemble’s words: “Continuously improving industry bargaining models will lead to better outcomes for our members and industry”. We concur.
The approach being taken by NCC (also referred to as Local 1999 of the United Brotherhood of Carpenters (UBC)) is to organize all employee units. This allows a construction or maintenance project to move forward with less restrictions due to work rules or jurisdictional disputes. As part of the UBC, NCC has access to the parent union’s membership as well as a wider group from all building trades.
NCC also is offering a type of project agreement to a contractor on a given project wherein they act as a de facto labour broker and all trades are covered under a common agreement that reduces friction points and increases opportunities for trade cooperation. While their efforts are fledgling we believe the model has merit and is a significant development for the industry.
What the NCC is doing is to bring some of the underlying issues to the forefront of public debate. This inevitably presents an important challenge to others - to adapt or perish. While this may seem dramatic we believe that many industry observers truly think that in the future there will be consolidation amongst unions out of necessity. It will not only be driven by the fact that some of the building trade unions are simply too specialized to be able to maintain the scale necessary to actively provide the services their members need, it will also be influenced by the changing face of construction and client needs.
One example may help clarify things. All construction projects need scaffolding but the demand for scaffolders is not continuous. Many projects also need insulators and painters. Again, demand is not continuous. The inconsistency in demand leads to the fact that these trades are not necessarily as attractive for new comers who want greater employment stability. Under an all trades union model a trades person could be trained in multiple areas and thus have the opportunity for more continuous employment.
As we expand that kind of thinking we see that certain trades groups will be more threatened than others in terms of holding onto a monopoly over certain single trade work. For example, while carpenters have specialized skills there is a significant part of the carpenter trade that is conducive to being practiced by anyone with a minimum of training. Thus, the UBC may be more threatened by future changes. Having said that it is inspiring to see them moving forward with an alternative model.
The NCC is not necessarily the “be all and end all” solution but they are to be admired for bring forth the challenge and providing the kind of leadership we need to allow Canada to develop a more competitive approach and industrial strategy that assures all our futures.
[1] Sam Kemble’s post on LinkedIn https://www.linkedin.com/search/results/all/?fetchDeterministicClustersOnly=true&heroEntityKey=urn%3Ali%3Afsd_profile%3AACoAAAS_IpEBF8-CEWabsvO4QgTnO5U3DdzjeKM&keywords=sam%20kemble&origin=RICH_QUERY_SUGGESTION&position=0&searchId=4daecc12-a30e-4e10-b68e-b0713e6aab79&sid=8Yx
[2] Labour Models in this context mean either the Building Trade Model (one trade, one union) or the all employee bargaining units of CLAC, CMAW, CUSW and the like.