A new report prepared by think tank Cardus suggests that the Region of Waterloo has realized a number of important benefits as a result of reopening its procurement processes following the passing of Ontario’s Bill 66.

The report, Bouncing Back Through Diversity: The Effects of Bill 66 on Construction Competition in the Region of Waterloo, fills in the picture of what happened in the Region of Waterloo since July 2019, following the passage of Bill 66 in the Ontario legislature. The bill redefined municipalities in a way that allowed them to return to open and competitive bidding for public projects, opening them to all qualified firms, regardless of the affiliations of their workers.

Previous practices had disqualified 93 percent of potential contractors in the region, leaving work in the hands of a very small pool of bidders.

The report looked at data from 22 projects tendered between 2014 and 2017, during which the region was certified as a “construction employer” for the industrial, commercial and institutional sector and became a signatory to the provincial collective agreement of the Carpenters’ union. It compared those tender findings to 26 projects tendered between 2019 and 2021 when the region tendered under a fully competitive regime after the passage of Bill 66.

The key finding from the report suggests that the region saved at least 14 percent—an estimated $24 million—in municipal construction costs since it re-opened its tendering practices. At the same time, it saw an increase of 50 percent in the average number of bidders per tender—from 3.68 bids per project among the 22 projects tendered during the signatory period to 5.54 bids per project for the 26 projects tendered during the post-Bill 66 period.

Additionally, during the signatory period, the region saw eight of its 22 projects receive either only one or two compliant bidding firms, while four of its 26 projects tendered during the post-signatory period received only one or two bids. The highest number of bidders on any single project during the signatory period was eight, while in the post-signatory period, the figure increased to 22.

“The estimated $24 million in savings is equal to the combined cost of the Galt Wastewater Treatment Plant upgrades along with several other smaller jobs,” said Brian Dijkema, vice-president of external affairs at Cardus and the author of the report. “We’ve seen similar results in Hamilton and Sault Ste. Marie, which also adopted fair and open contract bidding on their infrastructure projects. Among Ontario cities, Toronto is the outlier in continuing to restrict bids to a small group of contractors, forcing residents to pay more while getting less.”

Curiously, in most tenders issued after the signatory period, firms signatory to the Carpenters’ union were absent from the bidding. Of the 26 projects in that period, 21 had zero bids from Carpenters-affiliated firms.

Waterloo Region isn’t the only municipality to report procurement benefits resulting from Bill 66. The City of Hamilton, which also moved to a competitive tendering process as a result of Bill 66, issued a report in 2019 that led to almost identical conclusions. It found price savings in the range of 9 to 32 percent, with an average savings of 21 percent. City staff also noted that “broader procurement opportunities will result in expanded access to the city’s construction procurement” among a greater diversity of bidders. Further, they noted that open tendering will enable them to better follow their own policies on equitable treatment of vendors. 

“The overarching message coming out of our report is that there is no compelling evidence to support closed tendering practices among municipal authorities,” said Cardus executive vice-president Ray Pennings.