Think tank Cardus is warning the Ontario government about what it calls are “serious downsides” of project labour agreements (PLAs) in construction procurements.

A PLA is a contract between a construction owner or proponent and a labour organization, usually a labour union or an alliance of labour unions, which governs labour issues for a specific construction project. It can cover a wide-ranging set of issues, including wage rates, work hours, health and safety provisions, and even limit strikes or lockouts. But, Cardus says in a new report, PLAs can also be deeply unfair.

“PLAs can introduce tendering practices that restrict labour on major infrastructure projects to workers who are affiliated with one labour union or a set of labour unions, excluding construction workers who wish to affiliate with other unions or not to affiliate at all,” says Renze Nauta, the author of Watch Your Step: PLAs and the Risks to Competitive Bidding in Ontario.

The brief takes note of a study by the Institute for Construction Employment Research, which found that 96% of the Ontario PLAs it examined had some form of mandatory membership of workers in specific unions. Nauta says restrictive PLAs are fundamentally unfair.

“All Ontario workers and contractors should be able to work on and bid on Ontario- and nation-building projects, but restrictive PLAs discriminate against those who want to be members of unions a PLA excludes or don’t want to be unionized at all,” says Nauta. “To make matters worse, restrictive PLAs also cause construction costs to increase by limiting competition for construction contracts.”

Previous studies have shown that restricting competition for construction procurement can increase project costs by 14 to 21 percent.

While current Ontario PLAs are almost exclusively in the private sector, the Ottawa Hospital’s use of a competition-limiting PLA suggests public-sector use of these agreements could grow in the future. It would be alarmingly unfair if PLAs shut Ontario workers out of their own government’s $200 billion plan to expand highways, transit systems, hospitals, and other infrastructure over the next decade.

Nauta warns that public-sector PLAs could undo the progress Ontario has made in ensuring fair, open, and competitive construction procurement at the municipal level.

“Ontario’s government needs to make sure it does not allow PLAs to become a backdoor way of reversing its progress in eliminating anti-competitive construction procurement practices,” he says.