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Canadians eye repeal of Davis Bacon-modeled construction wage inflators

The voice of Canada's open shop construction associations praised the federal government for including in its Budget Implementation Act repeal of the Depression-era Fair Wages and Hours of Labour Act.

Merit Canada President Terrance Oakey calls the action a good one for Canada's construction industry, particularly its open shop sector, noting, “[We are] pleased the Government is committed to reducing red tape, especially for small businesses. The measures will increase the ability of small and medium size open shop construction companies to efficiently perform work on federal construction projects and we call on Members of Parliament from all parties to ensure the budget act is passed without delay.

"Wages and working conditions today are a far cry from 80 years ago,” he adds, when few, if any, federal or provincial laws and regulations were in place to protect construction workers’ interests. Today, Oakey contends, "there are a host of measures to enhance and protect working conditions, employment standards, labour relations, wages and hours of labour." Regulated minimum wages generally have a negative impact on young workers with little experience, he says, as they increase the marginal labor costs and discourage employers from hiring additional workers even in times of great need.

Merit Canada was founded in 2008 as a national voice for eight provincial associations representing open shop contractors, who employ about 70 percent of the country’s construction workforce. The group points to American studies indicating that construction industry productivity is lower in jurisdictions that stipulate minimum wages for public construction projects compared to those that use strictly labor market-based approaches. “Wages and working conditions should be determined directly between employers and employees, or through a collective bargaining process within the boundaries of the law,” Oakey affirms.