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A FORUM ON OPEN SHOP CONSTRUCTION
MERIT CANADA AT WORK: Find out how we are advocating for best business practices
BENEFITS BOOM
Build up your perks
with the Merit Hour
Bank plan
THE $500,000 TOILET
Open tender avoids
project inflation
Volume 22 • Issue 2 • 2014
BY THE NUMBERS: Canada’s construction statistics, from coast to coast
The Fuzzy Line
When is a contractor
actually an employee
Find out if executive coaching
is right for you
OPENMIND_14_p01.indd 1 2014-04-30 10:50 AM
TOGETHER
WE
BUILD
SUCCESS.
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OPENMIND 2014 3
TOGETHER
WE
BUILD
SUCCESS.
000OM-PCL-FP.indd 1 2014-03-14 7:57 AM
Find the right corporate coach and
establish a relationship that could
change your career
By Michelle Lindstrom
Illustration by Steve Adams
25 Merit, Coast to Coast
Regional Merit organizations are making a
splash in their home provinces advocating for
an open shop approach
29 Merit Canada’s Efforts
Read about how Merit Canada is taking
care of business
By Terrance Oakey

32 Build Better
Apprenticeships
Look to successful models, rather than
legislating a poor solution
By Peter Pilarski
38 By the Numbers
Canadian construction statistics
6
5 Message From Merit
Canada’s Chair
By Domenic Mattina
6 The Benefit Boom
Merit member employees worked more
than 100 million hours in 2013. The Merit
Hour Bank is one of the reasons
By Suzanne Pescod
10 The $500,000 Toilet
If guaranteeing work to unions is
inflating the cost of public projects,
why aren’t we open tendering?
By Terrance Oakey
14 Independent Contractor
or Employee?
Clarify the fuzzy line that exists between
and employee and a contractor
By William Johnston
20 Coaches’ Corner
Find the right corporate coach and establish
a relationship that could change your career
By Michelle Lindstrom
20
Volume 22 • Issue 2 • 2014
14
Contents
10 32
OPENMIND_14_p02-05.indd 3 2014-04-30 10:52 AM
INVEST IN YOUR TEAM
CUSTOMIZE YOUR CORPORATE TRAINING PROGRAM
NAIT’s 40+ years of corporate training experience shows that we are essential to
helping business and industry become more productive, competitive and successful in
today’s global economy.
With more than 200 world-class programs, our Corporate and International office
customizes and delivers relevant training across a wide range of competencies, in
Alberta and internationally.
• Aboriginal Initiatives
• Business and Leadership
• Computer Training
• Engineering Technologies
• Environmental Management
• Information Technology
• Project Management
• Telecommunications
• Trades
Call today
780.471.6248 | nait.ca/cit
000OM-NAIT-FP.indd 1 2014-04-07 9:55 AM OPENMIND_14_p02-05.indd 4 2014-04-30 10:52 AM
Message From Merit Canada’s Chair
Publisher Ruth Kelly
Executive Editor Stephen Kushner
Associate Editor Suzanne Pescod
Director of Custom Content Mifi Purvis
Production Manager Betty Feniak Smith
Production Technicians Brent Felzien
Brandon Hoover
Circulation Manager Karen Reilly
Vice-President Sales Anita McGillis
Advertising Representatives Kathy Kelley
Alison DeGroot
Sales Assistants Julia Ehli
Michelle Benz

Art Director Charles Burke
Associate Art Directors Andrea deBoer
Colin Spence
Contributing Writers
Ben Freeland, William Johnston, Michelle Lindstrom,
Terrance Oakey, Suzanne Pescod, Peter Pilarski
Contributing Illustrators and Photographers
Steve Adams, Stockwell Collins, Nick Crane,
Kevin Ghiglione, Heff O’Reilly, Ben Rude,
Raymond Stockton
Open Mind is published two times per year by Venture
Publishing Inc. for Merit Contractors Association.
Venture Publishing Inc.
10259-105 Street,
Edmonton, Alberta T5J 1E3
Tel.: (780) 990-0839
Fax: (780) 425-4921
admin@venturepublishing.ca
www.venturepublishing.ca
Merit Contractors Association
103-13025 St. Albert Trail,
Edmonton, Alberta T5L 4H5
Tel.: (780) 455-5999 or 1-888-816-9991
Fax: (780) 455-2109
meritedm@meritalberta.com
www.meritalberta.com
Merit Contractors Association is a non-profit
organization that offers human resource services
to the open shop construction industry.
Printed in Canada by Transcontinental LGM Graphics
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. nor Merit Contractors
Association assume any responsibility or
liability for errors or omissions.
Canadian Publications Mail Product Agreement
#40020055
Copyright © 2014 by Merit Contractors Association
No part of this publication should be reproduced without
express permission of Merit Contractors Association.


Volume 22 • Issue 2 • 2014
OPENMIND 2014 5
INVEST IN YOUR TEAM
CUSTOMIZE YOUR CORPORATE TRAINING PROGRAM
NAIT’s 40+ years of corporate training experience shows that we are essential to
helping business and industry become more productive, competitive and successful in
today’s global economy.
With more than 200 world-class programs, our Corporate and International office
customizes and delivers relevant training across a wide range of competencies, in
Alberta and internationally.
• Aboriginal Initiatives
• Business and Leadership
• Computer Training
• Engineering Technologies
• Environmental Management
• Information Technology
• Project Management
• Telecommunications
• Trades
Call today
780.471.6248 | nait.ca/cit
000OM-NAIT-FP.indd 1 2014-04-07 9:55 AM
On behalf of Merit Canada,
welcome to the 22nd edition of
Open Mind magazine and the
fourth edition for Merit Canada.
Domenic Mattina
CHAIR
MERIT CANADA
Open Mind is Canada’s only magazine dedicated
to the open shop construction sector,
focusing on issues that affect the livelihood of
an industry employing more than one million
people across Canada.
Terrance Oakey has been leading Merit
Canada’s advocacy since 2011. In 2013, Merit
Canada led the charge on several initiatives
to increase the amount of competition in the construction industry, ending
“card check” at the federal level and advocating for the rights of the open
shop industry.
In the article “The $500,000 Toilet” (page 10), Oakey unpacks the issues of
open tendering, explaining how outdated practices are leading to increasing
expenses on federal and provincial projects.
For an update on Merit organizations across the country check out
“Merit, Coast to Coast” (page 25) to learn about the issues important to our
provincial associations.
What can a good business coach do for your business, and how do you
select a good business coach? In the article “Coaches’ Corner” (page 20) we
look at the ins and outs of business coaching in the construction industry
by interviewing both coaches and leaders to share their insights about their
business coaching relationships.
Apprentices are the future of the construction industry, and it is
important to increase their abilities to learn while endorsing the trades
as a viable career option to a younger generation. So how does our current
regulation shape the way apprentices are being taught on the job? With an
emphasis on the arguments for and against deregulation, check out the
story “Build Better Apprenticeships” (page 32) to learn more.
A challenge to business owners and a legal conundrum in some cases,
is defining the difference between an independent contractor and an
employee. Written from a legal perspective, the story “Independent
Contactor or Employee?” (page 14) defines the two identities and offers tips
on how to run your business smoothly and legally while employing both
employees and contractors on projects.
We hope you enjoy the 2014 edition of Open Mind, and as always we
encourage you to give us feedback or suggestions on future topics.
From all of us at Merit Canada, have a great 2014!
OPENMIND_14_p02-05.indd 5 2014-05-01 2:10 PM
6 OPENMIND 2014
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OPENMIND 2014 7
BY SUZANNE PESCOD
he year 2013 was record
breaking for the Merit Hour Bank
program. Merit Member employees
worked more than 100 million hours,
a significant indicator of Merit’s tremen-
dous growth, not only over the past year,
but since its inception.
A good benefit package is one of your
best tools to attract and retain the best
employees. As shown in many surveys, a
benefit package is an
essential component of
preferred employment.
But the construc-
ti on i ndustry has a
diversity not seen in
many other industries.
Project based, seasonally affected, and skills
driven, many components of the industry
mean you can’t package just any benefit
program into something that meets the
needs of employers and employees.
In Western Canada, open shop contrac-
tors make up nearly 80 per cent of the work
underway in the construction markets. As
you venture east across the country, the
numbers rise only marginally for the build-
ing trade unions, but economic factors
have put open shop contractors in a pre-
ferred market, as they have a much better
ability to provide their clients with the most
cost-effective product. This relationship
and the strength of a competitive market
are great for economics, but when we talk
Why the Merit benefit plan has
seen significant growth over
the past 20 years
T
BOOM
Merit Hour Bank plan participants
know that they and their families
will be taken care of.
about benefits, we need to think about the
construction employee.
It is with both the employer and the
employee in mind that Merit provides a
tailor-made benefit plan that has yet to be
topped by anything else in the open shop
construction industry.
Merit’s Hour Bank program is the
only one of its kind in the free enterprise,
non-union environment.
As employees work they build hours in
their Hour Bank account in order to qual-
ify and maintain benefits, in contrast to
stationary industry who use a monthly pre-
mium structure.
To become “in-benefit” an employee
must first accumulate 300 hours of work
for a Merit company, and then for every
150 hours worked following, the employee
receives a month of benefit coverage. If any
employee ever falls below the 150 hours,
they are given a self-pay option in order to
maintain their benefits for themselves and
their family.
The per-project need for labour in the
construction industry provides months,
sometimes years of steady work for a
BOOM
OPENMIND_14_p06-09.indd 7 2014-04-30 10:52 AM
8 OPENMIND 2014
skilled construction person, but once the
project is completed, many are laid off, or
left to find work on another project with
another company. The Merit Benefit Plan
is portable, and an employee does not lose
their benefits, or standing in benefit, if they
find work with another Merit company. The
ability for employees to transfer their ben-
efits to another company is an incredibly
important factor in the success of the Hour
Bank plan.
If an employee is unable to find work
immediately following a downsizing or
layoff, the Hour Bank program provides a
self-payment option to the employee, giv-
ing him up to six months to retain benefits
while out of work.
Imagine the difference in your quality
of life if you knew that you and your fam-
ily would be OK in the face of job loss. The
peace of mind and ease of transition is one
of the reasons why employees are often
Merit’s biggest source of referrals as they
transfer from company to company.
The transfer of benefits between Merit
companies is also a huge boost to employ-
ers as Merit has seen the search term
“Merit Benefits” become one of the more
popular searches within the industry for
online job-seekers. Companies are now
using the industry recognized Merit Ben-
Benefit Boom
efit program as a means to attract new
skilled employees.
The economics of the Merit Benefit
plan and its cost effectiveness are driven by
several factors.
One is that the Merit plan avoids the
costly aspects of dealing with an insurance
broker, who then engages an insurance
company. With the Merit plan there are
no commissions being paid and low fees to
insurance companies as Merit’s size allows
it to negotiate low rates not offered by any
competitors in the market.
The result is low premiums to
contractors.
The Merit plan comes
with the added bonus of
Mercon admi ni strati on,
which keeps the bulk of the
paperwork and issues of dealing with ben-
efits, out of your office. Mercon acts as a
third party administration for members,
the only thing companies have to do is
report their hours, and then Mercon looks
after everything else. Communication
about benefits, claims issues, and all ques-
tions about benefits are handled through
the Mercon office.
Adding to the growth of the benefit plan,
Merit recognized a need from members to
develop a plan for their office employees,
so Merit constructed a salaried plan that is
being quickly taken up by member compa-
nies across the country. Although it follows
a different set of guidelines tailored to the
salaried worker, the benefit plan is competi-
tive, cost effective and, again, recognized by
the construction industry. Recently Merit adopted a new tagline,
“Your People Have People Too.” This
sentiment resonates loudly within the
industry. By providing not just medical
and dental coverage, but optional benefit
coverage, retiree plans and several free-
of-charge counselling services, employees
know that they and their families will be
taken care of.
In fewer than eight years, the Hour
Bank program has doubled reported hours
worked. With its competitive rates, out-
standing coverage, and increased adoption
across the country throughout the open
shop sector, the Merit Hour Bank plan
continues to grow in recogntion, use, and
value to all of its members.
When we talk about benefits,
we need to think about the
construction employee.
YEAR TOTAL
2013 103,774,392
2012 96,729,350
2011 87,908,004
2010 79,583,013
2009 74,140,547
2008 77,595,931
2007 69,743,223
2006 58,264,783
2005 51,931,342
2004 43,693,974
2003 40,670,945
2002 36,126,615
2001 33,033,640
2000 26,644,185
1999 22,617,321
1998 19,474,088
1997 14,990,746
1996 10,843,291
1995 8,232,430
1994 7,332,558
1993 7,244,617
1992 7,188,576
1991 6,585,812
1990 6,729,128
1989 6,341,166
1988 5,713,626
1987 5,045,662
1986 2,158,821
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10 OPENMIND 2014
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OPENMIND 2014 11
$500,000
TOILET
THE
BY TERRANCE OAKEY
Guaranteeing work to unions is inflating
the cost of public projects. So why is
this happening?
his past year, Merit Canada focused its efforts to bring a truly
open and transparent tendering system to the construction
industry at the federal level and – in Ontario and Manitoba – at
the provincial level. Merit Canada launched a new website
to bring attention to the issue (opportunitytowork.ca) and ran ads in a
number of publications, and those outreach efforts are starting to pay off.
At the federal level, the House of Commons Transport Committee
launched an important study called How Competition Can Make
Infrastructure Dollars Go Further and held hearings from April to June. On
behalf of members across the country, Merit Canada appeared before
the Committee and brought other stakeholders together to advance
this important issue. The move was timely, coming during continued
fiscal challenges at all levels of government coupled with crumbling
infrastructure in many jurisdictions.
Since then, Merit Canada’s public engagement has continued to draw
attention to outrageous examples of what happens when competitive
bidding is not allowed. Consider the lowest bid to build a simple brick
public washroom in Kitchener: $564,744. This is 40 per cent higher than
budgeted and a whopping 150 per cent more than the average cost to
build a house in Kitchener.
T
OPENMIND_14_p10-13.indd 11 2014-04-30 10:53 AM
goes down and costs go up. A study conducted by the City of
Montreal found closed tendering inflated project costs any-
where from 30 to 85 per cent.
As we argued before the Transport Committee, it is time
for Ottawa to take a leadership role and ensure projects that
use any federal funds be tendered openly. This policy should
be included in all infrastructure agreements and apply to all
Crown corporations and any other federal mechanisms used to
fund infrastructure.
However, the debate around open tendering is not only tak-
ing place at the federal level. For example, the restrictive poli-
cies of the City of Toronto have come under scrutiny in recent
months. The city continues to have laws on the books that
restrict open tendering of projects, including an official fair wage
policy that requires all bidders to meet the specified conditions
for salary and benefits. This policy restricts competition since it
blocks some companies from even bidding, while making sure
that the costs for all bidders are raised to those of union-only
shops, thus raising costs for taxpayers.
Toronto is also bound by decades-old certifications with
unions representing electricians, carpenters, plumbers, brick-
layers, painters, glaziers, sheet metal workers, asbestos workers
and ironworkers in the industrial, commercial and institutional
sector. In addition, the Toronto Transit Commission (TTC)
engages in a voluntary closed tendering process, requiring bid-
ders to have membership in the building trades council.
All this incurs a major cost to the taxpaying public. During
the 2010 municipal election, Rob Ford said
the city would save $80 million a year – $320
million in his first term as mayor – by scrap-
ping the city’s fair wage policy. According to
a Cardus study, construction projects in the
city worth approximately $591,000,000 were
subject to restrictions due to construction
labour monopolies and Toronto Councillor
Karen Stintz has put the price of restrictive
union rules at $100 million a year.
Another key development in this fight
around open tendering is taking place in
Ontario where the provincial Conservatives
have proposed a policy that would fix the
situation in Toronto. The Conservatives
have recognized the harm that union-only
tendering has brought to that province and
have committed to “abolish the practice of
closed tendering across Ontario’s munici-
pal and broader public sector.” The party is
currently the official Opposition in Ontario
with an election expected in the spring of
2014. If the Conservatives are elected, this
could lead to Ontario being the first prov-
ince in Canada to legislate open tendering
provisions in public sector infrastructure
contracting.
Open tendering is about fairness
for taxpayers. Governments have an
There are other examples from the hall of shame in the area.
Consider that the City of Waterloo was forced to appeal to
the Ontario Labour Board in its effort to open a public tender for
a $140 million sewage treatment plant to 27 contractors, rather
than just two.
There are many more examples like these across Canada, where
too many jurisdictions continue to practice closed tendering, in
which specific unionized contractors affiliated with the building
trades unions are given privileged access to public sector contracts.
This arcane and indefensible practice means that right off the top,
seven out of 10 construction workers in Canada are excluded from
employment on these projects because they do not belong to a union.
To make things even less competitive, specific unions have privi-
leged access to these contracts over other unions, thereby further
limiting competition.
It does not take a degree in economics to know what happens
when 70 per cent of any industry is barred from competing. Quality
Rob Ford said the city would save
$80 million a year – $320 million
in his first term as mayor – by
scrapping the fair wage policy.
The $500,000 Toilet
Training our People.
We are wired like that.


We are honored to be recognized as the
winners for the "2014 Contractor of the Year”
Trade under 15 M. We wish to thank our People
who through their expertise have earned this
recognition. People are our greatest asset and
success is only possible with you. We also wish
to thank our valued clients and contractors who
have given us the opportunity to provide
electrical services. Thank you for your trust and
confidence in our dynamic team!
13415 - 149 Street, Edmonton, AB, T5L 2T3
Phone: 780-444-6510 • Fax: 780-483-4073
WWW.ALTAPRO.CA
D E S I G N - B U I L D
E L E C T R I C A L S E R V I C E S
OPENMIND_14_p10-13.indd 12 2014-05-01 2:08 PM
obligation to use their money efficiently. Real competi-
tion ensures that infrastructure dollars go further. More-
over, companies that pay federal taxes should not be
precluded from bidding on public contracts – paid for with
their tax dollars – simply because they do not belong to the
right union.
The open tendering fight is also taking place in Manitoba,
though in this case it is more focused on the rights of work-
ers. Merit Canada has partnered with its provincial affiliate to
launch a court action against Manitoba Hydro over the so-called
“Manitoba Hydro scheme.” The scheme requires all contractors
who obtain work on certain large-scale Manitoba Hydro projects
to agree as a condition of obtaining the work that their employees
working on the project will become union members, pay union
dues and be covered by a collective agreement. A similar scheme
has been put in place for work on the Manitoba floodway.
Merit Manitoba’s challenge of both schemes is based on two
principle arguments from the Canadian Charter of Rights and
Freedoms. The first is that the requirement to join a designated
trade union in order to work on the project and/or remit dues to
that union, whether or not the employee wishes to be a member
of that union or any other, violates the affected employees’ free-
dom of association, which is protected by s. 2(d) of the Charter.
The second argument is that, having been compelled to join
a union and/or remit dues to the union in order to work on the
project, the employees’ freedom of expression, which is protected
by s. 2(b) of the Charter, is violated by the union’s public expres-
sions of support for political parties or policies that the employ-
ees do not support.
These breaches of employees’ freedom of association and
expression are not justified in a free and democratic society as
required by s. 1 of the Charter. This Charter violation is nowhere
more apparent than where unions are participating in the polit-
ical process, and are using union dues for political or other
purposes outside of representation of workers in collective bar-
gaining or contract administration.
These battles continue in 2014 and Merit Canada will happily
take them on because the issues at hand deal with fundamental
rights for workers and fairness for taxpayers. It is time for gov-
ernments to abolish these policies. If not, they will be forced to
publicly defend them to taxpayers.
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OPENMIND_14_p10-13.indd 13 2014-05-01 2:08 PM
14 OPENMIND 2014
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OPENMIND 2014 15
EMPLOYEE
INDEPENDENT
CONTRACTOR
OR
BY WILLIAM JOHNSTON (LAWYER WITH THE FIRM MCLENNAN ROSS)
There are plenty of people
working hard on your site. You
should know where the potential
pitfalls lie that may blur the line
between employee and contractor
T
he use of independent contractors (or “direct service
providers”) in business is a means for companies to reduce costs.
However, improperly classifying a worker as an independent
contractor can have serious implications. Regardless of the parties’
written agreement or any clear understanding of the intention that
a worker is an independent contractor, courts, Labour Tribunals and
the Canada Revenue Agency cannot be bound. The government will
assess the putative employer to determine his liability for unpaid
taxes, workers’ compensation premiums or other levies owing in
an employment relationship. The employer may amass penalties if
the essence of the relationship is actually one of employment. The
independent contractor can also potentially be awarded damages
under employment standards legislation or human rights legislation
if the relationship is truly an employment relationship.
OPENMIND_14_p14-19.indd 15 2014-04-30 10:54 AM
some more inclusive than others, but most
tend to follow the common law test of
“employment,” where five considerations
are of primary importance: control, own-
ership of tools, chance of profit/risk of
loss, integration of
services into payor’s
operations, and fre-
quency of payment
under cont r act .
Other factors will
also receive consid-
eration, particularly
the type of services
under contract, and
the overall circum-
stances. There is no
exhaustive list of
relevant indicators, and we consider each
case in context.
Control is perhaps the most impor-
tant consideration of all. The ability to
delegate tasks on an ongoing basis and
to circumscribe the manner and hours
in which the work is to be completed
are typically essential in an employment
relationship. In making these demands,
the payor will typically also impact the
person’s ability to make a profit, since he
isn’t free to innovate, or increase produc-
tivity. For the payor to achieve control,
the contractor requires direct and ongo-
ing supervision, which is not usually
indicative of an independent enterprise
and therefore points to an employment
relationship. In the lists of factors set out
above, it is easy to perceive control as a
common element throughout.
In addition to the above factors, it is
also noteworthy to consider the financial
dependence of the independent contrac-
tor, particularly in lawsuits against the
payor company for wrongful dismissal
and for matters relating to unpaid tax
remittances and unemployment bene-
fits. Courts are sympathetic to independ-
ent contractors terminated after a long
history of service and whose livelihood
has become dependent on the parties’
business relationship. These people typi-
cally provide the overwhelming majority
of their services to the other party. The
loss of the contract without warning has
profound implications to the contractor’s
economic well-being. If successful in their
action, courts will assess damages for the
period of reasonable notice which should
have been given in a similar fashion to
regular cases of wrongful dismissal of
an employee.
IMPLICATIONS OF A “DEEMED
EMPLOYER” DESIGNATION
Independent contractors in a deemed
employment relationship can sue for
damages when the contract is terminated
without reasonable notice. You might
think that a termination provision in the
contract saves the day but termination
provisions that are less than required by
the relevant employment standards legis-
lation will be void. The payor can also be
liable for unpaid overtime, vacation pay,
holiday pay and other benefits provided
under employment standards legislation.
Claims may proceed either in court or in
an employment standards tribunal. If suc-
cessful, damages for the employer who is
improperly holding wages and benefits,
as well as damages for failing to provide
Independent Contractor or Employee
Determining if a worker is an
employee or an independent
contractor is not about
whether he is performing
services as his own business.
Companies must be aware that in pur-
suing this type of business relationship
with a contractor they may not achieve
the arms-length relationship intended
and could be liable just as though the
independent contractor were actually
an employee.
What are the factors that inform
whether an ostensible arms-length
independent contractor is actually an
employee, despite to the intentions of the
parties? The answer should drive home the
implications of improperly designating a
worker as an independent contractor.
FACTORS INFORMING THE NATURE OF
THE PARTIES’ RELATIONSHIP
The tests labour tribunals rely on, in tax
court and in regular court, are all very
similar although there may be a different
emphasis on the various factors, depend-
ing on which type of issue is under review.
The intention of the parties is impor-
tant but is absolutely not determinative.
Beyond the intention of the parties, adju-
dicators look at other factors to discern
the essence of the relationship. Context is
extremely important as different types of
independent contractors will necessarily
present features of an employment rela-
tionship due to the nature of the work. No
one factor is decisive, and each factor may
have a different importance in the assess-
ment depending on the type of services
under contract and the forum in which
the question is being decided.
There are different definitions of
“employee” in various pieces of legislation,
OPENMIND_14_p14-19.indd 16 2014-04-30 10:54 AM
reasonable notice prior to termination,
will be awarded to the independent con-
tractor. Though uncommon, if the man-
ner in which the contract was terminated
was egregiously wrong or careless, and the
independent contractor suffers emotional
harm, the court may also award damages
over and above the typical damages for
wrongful termination.
The payor may be liable to the inde-
pendent contractor under human
rights legislation with the potential
for damages. An independent contrac-
tor whom the court or tribunal deems
an empl oyee mi ght cl ai m that the
payor discriminated against them on
the basis of a protected ground, such
as denying maternity and parental
leave, discriminating on the basis of
family status, or failing to accommodate
disabilities.
Another unexpected consequence
for employers is that labour boards may
be prepared to accept applications for
union certifications that include signa-
tures of dependent
contractors and may
certify bargaining
units that include
these people.
A ruling in any
court or tribunal
that decides this type
of issue is not bind-
ing on any other.
These decisions are
made by reference
to the purpose of the legislation or right
that will be affected. Therefore, even if a
court or tribunal decides that a depend-
ent contractor is not an employee for one
purpose the possibility remains that the
same person will be an employee for a
different purpose.
INDEPENDENT CONTRACTOR FROM THE
CRA PERSPECTIVE
The distinction between classifying a per-
son as an employee rather than an inde-
pendent contractor for income tax, the
Canada Pension Plan (CPP), Employment
Insurance (EI), and Goods and Services Tax
(GST) purposes is crucial for determining:
• Income tax withholding obligations of
the payor. Employers are responsible for
General Contracting
Project Management
Butler Building Systems
Design/Build Contracting
Elan Construction Limited
#100, 3639 - 27th Street N.E.
Calgary, AB T1Y 5E4
Tel: (403) 291-1165
Fax: (403) 291-5396
www.elanconstruction.com
elan
Even if the parties believe
they have not created an
employment relationship,
the courts may still find
that one exists.
making proper income tax withholdings
from payments of employment income
to employees; no such requirement exists
for payments to contractors.
• Contri buti ons and premi ums
required in respect of CPP and EI.
Employers are required to make appro-
priate EI and CPP contributions and
wi thhol di ngs from an empl oyee’ s
income, again, something not required
with regard to payments to contractors.
• Deductions for the recipient in com-
puting taxable income for a taxation
year. Contractor businesses (with the
exception of personal service businesses
addressed below) may deduct numerous
expenses used for the purpose of earn-
ing income, while employees have only
restricted deductions available to them.
• Whether services provided by the
recipient are subject to GST. A contrac-
tor’s services will likely be considered a
taxable supply subject to GST, while an
employee is obviously not required to
charge and collect GST.
The test to determine whether a
worker is an employee or an independent
contractor is whether or not the person is
performing the services as his own busi-
ness, on his own account. We base this
question on a two-step process of inquiry:
first, by looking at the subjective intent
of the parties; second, by looking at the
reality of how the work is being accom-
plished to see whether the objective real-
ity matches the parties’ subjective intent.
The objective reality considers all rele-
vant circumstances focusing on the same
factors as above. Even if the parties believe
they have not created an employment
relationship, if the circumstances do not
support that conclusion, the CRA and the
courts may still find that an employment
OPENMIND_14_p14-19.indd 17 2014-04-30 10:54 AM
18 OPENMIND 2014
relationship in fact exists. The unfortu-
nate outcome for the payor/employer is
that they can be liable to pay unpaid remit-
tances for income tax, CPP and EI.
TRAP FOR THE UNWARY: PERSONAL
SERVICE BUSINESSES
Given the added responsibilities, both
under employment law and tax law, a
payor wishing to avoid being an employer
may choose to hire workers as independent
contractors as opposed to employees. One
of the ways employers will help push work-
ers into the contractor classification is by
only paying corporations.
Paying only corporations reduces the
risk (from the payor’s perspective) that
the CRA will consider the payor to be an
employer. Workers often believe being
paid through a corporation they own and
control is a good idea, as there are numer-
ous deductions and tax planning options
available to a Canadian small business
corporation engaged in an active business.
However, both parties should be cautious.
Under subsection 125(7) of the ITA, in cir-
cumstances where a worker would reason-
ably be regarded as an employee, but for
the existence of their corporation, the CRA
could conclude the worker’s corporation is
a personal service business.
Importantly, as the personal service
business classification is an anti-avoidance
provision, the Tax Court has indicated that
the intention of the parties is not relevant
to determining whether the corporation
is a personal service business, even though
intention is relevant in determining
whether a worker is an employee in other
parts of the ITA, the CPPA, the
EIA, and the ETA.
Personal service busi-
nesses are taxed at a higher
rate and deni ed many
deductions. While these
corporations can take tax
planning steps to limit
the impact of being clas-
sified as a personal ser-
vice business, at best the
worker will end up being
taxed similarly to an
employee. If he doesn’t
take proper planning
steps, the worker and
his corporation may
end up paying significantly
more taxes than he would if
he had had simply been an
employee. As a result, it is better
for the worker to be classified as
an employee than a personal ser-
vice business. While the direct risk
of being found to be a personal
service business is largely borne by
the worker, there may be business
reasons and overall liability rea-
sons why a payor may prefer not
to place this risk on their workers.
Resist the temptation to treat
employees as contractors. You
should only do so
when it is clear
that there is a
good argument
that they are
truly independent
contractors.
Independent Contractor or Employee
The unfortunate outcome
for the payor/employer is
that they can be liable to
pay unpaid remittances for
income tax, CPP and EI.
® /

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RBC Group Advantage
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from your employee benefits?
As part of Merit Canada

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RBC Group Advantage
TM
member and have access
to all-inclusive banking packages that could save
you money. Make the switch today and receive
up to $625 in gift cards!
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® /

Trademark(s) of Royal Bank of Canada. RBC and Royal Bank are registered trademarks of Royal Bank of Canada.

All other trademarks are the property of their respective owner(s).
+
To get $625 worth of gift cards/certificates, you will need a total of 75,000 RBC Rewards points. For more details, go to www.rbcrewards.com. For complete terms and conditions of the
group banking offer, go to www.rbc.com/groupterms.
102027 (03/2014)
RBC Group Advantage
Are you getting the most
from your employee benefits?
As part of Merit Canada

, you are an
RBC Group Advantage
TM
member and have access
to all-inclusive banking packages that could save
you money. Make the switch today and receive
up to $625 in gift cards!
+
Ask us about the
RBC Group Advantage program.
Call 1-888-769-2566
or visit rbc.com/meritcanada.
TM
Switch today and earn
RBC Rewards
®
points worth
up to $625 in gift cards.
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20 OPENMIND 2014
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OPENMIND_14_p20-24.indd 20 2014-04-30 10:55 AM
OPENMIND 2014 21
A how-to approach to find the right
person and establish a relationship
that could change your career
BY MICHELLE LINDSTROM
A
n executive coach has a relationship with a company leader
much like a sports coach does with an athlete. The sports
coach pushes the athlete to improve habits, endurance,
knowledge and ability to be better at his or her sport. But
the coach can’t do the work for the athlete.
FMI Corporation, one of many business-coaching options out
there, purposely uses player-to-coach relationship principles when
working with executives in the construction industry. Jake Appelman,
a principal at FMI, says the fundamental purpose of executive
coaching is to help business leaders get better results via a customized,
coach-to-coached relationship.
OPENMIND_14_p20-24.indd 21 2014-04-30 10:55 AM
22 OPENMIND 2014
Most executive coaching relationships
start with the two parties creating a
goal-focused plan that notes specific items
the executive wants to improve upon with
the coach’s help. It’s a plan both can refer
back to along the journey, which typically
lasts six months to a year.
Appelman says for FMI, the coach’s
first conversation with
a client establishes the
“criteria for success,”
which breaks down
how many meetings
the two will have, who
will contact whom
and confidentiality
ground rules. Some company owners will
sponsor coaching sessions for one of their
executives and request to hear the details
and plan of what the pair covers each
session. The coach makes certain how
much detail the coached person is willing
to share, and with whom.
“From there, we build our coaching
plan, which is a critical document that
shows how we’re going to measure success
at the end of it all,” Appelman says.
Executive coaching is a foreign concept
to many company leaders and therefore,
few purposely seek out such assistance.
Appelman says much of the coaching
business FMI gets is from referrals, but it
stems from the consulting work FMI does
for overall organizational improvement.
Consul ti ng typi cal l y i nvol ves a
comprehensive analysis of a company,
followed by a full report with recommen-
dations of areas on which to improve.
Consultants would typically leave it to
the company to implement the items in
the report afterwards, Appelman explains.
“If we’re working with a company around
its succession plan, ownership transfer
or leader development in general, we’ll
bring in executive coaching as a way
to accelerate that process and to drive
individual change or help it change an
organization.”
No t a l l c o a c he s t a k e FMI ’ s
two-pronged approach, but Appelman
says that guiding an entire organization,
in addition to one-on-one leadership
training, tackles a challenge organizations
tend to face during phases of change and
improvement.
Coaches’ Corner
“If you just do the individual executive
work, the executive goes back in and no one
else has changed,” he says. “It’s the same
culture with people who aren’t supportive
and don’t give feedback so the coachee
[coached person] is trying out all this new,
great stuff he learned with his coach but
the environment just rejects it.”
Exective coaching is not therapy,
stresses Dr. Marvin Washington, an
associate professor for the Alberta School
of Business at the University of Alberta who
also coaches a few executives each year. The
relationship with a coach is meant to be a
safe platform to talk about the challenges
an organizational leader faces, he says. It
is also to guide the conversations, keeping
the executive focused on his or her profes-
sional goals.
This type of coaching is geared to the top
two or three levels of a company because,
the higher up in an organization you go,
the fewer people there are who have gone
where you’ve gone and who have a sense of
what you’re going through, Washington
says. “This means you have people
looking outside of the organization to
get that sort of mentoring, coaching and
development.”
Knowi ng when to seek out that
outside advice may not be as obvious as
some would think. Washington says the
right time should be at the middle-point
between a company’s roller coaster ride
of crisis and growth.
“ Whe n y ou’ r e i n
crisis, your first job
is to solve the crisis,”
Washington says of
company executives.
“If you’re in a rapid
growth phase, you’re
probably just trying to manage the
growth.” Between those two extremes,
executives would benefit from setting
aside some time to invest in themselves.
“The real value of executive coaching
is that it’s designed to work for very busy
executives,” Appelman says. “Instead of
saying, ‘We’re going to send you off for
a four-day program and pull you out of
operations and executive leadership for
four days,’ we integrate it into their daily
routine. Most of them can spare an hour
for a phone call every two or three weeks.”
With each check-in phone call, the
coach and executive refer to the initial
coaching plan and confirm things are on
track. A coach may check if an executive
had that planned tough conversation with
Executive coaching starts with two parties
creating a goal-focused plan around areas
the executive wants to improve.
OPENMIND_14_p20-24.indd 22 2014-04-30 10:55 AM
OPENMIND 2014 23
From an executive’s perspective, it’s
important that he finds the right coach
to motivate him, and sometimes the first
coach isn’t the right one. Washington
compares executive coaches to personal
trainers at a gym. “If I’m a yeller-in-your-
face, and you need somebody to hold
your hand and be a cheerleader, instead
of me trying to become that, let me go
find you a cheerleader,” he says, adding
that a good coach will have relationships
with other ones to be able to refer clients
appropriately.
He jokes that to determine if a rela-
tionship will work for him and a client,
it’s a “three-date thing.” He doesn’t count
the first meeting as one of the “dates”
because it is just for coffee and it’s free.
If there’s enough of a match after that
to go further, then they meet two more
times to discuss the goals and overall plan.
The third date is to finalize a few things
and ensure both parties feel this will be a
good use of their time. If they don’t, both
can walk away and no harm is done.
“It’ s an i nti mate rel ati onshi p, ”
Washington says. “I don’t want to waste
your time, but I also don’t want to waste
an employee to see how it went. Also, a
coach may suggest a book to read or listen
to that pertains to the executive’s current
situation, and may ask for feedback at
the next scheduled call. When company
leaders have a specific request, such as
guidance on how to better develop talent
for the organization, Appelman has asked
executives to keep a journal, noting at the
end of each day the success, failure, and
general progress of an initiative.
The regularly scheduled check-in calls
also present an opportunity for the people
being coached to provide feedback about
the relationship. If they aren’t getting
what they expected, then they need to
speak up early on and be clear about what
they really want and need. This way the
coach can adjust his or her guidance.
Appelman says a good executive coach
has no ego and remains committed to the
executive’s success. He also cites other
attributes a coach should have: great
listening skills to provide guidance, not
answers; flexibility to the day’s concerns
of an executive, which can completely
change the focus of a check-in call; and
candor because the higher up in an
organization an executive goes, the less
direct feedback he or she will receive
from colleagues.
“I would say that the executives should
be prepared for anywhere from four to five
hours of homework in between check-in
calls to really make
it work,” Appelman
says. He’ s wary
of anyone who
requests coaching
but then hesitates
with the mention
o f t h e e f f o r t
that both parties have to contribute to
this type of relationship. His company
has walked away from engagements
with potential clients who were not
committed enough.
“The coachee really has to be willing
to learn, do the work and show up –
literally – for the calls and not skip them.
He must be committed to the process,”
Appelman says. “For that reason, we
usually recommend the ideal coachee
to be someone who is already a high-
performer.”
my time because I could be doing this with
someone else.”
When a good connection is made,
Washington guides executives to structure
their thinking. They have spent years
running from crisis to rapid growth and
back again and lost the ability to think
effectively. “We know that when they do
think, good things happen,” Washington
says. “The hour of structured thinking
time [with a coach] will solve many hours
of problems.”
After working his way up through the
company his parents founded, Cory
Jodoin became a co-owner of Jen-Col
Construction Ltd. in 2000. Then last year,
he bought his parents out, becoming
the sole owner and president of the
36-year-old commercial contracting
company in Stony Plain.
The shift from managing to leading
triggered Jodin’s memories of an attempt
to self-train for an arduous backpacking
trip years ago. He trained alone but didn’t
pace himself properly or do the specific
exercises needed to be truly prepared for
the trip and paid for it physically.
“At the end of the day, it really boils
down to this,” he says, “You don’t know
everything and, to be truly successful, you
need to surround yourself with the best
people to help you achieve your objective.
It doesn’t matter how high up the ladder
you are, you do not
know everything and
everyone can learn
and grow.”
In construction,
J odoi n s ays t hat
when competitors
talk it is never to
share industry insight or to ask for advice.
It’s just simple chit chat. So if the solution
isn’t in-house, where do you go?
Jen-Col hired FMI to consult the
company t hr ough i t s l eader shi p
transition, which led to Jodoin and two
other executives signing up for about a
year’s-worth of executive coaching. He
liked that FMI’s sole focus is the construc-
tion industry, then he didn’t have to spend
time explaining what he does and why.
He wanted coaching because the
timing felt right but also he saw the folly
Knowing when to seek outside advice may
not be obvious. The right time should be at the
middle-point between crisis and growth.
OPENMIND_14_p20-24.indd 23 2014-04-30 10:55 AM
Coaches’ Corner
of taking the same approach to issues over
and over and expecting different results.
“Coaching funnels you in the right – or
different – direction to analyze something
or look at it differently,” Jodoin says.
“When you become a leader of a company,
you change from doing to leading, and
leading is basically working with your
people and coaching them to achieve the
vision and goals.”
He doesn’ t suggest t aki ng t he
coaching route if it’s just another thing
to check off your to-do list. “You’re not
going to get what you want out of it,”
he says. “But if you’re really committed
to growing, coaching is a great way of
doing it.”
The benefits come back to a sports
analogy. “The vast majority of executives
spend 90 per cent of their time performing
and 10 per cent of their time practising,”
Appelman says. “If you look at really great
performers from an athletic perspective,
they spend the vast majority of their time
preparing to perform.”
The International Coaching Federation (ICF) is currently
the leading certification body for executive coaches.
Certification levels are based on the number of hours a
person spends coaching and whether he or she has
taken an accredited coaching training program.
See coachfederation.org for more information.
Once you identify a potential coach based on the coach’s certification level
or resumé, it’s time to interview him or her with the following questions:
REFERENCES: Can I speak to a couple of people you have coached?
STYLE: What is your coaching approach? How do you get results?
BENCHMARKING: How do you measure results and mark progress?
EXPERIENCE: How many people have you coached? How long have you been
coaching? What level of executives do you coach?
SPECIALIZATION: Do you focus on any particular industry? Do you understand
my business at a day-to-day level? Have you worked in my industry before? (Note:
The U of A’s Dr. Marvin Washington coaches all industries – police, health care,
small-business entrepreneurs – and says if the relationship is good, a coach can
provide effective guidance across industries.)
WHERE CAN I GET ONE?
George Pinckney,
Director Business Development
Suite 1250
10303 Jasper Avenue
Edmonton, Alberta
Phone (780) 429-3500
OPENMIND_14_p20-24.indd 24 2014-04-30 10:55 AM
OPENMIND 2014 25
Regional Merit organizations are making a splash in their
respective home provinces as they continue to advocate
for a fair open shop approach
All over Canada, Merit Contractors Association is having an effect on the
training, compensation and continuing advocacy for the construction
industry. Their efforts are transforming our industry’s landscape.
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OPENMIND_14_p25-27.indd 25 2014-04-30 10:56 AM
Merit Manitoba
Merit Contractors Association
of Manitoba continues to
expand its footprint across the
province. The membership is
currently growing at about 10
per cent annually, and com-
prises 235 companies with
more than 5,000 employees.
In 2012, a group of construc-
tion workers, supported by
Merit Manitoba, filed a statement of claim in the Court of Queen’s
Bench challenging the Manitoba NDP government policy, and
Manitoba Hydro PMAs that put the interest of trade unions
over the charter-protected rights of workers who chose to remain
non-unionized. Essentially “Does the Canadian Charter of Rights
and Freedoms protect the rights of open shop or non-unionized
workers?”
In 2013 the case
began to slowly find
its way through the
court with briefs and
affidavits filed, and
preliminary hear-
ings set for 2014.
Merit Manitoba continues to provide a voice for open shop
construction and is very active in providing Gold Seal Credit
Courses and other education and training opportunities
to members.
New construction in all sectors has sustained a fairly high
level of activity across Manitoba, which is experiencing a lack
of skilled trades. And although Merit is well represented on
trade advisory committees, this situation is only exacerbated
by the fact that the apprenticeship system has refused to relax
apprenticeship ratios that would permit two apprentices to
each journeyperson.
Merit Ontario
Under the l eadershi p of
Premier Kathleen Wynne,
the minority Liberal gov-
ernment, propped up by the
NDPs, continues to stand in
the way of an equitable and
competitive marketplace for
construction in Ontario.
I n May, 2013, Me r i t
Ontario stood alongside
MPP Michael Harris as he tabled Bill 73, the Fair and Open
Tendering Act, which was designed to preserve and maintain
open bidding for public infrastructure projects tendered by
Ontario municipalities and school boards. In September,
despite overwhelming support from municipalities, local
contractors and taxpayers throughout the province, the
Liberals and the NDP joined forces and voted against Bill 73.
Merit Alberta
This year the Alberta associ-
ation has stayed strong with
its commitment to training
by redeveloping and intro-
ducing more updates to the
Leadership Development for
Supervisors course, focused
on harnessing an employee’s
natural leadership abilities
and providing him or her with
the skills to truly mentor and lead within an organization.
On the public policy front, Merit Alberta has continued to
work to improve construction competitiveness by participating
in an industry stakeholders consultation led by former Alberta
Labour Relations Chair, Andy Sims. That process has been com-
pleted, and the report has been submitted to the government
for review and action.
The association is now
engaged i n a l obby
effort to encourage the
government to amend
legislation in such a
way that it improves
competitiveness.
Merit Alberta has also taken a lead role on the Alberta
Coalition for Action on Labour Shortages. This group of indus-
try associations, representing 21 industries across the country,
advocates for changes to immigration laws and enhancements
to the temporary foreign worker program.
For another year in a row Merit Alberta saw growth in the
Merit member employee hours worked under the Hour Bank
program, as well as growth in the number of new firms partici-
pating in the program. The growth allowed Merit to lower rates
and increase coverage for a second year in a row, putting Merit’s
plan head-and-shoulders above the rest.
Merit Saskatchewan
Merit Contractors Association
of Sask-atchewan celebrated
its 25th Anniversary in 2013.
The association has contin-
ued to grow and now provides
services for approximately 250
members, with close to 5,000
employees.
I n 2013, Mer i t Sas k-
atchewan launched an annual
awards program to recognize the achievements of employees of
member companies.
Merit Saskatchewan continues to be very vocal as an
advocate for the open shop construction sector, lobbying
for change to various legislation and regulations pertain-
ing to labour standards, workers’ compensation, OHS,
and procurement.
Across the Nation
THE MERIT HOUR BANK BENEFIT PLAN IS A
STRONG DIFFERENTIATOR FOR OUR MEMBERS, AS THEY
CONTINUE TO GROW THEIR BUSINESS IN A HIGHLY
COMPETITIVE MARKETPLACE.
26 OPENMIND 2014
OPENMIND_14_p25-27.indd 26 2014-05-01 2:09 PM
As a result, thousands of contractors who have been unfairly
barred from working on public infrastructure – in the com-
munities where they live, work and pay taxes – continue to
have their rights ignored.
Since its official opening in April 2013, Merit Ontario
continues to call into question the integrity of the Liberal-
backed Ontario College of Trades. Most recently, MPP
Garfield Dunlop has written to the attorney general of
Ontario asking for an independent investigation of the
apprentice-to-journeyperson ratio review completed by a
Ontario College of Trades panel in 2013. The panel’s chair-
man failed to disclose a 20-year professional relationship
with the International Brotherhood of Electrical Workers
(IBEW) union. The IBEW made a recommendation to the
Ratio Review Panel that the panel accepted. The outcome
has served as a prime example of the lack of process and
accountability at the College.
With a provincial election on the horizon for the spring,
issues in construction and labour in Ontario will no doubt
remain at the forefront of political debate.
Merit New Brunswick
After mourning the tragic
passing of the highly respected
Linwood Hupman, former
executive director of Merit
New Brunswick, and facing
the huge void he left, the Board
of Directors decided to hit the
reset button. A new commit-
ment to improved communi-
cation, membership, training
and awareness of Merit NB became the new mandate.
A strategic planning process leads the way, almost
immediately after hiring a new executive director, Graeme
Scaplen. He brings extensive management, marketing, sales
and communication skills to the association. Completion
and delivery of the new strategic plan (including its goals
and actions) is at the top of his challenges. “Reaching out
to our existing members, and delivering Merit’s outstand-
ing success story and Hour Bank benefits program to all
New Brunswick open shop contractors are my top priori-
ties,” Scaplen says.
The premier of New Brunswick has officially announced
a provincial mandatory health benefits program that affects
all employers and employees. Now is the time for open shop
construction contractors to embrace and secure an afford-
able company health benefits plan for themselves and their
employees before the government mandates their program,
which will not be comparable to Merit’s in terms of coverage
and cost.
Merit Nova Scotia
Ready to celebrate its 20th
anniversary in 2014, Merit
Nova Scoti a i s proud of
its efforts in 2013, which
included successfully lob-
bying for amendments to
Nova Scotia’ s restrictive
First Contract Arbitration
law, and making workplace
safety a priority by calling for
more safety oversight and stricter rules on all worksites across
the province.
The year ahead will provide new training opportunities for
open shop employers and employees and focus on changing
union-favourable labour legislation that hurts open shop con-
tractors of all sizes on any given day.
Merit Newfoundland
and Labrador
Me mbe r s of t he Me r i t
Contractors Association of
Newfoundland and Labrador
are experiencing the benefits
of an economic boom in the
province. Construction in all
sectors is at an all-time high,
which brings with it a new set
of challenges: recruiting and
retaining qualified people to get the work done.
The cyclical trade demands of the natural resource
mega-projects have put a strain on open shop contractors that
will continue through to 2017 with the development of both
the Hebron oil project and the Muskrat Falls hydroelectric
project. The Merit Hour Bank benefit plan is a strong differen-
tiator for members, as they continue to grow their business in
a highly competitive marketplace.
Merit has been tireless in its efforts to reverse the decision
to replace secret ballot voting with automatic card-based cer-
tification when deciding the fate of an employer to be union-
ized or not. It has the ire of the entire business community.
“We are also excited to be working on the harmonization of
apprenticeship systems across Atlantic Canada, and providing
input to a new provincial immigration strategy and workforce
development strategy,” says executive director Paul Dubé.
“This will be a very busy year.”
THE YEAR AHEAD WILL PROVIDE NEW
TRAINING OPPORTUNITIES FOR OPEN SHOP
EMPLOYERS AND EMPLOYEES AND FOCUS
ON CHANGING UNION-FAVOURABLE
LABOUR LEGISLATION THAT HURTS
OPEN SHOP CONTRACTORS.
OPENMIND 2014 27
OPENMIND_14_p25-27.indd 27 2014-04-30 10:56 AM
Blue: C 100 M 84.09 Y 11.04 K 3.08
Red: C .91 M 100 Y 92.14 K 0.02
WHY IS BIG
LABOUR
AFRAID OF
THE LIGHT?
Canadians are a generous people who
support many initiatives. Because of
the role that labour organizations
play, they receive very favourable
tax benefits. Dues are 100% tax
deductible. They are exempt from
income tax. They are exempt
from capital gains tax. In return,
Canadians have a right to see the
That’s only fair. Yet, we don’t.
Unlike charities, religious organi-
zations and political parties, labour
organizations are not required to
disclose their financial information.
And Big Labour leaders are fighting
to keep it that way.
finances of organizations subsidized
by their tax dollars.
Labour organizations are also very
political. Canadians also have the
right to know how organizations
receiving public benefits are trying
to influence public policy.
Whose interests are Big Labour
leaders protecting by trying to keep
their finances secret? Canadians or
their own?
It’s time to end the special treatment
for Big Labour.
opportunitytowork.ca
merit_ad.indd 1 2013-10-21 1:34 PM
000OM-Merit-FP.indd 1 2014-04-09 8:38 AM OPENMIND_14_p28-31.indd 28 2014-04-30 10:57 AM
Merit
OPENMIND 2014 29
Canada
WORKS FOR
erit Canada continues to move issues forward that are of concern to the
open shop construction sector and, beyond that, people who share our
free-enterprise philosophy. As the federal government considers what’s
important for the next two years of its mandate, Merit Canada is focus-
ing on three priorities, which the organization developed in response to a considera-
tion of many examples of flagrant waste. (See “We Couldn’t Make This Stuff Up” on the
following page.)
The examples we listed in the sidebar are just a handful from a longer list of
questionable union activity and bizarre outcomes from union-friendly public
policies. The long list could ultimately stretch on for several pages. All of these
examples are linked by a simple underlying fact: existing laws governing labour
organizations have created an environment ripe for abuse, with no accountability to
union members, taxpayers or the general public.
It is time to tilt the balance back in favour of transparency, accountability and respect
for taxpayers, and there are at least three immediate measures the federal government
can implement to make that happen.
M
Blue: C 100 M 84.09 Y 11.04 K 3.08
Red: C .91 M 100 Y 92.14 K 0.02
WHY IS BIG
LABOUR
AFRAID OF
THE LIGHT?
Canadians are a generous people who
support many initiatives. Because of
the role that labour organizations
play, they receive very favourable
tax benefits. Dues are 100% tax
deductible. They are exempt from
income tax. They are exempt
from capital gains tax. In return,
Canadians have a right to see the
That’s only fair. Yet, we don’t.
Unlike charities, religious organi-
zations and political parties, labour
organizations are not required to
disclose their financial information.
And Big Labour leaders are fighting
to keep it that way.
finances of organizations subsidized
by their tax dollars.
Labour organizations are also very
political. Canadians also have the
right to know how organizations
receiving public benefits are trying
to influence public policy.
Whose interests are Big Labour
leaders protecting by trying to keep
their finances secret? Canadians or
their own?
It’s time to end the special treatment
for Big Labour.
opportunitytowork.ca
merit_ad.indd 1 2013-10-21 1:34 PM
000OM-Merit-FP.indd 1 2014-04-09 8:38 AM
BY TERRANCE OAKEY
Three federal-level measures will tilt the
balance back in favour of transparency,
accountability and respect for taxpayers
OPENMIND_14_p28-31.indd 29 2014-04-30 10:57 AM
30 OPENMIND 2014
First, Parliament needs to pass Bill
C-377, which will establish new report-
ing requirements for unions, including
annual financial statements, the amount
of time spent on political activities and
financial support for
social causes, such as
legal defence funds
for NDP MPs. Cases
of inappropriate or
questionable finan-
cial activity by union
bosses will persist as
along as unions collect over $4 billion
annually in forced contributions, and as
long as they have no obligation to report
how that money is spent to their mem-
bers or the public – even though they
receive $400 million in tax breaks annu-
ally. How can there ever be accountability
without transparency?
It is stories like those coming out of Que-
bec’s Charbonneau Commission about
inappropriate expenses and links between
organized crime and union bosses that
led countries like the U.S., Britain, France
and Australia to implement union trans-
parency legislation. Canada’s peers have
had legislation in place for years – decades
even in some cases. Continued opposition
to Bill C-377 after these latest revelations
is confounding and troubling and ulti-
mately raises more questions about what
may really be going on behind the scenes.
The current system is ripe
for abuse – both from union
organizers and employers.
Merit Works For Canada
WE COULDN’T MAKE
THIS STUFF UP
Merit Canada chose to adopt its
three federal-level policies in a
consideration of the following and
other similar events taking place
in Canada.
A former union executive told
the Charbonneau Commission that
Quebec’s largest labour union was
controlled by high-ranking mem-
bers of the Mafia and Hells Angels.
Union bosses in Quebec helped
rebuild a biker strip club that had
burned down, and included a
$1 million investment from a
union-controlled fund.
A union boss allegedly filed
more than $125,000 in fraudulent
expenses over a six-month period.
The lowest bid to build a simple
brick public washroom in Kitchener,
Ontario came in at $564,744, which
is 40 per cent more than budget-
ed and more than 150 per cent in
excess of the average cost to build
a house in the city – including the
cost of the lot.
The City of Waterloo was forced
to appeal to the Ontario Labour
Board in its effort to open a public
tender for a $140-million sewage
treatment plant to 27 contractors
rather than only two.
Rank-and-file members from at
least 17 unions contributing thou-
sands of dollars to a legal fund for
NDP MP Pat Martin to defend him-
self in a defamation suit that had
nothing to do with labour issues.
OPENMIND_14_p28-31.indd 30 2014-04-30 10:57 AM
Second, to address the issues highlighted
by the Kitchener and Waterloo examples
mentioned at the outset, it is time to end
the privileged access to public sector
contracts enjoyed by unions in many
parts of the country, known as closed
tendering. Under this system, bidding
on public sector projects is restricted to
specific unionized contractors affiliated
with the building trades unions.
This arcane and indefensible practice
means that – right off the top – seven out
of 10 construction workers in Canada
are excluded from employment on these
projects because they do not belong to a
union. To make things even less competi-
tive, specific unions also have privileged
access to these contracts over other unions,
further limiting fair competition.
It does not take a degree in economics
to know what happens when 70 per cent
of any industry is barred from compet-
ing. Quality goes down and costs go up.
The example of the half-million-dol-
lar bathroom in Kitchener is just one
of many. A study conducted by the City
of Montreal found closed tendering
inflated project costs anywhere from 30
per cent to 85 per cent.
Ottawa should take a leadership role
OPENMIND 2014 31
Finally, the third area in need of reform
surrounds union voting. It is time to bring
basic democratic practices to unions and
guarantee federal workers a secret ballot vote
when deciding to join a union. The current
system is ripe for abuse – both from union
organizers and employers. A secret ballot
is the best way to ensure that a decision to
join a union is conducted in a fair manner,
without any threat of intimidation or offer
of reward for voting one way or another.
Such a system will help ensure that
an employee’s decision to join a union is
based on sound personal reflection – not
fear of reprisal. In addition, if unions were
also forced to operate in a more trans-
parent manner, as outlined in Bill C-377,
potential members could better under-
stand the priorities of the organization
they are being asked to join.
These three policy changes extend the
principles of transparency and accountabil-
ity – which are the underpinning of all our
democratic institutions – to unions as well.
This is long overdue and those who con-
tinue to oppose timely change risk doing
irreparable harm to Canada’s labour
movement since the general public will
not tolerate more stories like the ones
listed here.
on this issue and ensure that projects
that use any federal funds be tendered
openly. This policy should be included
in all infrastructure agreements and
apply to all Crown corporations and
any other federal mechanisms used to
fund infrastructure.
Open tendering is about fairness for
taxpayers, since governments have an
obligation to use their money efficiently.
Moreover, companies that pay federal
taxes should not be precluded from bid-
ding on public contracts – paid for with
their tax dollars – simply because they do
not belong to the right union.
OPENMIND_14_p28-31.indd 31 2014-04-30 10:57 AM
32 OPENMIND 2014
OPENMIND_14_p32-37.indd 32 2014-04-30 10:58 AM
OPENMIND 2014 33
Let’s look to successful models that
encourage respect, rather than
legislating a poor solution
anada is experiencing a serious shortage
of qualified tradespeople, which will only get
worse in the next decade as we are not train-
ing enough apprentices to keep up. In fact, according
to the International Labour Organization, Canada
had only 30 apprentices per 1,000 employees in 2011,
well below Germany with 39, Australia with 40 and
Switzerland with 44. To address this problem, govern-
ments, employers, industry associations and unions
have all implemented a variety of programs, strategies
and regulations to get more apprentices into training.
They have experienced varied levels of success.
C
BY PETER PILARSKI
BUILD
BETTER
APPRENTICESHIPS
OPENMIND_14_p32-37.indd 33 2014-04-30 10:58 AM
Build Better Apprenticeships
While some government programs –
such as tax credi ts, empl oyment
insurance programs and grants, have
provided incentives for workers and
employers to utilize the apprenticeship
training system in greater numbers –
other government regulations have
created disincentives to apprentice-
ship training. Now, some governments
have been suggesting that mandating
a minimum ratio of apprentices on
government infrastructure project
sites could be a way to increase the
number of apprentices being trained.
Unfortunately, these governments have
made this suggestion with no evidence
that this approach will actually increase
apprenticeship training numbers.
But more regulation might not solve
the problem. Government regulation
of apprenticeship training could be
detrimental to the industry.
According to the 2013-14 World
Economic Forum’s global competitive-
ness rankings report, amongst the “most
problematic factors” for doing business
in Canada are “insufficient capacity to
innovate, restrictive labour regulations
and an i nade quat e l y e duc at e d
workforce.” Some of these issues were
recently studied by the C.D. Howe
Institute, too. Its study, called Access
Denied: the Effects of Apprenticeship Restric-
tions in Skilled Trades found that overall,
“strict provincial regulations on the rate
at which firms may hire apprentices,
which is relative to the number of
certified workers they employ, reduce
the number of people who work in a
trade.” The study also concluded that
“trades in provinces with the strictest
regulations on hiring have lower levels of
young workers.”
In other words, if provinces want
more workers in the trades, they should
allow firms to hire more apprentices
and should loosen restrictions on entry
into apprenticeship training and into
the trades.
The C.D. Howe study examined the
impact of journeyperson-apprentice
ratios and found that, among other
things, these ratios “reduce the incentive
34 OPENMIND 2014
OPENMIND_14_p32-37.indd 34 2014-04-30 10:58 AM
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36 OPENMIND 2014
for a firm to grow: if the firm wishes to hire
additional apprentices, it would first have
to hire more journeypersons (which may
not exist or be available), thus increasing
the effective cost of labour.” This disin-
centive to grow is problematic and can be
most harmful to smaller businesses that
do not have multiple certified journey-
persons; this problem will be exacerbated
as the number of certified journeyper-
sons retiring from the trades increases
substantially over the coming
years. With a growing need to
train more apprentices and an
aging and retiring workforce,
apprenticeship ratios could
have a crippling effect on the
industry going forward.
The study found that “in
trades in provinces where
there is a j ourneyperson-
apprenticeship ratio above one, there are
44 per cent fewer workers as a share of the
provincial workforce relative to otherwise
comparable trades for which there is no
fixed ratio.” The study further found that
ratios above one “result in 38 per cent
fewer young workers – those between the
ages of 25 to 34 – in a trade.”
One of the reasons often cited for
high journeyperson-apprenticeship
ratios is that they increase the quality of
training and thus protect consumers from
unqualified tradespersons. The study’s
analysis of the data, however, found no
evidence to support these claims. Further,
the report concluded that, “while formal
apprenticeship does impart valuable
skills, there is no evidence that barriers
to entry, such as strict journeyperson-
apprentice ratios, are necessary to increase
skills training.”
Similar to how restrictive policies such
as journeyperson-apprentice ratios distort
the number of people that participate in
apprenticeship training and the ability of
companies to grow, potential government
policy that would mandate a minimum
number of apprentices on government
infrastructure projects would create
unnecessary market distortions.
For example, regulating a minimum
number of apprentices on jobs could
A CANADIAN APPRENTICESHIP
FORUM PAPER FOUND
CONSUMERS DO NOT VALUE
THE CONTRIBUTION THAT
TRADESPEOPLE MAKE.
Build Better Apprenticeships
OPENMIND_14_p32-37.indd 36 2014-04-30 1:12 PM
OPENMIND 2014 37
mean that smaller firms may not be able
to participate on those jobs, especially if
journeyperson-apprentice ratios make
hiring more apprentices cost prohibitive.
It also means that the most qualified
and experienced firms may not be able
to participate because they don’t have
enough apprentices available, or because
their apprentices are working on a
different jobsites. Such a policy could also
create a disincentive for companies to
help their apprentices to become journey-
persons. After all, such a move would put
a company out of line with its arbitrary
contractual obligation to employ a set
number of apprentices on a job.
Another interesting finding in the
study is that the length of apprenticeship
training matters. The study found that,
relative to trades with apprenticeship
terms of less than two years, “employment
is 48 per cent higher in trades with appren-
ticeship terms of between two and three
years. Trades with apprenticeship terms
of three to four years have 34 per cent
higher employment than trades with less
than two years of apprentice training.”
The authors concluded that “lengthier
apprentice programs induce workers to
enter a program, but there are diminishing
returns for the longest programs.” This
finding is particularly useful given the fact
that it takes “roughly one-third longer to
qualify as a carpenter or welder in Canada
than it does in Germany,” which is inter-
nationally recognized as having one of the
most effective apprenticeship systems.
There is value in aligning the length and
structure of apprenticeship training in
Canada with countries that are achieving
better outcomes.
We don’t need more regulation based
on unproven claims and assumptions in
the apprenticeship system.
What we need are policies and part-
nerships that get to the root of why
apprenticeship numbers are not as high
as we would like them to be. According to
the Canadian Council of Chief Executives,
“resistance to so called ‘blue-collar’ work
remains much stronger in Canada than
in many other countries, especially in
Europe.” This finding is consistent with
a recent Canadian Apprenticeship Forum
research paper called Youth Perceptions
of Careers in the Skilled Trades. The paper
found that, “youth did not feel their
parents, guidance counsellors or friends
encouraged them to consider the skilled
trades.” It also said, “consumers and the
general public do not value the contribu-
tion that tradespeople make to society;
stereotypes exist that prevent women
from pursuing many trades careers; and
negative impressions of the skilled trades
are perpetuated in the media.” The C.D.
Howe study comes to a similar conclusion
about the reasons behind the shortfall of
skilled tradespeople in Canada.
So, rather than continuing to pursue
counterproductive, protectionist policies
such as restrictive journeyperson-appren-
tice ratios, and rather than regulating
a minimum number of apprentices on
government infrastructure projects
without the evidence to back such a
policy’s effectiveness, governments should
partner with industry. This partnership
could reveal real solutions to identified
problems – mainly, a lack of appreciation
and respect for what have become some of
the best paying, highly technical and most
exciting careers available in the country.
Build Better Apprenticeships
OPENMIND_14_p32-37.indd 37 2014-04-30 11:18 AM
38 OPENMIND 2014
Capital expenditures for construction in Canada
(in $ millions):
St. John’s
Fredericton
Halifax
Toronto
Winnipeg
Saskatoon
Calgary
Vancouver
285,045.4
Yearly Value of all building permits by Province (in $ millions)
2012 2013
147.2
108
114.4
116.7
129.3
118.8
97.1
98.2
1,184.60
1,551.10
968.5
29,547.50
2,485.70
3,114.10
14,662.90
10,759.60
149.8
108.3
117.3
119.6
135.6
120.5
102.2
97.1
942.7
1,171.70
1,004.90
28,932.90
2,608.20
3,173.90
17,262.40
9,976.10
Wholesale merchants’ sales by industry unadjusted ($ millions) across Canada
2012 2013
Building supplies 81,522.1 83,637.2
Metal products 25,660.9 25,792.2
Lumber and millwork 18,827.8 18,694.8
Machinery and equipment 37,033.4 39,150.2
Average number of employees covered under the
Merit Hour Bank Benefit Plan:
2012 2013
48,015 51,169
(SOURCE: Statistics Canada)
Construction price index for apartment buildings:
2012
2013
Halifax
138.8
140.2
Toronto
144.4
145.2
Calgary
166.4
169.2
Vancouver
144
148
Total person hours worked
under the Merit Hour
Bank Benefit Plan:
2012
2013
96,729,350
103,774,392
(
S
O
U
R
C
E
:

M
e
r
i
t

C
o
n
t
r
a
c
t
o
r
s

A
s
s
o
c
i
a
t
i
o
n
)
New housing
price index
($ thousands)
2012 2013
2012 2013
290,950.4
(preliminary)
Newfoundland and Labrador
Nova Scotia
New Brunswick
Ontario
Manitoba
Saskatchewan
Alberta
British Columbia
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NUMBERS BY THE
OPENMIND_14_p38-40.indd 38 2014-04-30 11:00 AM
Mark’s is a member of the Canadian Tire Corporation Family of Companies
Since 1993 Imagewear has been supplying
more Canadian companies with their branded apparel,
footwear and promotional items. From the front office
to the warehouse, to out in the field we find exactly
what you need to keep your company working
in comfort and safety.
To ensure your workers are comfortable and have the safest gear,
we offer a voucher program and/or employee savings card
that’s truly unique in it’s ability to give workers
the chance to try on and pick up exactly the right clothing
and footwear at any of our 380+ Mark’s stores across Canada.
To find what works best for your company,
contact one of our knowledgeable sales consultants.
TOLL FREE 1.855.592.7444
FAX 1.800.683.7790
EMAIL imagewear@erequest.ca
WEB www.imagewear.ca
TOP MARK’S
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