A Newfoundland and Labrador Benefits Agreement (NLBA) framework will prioritize the hiring of local residents, apprentices, indigenous workers, tradeswomen, and other underrepresented workers.  This policy ought to be applied to public infrastructure projects, resources projects and, any other projects where public funds are used directly or indirectly.

Full implementation of an NLBA framework will ensure both economic and social benefits for the residents of Newfoundland and Labrador.  This Best Value Procurement approach using an NLBA will safeguard maximum benefits from the project so that the full potential of public investments is received by the people of our province.

Currently, we have a construction unemployment level of over 70, a declining population, and an increase in out-migration.  Now is the time to change the status quo way of constructing infrastructure and developing our resources.  As the Provincial Government continues their $3 billion infrastructure strategy, now is the time to use this considerable economic power even more deliberately and strategically to make sure we not only improve the services from a new infrastructure project, but we also extract every possible economic and social benefit too.  This would be the best value procurement for the residents of Newfoundland and Labrador!

More than ever now is the time to implement a Newfoundland & Labrador Benefits Agreement policy.

NLBA Elements

The objective of a Newfoundland and Labrador Benefits Agreement (NLBA) is to support the continued development of our world-class trades workforce and drive the local economy by creating good jobs for the residents of Newfoundland and Labrador. This policy will be applied to public infrastructure projects, resource development projects, and any other projects where public funds are used directly or indirectly.

Establishing specific targets or benchmarks, and proper monitoring and accountability measures is critical to the success of an NL Benefits Agreement policy.

Below are the elements and provisions of an NLBA which will return the maximum value of the project back to our residents. Projects paid for by NL taxpayers should be built by NL taxpayers.

A key to retaining a world-class workforce in this province is the provision of opportunities for apprentices to receive work experience, work through their block training, and ultimately receive their red seal (journeyperson) certification.  Under an NLBA, Government would institute a requirement on public infrastructure for an apprentice hiring ratio of 25%, similar to previous resource development projects under project labour agreements.  In the absence of this requirement, research demonstrates that contractors WILL NOT make this a priority, and opportunities to support our apprentices will be lost.

Up to 2018, as a result of agreements in place on resource development projects, Newfoundland and Labrador was leading the county by employing approximately 14% females in the construction industry.  Our success was so admired by the rest of the country that they came to Newfoundland and Labrador to study what was allowing NL to be so effective, in fact, they have since duplicated NL’s Office to Advance Women Apprentices in numerous parts of the country. Regrettably, with the decline of resource development projects, and no requirement to hire women on provincially-funded construction projects, the percentage of women skilled trade workers have decreased to 8%.

Under an NLBA, Government would institute a requirement for the hiring of 14% women on ALL provincially funded work.

 

Using an NLBA, parties recognize that the development of construction skills for Indigenous and other under-represented groups will aid in growing the skilled workforce while providing equal representation, enhance economic participation, and provide other community benefits.  Working with the Labrador Indigenous Skilled Trades Office, the developer will maximize the opportunities available to Indigenous skilled trade workers.

On a project-by-project basis, each NLBA will be developed for the inclusion, recruitment, and training of indigenous and other under-represented skilled trade workers.

Under an NLBA, on provincially funded or assisted projects, Government’s hiring policy would provide preference to qualified NL residents by hiring as follows:

  1. Newfoundlander and Labrador residents
  2. Canadians
  3. Other

This is the same requirement on current Project Labour Agreements at the West White Rose Project and at Muskrat Falls. As well as previous PLA’s starting with Hibernia, Terra Nova FPSO, Vale’s Long Harbour Processing facility, and the Hebron project.

The objective would be to ensure qualified Newfoundlanders and Labradorians receive the first opportunity to work on publicly funded infrastructure projects.  We are seeing increasing examples of contractors from outside the province coming in to do work, and bringing their entire workforce with them, while qualified residents, many living right in the communities where the work is happening, sit at home unemployed.

Receiving the maximum benefits from our projects would require the following monitoring, reporting, and accountability measures:

  1. Make the requirements known in advance of any public tender/awarding of work, thereby ensuring the “rules of the game” are known upfront by all bidders.
  2. Require ALL contractors to submit regular monthly employment reports for review by government officials.
  3. Appoint officials as the government contact for monitoring compliance of workforce development requirements.
  4. Adopt a Non-Compliance Policy, which would have consequences of increasing severity for those contractors who do not follow the policy, including:
    1. First Offence: $750 per day for each day in non-compliance
    2. Second Offence: Disqualification from further Provincial Work for a period of two years.

 

Frequently Asked Questions (FAQs)

A Newfoundland and Labrador Benefits Agreement would be a legal labour agreement that would be applied to public infrastructure projects, resources projects, and any other projects where public funds are used directly or indirectly.

The Trades NL “NLBA” model is focused on:

  • Employing local qualified skilled trade workers first; and
  • Developing the Newfoundland and Labrador skilled trades workforce.

In Newfoundland and Labrador, we have a number of well-defined challenges around construction employment and workforce development.  Along with high construction unemployment, we have an aging workforce and barriers to underrepresented groups including women, youth, indigenous, and other underrepresented workers from entering the construction workforce.  Construction jobs are highly skilled and rewarding careers that deserve to be open to all Newfoundlanders and Labradorians.  Implementation of an NLBA will remove some of those barriers.

Provisions of a Newfoundland and Labrador Benefits Agreement would include:

  • The requirement to hire local qualified skilled trade workers first;
  • The requirement that a percentage of the workforce be apprentices;
  • The requirement that a percentage of the workforce be women;
  • The requirement that reasonable efforts be applied for the recruitment and inclusion of indigenous and other underrepresented skilled trade workers; and
  • The requirement to pay local prevailing wages and benefits.

Now is the opportunity to imbed these provisions into public infrastructure projects so that the best value is derived from the investment.  The best value is not the lowest bidder. The best value is optimizing the expenditure, to build both infrastructure and the people the infrastructure is there to serve.

Benefit Agreements are not a new concept.  They have been happening all over North American for more than 20 years.  Benefit Agreements help to ensure public projects are completed on time and on budget while reaping a lasting legacy among the workers who built the project.

What may be different, is the title name of such agreements or policies.  Depending on the jurisdiction, similar policies may have used some of the following names:

  • Project Labour Agreements
  • Workforce Development Agreements
  • Local Benefit Agreements
  • Community Benefit Agreements

In Canada, Benefit Agreements are policy in many other provinces such as Manitoba and Quebec for many years. In recent years, we have seen Benefit Agreements become policy in western industrial provinces like British Columbia and Alberta. Today, there are over 70 Benefit Agreements in Ontario alone, and recently the government in Nova Scotia adopted the provisions of a Benefits Agreement strategy.  There are cities across Canada using Benefit Agreements on infrastructure projects every day.

They are not new to Newfoundland and Labrador either.  Our province has used Benefit Agreements or Project Labour Agreements (PLA) successfully on every previous mega project starting with Hibernia, Terra Nova FPSO, Voisey’s Bay mine, Vale’s Long Harbour Processing Facility, SeaRose FPSO, Hebron, Lower Churchill Development, and the West White Rose Project.  All of these PLA’s have been recognized and endorsed by the Government of Newfoundland and Labrador.

In an era of stagnant wages and rising inequality, making sure everyone benefits from the billions of dollars spent by the government on construction work has never been more important.  A Newfoundland and Labrador Benefits Agreement policy will go a long way to make sure local workers can get the good, high-paying jobs that are the foundation of our economy.  Moreover, it also tackles issues within the Newfoundland and Labrador workforce including high unemployment and aging workers, and opens opportunities for younger and underrepresented workers to enter the construction workforce.

When Newfoundlanders and Labradorians build our province, everyone benefits.  Keeping jobs local keeps taxes and revenues within the provincial economy – It supports local communities, convenience stores, recreation, and auto dealers, as well as restaurants and other hospitality industries. Projects paid for by Newfoundland and Labrador taxpayers should be constructed by Newfoundland and Labrador taxpayers.

Establishing specific targets or benchmarks as a requirement through the percentage of hours worked is critical to the success of a Newfoundland and Labrador Benefits Agreement strategy.

As per previous Project Labour Agreements (PLA’s) on mega projects in Newfoundland and Labrador, and similar Community Benefits Agreements (CBA’s) in other provincial jurisdictions, the following NLBA hiring protocol will occur on public infrastructure projects, resources projects, and any other projects where public funds are used directly or indirectly:

  • Qualified local Newfoundland and Labrador Skilled Trade workers ;
  • Qualified Canadians second; and
  • All other qualified.

Providing opportunities for new entrants into the skilled trades is critical to sustaining Newfoundland and Labrador’s world-class workforce, and by implementing an NLBA, public projects will be used to maximize the training and development openings for apprentices.

For each NLBA, the overall target ratio of apprenticeship hours to journeyperson hours shall be twenty-five percent (25%) for all NL‐recognized Red Seal trades, averaged over the project. For each project, the Developer and/or Contractors will assess and establish an overall ratio of apprenticeship hours to journeyperson hours applicable to meet the NLBA 25% target.  The percentage may vary on a trade-by-trade basis subject to meeting the project target.  Workplace safety shall always be a paramount consideration in establishing the ratios.

As a result of very successful Project Labour Agreements (PLA’s) on projects like the Vale Long Harbour Processing Facility and Hebron, Newfoundland and Labrador successfully diversified our building trades workforce by opening doors, providing supports, and adapting the construction environment to welcome women in trades.  Subsequently, as a result of these PLA’s, along with support systems like those offered at the Office to Advance Women Apprentices (OAWA) and the Women Resource Development Council (WRDC), the number of women in trades in Newfoundland and Labrador reached over 14%, well ahead of the Canadian average of 4%.  This success was the result of inserting provisions and supports that opened doors to women in trades.

Unfortunately, recent data reflects a decline among Newfoundland and Labrador women in trades to less than 8%.  A statistic that is discouraging and warrants immediate action. In a total population of nearly 50% women, we all must do better to reflect better results for women of the skilled trades.  While the government currently requires women’s employment plans to be developed, they fail to set targets, monitor, or hold the developer accountable for results.  Implementing an NLBA will define realistic targets that will open opportunities for women in trades.

For each NLBA, the overall target ratio based on hours worked for women in NL-recognized Red Seal trades shall start at fourteen percent (14%).  The percentage may vary on a trade-by-trade basis subject to meeting the project target.  For each project, the Developer and/or Contractors will assess and establish an overall percentage of hours worked to meet the NLBA 14% target.

Using an NLBA, parties recognize that the development of construction skills for Indigenous and other under-represented groups will aid in growing the skilled workforce while providing equal representation, enhance economic participation, and provide other community benefits.  Working with the Labrador Indigenous Skilled Trades Office, the developer will maximize the opportunities available to Indigenous skilled trade workers.

On a project-by-project basis, each NLBA will be developed for the inclusion, recruitment, and training of indigenous skilled trade workers.

The goal is to broaden the spectrum of trades for indigenous workers, advance their careers to become journeypersons and red seal certified, so they become industry leaders, shop stewards, and supervisors on Newfoundland and Labrador construction sites.

The people of Newfoundland and Labrador deserve a fair day’s pay in return for a fair day’s work.  Under an NLBA, a wage table will be developed outlining the wages, benefits, and other items that govern a workers’ terms of employment.  This ensures, under the procurement process, that all bidders are following the same wage and benefits package when submitting their tender package.  This process levels the playing field for both union and non-union developers when competing on public infrastructure projects.

Some people might ask about the impact that an NLBA might have on worker mobility, as many from Newfoundland and Labrador travel regularly outside the province for work. Experience has taught us – all through the implementation of past benefit agreements in our province – that there has been no negative impact on worker mobility.  The majority of our NL workforce who travel to other provinces do so because there are workforce shortages in those provinces.  NL workers are recruited because there are skill sets and experiences required that other provinces are unable to fill.

Trades NL meets regularly with the Alberta Council of Turnaround Industry Maintenance Stakeholders (ACTIMS), a group comprised of oilsands owners, heavy industrial maintenance contractors, and labour providers, including Syncrude, Suncor, and Shell Canada, to recruit trades workers from NL to work on major maintenance and refit projects in Alberta.  This is an annual occurrence, and the numbers recruited are based on the vacancies they are unable to fill locally.  Likewise, we continue to have similar experiences here in NL where, on numerous resource development projects, non-NL residents have been recruited to work with us to fill positions that we were/are unable to fill.

A further question raised is the impact that an NLBA would have on trade agreements.  As we have indicated previously, NL has been using benefits agreements that include local hiring priority as far back as the Hibernia Project, and there has been no issue with, or violation of, trade agreements.  An NLBA does not prohibit a non-resident company or worker from working in NL, it just gives priority to locals first.   Similar policies are being used in other provinces throughout the country.

Trades NL is recommending the name Newfoundland and Labrador Benefits Agreement for 3 reasons:

  1. Definition: Rather than use the words community or local, the people of Newfoundland and Labrador look at ourselves as one community, a collective community. Not to pit one town against another town or one region against another region. Newfoundland and Labrador is one community.
  2. Remove Stigma: There are many different forms of benefit agreements in other jurisdictions around North America and closer to home in Canada. Other models may have required developers to construct playgrounds or theatres, or may have required a community fund to be resourced from the project.  As a result, their provisions may have created opposition to the concept.  The proposed Newfoundland and Labrador benefits agreement model is unique and much different than many benefit agreements in other jurisdictions.  Our model is focused on developing employment opportunities and developing our workforce for the future.
  3. Authentic: As Newfoundlanders and Labradorians, we are proud people that want to do things on our own. We do not want a model passed on where we are told to follow suit. So, it is important that Newfoundland and Labrador implement a model that is genuine, dependable, and authenticated by the people of our province.

A Newfoundland and Labrador Benefits Agreement policy would be applied to:
• all public infrastructure projects;
• all resource development projects, and
• any other projects where public funds are used directly or indirectly.

In the event a project exceeds $1,000,000, the successful contractor/developer would be required to submit for approval a formal-comprehensive NLBA strategy that meets the targets and goals of the policy.
Private Projects
Projects that require any sort of investment, tax relief, or other financial incentives from the provincial government. For example, the Canopy Growth facility in St. John’s.

Public Government Funded Facilities
Projects that the provincial government will fund partially or fully and own by the provincial government. For example, schools, health care facilities, office space, etc.

Resource Development Projects
Projects that develop, extract, or process natural resources that are owned by the Government of Newfoundland and Labrador. For example, oil, gas, wind, hydro, minerals, etc.

Public-Private Partnerships
Projects that the provincial government enters into a long-term lease arrangement in which the lease will be paid for by the people of the province. For example, long term care facilities, schools, institutions, health care facilities, etc. There is an inherent public distrust of P3’s. An NLBA will help address this perceived lack of value to the public by providing real value at the local level.

Policy statements without specific requirements do not change outcomes.  As an example, the government currently requires developers to submit a women’s employment plan. However, with no identified targets, monitoring, and contractors being held accountable for non-compliance, the results of government policy are not achieved.  Similar examples are available for local hiring, apprenticeship development, and fostering an employment environment for indigenous and other underrepresented workers.  There must be specific goals and accountability measures – measurements for success.  Otherwise, bidders will continue to take the “path of least resistance” with no labour force development.

As the Government of Newfoundland and Labrador will be the project owner, you have the ability to define the procurement requirements, monitor the results, and continue to evaluate so that we make sure that the people of our province extract every possible economic and social benefit too.

As part of an NLBA project, the following protocol will be followed to guarantee success:

  • Developers/contractors will be required to develop, for approval, a progressive workforce development plan which meets the targets set forward by the government in the NLBA policy;
  • Developers/contractors will be required to submit regular monthly employment reports based on the provisions of the NLBA policy;
  • Government will assign resources to monitor monthly reports for compliance and publish reports publicly. This process currently exists with the CNOPB for offshore projects and the current Lower Churchill project; and
  • Government will include in all infrastructure projects, valued at $100,000 or more, a non-compliance penalty.

Enforcement

If during the construction of the project, the contractor fails to comply with the requirements set out under the NLBA provisions, this will be deemed a Non-Compliance.

In the event of a non-compliance, under the first offense, the contractor agrees to pay the provincial treasury liquidated damages in the amount of Seven Hundred Fifty Dollars ($750) for each calendar day of the construction period during which the contractor is not compliant with the provisions outlined in the NLBA. The contractor and the government agree that this is the best pre-estimate of loss to the province in the event of a failure to comply and that it is not intended to be, nor is it to be interpreted as a penalty.  In the event of non-compliance, the government will have the right to hold back, drawback, deduct or set off from and against the amounts of any monies owing at any time by the government to the contractor.

If the non-compliance occurs notwithstanding reasonable commercial efforts by the contractor to comply with the NLBA provisions, the obligation to pay $750 per day to the provincial treasury will not apply.

In the event of non-compliance a second time, the contractor will be disqualified from further provincial infrastructure projects for 2 years.  It is believed that, after the first offense is recognized and implemented, contractors would become compliant with the provisions of the NLBA. No contractor would want to be disqualified from future provincial government work.

The incremental costs involved with Benefit Agreements are generally modest and predominantly borne by the contractors whose bids are made more attractive by the commitment to benefit local residents and the government.  Research in America increases the cost of a Benefits Agreement project by 0.003% – 1%.  The economic return, if structured and monitored correctly, will exceed the cost incurred by implementing an NLBA.

Furthermore, an NLBA partnered with Trades NL is subject to strict timelines and they prohibit work stoppages that might otherwise cause delays to the contractor.  In addition, when qualified local workers and businesses are given preference, tax revenue and disposable income stay in the local community, region, and province.

Fair and Transparent

  • Non-union and union contractors may bid on NLBA projects.
  • The only requirement is adhering to the provisions of the NLBA.
  • Provisions are known upfront, which levels the playing field for both the contractors and workers.

A provincially mandated Benefits Agreements for infrastructure projects can have many advantages for developers, local communities, small businesses, labour unions, and the provincial government itself.

Developers/Contractors

Can benefit by knowing the ground rules for development. An NL Benefits Agreement framework can help the developer/contractor negotiate:

  • community support
  • development permits
  • environmental approvals
  • tax concessions and other subsidies from local and provincial governments
  • local workers
  • local business support
  • skilled trade labour with predictable wages and no-strike clauses.

Local Communities

Local communities can benefit by being part of the larger provincially mandated framework. An NL Benefits Agreement can help the local community negotiate:

  • environmental protection
  • employment opportunities for local workers at good wages
  • contract opportunities for local businesses
  • population increases as skilled workers resettle for ongoing maintenance work
  • an increased tax base for the local government.

Local Businesses

Local businesses can benefit from a fairer playing field. An NL Benefits Agreement can:

  • include provisions that break large contracts into smaller contracts in recognition of local business capabilities
  • guarantee specified shares of contract work
  • offer new opportunities for existing staff
  • create opportunities for new employees.

Building Trade Unions

Building trades can also benefit from a fairer playing field. An NL Benefits Agreement can:

  • open new opportunities to work with developers
  • provide a guaranteed percentage of work
  • create new, well-paid union jobs
  • guarantee opportunities for apprentices
  • help diversify the workforce by supporting Indigenous and women workers.

Government

The Government of Newfoundland and Labrador can also benefit. An NL Benefits Agreements can help to:

  • ensure compliance with federal and provincial regulatory frameworks
  • align major infrastructure projects with the government’s social, economic, and regional development policies and programs, while also reducing the costs of delivery
  • strengthen local communities and local governments
  • reinforce local business strengths
  • help develop a more skilled and diverse workforce
  • ensure lasting benefits to local communities, workers, businesses, and the province
  • increase the tax base.

More than ever, now is the time to implement a Newfoundland & Labrador Benefits Agreement policy.  Construction activity continues to decline, unemployment levels are rising, and out-migration will continue.  Trade workers and their families are hurting as we continue to receive bad news and layoffs, consequently when trade workers are not employed, or the provincial economy suffers.

Collectively we have to be creative thinkers, authentic, and goal-driven to achieve positive outcomes.  Let’s lean on best practices of Benefit Agreements in other jurisdictions and endorse a model made by Newfoundlanders and Labradorians, which works best for Newfoundland and Labrador residents.

As the provincial government continues a bold infrastructure strategy and the development of our many resources, let’s be leaders of our own destiny.  The full implementation of a Newfoundland and Labrador Benefits Agreement policy is a tremendous economic diversification strategy, which keeps investment at home, for the benefit of Newfoundlanders and Labradorians. It will put local residents to work, create wealth for our communities, and generate revenue that goes back to support our schools and communities, and organizations.

Contact

If you have any questions, would like more information on Trades NL or to learn more about NLBA, please contact us.

Telephone: 709-726-5660 ext. 202
Email: info@tradesnl.com

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