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The B.C. Government’s proposed Community Benefit Agreements (CBAs) could cost a family of four between $2,000 and $4,000 over the next three years alone; find out how the new plan will impact your business and bottom line.
The B.C. government is closing their doors on the majority of construction in our province.
On July 31st, the B.C. government announced that all provincial infrastructure projects moving forward will require contracting companies to sign Community Benefit Agreements (CBAs). While the plans are not clear yet, our initial estimates (based on similar agreements in the past) suggest this policy could cost every B.C. family of four between $2,000 and $4,000 over the next three years – the remainder of the NDP government’s mandate.
How CBAs will cost you money
CBAs require all contractors to join a government selected union for the duration they are employed on the project. Supporters of the proposed policy say CBAs increase certainty in construction projects while providing great benefits for communities by hiring more from local communities, women, and minority group members.
While these are good goals, they need to be balanced with cost. The agreements will add significant costs for all taxpayers – including the very populations that the government claims to be helping. Additionally, the proposed policy would either force private construction workers to join a union in order to bid on a public project or shut that door for them completely.
How did CFIB estimate the cost of CBAs?
The proposed CBAs are similar to the Highway Contractors LTD (HCL) from the 1990s.
A BDO analysis commissioned by the Vancouver Board of Trade in 1994 found the agreement increased labour costs by approximately 37 per cent. Assuming labour will make up between 25 and 50 per cent of the total cost for future public infrastructure projects, CFIB applied this 37 per cent increase to the Pattulo Bridge and all budgeted infrastructure projects for the next three years.
The cost of CBAs on the Pattulo Bridge project alone could cost taxpayers between $129 and $259 million. While for the next three years, taxpayers could carry an additional burden of between $2.4 and $4.8 billion. All of this is leading us to wonder, why is the government trying to repeat a failed policy?