A group representing construction companies across Canada is raising the alarm over a recently signed agreement to help build The Ottawa Hospital’s new $2.8-billion Civic campus, saying the deal with a local trades group “shuts out” competing workers and businesses and will drive up the cost of the project.
The Progressive Contractors Association of Canada said Monday it filed a complaint with the Competition Bureau last week urging the independent regulator to investigate the agreement between The Ottawa Hospital and the Unionized Building and Construction Trades Council of Eastern Ontario and Western Quebec.
The complainants claim the exclusive deal prohibits contractors and workers who are not affiliated with the trades council from bidding on and constructing the new hospital complex.
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Karen Renkema, vice-president Ontario at the PCA, told OBJ Monday the agreement is “not in the public interest” and violates the federal Competition Act.
“When you limit competition, the costs are going to increase,” Renkema said. “That’s the bottom line.”
When it announced the deal last month, The Ottawa Hospital described it as a “first in Ontario health care.”
In an email to OBJ on Monday afternoon, the hospital said the agreement has been “reviewed by the Ontario Labour Relations Board and allowed to move ahead,” adding that employment opportunities at the hospital site will be “open to all construction workers.”
The hospital said the deal “sets the terms to create consistent safety standards, ensuring all workers on site are properly trained and certified, and to eliminate risk for work delays and disruptions caused by strikes or lockouts for the duration of the project.”
The statement added that the agreement will “create apprenticeship opportunities for populations underrepresented in the construction trades, including First Nations, Inuit and Métis people, women, and diverse and at-risk youth.”
But Renkema argued that the “precedent-setting” agreement will actually make it harder for the hospital to hire the most qualified contractors for the project.
“You’re restricting that field of bidders to a very small number of people,” she said. “We’re already facing labour supply shortages. When you restrict the pool of workers that can actually work on a project, you’re actually making it worse. We scratch our heads on why this deal has been done.”
The Unionized Building and Construction Trades Council of Eastern Ontario and Western Quebec did not immediately respond to requests for comment.
The PCA, which says its members employ more than 25,000 unionized construction workers, pointed to a report from the Montreal Economic Institute that concluded the agreement will boost the hospital’s construction costs by $168 million to $525 million.
“There is quite a bit of strife within the contractor community about this particular project,” Renkema said.
Construction of the 2.5-million-square-foot facility at Dow’s Lake is slated to begin next year and wrap up in 2028.
Last year, the hospital released an economic impact study from Deloitte that said the project is expected to pump nearly $2 billion into the local economy and create more than 4,000 full-time jobs annually over that four-year span.
The report estimates that anywhere from 200 to 5,000 tradespeople will work on the new hospital each day as construction ramps up, with a daily average of 2,000 workers on site.
The hospital’s chief financial officer, Nathalie Cadieux, told OBJ last spring she was concerned that soaring inflation would drive up costs and acknowledged that keeping the project on budget would be a challenge.
“(Labour) supply and demand is definitely on our mind,” she added. “Our hope is it will stabilize (before 2024). But it’s definitely a risk that everybody is concerned with right now.”
The new Civic campus will replace the current facility on Carling Avenue, which opened in 1924. The new building will include 641 beds, nearly 100 more than at the existing campus, in a one-bed, one-bathroom-per-room model.
The facility will feature a state-of-the-art digital health innovation hub, another innovation centre dedicated to health-sciences research, and a new rehabilitation complex. The new Civic will also be home to an expanded biotherapeutic manufacturing centre that’s expected to develop new vaccines and other health-care treatments.