Three construction associations say they’re concerned about a “hidden fee” in a provincial jobs plan that imposes a surcharge on contractors awarded public building projects.

The Winnipeg Construction Association, the Manitoba Heavy Construction Association and the Construction Association of Rural Manitoba issued a joint statement Thursday about the Manitoba Jobs Agreement (MJA), which is meant to ensure public projects prioritize Manitoba workers.

The organizations said the agreement charges existing contractors $0.85 per hour for each worker on government-funded projects, with fees collected going to a group of unions. They want Manitoba’s auditor general to investigate.

“On a major MJA-covered infrastructure project, that’s not pocket change. That’s potentially millions of dollars diverted from public investment, with zero transparency,” a portion of the statement reads.

The associations argue the fee structure is opaque and say it benefits union shops over the non-union shops that make up the majority of contractors in Manitoba.

“A lot of them will be suspicious and have a lack of understanding of what the agreement requires them to do and will simply stay away,” Ron Hambley, president of the Winnipeg Construction Association, told CBC News.

Fee common in major projects: Paulson

The fee is to go to Manitoba Building Trades, a coalition of trade unions. The head of the coalition says it’s a standard administrative fee seen in other jurisdictions.

“These are common practices across the country on major projects, whether that’s the … government of Ontario doing it, private contractors across the country on major hospital and infrastructure builds,” Manitoba Building Trades executive director Tanya Paulson told CBC News.

“We are bringing worker perspective and worker prioritization and worker planning to the forefront of capital projects.”

Tory labour critic Josh Guenter (Borderland) and economic development critic Konrad Narth (La Vérendrye) said the government needs to be more transparent about where the fee proceeds go.

“There’s no ability for Manitobans to look into where is this money going, and that’s a huge concern,” Guenter said after question period. “The Manitoba construction industry clearly is very concerned.”

The NDP says the Manitoba Jobs Agreement applies to construction projects that are estimated to cost at least $50 million. The framework sets targets such as hours worked by Manitoba workers, equity groups and apprentices based on the specifics of a project. 

In January, the province said the construction of four schools will be the first projects built under this agreement. The six deals were split evenly between union and non-union shops.

If the wage surcharge is “$0.85 on every hour worked, these are very significant cost implications for some of these large projects,” Hambley said. “We want to know if … there’s a plan to use the money, what it’s for, how it’ll be tracked.”

Reporters asked Public Service Delivery Minister Mintu Sandhu several times on Thursday what the fee is for.

“We are training the workforce for the future,” he said. “It’s about training.”

Sandhu offered few other details other than that it was associated with training. He suggested the NDP wants to ensure there are enough good-paying jobs in construction in Manitoba.

“If the minister says it’s for training, that’s the first we’ve heard of that,” Hambley told CBC News. “I don’t believe there’s a shortage of training dollars. There’s a shortage of people.”

Paulson said the administration and facilitation of training makes up a portion of the fee, which is needed to administer the project labour agreement.

Progressive Conservative Leader Obby Khan said local companies aren’t as willing to bid on government MJA contracts out of concern for the associated workforce requirements.

He also said Manitoba Building Trades has taken out ads in support of the government policy and questioned why.

“That’s Manitoba taxpayer dollars being siphoned off in this job agreement to go to an organization that is supporting this NDP government, and that is wrong,” Khan said.