Toronto has rejected new provincial legislation that opens public-sector construction work to non-unionized workers, setting the stage for a legal showdown with those shut out of bidding on projects.

Toronto City Council voted overwhelmingly to opt out of the legislation at a meeting on Wednesday, leaving it poised to become the only municipality in Ontario that allows a select group of labour unions to bid on construction work.

Other municipalities with collective agreements binding them to trade unions have opted for open tendering. A Hamilton City Council committee voted 11-1 on Wednesday in favour of allowing all qualified companies to bid on city construction contracts. The matter comes before Hamilton council in one week for a final vote. Waterloo Region and Sault Ste. Marie have also endorsed open bidding.

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The contentious issue landed before municipal councils after the provincial government introduced omnibus legislation, known as Bill 66, last December. The legislation automatically deems municipalities, school boards, hospitals and universities as non-construction employers, opening bidding on construction contracts to all qualified companies.

However, the provincial government amended Bill 66 in March, giving municipalities and other public entities the choice of opting out of the new rules and maintaining the status quo.

Toronto councillor Anthony Perruzza argued at Wednesday’s meeting that the city should opt out, saying he was skeptical about a report prepared by the city manager, recommending that council endorse Bill 66 and concluding that more competition would lead to lower prices. The report estimated the city could save between $12-million and $48-million a year.

“Everybody understands that the numbers being bandied about probably aren’t true,” he said. “It’s really an ideological debate that has been foisted on us.”

Councillor Jaye Robinson argued that the city should end its long-standing agreements with nine labour groups. “What are we afraid of?” she said. “Opening the market to everyone?”

Toronto is bound to nine provincewide collective agreements in the industrial, commercial and institutional (ICI) sector. To win ICI construction projects with the city, contractors must agree to employ workers from the nine unions. In 2018, Toronto awarded approximately $2.6-billion in contracts for all goods and services and $616- million of those contracts were in the ICI sector.

Despite a heated debate, Toronto council voted 20-4 in favour of maintaining the status quo with organized labour. It also voted in favour of allowing one more labour group, the Laborers’ International Union of North America (LiUNA), to bid on city construction work.

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The Progressive Contractors Association of Canada (PCA) said in a statement on Wednesday that it plans to legally challenge Toronto’s decision to reject Bill 66 and invite LiUNA into a group that has “monopolized” city construction projects for years.

“It’s just plain politicking when a cash-strapped city council passes up substantial savings and puts special-interest groups ahead of their own constituents,” said Sean Reid, a vice-president at the PCA.

In Hamilton, where a committee made up of the mayor and all city councillors voted in favour of open tendering after a lengthy closed session, a representative of the union that stands to lose work, the United Brotherhood of Carpenters and Joiners of America Local 18, did not rule out taking legal action.

“The reality is that there are labour rights, they can’t just be wished away,“ said Kim Wright, a consultant to the Carpenters’ Union, when asked by Councillor Brad Clark if it was the union’s intention to challenge the matter in court.

Before the vote, Mr. Clark said the situation was “challenging” for the city because the province had put it in a position where it could face a potential lawsuit for not upholding the collective agreement with the Carpenters’ Union.

Ian DeWaard, Ontario director of the Christian Labour Association of Canada, appealed to councillors to break what he called the Carpenters’ 14-year monopoly in Hamilton despite the “political pressure” exerted by the union.

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However, Ms. Wright from the Carpenters’ Union told councillors any potential minor savings would be offset by a loss of training and apprenticeship opportunities, workplace safety measures and recruitment of workers from under-represented communities.

The committee’s vote was in line with a report by city staff recommending open tendering.

Currently, all of the City of Hamilton’s carpentry work must be performed by those signatory to the collective agreement with the Carpenters’ Union.

In Sault Ste. Marie, the city has been bound to provincial union agreements with the United Brotherhood of Carpenters and Joiners and LiUNA for more than 30 years. Malcolm White, deputy chief administrative officer of Sault Ste. Marie, said in an interview on Wednesday that there is "no appetite at council for exercising the opting-out provision.”

For its part, the Region of Waterloo’s council passed a resolution in January supporting Bill 66, paving the way for open bidding on construction contracts.

The region said it expects that moving to open tendering will translate into savings of between 3 per cent and 30 per cent. It also said that the number of bids it received following union certification in 2014 dropped by more than 50 per cent.