Quebec's Construction Nightmare

The "Godfather"

I know we spend an inordinate amount of time discussing language on this blog, but as I pointed out recently, the French/English debate takes up so much air that legitimate debate over the real problems that this province faces are too often left unexamined.

Last week a story exploded on the French side of the media in relation to union malfeasance, it was quite a humdinger and underlined the depths to which this province's construction industry is gripped by dishonest elements.

Curiously the story made barely a ripple in the English Press and so I thought it would be useful to run down the bare bones of the story for those of us on the English side who missed it.
It's unfortunate that the English media chose to largely ignore the story, the ongoing saga of corruption is like a disease eating away at the fabric of our society and bears very close examination.

This isn't a French/English story, it is a story of good versus evil and whether we as a society have the wherewithal and the intestinal fortitude to set our house in order.

Corruption in Quebec's construction industry generally takes the form of contractors rigging tender bids by means of illegal cooperation among the players. It's a story as old as the hills.
This illegal practice remains the principle focus and obsession of Quebec's Press corps, determined to prove that the government of Premier Charest is turning a blind eye to the practice because his Liberal party is the beneficiary of illegal campaign contributions from those involved.

But these last weeks we've been exposed to another aspect of perfidy in the construction industry, this time on the side of unionized labor, a problem even more dangerous and costly than bid-rigging.

The story started with the French language television news magazine infiltrating a union meeting and  surreptitiously filming the union boss of Local 144 International, Gérard Cyr, a nasty piece of work, if ever there was one.
It was quite a show!

Mr. Cyr is the business agent of Local 144, a designation akin to calling Bill Gates a minor software engineer.
Mr. Cyr is in fact the most powerful personality in all of Quebec's construction industry, directly controlling 98% of the province's boilermakers, 96% of steel erectors, 90% of pipefitters and 93% of plumbers!
Local 144 directly controls the flow of workers to over 50% of Quebec's construction industry and employers are at its absolute mercy, to say the least.

Up until recently, when the Quebec government passed a law (Bill 33) banning the practice, the union controlled which workers and how many would be assigned to each job site, and you can imagine the abuse, considering that employers had no other choice but to do business with Mr. Cyr and his cohorts of local 144.

Even the workers are under the absolute control of the union, which exercises the power to provide work to those who tow the line or keep dissenters off the job site. 
A worker who ran afoul of the union told a reporter that he was forced to exile himself to Fort McMurray in Alberta to seek work. Link{Fr}

Now the news story started with this, a speech captured on tape of Mr. Cyr, addressing a large room of union workers, looking and sounding like a union gangster.

"I AM THE GODFATHER!!" he shouted. 

The broadcast of this speech along with an exposé of the deep down reality of Local 144 was a shocking and disturbing eye-opener that even had the Minister of Labour Lise Thériault shaking her head in disbelief.

 "After watching this video, Ms. Thériault immediately responded in an interview on the  Larocque Lapierre show.
She announced that the Commission will investigate the construction sites mentioned in the report.
"I am deeply shocked to learn that workers must pay to work," says Thériault. "The allegations are all too serious."

Ms. Thériault was particularly hurt by degrading and sexist comments uttered by Mr. Cyr. "It doesn't make sense. We're not in 1950, it's 2012. Women fought hard enough to earn their place in positions of power." Link{FR}

You can watch the entire speech and all the allegations in three stories by J.E. (in French) here;
Part One  Part Two  Part Three


Now you might be familiar with Canada's Competition Act or at least its principles.

"The purpose of this Act is to maintain and encourage competition in Canada in order to promote the efficiency and adaptability of the Canadian economy, in order to expand opportunities for Canadian participation in world markets while at the same time recognizing the role of foreign competition in Canada, in order to ensure that small and medium-sized enterprises have an equitable opportunity to participate in the Canadian economy and in order to provide consumers with competitive prices and product choices."

 The act insures that companies aren't allowed to become monopolies that gobble up all the competitors, thus controlling the entire market, enabling them to charge higher prices and offer poorer service.
This rarely happens in Canada but the situation gets more complicated where;
"a market or industry is dominated by a small number of sellers (oligopolists). Because there are few sellers, each oligopolist is likely to be aware of the actions of the others. The decisions of one firm influence, and are influenced by, the decisions of other firms. Strategic planning by oligopolists needs to take into account the likely responses of the other market participants."  Wikipedia

Many would argue that this is exactly the situation with Canada's wireless telephone industry where  three companies control close to 90% of the subscribers, leading Canada to have some of the highest wireless rates in the western world.
The federal government is aware of the problem and is trying to bring new players into the market to stimulate competition.

So what happens when similarly, one union and one union boss controls 50% of labor pool in Quebec's construction industry?
Not only are prices higher and service poorer, they are astronomically and criminally so.

The television exposé detailed the horror story rather explicitly and the picture is frightening. For the first time witnesses (mostly anonymous, out of fear) are coming forward to tell the truth about Local 144 and the Quebec construction industry.

The union shakes down employers to hire more workers than needed and forces them to pay extortionist salaries.
At one point in the construction of a pipeline between Quebec city and Montreal, some workers made  $90,000 in the three months leading up to Christmas!

Stories of kickbacks abound, where every Friday workers fortunate enough to get these jobs prepare envelopes of two or three hundred dollars in cash which are given to union collectors.

Here are some translated quotes from Le Journal de Montreal which also ran a story about Local 144

"Local 144 isn't complicated, it's like a biker gang."

"Because I'm not in the right gang, I work only four months a year."
 
"On the Ultramar pipeline those who were in Gérard's clique made $5,000 a week, those who weren't, stayed at home."
 
"On the construction sites, there's a big waste of time. Where you need one guy for the job, there are two, where you need three, there are six."


"On the laying of four inch pipes, we had to install three per day. If you laid  four, you were thrown off the job. Guys could easily lay ten per day."

"It's a small group that direct an entire province, a circle, a  family"

"They supply forty guys for a job that require twenty. It leads to an awful lot of coffee breaks"

"Everybody has envelopes and all deals revolve around them"

The union successfully negotiated a $1,000 a week travel allowance for workers working on the pipeline, even for those who lived close to the the work site!

Another interesting shakedown is the requirement that the union approve building materials, a practice specifically outlawed.
The union provides stickers that are affixed to approved products like pipes and fittings.
One employer recalled paying $12,000 for 'stickers' to add to products that he acquired outside the inner circle. Link{Fr}

Anyway you look at it , that is a criminal shakedown.

In the face of all the allegations the union stands firm, denying every allegation including the one that accuses them of organizing a devastating shutdown of Quebec's construction sites last October in protest of Bill 33. In scenes worthy of a Sopranos episode, roving bands of union thugs intimidated workers with all manner of threats and in one case actually turned off a generator providing electricity to a pump providing air to a diver working underwater! Link

“They shut us down,” said a worker sitting outside a downtown coffee shop who had planned to work on Tuesday. When asked whether he felt intimidated, the man in his 30s replied, “Let’s just say we were encouraged to walk away by several guys who weighed about 250 pounds.” Link{Fr}

As you can imagine Gerard Cyr and Local 144 have a lot to be angry at the government about, which is menacing the evil empire.

Bill 33 was the was a giant first step in bringing the industry to order, but as usual, nobody in the Press is willing to credit the government for taking action.

Of course that one single law doesn't go far enough and calls for action are starting to be heard;

"In light of all this information, the office of the Labour Minister Lise Thériault, stated: "We seek to put an end to acts of intimidation, extortion or fraud of individuals in positions of power within of an employee organization, who pervert the true and essential mission of trade unions, which is the defense of workers. "

According to Yves-Thomas Dorval of the Employers Council, "we must go further than Bill 33, one must ask about the compulsory unionism in the construction environment."  Link{Fr}

By the way, in the aftermath of the fallout over Mr. Cyr's outburst and the disturbing revelations that followed, the 69 year old union leader announced his decision to resign soon, turning over his job to the capable hands of his own son-in-law..
Plus ça change........


Is it any wonder Quebec is going broke? Perhaps Canada should ramp up the equalization payments...

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 Here's the audio of the interview On CJAD last Thursday, where Brent Tyler, myself 

and Aaron Rand discuss Bill 101