Monday, April 9, 2012

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."
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...

 Here's the audio of the interview On CJAD last Thursday, where Brent Tyler, myself 
and Aaron Rand discuss Bill 101


  1. Editor, damn straight "Plus ça change"! The Quebec construction industry is an evil empire out of the Dark Ages! Now "le nouveau perrain" is going to be the son-in-law of "le vieux perrain"? That's like Assad the father passing the bloody butchership of Syria down to the son who is mimicking his father down to the last slaughter.

    Canada's old Anti-Combines legislation and now it's descendent, Anti-competition legislation is nothing more than a paper tiger, and so is Quebec's Bill 33. Betcha a buncha blintzes nothing, but nothing in the Quebec construction industry is going to change. Construction workers from outside Quebec won't be able to get work in Quebec, while THEY will be able to leave Quebec to seek work elsewhere.

    The fellow who was exiled to Fort McMurry should likely be thankful he got work out there! There are many well-paying jobs out there, and his take-home pay will likely be much better, even if his paycheck is less than it would be in Quebec!

    If the Quebec Government makes a concerted effort to investigate the industry, mostly through infiltration, MAYBE, JUST MAYBE Bill 33 will be useful, but if after almost 70 years nothing has changed, and the next in line to the godfathership is family, FAGGEDABOUDIT! JUST FAGGEDABOUDIT!

  2. Editor,

    I think you just made a fatal typo. You wrote:

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

    I believe you meant to say as below, since no sane government will issue a law explicitly banning competition.

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

    1. Maybe the Quebec government (especially if led by the PQ) would come out with a Quebec Anti-Competition Act so that they wouldn't have to compete with anglophone companies from the rest of the world. Oh wait! Isn't that what's going on in the Quebec construction industry already, hence all the corruption? LOL

    2. The legislation is the Competition Act, RSC 1985. It is federal jurisdiction, Roger Rabbit, so Quebec has no power to regulate competition. But perhaps you were being sarcastic ?

      Unions would not normally be subject to prosecution under the Competition Act because their activities are regulated by Quebec's "Act Respecting Labour the Construction Industry" and other applicable laws.

      This is not really about the french vs english theme which is so popular on this blog. There are provincial differences in labour relations law and it is true that Quebec has protected unions more than in most other provinces but that is the result of various well meaning left of centre administrations in Quebec. Every now and then the Quebec government has to push back and that is happening now. But construction activity in Quebec has not decreased because of the perceived enhanced role of unions in Quebec. Some elements of the construction process such as the average cost of general labour may be a little more expensive in Quebec than in Ontario, Mr Sauga, but other elements are not - such as development fees in many Quebec municipalities and - a big one - the cost of land. No, it is not unions that generate or depress the activity level in the construction industry. Employment of unionized labour is a following indicator. Investment in the development industry in turn follows the demand for new buildings. If folks are not buying new houses and building new factories and demanding newer and better office space then there are fewer construction labourers required - regardless of what M. Cyr thinks.

      There are presently about 175 construction cranes active in the City of Toronto and the GTA. There are about 95 active in New York City. I can't say how many in Montreal but let's just agree that it is...fewer. But all of the Toronto projects are largely being constructed by unionized trades and general labour. Local 183 of the Labourer's International Union of North America is the LARGEST labour union local in North America. So you can't escape unions by building in Ontario, particularly in the mid and high rise concrete sector and the commercial and industrial sectors which are so dynamic in Toronto. And corruption ? Well, Local 183 was in trusteeship recently for an extended period following allegations of the improper use of union funds and all of its top mangement ended up being replaced. And on the management side don't you recall the dredging scandal which resulted in convictions of senior Ontarion executives. Or the price fixing in the Ontario cement industry ? I could go on but you get the picture. No, dear Mr Sauga and much respected Crusading Editor - Quebec has no monopoly on rapacious unions and corruption in the construction industry. That business generates large rivers of cash flow. It's very tempting for some people. That is human nature and has nothing to do with Ontario vs Quebec or francophone behaviour vs anglophone behaviour. As ever, follow the money. And more money = more temptation.


    3. Well, of course I was being sarcastic. Hey maybe that's another area of federal jusidiction Quebec wants to take over, because everyone knows how "Québec sait faire." The Quebec government has done such a bang-up job on health as an example.

      There has been corruption in the Quebec construction industry for a long time, back to the construction of the Olympic Stadium.

      It has everything to do with keeping outside competion from working in Quebec. In fact, because of Quebec doing this, the "Fairness is a Two-Way Street Act" was passed in Ontario in 1999.
      Now, In 2006, Ontario Premier Dalton McGuinty and Quebec Premier Jean Charest came to an agreement to overcome the legislation but it was well recognized that Quebec was not allowing Ontarians to work here in the same capacity as Quebeckers could work there.

      The fact that Quebec was a closed shop has allowed corruption to seep in, as we can see by Gerard Cyr sounding like an old-time gangster in the video posted by the editor of this blog. "I am the godfather!" I mean, really, who says that?

      The fact of our quickly crumbling infrusture (like the Champlain Bridge, Big O, and Turcot Intechange) in conjunction with the fact that we pay AT LEAST 30% more than other jurisdictions is a serious indictment of our system.

      Telling me that there is corruption elsewhere hardly makes it right and we want to be compared with the best, not anyone else.

    4. Sandy McTire,

      Since you seem to be knowledgeable in construction industry, let me ask you this. Why is the cost of building in the province of Quebec very high compared to other Canadian / U.S. jurisdictions? Case in point is the new Quebec City arena. The cost is projected at CAD 400 million for around 18 000 seats. The newest arena in the NHL, Consol Energy Center in Pittsburgh is worth USD 350 million in 2012 dollar with more or less the same capacity.

    5. Tee hee, Sandy McTire, please tell me that you really do wear a Tam O'Shanter!

  3. Construction costs vs built asset value: Not the same thing. Some structures cost far more money to build than they are worth, perhaps the Big O is an example, but also Toronto's Skydome.

  4. I am sorry, this is out of topic but I need to share it since I have quite a good chuckle reading it. The editor of wrote this on his home page:

    Le règlement de la question québécoise à Ottawa se résume en un seul mot : constitution ? NON. ANGLICISATION ! Le reste (immigration, acculturation, américanisation, mondialisation), complétera la manoeuvre. Ce ne sont pas des gougounes comme Christ. St-Pierre et des Ti-clin JJC qui défendront l’âme québécoise. Il ne faut pas écouter les hommes-à-genoux depuis 30 ans ! Il nous faut écarter l’atavisme des loosers. Il nous faut dès maintenant affronter les oligarchies qui ont décidé de la mort de notre conscience nationale ! RENVERSER LA TYRANNIE !

    You see? Ottawa is even responsible for Americanization and globalization in Quebec.

    1. You should not fritter away your precious time reading that pipe dream from some frustrated unhappy creatures out of touch with any possible reality (even Leibniz's quote 'Our world is the best possible of all worlds' is too far from those nitwits who live beyond any possible world in any possible reality).


    2. Indeed, blame la Fédé avant tout! Everyone except for the real source of the problems...

    3. It is indeed a pity that such blather goes unchallenged... and even more so that we preach to the choir here rather than responding directly to these dingbats...

    4. No need to always challenge the dingbats because I would think that normally people would be able to notice that they are dingbats.

      For example, there is a separatist who comes on this blog to promote his website replete with false information and hidden insults to people who disagree with him.

      Do you think I am going to waste my time refuting his nonsense here or on his dead website?

      No! He's a dingbat! Let his website remain dead!


  5. Heh, my second favourite topic, unions..

    They've got a great racket going, they've managed to convince millions of sheep that they (the unions) are there for their (the workers) good. And if you say anything against the unions, you're a heartless pig who doesn't care about the poor exploited workers suffering at the hands of their rich fat-cat capitalist bosses.

    It reminds me of the separatists really... They too manage to convince hundreds of thousands of not-too-bright sheep with their propaganda.. And separatists, just like union members, make it seem like you have no respect for this province if you speak out against them or don't agree with their opinions.

    I guess we need more people who can think for themselves.

    1. Malheureusement peu d'individu peuvent bénéficier d'un quotient intellectuel tel que le vôtre.Si c'était le cas,la majorité des problèmes de l'humanité serait évidemment choses du passé...Ho misère.

    2. this, the king of the kings of the "Nebochanten" (look up on any German dictionary)


    3. Bien sûr, tous les syndicats sont maléfiques...

    4. Interestingly, for soccer fans, M. Cyr could pass for former England manager Fabiola Capello, or vice versa!

  6. It is pretty interesting how QC was so focussed on the Corruption scandals until the Language Hysteria ramped up again - makes you wonder if the Political parties, all of the on the take, used this as a classic 'hey look over there' to distract the ethnic majority of Quebeckers from the REAL issues that need to be addressed regarding the enormous waste that goes on with the public purse.

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