Regulating installation, maintenance and repairs of production machinery work in factories in respect to Act R-20 on construction

An average of 53 to 87% higher labour and productivity costs

MONTREAL, Jan. 18 /CNW Telbec/ - If the Québec government decides to fully subject work pertaining to the installation, maintenance and repair of production machinery in factories to regulations of the Law respecting labour relations, vocational training and workforce management in the construction industry (Act R-20), it would lead to an average of 53 to 87% higher labour and productivity costs. This would represent an overall annual increase varying between $68 and $275 million for the province's job providers.

This is the main finding in an independent study conducted by the KPMG firm on behalf of the Quebec Employers Council that was released today. To avoid any controversy, it must be noted the averages were calculated without using the largest gap of 260 and 304% reported in the study. These are actually very conservative estimates because the economic data used covers the recent recession period, when there was a downturn in private investments.

The study was conducted in consideration of the pressure exerted by industrial trade unions in the construction sector in an effort to force the government to ensure more of the work projects related to production machinery in factories are subjected to the law. This pressure led to the creation of a work committee, whose report was issued last fall (Mireault report).

"The KPMG study clearly indicates that subjecting work relating to production machinery in factories to Act R-20 would lead to a marked increase in costs for job providers in Québec," stated Yves-Thomas Dorval, the president of the Quebec Employers Council. "At a time when the government is looking to provide employers with the best possible conditions to attract and hold on to private investment that is needed to create wealth, it must avoid going this route at all costs because it would send a negative signal to current and potential investors and would have a disastrous effect on Québec's public finances and our overall prosperity."   

Adopted in 1968, Act R-20, which regulates labour relations in Québec's construction industry, obligates businesses that are subject to the law to operate in compliance with regulations that run counter to the needs of job providers, particularly in terms of the compartmentalizing of trades, union placement and work conditions. The latter are the result of collective bargaining agreements between the associations representing the construction entrepreneurs and the unions, with the job providers taking no part in the negotiations, even though the law obligates them to absorb the costs (salaries, social benefits, bonuses and additional expenses).     

KPMG conducted a comprehensive study with six major job providers representing various industrial sectors and areas of activity in the province to measure the impact that subjecting production equipment work to the regulations would have on each company. This approach, which takes results by work stages and the type of costs into consideration, allows one to isolate costs billed to the job provider on an hourly basis (salaries, bonuses, profit margins and other expenses) from those related to a potential loss of productivity. From the resulting differentials, KPMG was then able to do impact analyses at the industry level depending on different scenarios, based on the economic and public data contained in the Mireault report, and by using the hours reported to the Québec Construction Commission.

Maintain freedom of choice or thoroughly update Act R-20

The Quebec Employers Council actively led a series of consultations on the subject in the spring of 2010. Following the consultations, the job providers' consensus position on the issue was presented to the major elected officials and high-ranking public servants at a series of meetings the Quebec Employers Council coordinated throughout the summer and fall of 2010. This study is a complement to the series of meetings.

"Along with the unproductive costs related to specific regulations in the construction sector that exist only in Québec, such as mandatory unionization, union placement of the labour force, the high amount of compartmentalized trades and the presence of a worksite union delegate, job providers have no voice in negotiations for new collective bargaining agreements in the construction sector, even though, in the end, they are the ones paying the bill," said Mr. Dorval. "In this context, at the very least they should be allowed to maintain their freedom of choice in conducting work related to production machinery. Otherwise, it's time to move ahead with extensive reform of the entire labour relations system in the Québec construction industry so that some of the aberrations can be corrected. The ball is now in the court of the Labour Minister, Lise Thériault.

"Such a reform would help to improve the situation in the overall construction sector, and not just regarding production machinery in the industrial sector. As the main job provider in Québec, the government, with its corporations and agencies, would be the main beneficiary," added Mr. Dorval.

The KPMG study and the job providers' statement are available on the Quebec Employers Council website (

The Quebec Employers Council brings together many of Québec's largest companies and the vast majority of sector-based employers' groups, making it Québec's sole employer federation.


For further information:

Patrick Lemieux
Advisor - Communications
Mobile: 438 886 9804

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