Community Planning and Economic Development Standing Committee

Construction associations don’t want to pay a living wage

Changes coming to the hotel levy
 | January 28, 2021

Community Planning and Economic Development Standing Committee, Jan. 28, 2021

Meeting recap (the important stuff):

The various construction industry associations are fighting hard to not have to pay their workers a living wage. 

In today’s meeting three construction association executive directors/CEOs made a presentation to the committee outlining their concerns with the living wage policy. They said it would create a two-tier wage system because they wouldn’t be paying non-city contracts a living wage, which makes things inequitable. They also mentioned that if they paid their workers a living wage, then the supervisors and managers would also need to be paid a living wage, which is a problem? For… someone? They also highlighted that it would be a tax burden for taxpayers. The living wage policy is expected to cost roughly $8 million if fully implemented. This means the tax burden to you and I, would be less than two cents per year. Quite the burden. 

Councillor Trish Purdy was concerned that the city’s policy could hurt small businesses, and there are some concerns with the increased administrative costs for public bids. Other councillors were receptive to the idea that the city could do better in this regard. Which makes sense, if the higher bid costs are due to the city’s policies requiring a living wage, then companies shouldn’t be punished for higher bids as a result. 

Councillors Lindell Smith and Sam Austin pushed back hard against the construction association CEOs. 

Smith pointed out that the construction industry was spending a lot of time addressing concerns with this policy about paying people a living wage, but not a lot of time on addressing the problems in their own industry. He referenced a study that showed African Nova Scotians with certified tickets and red seals are 30 per cent less likely to get positions than their white counterparts. The CEOs pointed out that they have a diversity plan, but also noted that this living wage policy will hurt diversity because the lower wage earners are the first to be let go if they have to pay a living wage. Which heavily implies non-white workers are paid less than their white counterparts. 

Sam Austin asked the CEOs directly if they were opposed to paying their employees a living wage. They stuck to talking points and dodged the question entirely. This prompted Austin to say he wasn’t open to “the argument that people should continue to not be paid enough to live in this city, I’m just not interested.” And thanked them for their presentation. 

Changing beats completely, there are probably going to be changes coming to the HRM’s hotel levy that will allow the city to tax AirBnBs. Hotel levies are common across the country and world, but the HRM is lagging behind in the rates charged. The proposed changes would also give the HRM power to change the levy in the future, even though it has no plans to currently, due to the pandemic. 

The Neptune Theatre gave a presentation as well and was sent to the Audit and Finance Committee to ask for $100,000. 

Who said what (paraphrased): 

Blackburn: Welcome to the meeting! First up we have a presentation from Neptune Theatre. Welcome, Lisa Bugden and Jeremy Webb.

Jeremy Webb, Artistic Director: Neptune’s been in business since 1963, 58 years! We’ve been changing since 2017 to make sure we were more representative of the communities in the HRM. We’ve added autistic and ASL-friendly performances. 

Bugden: We’ve been working to be more sustainable and less reliant on gov’t support. Roughly 50 per cent of our audience in the summer is from away. The pandemic hit us hard. 

Webb: Revenue dried up almost overnight in March 2020, we were the first to shut down completely, and we’ll likely be the last to start back up. 

Bugden: We’ve lost a lot of revenue, but we pay our artists fairly, so we paid out our contracts. People spend a lot of money downtown when they come to our shows. About 90 per cent of our revenues come from our shows. WESB has been crucial to keeping a core of our staff employed. 

Webb: Even though there’s a light at the end of the tunnel we expect to be restricted by necessary public safety precautions when we re-open. We’re planning on reopening late summer. 

Bugden: We’re requesting $100,000 to help reopen. 

Webb: We’re requesting $100,000 to help reopen (said differently highlighting the importance of the arts in Halifax. Side note: they’re really important, says the guy writing this who went to theatre school in the early 2000s).

Blackburn: Any questions? 

Austin: It’s a process question, when it comes to money, are we sending people to Audit and Finance? 

Denise Schofield, director: This would be considered a grant, and sent to Audit and Finance? 

Austin: Can we do it? Or does Neptune need to give the presentation again? 

Schofield: *Technical difficulties* Can you hear me? I’m in the office but the internet is bad? Option one, send the presenters to Audit and Finance or option two, write a formal letter to Audit and Finance. 

Austin: Should we touch base with Audit and Finance to see what they want? 

Russell: As chair of the Audit and Finance Committee, I think the presentation would be helpful in our next meeting on Feb. 11, the letter of request would also be helpful. It’s going to be a long meeting, but it’s really important to me since my great grandfather was one of the founders, so we’ll get it in there. 

Austin: I think we have to think carefully about where we fit as a municipality with COVID relief. It’s worth a report, I don’t have my mind made up about whether we should be in the business of COVID relief. 

Blackburn: Do we need a motion to send this to Audit and Finance? 

Clerk: I think the verbal discussion is enough. 

Blackburn: On to the presentation about living wage framework from the construction industry bosses

Melody Hillman, Acting President and CEO, Construction Association of Nova Scotia: (Bias alert: straight up, this is bosses advocating not to pay workers a living wage. Even though it is of no cost to them. All they have to do is charge the city more for the work that needs to be done. It won’t impact the amount of work the city does, nor will it impact their bottom line. It may cost us, taxpayers, an extra cent of tax. This paraphrasing will reflect my bias) We’re the Construction Association of NS, NS Road Builders Association, NS Home Builders Association. Our associations represent 1230 people, and 36,000 people and taxpayers (not this taxpayer). We’ve done a bunch of meetings with city staff. We weren’t consulted about whether we should have to pay workers a fair wage. We might have to pay our workers more for private work where we don’t have to pay our workers a living wage. We don’t have the administration to do that. Everyone would also make more money. If someone goes from minimum wage to $22 dollars an hour we’ll have to pay our supervisors more than $20 dollars an hour (supervisors, currently, don’t make a living wage it seems) and then we have to pay everyone a fair wage for their work! Companies won’t bid for HRM contracts if they have to pay people! The city will have to choose between getting less work done or paying more for the work (they’ve already chosen the latter). And undue expense to taxpayers (it’s like one cent. It will cost you, taxpayer roughly one cent in taxes to make sure your fellow Haligonian in the construction industry can comfortably feed their family, is that worth it to you? It is to me.) Questions?

Cuttell: I have heard concerns from small businesses about the complications, and it raises concerns for me. We want to support our small businesses. I think everyone should be able to earn a living wage, but a living wage is based on the cost of living, so it’s like we’re taking it from one pot and moving it to another. I don’t know what the outcome will be on our small businesses, so they’re worth noting. (If small businesses can’t survive while paying a living wage, that means it can’t survive without exploiting the labour of its employees, so should it survive?)

Smith: You mention that this will add a burden to smaller businesses and potentially smaller businesses while bidding, what’s the concern? I don’t see anywhere in the concerns that you’ve mentioned is the reason we’ve asked for this. There are people who aren’t making wages enough to live, and businesses aren’t taking this into consideration. It seems to me you’re focusing on what’s wrong with this policy, but not what wrong with your industry. Like how African Nova Scotians with certified tickets and red seals are 30 per cent less likely to get positions, this is from 2017, than their white counterparts. (LINDELL SMITH LAYING IT DOWN.) This isn’t about making life more difficult for you, it’s about making it less difficult for people who are in the industry. Do you not see the value of these policies? When you say it could create hardship in bidding, I’m trying to understand that. 

Hillman: The labour force question, we have a plan to fix that and are looking to improve it. We’d love to have the city involved in shaping this. We want diversity, but there’s a labour shortage (okay? Doesn’t seem relevant).

Duncan: We’re focused on workforce development, we’re struggling to try and connect with diverse communities and we have jobs that need to be filled. You’re creating a two tier wage system (incorrect, the companies are deciding to have a two-tier wage system so they can pay people non-living wages when it’s not a city contract. The city is not doing this.) City work will require living wages, but in private work where we don’t need to pay a living wage, I might not bid on HRM’s work since I’d have to pay people a living wage. There’s a small margin for profit and a higher administrative burden in a public project. I can make more money in the private sector (can your workers?) so I might not bid on public sector jobs. The living wage hasn’t been part of the consultation. This may have a negative impact (fun fact: not being able to afford to live has a negative impact too).

Austin: Looking through the list of concerns, there’s some administrative stuff that we could work on. My main question is since you don’t state it explicitly: are you opposed to paying your workers a living wage? 

Grant Feltmate, Executive Director, Nova Scotia Road Builders Association: The difficulty is that we’re dealing with a minimum wage situation in Nova Scotia, and the living wage contracts hit at the same time. Most of our folks are paid above a minimum wage. Increasing wages will increase the costs, and have a ripple effect because the people above them will want to be paid more (hasn’t answered the question). It’s difficult to pay a living wage in just the HRM. So people won’t bid. The administration, when you add complexity then it always helps the big folks. You’re favouring the big companies. The diversity stuff, we have a large demand for labour, we’re looking for all the workers we can find. We agree with Mr. Smith in theory, but the living wage isn’t the way to do it. It’ll hurt diversity (how, exactly?) In fact, if you put a living wage policy in effect it hurts the lower wage people because we, the construction industry, fire them or reduce their hours instead of pay them. Diversity conversations should be separate, we don’t have a good methodology to get those people from where they are, to working for us (change your hiring practices?), because we’re looking for workers!

Smith: Just to clarify, living wage is one thing. Attracting a diverse workforce has more to do with your corporate practices. The living wage policy is a social policy where we outline all of the social responsibilities we want to see, like diverse workforces and environmental stewardship. A living wage doesn’t mean a diverse workforce, that’s on you.  

Grant: We agree, we don’t have any difficulty with the social procurement policies, just how we get there. 

Purdy: This is fascinating, I see both sides. I’m just thinking about what our CFO said, the biggest thing they try and keep in mind is to do no harm. The impact on small business and taxpayers and lower-income earners. A living wage is so important and necessary, what is the harm? Both sides are so important. Doing no harm is important (the choice here is this; harm number one: construction companies make less profit. Harm number two: people can’t afford to eat. Real head-scratcher on which one’s worse). 

Austin: When this came to council we came into it eyes wide open that it would create pressure, it’s hard to have a workspace where some people get higher wages on HRM jobs. We were deliberate in saying ‘yes, that’s the point to use our power to lift people out of poverty conditions.’ I’m open to removing administrative burdens. But not the argument that people should continue to not be paid enough to live in this city, I’m just not interested. Thanks for coming out. 

Karen Slaunwhite, Executive Director, Nova Scotia Home Builders Association: We’re not against social procurement policy, but we’re for equity. So if there’s a two-tier system (which there could be, created by the construction companies not paying people a living wage for non-city contracts) it won’t be equal. It really does impact smaller businesses from an administrative point of view. Adding extra layers of admin to a small business means they won’t bid. We can’t forget the smaller companies (just forget about the workers). It does concern me that we weren’t consulted about this living wage policy. 

Feltmate: There has to be contractual enforcement, if there is non-compliance how will it be addressed? I would ask the city to take a pause and work with industry on solutions. 

Blackburn: On to the tourism masterplan! Do we have a presentation? 

Maggie MacDonald, Regional Recreation Services: A year ago council approved the development of a Regional Destination Development Plan by Discover Halifax. It was led by Discover Halifax. 

Ross Jefferson, Discover NS: We started the development of this plan pre-COVID, we were going to release this plan in March of last year. It was the worst time to launch a plan, but the best time to have a plan. Tourism is important to the HRM, it’s about $1.3 billion in revenue. It’s an estimated loss of $750-850 million in 2020. We have a plan for tourism. (TL;DR, grow the economy and support the tourism industry, be recognized as the favourite Canadian city) Questions? 

MacDonald: The recommendation report has action items for council. 

Blackburn: Questions? Put the motion on the floor first, if you do. No? Someone put the motion on the floor? 

Cuttell: (Reads the motion for agenda item 12.1.1 as written) I love this community first strategy. This is a good time to engage with communities to figure out their tourism potential. 

Purdy: Is the marketing levy a tax?  

Jefferson: Yes there’s a hotel tax for hotels with 20 or greater rooms. 

Purdy: To remove the cap, it’s so you can apply this to rentals like AirBnBs? 

MacDonald: Yes, that’s one part of it. The other part is to permit the city to increase the levy.

Purdy: We have the best city in the world, can the hotel industry bear the removal of the cap?

Ross, staff: The idea of increasing this came from the hotel association about four years ago. Although it’s a challenging time for the industry, their support for this is steadfast. We have one of the lowest hotel taxes in the country, and it’s common around the world. But yes, hotels are in support. 

MacDonald: We wouldn’t make changes without support, this just allows us to make changes in the future. 

M/S/C – Vote – Unanimous – Aye

Cuttell: Can I bring forward an information item for a future meeting? The green network plan? 

Clerk: Got it. 

*Meeting adjourned*

Present:

Councillor Lisa Blackburn, Chair (District 14)

Councillor Sam Austin, Vice-Chair (District 5)

Councillor Trish Purdy (District 4)

Councillor Lindell Smith (District 8)

Councillor Patty Cuttell (District 11)

Councillor Paul Russell (District 15)

Absent: 

Councillor Pam Lovelace (District 13)

Interviews:

N/A – COVID

Previous meeting minutes and current agenda:

Previous meeting

Current agenda


A former Naval Officer turned journalist, Matt Stickland is committed to empowering his community to ensure that everyone has access to the information they need to make their city a better place.

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